Shares of Workday Inc. fell more than 5% in late trading today despite the human resources and finance software provider reporting earnings and revenue beats in its fiscal 2026 third quarter.
For the quarter that ended on Oct. 31, Workday reported adjusted earnings per share of $2.32, up from $1.89 in the same quarter of the previous fiscal year, on revenue of $2.432 billion, up 12.6%. Both figures were ahead of the $2.18 per share and revenue of $2.42 billion expected by analysts.
Subscription revenue rose almost 15%, to $2.244 billion. Operating income hit $259 million, up from $165 million a year prior. The company’s 12-month subscription revenue backlog rose neary 18%, to $8.21 billion, and total subscription revenue rose 17%, to $25.96 billion.
New customers in the quarter included the County of San Luis Obispo, Fuji Electric Co. Ltd., Hoshino Resorts Inc., Kelly Services Inc. and The Magnum Ice Cream Co. Workday also expanded existing relationships with CommonSpirit Health, Cornell University, DBS Bank Ltd., Guardian Life Insurance Co. of America, IMA Financial Group Inc., Levi Strauss & Co., Northeast Georgia Medical Center Inc. and Novartis AG.
Business highlights in the quarter included the U.S. Department of Energy going live on Workday Government, making the department the first cabinet-level agency to bring its core HR systems into a FedRAMP-authorized cloud.
Workday announced on Sept. 16 that it had acquired Sana Labs AB, an artificial intelligence company offering enterprise knowledge and employee training tools, for about $1.1 billion. Workday also closed its acquisition of Paradox Inc., a candidate experience agent that uses conversational AI to simplify every step of the job application journey.
The quarter also saw Workday hold its annual Rising customer conference that featured new Workday Illuminate Agents, the launch of Data Cloud, the open developer experience Workday Build and Workday Flex Credits, a new transparent subscription-based consumption model for AI.
“Workday delivered another solid quarter, fueled by the strength and diversity of our business and the momentum we’re seeing across our AI portfolio,” Chief Executive Carl Eschenbach said in the company’s earnings release. “By unifying people, money and AI agents on one trusted platform, we’re giving customers a real edge, helping them empower their people, simplify how work gets done, and drive results that truly matter.”
For its fiscal fourth quarter, Workday said it expects subscription revenue of $2.355 billion, representing growth of 15.5%, and for the full year, subscription revenue of $8.828 billion, representing growth of 14.4%.
The growth figures were roughly in line with expectations but could also be why the stock is down. Investors were likely looking for higher growth numbers.
Photo: Workday
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