Workday Announces Fiscal 2026 Third Quarter Financial Results

Fiscal Third Quarter Total Revenues of $2.432 Billion, Up 12.6% Year-Over-Year
Subscription Revenues of $2.244 Billion, Up 14.6% Year-Over-Year

PLEASANTON, Calif., Nov. 25, 2025 /PRNewswire/ -- Workday, Inc. (NASDAQ: WDAY), the enterprise AI platform for managing people, money, and agents, today announced results for the fiscal 2026 third quarter ended October 31, 2025.

Fiscal 2026 Third Quarter Results

• Total revenues were $2.432 billion, an increase of 12.6% from the third quarter of fiscal 2025. Subscription revenues were $2.244 billion, an increase of 14.6% from the same period last year.
• Operating income was $259 million, or 10.7% of revenues, compared to an operating income of $165 million, or 7.6% of revenues, in the same period last year. Non-GAAP operating income for the third quarter was $692 million, or 28.5% of revenues, compared to a non-GAAP operating income of $569 million, or 26.3% of revenues, in the same period last year.¹
• Diluted net income per share was $0.94, compared to diluted net income per share of $0.72 in the third quarter of fiscal 2025. Non-GAAP diluted net income per share was $2.32, compared to non-GAAP diluted net income per share of $1.89 in the same period last year.¹
• 12-month subscription revenue backlog was $8.21 billion, up 17.6% from the same period last year. Total subscription revenue backlog was $25.96 billion, increasing 17.0% year-over-year. 12-month subscription revenue backlog and total subscription revenue backlog include the impact from the acquisition of Paradox, which closed in the third quarter of fiscal 2026.
• Operating cash flows were $588 million compared to $406 million in the same period last year. Free cash flows were $550 million compared to $359 million in the same period last year.¹
• Workday repurchased approximately 3.4 million shares of Class A common stock for $803 million as part of its share repurchase programs.
• Cash, cash equivalents, and marketable securities were $6.84 billion as of October 31, 2025.

Comments on the News

"Workday delivered another solid quarter, fueled by the strength and diversity of our business and the momentum we're seeing across our AI portfolio," said Carl Eschenbach, CEO, Workday. "By unifying people, money, and AI agents on one trusted platform, we're giving customers a real edge—helping them empower their people, simplify how work gets done, and drive results that truly matter."

"Our Q3 results were driven by continued progress across several key growth initiatives, as we accelerate innovation across the platform and bring exciting AI solutions to market," said Zane Rowe, CFO, Workday. "We now expect fiscal 2026 subscription revenue of $8.828 billion, growth of 14%, and non-GAAP operating margin of approximately 29%."

Recent Business Highlights

• Workday welcomed new customers including County of San Luis Obispo, Fuji Electric Co. Ltd., Hoshino Resorts Inc., Kelly Services, and The Magnum Ice Cream Company, and expanded existing relationships with CommonSpirit Health, Cornell University, DBS Bank, Guardian Life Insurance Company of America, IMA Financial Group, Levi Strauss & Co, Northeast Georgia Medical Center, and Novartis.
• The U.S. Department of Energy went live on Workday Government—the first cabinet-level agency to bring its core HR systems into a FedRAMP-authorized cloud.
• Healthcare became Workday's sixth industry to cross $1 billion in annual recurring revenue, driven by notable wins and go-lives including Advocate Health and Ardent Health.
• At its annual customer conference, Workday Rising, Workday unveiled several new innovations including:
  • New Workday Illuminate™ AI agents
  • Workday Data Cloud, a new data layer
  • Workday Build, a new open developer experience
  • Workday Flex Credits, a new, transparent subscription-based consumption model for AI
• Workday announced a new AI Centre of Excellence in Dublin, Ireland, with a three-year €175 million investment and the creation of 200 specialized AI roles.
• Workday closed the acquisitions of Paradox, a candidate experience agent that uses conversational AI to simplify every step of the job application journey, and Sana, a leading AI company building the next generation of enterprise knowledge tools.
• Workday formed a new partnership with Microsoft to help organizations securely manage their people and AI agents across their platform.
• Workday announced Pay Transparency Analyzer powered by Kainos, which helps organizations navigate global pay equity regulations, including the EU Pay Transparency Directive; announced an expansion of the Workday Agent Partner Network; and welcomed new partners to the Workday Wellness program—including Chime for financial benefits, Spring Health for mental wellness, and Strada for benefits admin.
• Workday was named a Leader in the 2025 Gartner^® Magic Quadrant™ for Cloud HCM Suites for 1,000+ Employee Enterprises¹, Cloud ERP for Service-Centric Enterprises², and Cloud ERP Finance³.

