Workday Reports Strong Financial Performance for Q3 FY2026 Amid Growing Demand for AI Solutions

Workday's Impressive Q3 FY2026 Results

On November 25, 2025, Workday, Inc. (NASDAQ: WDAY), the leading enterprise AI platform, published its financial outcomes for the third quarter of fiscal 2026, ending October 31, 2025. The figures revealed a total revenue of $2.432 billion, reflecting a 12.6% year-on-year increase. Of this amount, subscription revenues reached $2.244 billion, marking a 14.6% growth compared to the same period last year.

This quarter also saw an operating income of $259 million, equivalent to 10.7% of total revenues, a considerable rise from the 7.6% margin recorded in the third quarter of fiscal 2025, which translated to an operating income of $165 million. Meanwhile, the non-GAAP operating income stood at $692 million, accounting for 28.5% of revenues, compared to 26.3% from the equivalent period in the previous year.

The diluted net income per share for the quarter was reported at $0.94, surpassing last year's $0.72. Furthermore, the non-GAAP diluted net income per share improved to $2.32, up from $1.89, marking a strong recovery across key financial metrics.

Growing Subscription Revenue Backlog

Workday showcased a robust 12-month subscription revenue backlog of $8.21 billion, up 17.6% year-on-year. This metric, in tandem with the total subscription revenue backlog, which stands at $25.96 billion (up 17.0%), indicates a strong pipeline that underscores the demand for Workday's offerings, significantly boosted by the acquisition of Paradox during this fiscal quarter.

Cash Flow and Share Repurchase

Operating cash flows detailed an impressive $588 million, climbing from $406 million in the third quarter of the previous year. Additionally, the company's free cash flows amounted to $550 million, increasing from $359 million.

An active share repurchase program saw Workday acquiring approximately 3.4 million shares of Class A common stock for $803 million, reflecting its commitment to returning value to shareholders. As of October 31, 2025, Workday's cash, cash equivalents, and marketable securities totaled $6.84 billion.

Strategic Remarks from Leadership

Carl Eschenbach, CEO of Workday, commented on the quarterly achievements, stating, “Workday delivered another solid quarter, fueled by the strength and diversity of our business and the momentum we're seeing across our AI portfolio. 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.”

CFO Zane Rowe elaborated on expectations for the fiscal 2026, forecasting subscription revenue of $8.828 billion, estimating a growth rate of 14%. The anticipated non-GAAP operating margin is projected to be approximately 29%, continuing the positive financial trajectory for the firm.

Recent Business Highlights

Workday's successful quarter included the onboarding of several new clients such as the County of San Luis Obispo and Hoshino Resorts Inc., alongside expansions with existing clients like Novartis and CommonSpirit Health. Additionally, Workday launched several innovative solutions during its annual customer conference, Workday Rising, including new AI agents and a new development framework aimed at enhancing customer engagement and operational efficiency. An interesting highlight was the establishment of an AI Centre of Excellence in Dublin, backed by a €175 million investment over three years, aimed at creating 200 specialized AI roles within the region.

Conclusion

Workday's third-quarter results of fiscal 2026 demonstrate not only significant year-over-year growth but also a firm commitment to innovation and customer satisfaction. With a strong financial foundation and an increasingly diverse portfolio, Workday is well-positioned to capitalize on future growth opportunities, especially in the AI space that has been gaining traction among enterprise clients worldwide.