Workday's Q2 FY2027 AI ARR Nears $600 Million, Up Over 200% Year-Over-Year

Workday reported fiscal 2027 second-quarter results on August 27, 2026, with total revenue up 12.8% year-over-year to $2.649 billion and subscription revenue up 13.9% to $2.471 billion. The standout figure was AI-specific: AI products contributed over $100 million in new annual contract value, more than 25% of total new ACV for the quarter, while AI annual recurring revenue reached nearly $600 million, up more than 200% year-over-year.

AI Adoption Numbers, Specifically

• More than 5,500 customers are now using at least one of Workday's internally developed AI agents, up more than 35% from the prior quarter alone
• AI ARR near $600 million, growing over 200% year-over-year, is a meaningfully faster growth rate than Workday's overall subscription business
• AI-driven new business is no longer a small side metric — at over 25% of new ACV, it is becoming a material share of what Workday is actually selling each quarter

Guidance Going Forward

Workday raised full-year fiscal 2027 subscription revenue guidance to $9.940-9.950 billion (13% growth) and increased its non-GAAP operating margin guidance to 31.0%. For the third quarter specifically, the company guided to total revenue of $2.69 billion (up 11%) and subscription revenue of $2.52 billion (up 12%) — a modest sequential deceleration in headline growth rate even as AI-specific metrics accelerate, worth watching together rather than in isolation.

What This Means If You're Evaluating Workday or a Competing HCM/Finance Platform

The 35%-in-one-quarter jump in customers actively using a Workday AI agent is the more telling number here versus the revenue growth alone — it suggests genuine usage traction, not just contract-level AI add-ons sitting unused. For anyone currently evaluating Workday or a competing platform, it's a reasonable prompt to ask any vendor directly what share of their own customer base is actively using AI features day-to-day, not just what percentage of new deals include an AI line item.