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Jan 31
Workday Q4 2026 Earnings Report
Workday reported strong fourth quarter fiscal 2026 results with significant growth in subscription revenue and operating cash flows.
Key Takeaways
Workday delivered a robust fourth quarter for fiscal 2026, characterized by a 14.5% increase in total revenues to $2.532 billion and a 15.7% surge in subscription revenues. The company demonstrated improved profitability with GAAP operating income more than doubling year-over-year and non-GAAP operating margin reaching 30.6%. Strong cash flow generation and a significant share repurchase program highlighted the quarter's financial strength.
Total revenues grew 14.5% year-over-year to $2.532 billion, driven by strong subscription services performance.
Non-GAAP operating margin expanded to 30.6%, up from 26.4% in the same period last year.
Operating cash flows for the full year reached $2.939 billion, representing a 19.4% increase over fiscal 2025.
The company returned $2.9 billion to shareholders through the repurchase of 12.8 million shares of common stock during the fiscal year.
Revenue by Segment
Forward Guidance
Workday provided guidance for Q1 and the full fiscal year 2027, projecting continued double-digit growth in subscription revenue and strong operating margins.
Positive Outlook
- Expected Q1 fiscal 2027 subscription revenue of $2.335 billion, representing 13% growth.
- Projected full year fiscal 2027 subscription revenue between $9.925 billion and $9.950 billion.
- Targeted Q1 non-GAAP operating margin of 30.5%.
- Targeted full year non-GAAP operating margin of 30.0%.
- Prioritizing investment in agentic AI roadmap to capture larger market opportunities.
Challenges Ahead
- Full year growth rate of 12% to 13% is slightly lower than the 14.5% growth seen in FY26.
- Operating income impacted by $303 million in restructuring expenses in FY26.
- Uncertainty regarding the timing and amount of adjustments for forward-looking GAAP margins.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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