Workday (NASDAQ:WDAY) Announces Quarterly Earnings Results, Beats Estimates By $0.15 EPS

Workday (NASDAQ:WDAY) posted its quarterly earnings results on Tuesday. The software maker reported $2.47 earnings per share for the quarter, topping analysts’ consensus estimates of $2.32 by $0.15, FiscalAI reports. The company had revenue of $2.53 billion for the quarter, compared to the consensus estimate of $2.52 billion. Workday had a net margin of 6.95% and a return on equity of 10.50%. Workday’s revenue was up 14.5% on a year-over-year basis. During the same quarter last year, the firm posted $1.92 earnings per share.

Here are the key takeaways from Workday’s conference call:

• Workday is pivoting to an AI-first “chapter four,” planning to marry its deterministic HR/finance core with domain-specific LLMs and agentic workflows to drive new product-led growth.
• Fiscal 2026 showed solid fundamentals — Q4 subscription revenue of $2.36B, full-year subscription revenue of $8.833B, CRPO up ~15.8% to $8.83B, ~30% non-GAAP operating margin, strong operating cash flow, and $2.9B of share buybacks in FY26.
• FY27 guidance is conservative as Workday prioritizes accelerated AI investment — subscription revenue guide of $9.925B–$9.95B (12%–13% growth) and ~30% non-GAAP margin, signaling near-term tradeoffs between growth re-acceleration and margin expansion.
• Early AI commercialization shows traction — Workday recorded 1.7 billion AI actions in FY26, >$100M of new ACV from emerging AI products in Q4 (100% YoY), >$400M ARR from these solutions, Sana Core/Enterprise moved to GA, and customers report meaningful ROI (e.g., ~25% HR case reduction).
• Execution and timing risks remain — a one‑time DIA contract boosted Q4, some large net‑new deals (Fed, SLED, Healthcare and parts of commercial) elongated into FY27, and average contract duration fell, which contributed to cautious near‑term visibility.

Workday Stock Performance

Workday stock opened at $130.23 on Wednesday. Workday has a 12-month low of $125.83 and a 12-month high of $281.00. The company has a debt-to-equity ratio of 0.34, a current ratio of 1.83 and a quick ratio of 1.83. The company has a market capitalization of $34.25 billion, a price-to-earnings ratio of 54.72, a price-to-earnings-growth ratio of 1.11 and a beta of 1.13. The firm’s fifty day moving average price is $184.46 and its 200 day moving average price is $213.51.

Key Workday News

Here are the key news stories impacting Workday this week:

• Positive Sentiment: Q4 beats — Workday reported better‑than‑expected fiscal Q4 results: revenue and EPS topped consensus and subscription revenue grew year‑over‑year, underpinned by strong cash flow. Workday Q4 results press release
• Positive Sentiment: Analyst buy thesis remains for some — Needham reaffirmed a Buy and kept a $300 price target, arguing AI investments offer long‑term upside despite near‑term headwinds. Needham buy rating
• Neutral Sentiment: Leadership/AI strategy — Workday has emphasized agentic AI as a growth driver and recently brought back a founder CEO, a strategic pivot that could help execution but adds uncertainty about near‑term priorities. CEO return and AI focus
• Neutral Sentiment: Broader software sell‑off — The pullback in software names and macro uncertainty amplified the reaction to Workday’s guidance, meaning market moves reflect sector trends as well as company specifics. Software sector pressure
• Negative Sentiment: Guidance miss — Management forecast FY‑2027 subscription revenue below Street estimates (and guided for slower subscription growth), signaling weaker new‑client wins as corporate tech spend moderates. Revenue guidance below estimates
• Negative Sentiment: Margins and AI investment cost — Workday warned of margin pressure as it accelerates AI investments and guidance for adjusted operating income was cautious, pressuring investor sentiment about near‑term profitability. Margin outlook and AI costs
• Negative Sentiment: Analyst reactions — Several brokers pared targets or downgraded WDAY (Jefferies, Mizuho among them); JPMorgan lowered its target too, increasing near‑term selling pressure. Jefferies cut Mizuho downgrade (summary) JPM price‑target move (summary)

Insider Activity at Workday

In related news, insider Gerrit S. Kazmaier sold 3,759 shares of the stock in a transaction dated Tuesday, January 6th. The stock was sold at an average price of $208.73, for a total value of $784,616.07. Following the completion of the transaction, the insider owned 105,167 shares of the company’s stock, valued at approximately $21,951,507.91. This represents a 3.45% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this link. Also, insider Richard Harry Sauer sold 1,130 shares of Workday stock in a transaction that occurred on Tuesday, January 6th. The stock was sold at an average price of $210.00, for a total value of $237,300.00. Following the sale, the insider owned 85,398 shares in the company, valued at $17,933,580. This represents a 1.31% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders sold 370,321 shares of company stock valued at $78,866,401. 20.00% of the stock is currently owned by insiders.

Institutional Trading of Workday

Institutional investors have recently added to or reduced their stakes in the stock. Brighton Jones LLC lifted its position in shares of Workday by 230.2% during the fourth quarter. Brighton Jones LLC now owns 4,005 shares of the software maker’s stock worth $1,033,000 after purchasing an additional 2,792 shares during the last quarter. Sivia Capital Partners LLC bought a new position in Workday during the 2nd quarter worth approximately $281,000. Fred Alger Management LLC bought a new position in Workday during the 4th quarter worth approximately $302,000. Mindset Wealth Management LLC grew its position in shares of Workday by 21.5% in the 4th quarter. Mindset Wealth Management LLC now owns 1,329 shares of the software maker’s stock worth $285,000 after acquiring an additional 235 shares in the last quarter. Finally, Numerai GP LLC bought a new stake in shares of Workday in the 4th quarter valued at approximately $271,000. 89.81% of the stock is owned by institutional investors and hedge funds.

Analyst Ratings Changes

Several equities research analysts have commented on WDAY shares. The Goldman Sachs Group started coverage on Workday in a research note on Monday, January 12th. They set a “neutral” rating and a $238.00 price target for the company. Raymond James Financial reissued a “market perform” rating on shares of Workday in a research report on Monday, February 9th. Barclays reduced their price target on shares of Workday from $280.00 to $275.00 and set an “overweight” rating on the stock in a research report on Monday, January 12th. Rosenblatt Securities raised shares of Workday from a “hold” rating to a “buy” rating and dropped their price objective for the stock from $235.00 to $180.00 in a research report on Tuesday, February 17th. Finally, Morgan Stanley reduced their target price on shares of Workday from $280.00 to $200.00 and set an “equal weight” rating on the stock in a report on Monday. One analyst has rated the stock with a Strong Buy rating, twenty-one have assigned a Buy rating and fourteen have assigned a Hold rating to the company’s stock. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and a consensus price target of $239.56.

About Workday

Workday, Inc (NASDAQ: WDAY) is a provider of cloud-based enterprise applications focused on human capital management (HCM) and financial management. Founded in 2005 by Dave Duffield and Aneel Bhusri following their tenure at PeopleSoft, the company develops software-as-a-service solutions that help organizations manage workforce and financial processes in a unified, cloud-native environment. Workday’s platform emphasizes continuous updates, data security, and a configurable architecture aimed at large and mid-sized enterprises.

The company’s product portfolio centers on Workday Human Capital Management and Workday Financial Management, with additional offerings for payroll, talent management, workforce planning and analytics.