• The bottom-line result notably exceeded the Fiscal.ai-compiled consensus of $2.17, while the top line was just ahead of the $2.42 billion consensus. 
• CEO Carl Eschenbach attributed the solid quarter to the strength and diversity of its business and the momentum seen across its AI portfolio.
• Year-to-date, Workday stock has lost nearly 10%.

Workday, Inc. (WDAY) shares slipped over 5% in Wednesday’s early premarket session as investors digested the company’s quarterly results that showed top-line growth roughly in line with estimates and subscription revenue growth that is forecast to slow down.

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Workday is a cloud-based software-as-a-service (SaaS) company that provides an artificial intelligence (AI)-powered platform for human resource and financial management.

Year-to-date, Workday stock has lost nearly 10%.

Workday’s Q3 Earnings Snapshot

Pleasanton, California-based Workday reported adjusted earnings per share (EPS) of $2.32 for the third quarter of the fiscal year 2026, and revenue of $2.432 billion, up 12.6% year over year (YoY). The bottom-line result notably exceeded the Fiscal.ai-compiled consensus of $2.17, while the top line was just ahead of the $2.42 billion consensus. 

The faster pace of repurchases during the quarter also boosted the EPS. 

Subscription revenue climbed 14.6% to $2.24 billion. The 12-month subscription revenue backlog climbed 17.6% YoY to $8.21 billion, accelerating from the 16.4% increase in the second quarter.

CEO Carl Eschenbach said, “Workday delivered another solid quarter, fueled by the strength and diversity of our business and the momentum we're seeing across our AI portfolio.” 

The company said the quarterly performance was driven by “continued progress across several key growth initiatives.”

Workday’s Outlook

CFO Zane Rowe said, “We now expect fiscal 2026 subscription revenue of $8.828 billion, growth of 14%, and non-GAAP operating margin of approximately 29%."

The company guided fourth-quarter subscription revenue to $2.355 billion, up 15.5%, and an adjusted operating margin of at least 28.5%. According to a CNBC report, the consensus estimates for the metrics are at $2.35 billion and 28.7%, respectively. 

What Workday Retail Feels About Stock

On Stocktwits, retail sentiment toward the stock stayed ‘extremely bullish’ as of early Wednesday, and the message volume increased to ‘extremely high levels.

A bullish user said they were feeling good about the earnings.

Another user said the stock will likely go much higher as the company offers AI for government and businesses. “Very undervalued, $300 will come quick,” they said.

According to Koyfin, the average analysts’ price target for Workday stock is $281.44, implying roughly 20% upside from current levels. 

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