Did Workday beat earnings in Q4 2026?

Yes, Workday beat both revenue and EPS in Q4 FY2026. Total revenue of $2.53B beat consensus by 0.4%, and non-GAAP EPS of $2.47 beat by 6.5% ($2.32 expected). This marks 9 consecutive quarters of beats.

Why did Workday stock drop after earnings?

Despite the Q4 beat, WDAY dropped 7.6% afterhours to $120.38 because FY2027 subscription revenue guidance of $9.93-9.95B (12-13% growth) came in below street expectations, signaling continued growth deceleration from 14.5% in FY26.

What did Workday guide for FY2027?

Workday guided FY2027 subscription revenues of $9.925-$9.950 billion (12-13% growth) and non-GAAP operating margin of 30.0%. Q1 FY27 guidance calls for subscription revenues of $2.335B and non-GAAP operating margin of 30.5%.

Workday (WDAY)·Q4 2026 Earnings Summary

Workday Beats Q4 Estimates but Stock Drops 7% on Slowing Growth Outlook

February 24, 2026 · by Fintool AI Agent

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Workday delivered a clean Q4 beat—revenue of $2.53 billion topped consensus by 0.4%, while non-GAAP EPS of $2.47 beat by 6.5% . But the stock plunged 7.6% afterhours to $120.38 as FY2027 guidance disappointed. Subscription revenue growth is decelerating from 14.5% in FY26 to 12-13% in FY27, signaling the high-growth era may be ending .

Co-founder Aneel Bhusri returned as CEO and framed AI as the next transformation opportunity: "We built Workday to bring innovation back to the worlds of HR and finance, and AI gives us the chance to do it all again" .

Did Workday Beat Earnings?

Yes. Workday beat on both lines and extended its streak to 9 consecutive quarterly beats:

Metric	Actual	Estimate	Beat/Miss
Total Revenue	$2,532M	$2,523M*	+0.4%
Subscription Revenue	$2,360M	$2,355M (guide)	+0.2%
Non-GAAP EPS	$2.47	$2.32*	+6.5%
Non-GAAP Operating Margin	30.6%	28.5% (guide)	+210 bps

*Values retrieved from S&P Global

The margin beat was particularly strong—non-GAAP operating margin of 30.6% came in 210 basis points above the 28.5% guidance from November, even absorbing $130M in restructuring charges .

Beat/Miss History (8 Quarters)

Period	Revenue	Rev Est	Beat	EPS	EPS Est	Beat
Q4 FY24	$1,922M	$1,917M*	+0.3%	$1.57	$1.47*	+6.8%
Q1 FY25	$1,990M	$1,973M*	+0.9%	$1.74	$1.58*	+10.1%
Q2 FY25	$2,085M	$2,072M*	+0.6%	$1.75	$1.65*	+6.1%
Q3 FY25	$2,160M	$2,131M*	+1.4%	$1.89	$1.76*	+7.4%
Q4 FY25	$2,211M	$2,182M*	+1.3%	$1.92	$1.78*	+7.9%
Q1 FY26	$2,240M	$2,217M*	+1.0%	$2.23	$2.01*	+10.9%
Q2 FY26	$2,348M	$2,341M*	+0.3%	$2.21	$2.12*	+4.2%
Q3 FY26	$2,432M	$2,417M*	+0.6%	$2.32	$2.17*	+6.9%
Q4 FY26	$2,532M	$2,523M*	+0.4%	$2.47	$2.32*	+6.5%

*Values retrieved from S&P Global

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What Did Management Guide for FY2027?

This is where the stock sold off. FY2027 guidance implies meaningful growth deceleration:

Metric	FY27 Guidance	FY26 Actual	Implied Growth
Subscription Revenue	$9.925B-$9.950B	$8.833B	12-13%
Non-GAAP Operating Margin	30.0%	29.6%	+40 bps

And Q1 FY2027 guidance:

Metric	Q1 FY27 Guidance	Q1 FY26 Actual	Implied Growth
Subscription Revenue	$2.335B	$2.063B	13%
Non-GAAP Operating Margin	30.5%	27.4%	+310 bps

The 12-13% subscription revenue growth outlook compares poorly to the 14.5% Workday just delivered in FY26 . CFO Zane Rowe said the company is "prioritizing investment in our agentic AI roadmap to capture a larger market opportunity" —suggesting AI investments will pressure near-term growth.