Financial Outlook

Workday is providing guidance for the fiscal 2026 fourth quarter ending January 31, 2026 as follows:

• Subscription revenues of $2.355 billion, representing growth of 15.5%
• Non-GAAP operating margin of at least 28.5%¹

Workday is updating guidance for the fiscal 2026 full year ending January 31, 2026 as follows:

• Subscription revenues of $8.828 billion, representing growth of 14.4%
• Non-GAAP operating margin of approximately 29%¹

Earnings Call Details

Workday plans to host a conference call today to review its fiscal 2026 third quarter financial results and to discuss its financial outlook. The call is scheduled to begin at 1:30 p.m. PT/4:30 p.m. ET and can be accessed via webcast. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 90 days.

Workday uses the Workday Blog as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

About Workday

Workday  is the enterprise AI platform for managing people, money, and agents. Workday unifies HR and Finance on one intelligent platform with AI at the core to empower people at every level with the clarity, confidence, and insights they need to adapt quickly, make better decisions, and deliver outcomes that matter. Workday is used by more than 11,000 organizations around the world and across industries – from medium-sized businesses to more than 65% of the Fortune 500. For more information about Workday, visit workday.com.

© 2025 Workday, Inc. All rights reserved. Workday and the Workday logo are trademarks of Workday, Inc. All other brand and product names are trademarks or registered trademarks of their respective holders.

Forward-Looking Statements

This press release contains forward-looking statements including, among other things, statements regarding Workday's fourth quarter and full year fiscal 2026 subscription revenues and non-GAAP operating margin, momentum, growth, and innovation. These forward-looking statements are based only on currently available information and our current beliefs, expectations, and assumptions. Because forward-looking statements relate to the future, they are subject to risks, uncertainties, assumptions, and changes in circumstances that are difficult to predict and many of which are outside of our control. If the risks materialize, assumptions prove incorrect, or we experience unexpected changes in circumstances, actual results could differ materially from the results implied by these forward-looking statements, and therefore you should not rely on any forward-looking statements. Risks include, but are not limited to: (i) breaches in our security measures or those of our third-party providers, unauthorized access to our customers' or other users' personal data, or disruptions in our data center or computing infrastructure operations; (ii) service outages, delays in the deployment of our applications, and the failure of our applications to perform properly; (iii) privacy concerns and evolving domestic or foreign laws and regulations; (iv) the impact of continuing global economic and geopolitical volatility on our business, as well as on our customers, prospects, partners, and service providers; (v) any loss of key employees or the inability to attract, train, and retain highly skilled employees; (vi) competitive factors, including pricing pressures, industry consolidation, entry of new competitors and new applications, advancements in technology, and marketing initiatives by our competitors; (vii) our reliance on our network of partners to drive additional growth of our revenues; (viii) our ability to realize the expected business or financial benefits of any acquisitions of or investments in companies; (ix) the regulatory, economic, and political risks associated with our domestic and international operations; (x) adoption of our applications and services by customers and individuals, including any new features, enhancements, and modifications, as well as our customers' and users' satisfaction with the deployment, training, and support services they receive; (xi) the regulatory risks related to new and evolving technologies such as AI and our ability to realize a return on our development efforts; (xii) delays or reductions in information technology spending; (xiii) adverse litigation results; and (xiv) changes in sales, which may not be immediately reflected in our results due to our subscription model. Further information on these and additional risks that could affect Workday's results is included in our filings with the Securities and Exchange Commission ("SEC"), including our most recent report on Form 10-Q or Form 10-K and other reports that we have filed and will file with the SEC from time to time, which could cause actual results to vary from expectations. Workday assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release, except as required by law.

Any unreleased services, features, or functions referenced in this document, our website, or other press releases or public statements that are not currently available are subject to change at Workday's discretion and may not be delivered as planned or at all. Customers who purchase Workday services should make their purchase decisions based upon services, features, and functions that are currently available.

