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Workday posts Q2 revenue growth and margin expansion on AI demand

Workday bought back about $1.33 billion in shares during the quarter and said AI made up 25% of new contract value.

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Workday reported Q2 results showing AI is being adopted within its enterprise software platform rather than replaced by customer-built automation, with revenue rising 12.8% to $2.65 billion and subscriptions growing 13.9% supported by AI-driven demand, MarketBeat Ratings reports.

The company said AI accounted for 25% of new contract value and that the number of clients using at least one agentic product grew 35%, while backlog increased 14.2% on a 12-month basis and 8% overall.

Workday also highlighted margin gains, widening adjusted operating income margin by 210 basis points as it increased investment, driving $2.75 in adjusted earnings per share, up 20% from the prior year and nearly 15 cents above expectations, according to the report.

In addition to operating performance, Workday authorized additional shareholder returns, buying back about $1.33 billion during the quarter and securing a new $4 billion authorization, while its Q3 and full-year targets were described as above consensus, the outlet added.

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