Workday 2026 Q3 Earnings Beats Estimates with 12.6% Revenue Growth and 30.6% Net Income Surge

Workday (WDAY) reported fiscal 2026 Q3 earnings on Nov 25, 2025, with revenue and EPS exceeding expectations. The company’s 12.6% year-over-year revenue growth and 30.6% net income increase underscored its strong performance. Guidance for Q4 subscription revenue and full-year growth aligned with market forecasts, reflecting confidence in sustained momentum.

Revenue

Workday’s total revenue rose 12.6% to $2.43 billion in Q3 2026, driven by robust subscription services. Subscription revenue, the company’s core offering, reached $2.24 billion, contributing nearly 92% of total revenue, while professional services added $188 million. This performance highlights the company’s ability to scale its cloud-based solutions amid competitive demand.

Earnings/Net Income

Earnings per share surged 30.1% to $0.95 in Q3 2026, up from $0.73 in the prior year. Net income climbed 30.6% to $252 million, reflecting improved operational efficiency and margin expansion. The company’s earnings growth outpaced revenue gains, signaling stronger profitability.

Post-Earnings Price Action Review

The stock price of Workday climbed 3.13% during the latest trading day and 3.57% over the past week, though it dipped 3.73% month-to-date. A post-earnings strategy of holding shares for 30 days yielded a CAGR of 13.17%, underperforming the market by 21.49%. With a Sharpe ratio of 0.37 and no maximum drawdown, the strategy offered minimal risk but conservative returns, suitable for stability-focused investors.

CEO Commentary

CEO Carl Eschenbach highlighted 15% subscription revenue growth and 28.5% non-GAAP operating margins, attributing success to AI-driven solutions and cross-selling. Strategic priorities include expanding AI capabilities via acquisitions (e.g., Sana, Paradox) and enhancing Workday GO for mid-market clients. Eschenbach expressed confidence in FY ’27 growth, emphasizing customer demand for integrated AI platforms.

Guidance

CFO Zane Rowe outlined Q4 2026 guidance: subscription revenue of $2.355 billion (15% growth), full-year revenue of $8.828 billion (14% growth), and non-GAAP operating margins of ≥28.5% for Q4. The company plans $5 billion in stock repurchases through FY ’27 and reiterated FY ’27 targets, including 13% subscription revenue growth and $2.7 billion in free cash flow.

Additional News

Workday closed the $1.1 billion acquisition of Sana AI to enhance its AI-driven workplace tools, automating tasks and streamlining data workflows. The company also expanded Workday GO, introducing global payroll and AI-powered deployment agents to target mid-market clients. Internationally, Workday appointed Zakaria Haltout as Group Vice President to lead expansion in the Middle East, capitalizing on growing AI and cloud adoption in the region.