Workday
Workday runs the core payroll, HR, and finance software for most large companies.
On the record
Checkpoint: Q2 FY2027 earnings report, first full quarter after Sana and Google Gemini rollout
The call
Workday's revenue and retention keep climbing even as its stock falls and it leans on Google's Gemini to power its own AI agents inside the system customers already run their payroll on.
Workday is software that handles payroll, HR records, and finance data for large businesses. It is hard to replace because switching away means months of risky work, and Workday keeps 97% of customers year after year; plus, its records are locked in with compliance rules that competitors would have to rebuild from scratch. The real question is whether Workday's new AI assistant tools (called agents) will become something customers actually use and pay extra for starting in 2026, or whether cheaper AI services from ServiceNow or generic AI models will do the job well enough without Workday's help.
Why
01
AI pressure: ServiceNow plus Moveworks agentic HR-assistant layer. ServiceNow and Moveworks are building AI agents that answer HR questions and route work, which could push Workday's own interface into the background. Could AI do the core job? Unlikely.
02
Bigger players: SAP SuccessFactors, Oracle Fusion Cloud. SAP and Oracle sell live competing cloud HR and finance suites to the same buyers and are adding their own AI features. Could a giant copy it? No, they are blocked.
03
What protects it. Payroll, HR, and finance data sit locked inside Workday with compliance and audit trails that make ripping it out a multi-year, high-risk project.
What would change this call
ServiceNow or Moveworks announces a named Fortune 500 account routing HR-assistant queries away from Workday's UI. Would show a rival agent layer capturing the user interface even while Workday retains the underlying system of record.
Workday's gross retention rate drops below roughly 94% in a quarterly filing. Would indicate real account losses rather than sentiment-driven stock volatility.
Flex Credits/agentic ARR growth stalls or blended gross margin visibly compresses in H2 2026 filings. Would suggest agentic monetization is not converting despite GA rollout of Developer Agent and Agent Passport.
Workday's gross retention rate drops below roughly 94% in a quarterly filing. Would indicate real account losses rather than sentiment-driven stock volatility.
Flex Credits/agentic ARR growth stalls or blended gross margin visibly compresses in H2 2026 filings. Would suggest agentic monetization is not converting despite GA rollout of Developer Agent and Agent Passport.
Key numbers
- FY2026 revenue $9.55B, up 13.1% YoY
- 97% gross retention, $28.1B contracted backlog
- Over 65% of Fortune 500 use Workday
Named risks
- Age-discrimination class action (Mobley v. Workday) proceeding as collective action since May 2025.
- Stock down ~45% YTD by June 2026 with heavy insider selling ($141.6M trailing 3 months by July 2026).
- 2025 data breaches tied to Salesforce/Salesloft Drift supply-chain and voice-phishing attacks, prompting lawsuits.
- Unproven Flex Credits consumption pricing could compress blended gross margin if agentic adoption stalls in H2 2026.
- Leadership instability: abrupt CEO change in February 2026 amid weak FY2027 guidance.
Rivals, as read in July 2026
| Rival | Direction | Evidence |
|---|---|---|
| SAP SuccessFactors | contesting | Decades-long HCM rival; Joule agent layer competes with Workday's Sana as of March 2026 |
| Oracle Fusion Cloud | contesting | Long-running Financials/HCM competitor, has not dislodged Workday's F500 share through mid-2026 |
| ServiceNow (Moveworks) | gaining on | Moveworks acquisition positions ServiceNow to contest the agentic HR-assistant seat, noted March 2026 |
| Google Cloud | contesting | Now a partner not rival: Gemini made default model inside Workday's Sana, May 28, 2026 |
| Rippling, UKG, ADP | contesting | Mid-market and adjacent HCM/payroll vendors compete for smaller accounts, per 2026 vendor comparisons |
Questions people ask
- Is Workday profitable in 2026?
- Workday's FY2026 (ended Jan 31, 2026) revenue was $9.55 billion, up about 13.1% YoY, with Q1 FY2027 revenue of $2.542 billion, up 13.5%. The company guides non-GAAP operating margin near 30% for Q2 FY2027, indicating continued profitable operations despite a volatile stock price.
- Could AI replace Workday?
- Unlikely soon. CEO Aneel Bhusri said on the Q4 FY2026 call that 'no amount of vibe coding is going to produce an HR or an ERP system.' Workday holds 97% gross retention and system-of-record status across over 65% of the Fortune 500 as of June 2026, making migration costly for rivals to exploit.
- Who is Workday's biggest competitor?
- SAP SuccessFactors and Oracle Fusion Cloud remain Workday's closest enterprise HCM/Financials rivals, while ServiceNow's Moveworks acquisition and SAP Joule are contesting the newer agentic HR-assistant layer, per reporting through March 2026.
- Why has Workday's stock dropped in 2026?
- Workday shares fell roughly 45% year-to-date by June 22, 2026, hitting five-year lows near $110-124 in March-April 2026 after a weak FY2027 guide delivered February 24, 2026, compounded by CEO turnover and about $141.6 million in insider selling over the trailing three months as of July 14, 2026.
- Who owns Workday?
- Workday is an independent public company, listed on Nasdaq as WDAY, added to the S&P 500 on December 23, 2024. Co-founders David Duffield and Aneel Bhusri retain significant stakes and influence; Bhusri returned as CEO on February 6, 2026.
- Is Workday's AI agent business actually growing?
- Workday reported agentic-AI ARR nearing $500 million as of Q1 FY2027 (ended April 30, 2026), with new annual account value from agentic AI products up about 200% year over year, per company-cited figures reported by financial media on May 26, 2026.
Timeline
- 2026-07-14Duffield sells $14.7M in shares; insider selling hits $141.6M over trailing 3 months
- 2026-06-02Launches Developer Agent, Agent-Ready Tools, Agent Passport at DevCon; GA planned H2 2026
- 2026-05-28Expands Google Cloud deal; Gemini becomes default model inside Sana agents
- 2026-05-20Q1 FY2027 results: revenue $2.542B, up 13.5% YoY
- 2026-03-17Sana for Workday and Sana Self-Service Agent roll out globally to full customer base
- 2026-02-06Aneel Bhusri returns as CEO, replacing Carl Eschenbach
- 2026-02-04Cuts about 400 jobs (2% of staff) in Global Customer Operations, ~$135M charge
- 2025-11-03Completes ~$1.1B acquisition of Sana Labs
- 2025-08-20Signs definitive agreement to acquire Paradox
- 2025-02-05Cuts about 1,750 jobs (8.5% of workforce) tied to AI reallocation
Revision history
20 July 2026
First assessed. Hard to displace. The text above is fixed as of this date and is not edited afterwards.
In the same band
Sources
- Workday (WDAY) Revenue 2009-2026 (2026-07-05)
- WDAY Press Releases (2026-05-20)
- Workday Launches New Tools for Developers (2026-06-01)
- Did the Rise in This Beaten-Down SaaS Stock Just Signal the Bottom? (2026-05-26)
- Workday Stock Hits a Five-Year Low (2026-04-27)
- Why is Workday stock tumbling today? (2026-07-14)
- Workday layoffs nearly offset last year's hiring (2025-02-05)
- Workday layoffs to hit about 400 jobs (2026-02-04)
- Workday Sana AI Agent (2026-03-18)
- Introducing Sana from Workday (2026-03-17)
- Workday and Google Cloud Expand Strategic Partnership (2026-05-27)
- Workday Launches New Tools for Developers (2026-06-01)