Workday (WDAY.US) Q3 2026 Non-GAAP EPS Rises 22.75%

Workday (WDAY.US) reported strong results for its fiscal third quarter ended October 31, 2025, with total revenues reaching $2.432 billion, an increase of 12.6% year-over-year. Non-GAAP diluted net income per share saw a significant rise to $2.32, up 22.75% from $1.89 in the same period last year. This performance exceeded analyst EPS estimates of $2.12.

Subscription Revenue Growth and Backlog

Subscription revenues were a key driver, growing 14.6% year-over-year to $2.244 billion. The company's 12-month subscription revenue backlog expanded by 17.6% year-over-year to $8.21 billion, indicating strong future revenue streams. Total subscription revenue backlog also increased 17.0% year-over-year to $25.96 billion, reflecting robust demand for Workday's offerings.

Strategic Initiatives and AI Momentum

Workday's CEO, Carl Eschenbach, highlighted the strength and diversity of the business, attributing success to momentum across its AI portfolio. The company welcomed new customers and expanded relationships, with healthcare becoming its sixth industry to cross $1 billion in annual recurring revenue. Workday also unveiled new AI innovations, including Workday Illuminate™ AI agents and Workday Data Cloud, and closed the acquisitions of Paradox and Sana to enhance its conversational AI and enterprise knowledge tools.

Management Outlook

Looking ahead, Workday's CFO, Zane Rowe, indicated confidence in continued growth, updating fiscal 2026 full-year subscription revenue guidance to $8.828 billion, representing 14.4% growth. The company also expects a non-GAAP operating margin of approximately 29% for the full fiscal year. For the fiscal fourth quarter ending January 31, 2026, Workday anticipates subscription revenues of $2.355 billion, reflecting 15.5% growth, and a non-GAAP operating margin of at least 28.5%.