Workday (WDAY) WDAY Q3 Financial Results Summary

2025-11-26 · Stocks · QuoteReporter

Workday (WDAY) Q3 2026 Financial Results Summary

Release Date: November 25, 2025

Workday, Inc. (NASDAQ: WDAY) announced its financial results for the third quarter of fiscal 2026, which ended on October 31, 2025. The following summarizes the key points from the report:

Financial Highlights

Total Revenues:
$2.432 billion, an increase of 12.6% year-over-year from Q3 FY 2025.
Subscription Revenues:
$2.244 billion, reflecting a 14.6% increase from the same period last year.
Operating Income:
$259 million, representing 10.7% of revenues, up from $165 million and 7.6% of revenues year-over-year.
Non-GAAP Operating Income:
$692 million, or 28.5% of revenues, compared to $569 million (26.3%) in the prior year.
Diluted Net Income Per Share:
$0.94, up from $0.72 in Q3 FY 2025.
Non-GAAP Diluted Net Income Per Share:
$2.32, compared to $1.89 in the same quarter last year.
12-Month Subscription Revenue Backlog:
$8.21 billion, increased by 17.6% year-over-year.
Total Subscription Revenue Backlog:
$25.96 billion, showing a growth of 17.0% from last year.
Operating Cash Flows:
$588 million, compared to $406 million in Q3 FY 2025.
Free Cash Flows:
$550 million, up from $359 million in the same period last year.
Cash, Cash Equivalents, and Marketable Securities:
$6.84 billion as of October 31, 2025.

Shareholder Returns

Share Repurchases:
Approximately 3.4 million shares of Class A common stock were repurchased for $803 million.

Business Developments and Growth Initiatives

New customers acquired include:
County of San Luis Obispo,
Fuji Electric Co. Ltd.,
Hoshino Resorts Inc.,
Kelly Services,
The Magnum Ice Cream Company.
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,
Novartis.
Notably, the U.S. Department of Energy transitioned to Workday Government, marking the first cabinet-level agency to move its HR systems onto a FedRAMP-authorized cloud.
Workday’s healthcare sector crossed $1 billion in annual recurring revenue.

Innovations and Partnerships

New Innovations Unveiled at Workday Rising:
Workday Illuminate™ AI agents,
Workday Data Cloud,
Workday Build,
Workday Flex Credits.
Established a new AI Centre of Excellence in Dublin, Ireland, with a €175 million investment creating 200 AI roles.
Closed acquisitions of:
Paradox (candidate experience agent utilizing conversational AI),
Sana (enterprise knowledge tools provider).
Formed a partnership with Microsoft aimed at enhancing organizational management of people and AI agents.

Financial Outlook

Q4 FY 2026 Guidance:
Subscription revenues projected at $2.355 billion, indicating a growth of 15.5%.
Non-GAAP operating margin expected to be at least 28.5%.
Full Year FY 2026 Guidance:
Adjusted to forecast subscription revenues of $8.828 billion, reflecting growth of 14.4%.
Non-GAAP operating margin projected to be approximately 29%.

Workday’s robust performance demonstrates its capacity to grow through strategic customer engagement and innovative solutions. The company continues to reinforce its market position in the AI-driven enterprise software landscape.

	October 31, 2025	January 31, 2025
Assets
Current assets:
Cash and cash equivalents	2,609	1,543
Marketable securities	4,234	6,474
Trade and other receivables, net	1,750	1,950
Deferred costs	286	267
Prepaid expenses and other current assets	296	311
Total current assets	9,175	10,545
Property and equipment, net	1,132	1,239
Operating lease right-of-use assets	721	336
Deferred costs, noncurrent	573	561
Acquisition-related intangible assets, net	549	361
Deferred tax assets	905	1,039
Goodwill	4,263	3,478
Other assets	433	418
Total assets	17,751	17,977
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	103	108
Accrued expenses and other current liabilities	352	296
Accrued compensation	574	578
Unearned revenue	3,871	4,467
Operating lease liabilities	117	99
Total current liabilities	5,017	5,548
Debt, noncurrent	2,986	2,984
Unearned revenue, noncurrent	70	80
Operating lease liabilities, noncurrent	690	279
Other liabilities	109	52
Total liabilities	8,872	8,943
Stockholders’ equity:
Common stock	0	0
Additional paid-in capital	12,311	11,463
Treasury stock	-2,706	-1,308
Accumulated other comprehensive income (loss)	-69	84
Accumulated deficit	-657	-1,205
Total stockholders’ equity	8,879	9,034
Total liabilities and stockholders’ equity	17,751	17,977

Revenues:	Three Months Ended		Nine Months Ended October
	October 31, 2025	October 31, 2024	October 31, 2025	October 31, 2024
Subscription services	2,244	1,959	6,473	5,678
Professional services	188	201	547	557
Total revenues	2,432	2,160	7,020	6,235
Costs and expenses(1):
Costs of subscription services	395	329	1,115	924
Costs of professional services	196	201	595	606
Product development	666	647	1,988	1,952
Sales and marketing	677	620	1,941	1,804
General and administrative	234	198	662	600
Restructuring(2)	5	0	172	9
Total costs and expenses	2,173	1,995	6,473	5,895
Operating income	259	165	547	340
Other income, net	79	62	198	178
Income before provision for income taxes	338	227	745	518
Provision for income taxes	86	34	197	86
Net income	252	193	548	432
Net income per share, basic	0.95	0.73	2.06	1.63
Net income per share, diluted	0.94	0.72	2.03	1.61
Weighted-average shares used to compute net income per share, basic	265,870	265,411	266,387	265,062
Weighted-average shares used to compute net income per share, diluted	268,629	268,549	269,700	268,936