Workday, Inc. Revenue & Financials

Workday generated $9.552 billion in total revenue for fiscal year 2026, a 13.1% increase from the $8.446 billion reported in fiscal 2025, with subscription revenues of $8.833 billion representing 92.5% of total revenue and growing 14.5% year-over-year. Professional services revenue was $719 million, down slightly from $728 million in fiscal 2025 as the company shifted toward partner-led implementations. Operating income was $721 million, or 7.5% of revenues, compared to $415 million, or 4.9% of revenues, in fiscal 2025, reflecting improved operational efficiency despite $303 million in restructuring expenses — more than triple the $84 million recorded in the prior year. Non-GAAP operating income, which excludes share-based compensation, employer payroll tax-related items on employee stock transactions, amortization of acquisition-related intangible assets, acquisition-related costs, and restructuring costs, was $2.824 billion, or 29.6% of revenues, up from $2.186 billion, or 25.9% of revenues, in fiscal 2025. This margin expansion demonstrates the operating leverage inherent in the SaaS model as fixed costs are spread across a growing revenue base. Net income for fiscal 2026 was $693 million, up from $526 million in fiscal 2025, with diluted net income per share of $2.59 compared to $1.95 in the prior year. Non-GAAP diluted net income per share was $9.23, compared to $7.30 in fiscal 2025, reflecting the company's underlying profitability when excluding stock-based compensation and other non-cash charges. The company's cash position is robust: cash, cash equivalents, and marketable securities totaled $5.443 billion as of January 31, 2026, down from $8.017 billion at the end of fiscal 2025 due to share repurchases and acquisitions. Operating cash flows were $2.939 billion, a 19.4% increase from $2.461 billion in fiscal 2025, while free cash flows reached $2.777 billion, a 26.7% increase from $2.192 billion. This cash generation funds the company's $2.9 billion in share repurchases during fiscal 2026, when approximately 12.8 million shares of Class A common stock were repurchased, as well as strategic acquisitions including Paradox, Flowise, and Sana. The balance sheet carries $2.987 billion in noncurrent debt and total liabilities of $10.269 billion against total assets of $18.074 billion, with stockholders' equity of $7.805 billion. Goodwill and acquisition-related intangible assets totaled $5.910 billion, reflecting the company's active M&A strategy. The 12-month subscription revenue backlog was $8.833 billion as of January 31, 2026, up 15.8% from the prior year, while total subscription revenue backlog reached $28.101 billion, increasing 12.2% year-over-year. This backlog visibility is a critical financial strength, providing near-certainty for approximately 92% of the next year's subscription revenue. The company's share-based compensation expense was $1.570 billion in fiscal 2026, up from $1.511 billion in fiscal 2025, reflecting the competitive talent market in the Bay Area and the company's reliance on equity compensation to attract and retain employees. The restructuring expenses of $303 million in fiscal 2026, related to workforce reductions and strategic realignment, impacted GAAP profitability but are expected to improve future operating margins as resources are redirected toward AI development and automation. The effective tax rate increased in fiscal 2026, with provision for income taxes of $316 million on pre-tax income of $1.009 billion, compared to $112 million on $638 million in fiscal 2025. The company's return on assets was 4.34% and return on equity was 10.86% on a trailing twelve-month basis, with a profit margin of 8.60%. The price-to-sales ratio of 3.87 and enterprise value-to-revenue ratio of 3.56 reflect the market's premium valuation of Workday's growth and recurring revenue model, while the forward P/E of 13.59 suggests expectations of significant earnings growth as margins expand.