Workday (WDAY) Reports Fiscal 2026 First Quarter Financial Earnings Results

Workday, Inc. (WDAY) today announced its financial results for the fiscal quarter, revealing a revenue of $2.24 billion, which surpassed analysts’ expectations by approximately $22.3 million. However, the company reported diluted earnings per share of $0.25, falling short of the estimated $2.01, marking a significant miss. Despite the earnings setback, the revenue growth highlights Workday’s continued momentum in the enterprise software market.

Key Highlights:

• Total revenues for Q1 FY2026 reached $2.240 billion, a 12.6% increase year-over-year.
• Subscription revenues were $2.059 billion, up 13.4% from the previous year.
• Non-GAAP operating income was $677 million, or 30.2% of revenues, compared to $515 million, or 25.9% in the same period last year.
• 12-month subscription revenue backlog increased by 15.6% to $7.63 billion.
• Workday’s cash, cash equivalents, and marketable securities totaled $7.97 billion as of April 30, 2025.
• The company reiterated its fiscal 2026 subscription revenue guidance of $8.8 billion and increased non-GAAP operating margin guidance to approximately 28.5%.
• New product introductions and customer acquisitions were highlighted, including new Illuminate Agents and partnerships with major companies like United Airlines and CVS Health.

Summary: Workday, Inc. reported strong financial results for the first quarter of fiscal 2026, with total revenues of $2.240 billion, marking a 12.6% increase year-over-year. Subscription revenues also saw significant growth, rising 13.4% to $2.059 billion. CEO Carl Eschenbach emphasized the company’s resilience and the increasing demand for its platform, stating, “Workday delivered another solid quarter, a testament to the durability of our business and the relevance of our platform as CEOs increasingly turn to us to drive efficiency, agility, and growth.” The company also noted a substantial increase in its subscription revenue backlog, which rose to $24.62 billion, reflecting a 19.1% year-over-year growth.

CFO Zane Rowe commented on the company’s strategic focus, stating, “Our first quarter results highlight the ongoing progress across our strategic growth areas and the continued efficiencies we are driving throughout the business.” Workday is maintaining its fiscal 2026 subscription revenue guidance of $8.8 billion while raising its non-GAAP operating margin guidance to approximately 28.5%. The company continues to innovate with new product offerings and has expanded its customer base, indicating a positive outlook for future growth.

Workday, Inc. (WDAY) has experienced a notable price fluctuation recently, with a slight dip of 0.97% over the past week, contrasting sharply with a robust 25.43% surge in the last month. This volatility may reflect investor sentiment as the company continues to showcase impressive growth metrics, including a two-year compound annual growth rate (CAGR) of 41.62% in earnings per share. Despite a high price-to-earnings ratio of 138.93, which suggests that the stock is trading at a premium, the company’s revenue and free cash flow CAGR of 16.51% and 30.00%, respectively, indicate strong operational performance. Furthermore, Workday’s net profit margin of 6.23% and return on invested capital of 3.63% suggest that while profitability is modest, the company is effectively utilizing its capital. Over the past year, the stock has seen a modest increase of 3.74%, hinting at a steady, albeit cautious, investor confidence in its long-term potential. As the market continues to react to these fundamental metrics, it will be interesting to see how Workday navigates the challenges and opportunities ahead.

Workday, Inc. provides enterprise cloud applications in the United States and internationally. The company’s applications help its customers to plan, execute, analyze, and extend to other applications and environments, and to manage their business and operations. It offers a suite of financial management applications, which enable chief financial officers to maintain accounting information in the general ledger; manage financial processes; identify real-time financial, operational, and management insights; enhance financial consolidation; reduce time-to-close; promote internal control and auditability; and achieve consistency across finance operations. The company also provides cloud spend management solutions that helps organizations to streamline supplier selection and contracts, manage indirect spend, and build and execute sourcing events, such as requests for proposals; Human Capital Management (HCM) solution, a suite of human capital management applications that allows organizations to manage the entire employee lifecycle from recruitment to retirement, and enables HR teams to hire, onboard, pay, develop, reskill, and provide employee experiences; Workday applications for planning; and applications for analytics and reporting, including augmented analytics to surface insights to the line of business in simple-to-understand stories, machine learning to drive efficiency and automation, and benchmarks to compare performance against other companies. It serves professional and business services, financial services, healthcare, education, government, technology, media, retail, and hospitality industries. The company was formerly known as North Tahoe Power Tools, Inc. and changed its name to Workday, Inc. in July 2005. Workday, Inc. was incorporated in 2005 and is headquartered in Pleasanton, California.