Workday reported QQ1 2026 revenue of USD 2.232 billion, up 12.61% year over year and 0.95% quarter over quarter, reflecting continued demand for its cloud-based HR, planning, and financial management solutions. Gross profit reached USD 1.695 billion with a robust gross margin of 75.94%, while operating income stood at USD 204 million for an operating margin of 9.14%. Net income was USD 68 million (net margin 3.05%), and diluted earnings per share were USD 0.25–0.26. Cash flow from operations was USD 457 million, with free cash flow of USD 421 million; capital expenditure was modest at USD 36 million, leaving the company with USD 988 million in cash and USD 7.97 billion in cash and short-term investments at period end. The balance sheet remains solid, featuring total assets of USD 17.21 billion, total liabilities of USD 8.29 billion, and stockholders’ equity of USD 8.92 billion. Net debt stood at USD 2.42 billion, and despite Positive operating cash flow, the company elected to repurchase USD 290 million of its own shares during the period, signaling confidence in intrinsic value and a constructive capital allocation stance.
Key drivers for the quarter included continued growth in core HR, planning, and analytics offerings, ongoing investments in R&D to expand product capabilities (R&D expenditure of USD 663 million represents a material investment intensity, approximately 29.7% of revenue), and disciplined cost management within operating expenses. While revenue momentum was positive, net income declined year over year by approximately 36%, reflecting higher operating costs and the ongoing cadence of growth investments. Looking ahead, the company’s near-term cash generation remains a meaningful margin of safety even as it navigates a competitive SaaS environment and macro uncertainty. Investors should monitor ARR/DBNRR, customer concentration risk, and the progression toward higher-margin, multi-module adoption to assess the trajectory of profitability improvements.