Workday’s QQ3 2026 results underscore durable top-line growth and a high-quality margin profile typical of a cloud-based SaaS platform with multi-product breadth. Revenue of $2.432B rose 12.96% year-over-year and 3.58% quarter-over-quarter, while gross margin remained robust at ~75.7%, supporting a healthy operating margin of 10.65% and net margin of 10.36%. EBITDA reached $452M, with an EBITDA margin of ~18.59%. Cash generation remained a core strength, with operating cash flow of $588M and free cash flow of $550M, driving a cash-and-investments balance totaling about $6.84B and a net debt position of $1.18B. Management commentary historically emphasizes cloud expansion, product innovation, and AI-enabled analytics, factors that are likely to sustain ARR growth and cross-sell opportunities across HCM, financial management, planning, and spend management modules. Although the results reflect solid performance, investors should note the premium valuation metrics (e.g., P/S ~26x, P/E ~63x) that imply confidence in sustained growth and margin expansion, balanced against industry competition and macro headwinds.
Key Performance Indicators
Revenue
Increasing
2.43B
QoQ: 3.58% | YoY: 12.96%
Gross Profit
Increasing
1.84B
75.70% margin
QoQ: 4.25% | YoY: 13.43%
Operating Income
Increasing
259.00M
QoQ: 4.44% | YoY: 56.97%
Net Income
Increasing
252.00M
QoQ: 10.53% | YoY: 30.57%
EPS
Increasing
0.95
QoQ: 11.76% | YoY: 30.14%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: USD 2,432,000,000; YoY growth 12.96%; QoQ growth 3.58%
Gross Profit: USD 1,841,000,000; GM % 75.70%; YoY margin +13.43%; QoQ margin +4.25%
Operating Income: USD 259,000,000; OM % 10.65%; YoY margin +56.97%; QoQ margin +4.44%
Net Income: USD 252,000,000; Net Margin 10.36%; YoY margin +30.57%; QoQ margin +10.53%
EPS: USD 0.95; Diluted EPS: USD 0.94; YoY EPS +30.14%; QoQ +11.76%
Cash Flow: CFO USD 588,000,000; Capex USD 38,000,000; Free Cash Flow USD 550,000,000; FCF per share USD 2.06; CFO per share USD 2.21
Liquidity & Balance Sheet: Total cash and short-term investments USD 6.843B; Cash and equivalents USD 2.609B; Short-term investments USD 4.234B; Total assets USD 17.751B; Total liabilities USD 8.872B; Stockholders’ equity USD 8.879B; Net debt USD 1.184B; Goodwill USD 4.263B; Intangibles USD 549M; Deferred revenue USD 3.871B; Current ratio 1.829; Interest coverage 4.47x
Valuation Context: Price-to-Sales ~26.28x; Price-to-Earnings ~63.40x; Enterprise value multiple ~196.66x; Implies a premium stance grounded in cloud mix and long-duration ARR, with investors attentively watching margin trajectory and efficiency gains.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.43B
12.96%
3.58%
Gross Profit
1.84B
13.43%
4.25%
Operating Income
259.00M
56.97%
4.44%
Net Income
252.00M
30.57%
10.53%
EPS
0.95
30.14%
11.76%
Key Financial Ratios
Gross Profit Margin
Excellent
74.20%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Fair
10.60%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Good
10.40%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Weak
1.42%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
2.84%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
1.83
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
Moderate
0.43
Debt-to-equity indicates balanced capital structure with manageable debt
P/E Ratio
High Growth
63.40x
Very high P/E indicates aggressive growth expectations, higher risk
Price to Book
High Premium
7.20x
Very high premium suggests asset-light business model or lofty expectations
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