 

 

 

 

 

About Non-GAAP Financial Measures

To provide investors and others with additional information regarding Workday's results, the following non-GAAP financial measures are disclosed: non-GAAP operating income, non-GAAP operating margin, non-GAAP diluted net income per share, and free cash flows. Workday has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. Non-GAAP operating income and non-GAAP operating margin differ from GAAP in that they exclude share-based compensation expense, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, acquisition-related costs, and restructuring costs. Non-GAAP diluted net income per share differs from GAAP in that it excludes share-based compensation expense, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, acquisition-related costs, restructuring costs, gains and losses on strategic investments, and income tax effects. Free cash flows differ from GAAP cash flows from operating activities in that it treats capital expenditures as a reduction to cash flows.

Workday's management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Workday's financial performance. Management believes these non-GAAP financial measures reflect Workday's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in Workday's business. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Workday's operating results and prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.

Management believes excluding the following items from the GAAP Condensed Consolidated Statements of Operations is useful to investors and others in assessing Workday's operating performance due to the following factors:

• Share-based compensation expense. Share-based compensation primarily consists of non-cash expenses for employee restricted stock units and our employee stock purchase plan. Although share-based compensation is an important aspect of the compensation of our employees and executives, this expense is determined using a number of factors, including our stock price, volatility, and forfeiture rates, that are beyond our control and generally unrelated to operational decisions and performance in any particular period. Further, share-based compensation expense is not reflective of the value ultimately received by the grant recipients.
• Employer payroll tax-related items on employee stock transactions. We exclude the employer payroll tax-related items on employee stock transactions in order to show the full effect that excluding share-based compensation expense has on our operating results. Similar to share-based compensation expense, this tax expense is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of our business.
• Amortization of acquisition-related intangible assets. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of the related amortization can vary significantly and are unique to each acquisition and thus we do not believe this activity is reflective of our ongoing operations. Although we exclude the amortization of acquisition-related intangible assets from these non-GAAP financial measures, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.
• Acquisition-related costs. Acquisition-related costs include direct transaction costs, such as due diligence and advisory fees, and certain compensation and integration-related expenses. We exclude the effects of acquisition-related costs as we believe these transaction-specific expenses are inconsistent in amount and frequency and do not correlate to the operation of our business.
• Restructuring costs. Restructuring costs are associated with a formal restructuring plan and are primarily related to workforce reductions, the closure of facilities, and other exit and disposal activities. We exclude these expenses because they are not reflective of ongoing business and operating results.
• Gains and losses on strategic investments. Our strategic investments include investments in early stage companies that are valuable to Workday customers and complementary to Workday products. Gains and losses on strategic investments may result from observable price adjustments and impairment charges on non-marketable equity securities, ongoing mark-to-market adjustments on marketable equity securities, and the sale of equity investments. We do not rely on these securities to fund our ongoing operations nor do we actively trade publicly held securities, and therefore we do not consider the gains and losses on these strategic investments to be reflective of our ongoing operations.
• Income tax effects. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. In projecting this long-term non-GAAP tax rate, we utilize a three year financial projection that excludes the direct impact of the items excluded from GAAP income in calculating our non-GAAP income. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate. For fiscal 2026 and 2025, we determined the projected non-GAAP tax rate to be 19%, which reflects currently available information, as well as other factors and assumptions. We will periodically re-evaluate this tax rate, as necessary, for significant events, relevant tax law changes, material changes in the forecasted geographic earnings mix, and any significant acquisitions.

Additionally, with regards to free cash flows, Workday's management believes that reducing cash provided by operating activities by capital expenditures is meaningful to investors and others because it provides an enhanced view of cash flow generation from the ongoing operations of our business, and it balances operating results, cash management, and capital efficiency.

The use of these non-GAAP measures have certain limitations as they do not reflect all items of expense or cash that affect Workday's operations. Workday compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review Workday's financial information in its entirety and not rely on a single financial measure.

Gartner Disclaimer

GARTNER is a trademark of Gartner, Inc. and its affiliates. MAGIC QUADRANT is a registered trademark of Gartner, Inc. and/or its affiliates and is used herein with permission. All rights reserved. Gartner does not endorse any company, vendor, product or service depicted in its publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner publications consist of the opinions of Gartner's business and technology insights organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this publication, including any warranties of merchantability or fitness for a particular purpose. Gartner content described herein (the "Gartner Content") represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and is not a representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this script in this press release), and the opinions expressed in the Gartner Content are subject to change without notice.

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SOURCE Workday Inc.