"In full year '26, we delivered 1.7 billion AI actions across the Workday platform and this is all organically developed AI in Workday."
— Gerrit Kazmaier
03Detailed Report
0M18.L
Company 0M18.L
Period
Q4 2026
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 26, 2026
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Executive Summary
Workday reported a solid end to FY2026 with meaningful contribution from AI-driven products and a framework for long-term reacceleration. Q4 FY26 subscription revenue rose 16% YoY to $2.36B, while total revenue reached $2.532B (+15% YoY), underscoring durable demand for Workday’s cloud-based HR, finance and planning solutions. The company continued to bend its AI roadmap toward enterprise-grade automation and insights, delivering 1.7B AI actions for FY26 and over $100M in new AI ACV in Q4, contributing to an AI ARR exceedance of $400M. The Sana Core/Enterprise launches and the Org-wide adoption of organically developed agents (12 new agents, >400 customers) are highlighted as accelerants for growth in FY27, with Flex Credits consumption enabling a more scalable monetization of AI-enabled workloads, including third-party agents.
Financial discipline remained a notable strength: non-GAAP operating margin stood at 30.6% in Q4 (29.6% for the full year), and free cash flow reached $2.78B in FY26 (up 27%). Workday also demonstrated strong cash generation and capital allocation discipline, repurchasing $1.5B in Q4 and $2.9B for the year, ending FY26 with $5.4B in cash and marketable securities and a net cash position of approximately $2.32B. Management reiterated a long-term growth trajectory centered on AI-enabled business process automation, with FY27 subscription revenue guidance of roughly $9.93B–$9.95B (12%–13% growth) and anticipated acceleration in the back half as agentic solutions move from early access to broader production.
Investors should monitor: AI adoption velocity and ROI from organic versus acquired agents, cRPO backlog progression, AI-driven expansion in international markets, the pace of gross and net retention, and the sensitivity of profitability to accelerated AI spending vis-à-vis the company’s plan for margin expansion through growth.
Key Performance Indicators
Revenue
Increasing
2.53B
QoQ: 4.11% | YoY: 14.52%
Gross Profit
Increasing
1.92B
75.87% margin
QoQ: 4.35% | YoY: 14.89%
Operating Income
Increasing
304.00M
QoQ: 17.37% | YoY: 305.33%
Net Income
Increasing
145.00M
QoQ: -42.46% | YoY: 54.26%
EPS
Increasing
0.55
QoQ: -42.11% | YoY: 57.14%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue and profitability
- Q4 2026 total revenue: $2.532B, up 15% YoY; QoQ not disclosed in provided data.
- Q4 2026 subscription revenue: $2.360B, up 16% YoY.
- FY26 total revenue: $9.552B, up 13% YoY; FY26 subscription revenue: $8.833B, up 14% YoY.
- Q4 non-GAAP operating income: $774M, non-GAAP OI margin 30.6%; FY26 non-GAAP OI: $2.82B, margin 29.6%.
- GAAP vs non-GAAP: Q4 GAAP operating margin not disclosed; management emphasizes non-GAAP operating performance as the key profitability metric.
- EPS: Q4 diluted EPS $0.55; annual diluted EPS $0.55.
Cash flow and liquidity
- Q4 2026 operating cash flow: $1.278B; FY26 operating cash flow: $2.94B, up 19%.
- Q4 2026 free cash flow: $1.218B; FY26 free cash flow: $2.78B, up 27%.
- Share repurchases: $1.5B in Q4; $2.9B in FY26; remaining authorization约$2.9B at quarter end.
- End-of-year liquidity: cash and marketable securities $5.404B; net cash position approximately $2.32B (net debt negative).
- Working capital and efficiency: 12-month subscription backlog (cRPO) ended FY26 at $8.83B; total subscription backlog $28.1B; gross revenue retention 97%; net expansion contributed ~60% of subscription growth in FY26.
Operational and product highlights
- AI and product architecture: full-year FY26 delivered 1.7B AI actions across Workday platform (organic AI). Sana Core and Sana Enterprise launched in GA on Feb 15 and integrated into Workday stack.
- Agent-driven growth: 12 new organically developed agents now GA; >400 customers actively using them; Self-Service Agent reduced HR case volume by 25% and boosted employee productivity by 20% in early-access pilots.
- AI economics: in Q4, AI-related deals contributed >$100M in new ACV (growth >100% YoY); AI ARR from solutions >$400M.
- Market and go-to-market: international expansion (Canada, EMEA, ASEAN, Japan) and partner ecosystem contributed to net new ACV; ~25% of net new ACV sourced via partners; Flex Credits pricing model aligns spend with value.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.53B
14.52%
4.11%
Gross Profit
1.92B
14.89%
4.35%
Operating Income
304.00M
305.33%
17.37%
Net Income
145.00M
54.26%
-42.46%
EPS
0.55
57.14%
-42.11%
Key Financial Ratios
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