Workday's (WDAY) decision to reaffirm but not raise its organic USD-based fiscal 2026 revenue guidance of $8.8 billion for the second straight quarter, despite upside fiscal Q2 results, signals a stable core business but a still-challenging demand backdrop, according to UBS Securities.

The company reported fiscal Q2 revenue of $2.35 billion, slightly ahead of estimates. While management raised its subscription revenue guidance for fiscal 2026 to $8.815 billion from $8.80 billion, UBS emphasized in a Thursday note that the organic USD-based revenue guide of $8.8 billion was effectively reaffirmed.

While the company's management described the raise as reflecting momentum and contributions from the Paradox acquisition, UBS said the move marked the second quarter in a row that Workday passed on its typical "beat and raise" cadence, suggesting demand remains "stable at best" amid ongoing macro pressure, with softness in the state, local and education vertical weighing on growth.

UBS said the Paradox deal should add roughly 75 basis points to fiscal 2027 growth, prompting it to lift its subscription revenue growth estimate to 14.4% from 13.5%.

The firm trimmed its price target to $245 from $250 while maintaining a Neutral rating.

Shares of Workday were down over 3% in recent Friday trading.

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