How Did the Stock React?

WDAY got crushed afterhours despite the beat:

Metric	Value
Regular Session Close	$130.23 (+0.8%)
Aftermarket Price	$120.38
Aftermarket Change	-7.6%
52-Week High	$281.00
52-Week Low	$126.62 (today's low)
Market Cap (at close)	$34.8B

The stock had already fallen 35% over the past year heading into earnings. Today's afterhours move suggests the market expected better FY27 guidance or more aggressive cost actions.

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What Changed From Last Quarter?

Several meaningful shifts emerged in Q4:

Leadership Change: Aneel Bhusri returned as CEO after Carl Eschenbach stepped down. This marks Bhusri's return to day-to-day operations after serving as executive chair .

Acquisition Spree: Workday closed three acquisitions in Q4:

Paradox (Q3) - Conversational ATS for frontline hiring
Sana (Q4) - Enterprise learning platform, now GA
Pipedream (Q4) - AI agent integration platform with 3,000+ connectors

AI Scale: Workday delivered 1.7 billion AI actions across its platform in FY2026 .

Backlog Strength: 12-month subscription revenue backlog grew 15.8% to $8.833B. Total subscription revenue backlog reached $28.1B, up 12.2% .

Capital Return: Workday repurchased ~12.8 million shares for $2.9 billion during FY26 .

What Are the Full-Year FY2026 Results?

Metric	FY2026	FY2025	YoY Change
Total Revenue	$9,552M	$8,446M	+13.1%
Subscription Revenue	$8,833M	$7,718M	+14.5%
Operating Income (GAAP)	$721M	$415M	+73.7%
Non-GAAP Operating Income	$2,824M	$2,186M	+29.2%
Operating Cash Flow	$2,939M	$2,461M	+19.4%
Free Cash Flow	$2,777M	$2,192M	+26.7%
Non-GAAP Diluted EPS	$9.23	$7.30	+26.4%

GAAP operating income was impacted by $303M in restructuring costs (vs $84M in FY25), including the workforce reduction announced earlier this month .

Balance Sheet & Cash Position

Metric	Jan 31, 2026	Jan 31, 2025
Cash & Marketable Securities	$5,443M	$8,017M
Total Debt	$2,987M	$2,984M
Unearned Revenue	$5,081M	$4,547M
Stockholders' Equity	$7,805M	$9,034M

Cash declined from $8B to $5.4B largely due to $2.9B in share repurchases and ~$2.1B in acquisitions .

Key Business Highlights

Customer Count: Over 11,500 customers globally, including 7,000+ core Financial Management and HCM customers
New Customers: Boston Children's Hospital, Copenhagen Airports, Fruit of the Loom, Insomnia Cookies, Lavazza, State of NY Court System
Expansions: Accenture, Ally Financial, Anthropic, eBay, Iron Mountain, Merck, Otis Elevator
EU Sovereign Cloud: Launched to help EU organizations maintain local data control
Workday GO: Expanded for midsize businesses with new global payroll and AI-powered deployment

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Forward Catalysts and Risks

Catalysts to Watch:

Agentic AI product launches (Sana Core/Enterprise now GA)
Pipedream integration enabling AI agents across 3,000+ apps
Government sector momentum (DIA contract, World Economic Forum partnership)
Margin expansion trajectory toward 30%+ non-GAAP operating margin

Risks:

Growth deceleration accelerating (14.5% → 12-13% subscription growth)
Enterprise spending environment remains uncertain
Integration risk from three acquisitions in quick succession
Stock near 52-week lows despite consecutive beats—sentiment overhang

Consensus Estimates Going Forward

Period	Revenue Est	EPS Est
Q1 FY27	$2,532M*	$2.52*
Q2 FY27	$2,637M*	$2.62*
Q3 FY27	$2,721M*	$2.71*
Q4 FY27	$2,813M*	$2.86*

*Values retrieved from S&P Global (pre-earnings consensus, may be revised)