Workday reported a solid Q3 FY26, with 15% subscription revenue growth and strong performance from AI products, which contributed 1.5 points of ARR growth. The company is confident in its growth outlook, with guidance for FY27 in line with its analyst day targets. Workday reported Q3 FY26 subscription revenue of $2.244B, up 15% YoY.
Workday reported a solid Q3 FY26, with 15% subscription revenue growth and strong performance from AI products, which contributed 1.5 points of ARR growth. The company is confident in its growth outlook, with guidance for FY27 in line with its analyst day targets. Workday reported Q3 FY26 subscription revenue of $2.244B, up 15% YoY.
Management emphasized strong AI momentum, with AI products adding more than 1.5 points of ARR growth, over 1 billion AI actions this year, and growing adoption across new and existing customers. They are investing aggressively in AI through acquisitions (Paradox, Sana…
Workday reported Q3 FY26 subscription revenue of $2.244B, up 15% YoY.
AI products contributed over 1.5 points of ARR growth.
Management repeatedly highlighted strong execution, AI adoption, and customer momentum, while reaffirming medium-term growth targets and expressing optimism about FY27.
Management emphasized strong AI momentum, with AI products adding more than 1.5 points of ARR growth, over 1 billion AI actions this year, and growing adoption across new and existing customers. They are investing aggressively in AI through acquisitions (Paradox, Sana, PipeDream) and positioning Workday as a trusted platform for AI-driven HR and finance, contrasting with fragmented point solutions
DIA contract phase one driving $15M Q4 revenue. Management repeatedly highlighted strong execution, AI adoption, and customer momentum, while reaffirming medium-term growth targets and expressing optimism about FY27.
Capex guidance remains approximately $200 million for FY26, with free cash flow of $2.70 billion. No changes to capex plans were mentioned.
Management repeatedly highlighted strong execution, AI adoption, and customer momentum, while reaffirming medium-term growth targets and expressing optimism about FY27.
“The Paradox acquisition in the quarter added over a point of CRPO growth and was not included in our backlog guidance.”
“AI products added more than 1.5 points of ARR growth this quarter.”
“our conviction is AI is going to be the new UI and that all of the legacy vendors who are not having leading experiences are going to get relegated through that.”
“we also saw some isolated impacts within institutions that rely heavily on federal grants, primarily in higher ed.”
| Показатель | Период | Диапазон | Середина | Статус |
|---|---|---|---|---|
| Op margin | FY2027 | 29% | 29% | MAINTAINED |
| Revenue | FY2027 Q1 | $2.35B | $2.35B | GUIDED |
| Дата прогноза | Показатель | Целевой период | Прогноз | Факт | Результат |
|---|---|---|---|---|---|
| FY2026 Q4 | Revenue | FY2027 Q1 | $2.335B | $2.542B | Met / beat |
Target is an early adopter of Workday's AI agents, indicating its confidence in the platform and potential for deeper integration.
“we have more than 150 customers, including Target, Accenture, and Netflix, using our agents and agent system of record in early access.”
… and completeness of vision. If you joined us at Workday Rising, you saw how our organic innovation is only accelerating. we introduced new Illuminate agents that tackle some of the toughest challenges at work, from performance reviews and workforce planning to financial close. These purpose-built agents are powered by our unmatched HR and financial data and context, which is what makes them highly accurate, actionable, and trusted. And now, we have more than 150 customers, including Target, Accenture, and Netflix, using our agents and agent system of record in early access. At the same time, we're opening up our platform so customers and partners can create their own AI-powered apps and agents with Workday Build. And with Workday Data Cloud, along with our partners, including Databricks, Salesforce, Snowflake, and now Google Cloud, customers can unlock even more insight and value from their Workday data. We're also accelerating our innovation through strategic acquisitions. We just closed our acquisition of Sana, an AI native platform with an incredible team. They're going to help us completely reimagine our user experience for the age of AI. Our vision is very simple and …
Bayer was a key new customer win for Workday in EMEA, signifying continued enterprise adoption in the region.
“A few of the great wins we had across EMEA in Q3 included Bayer, ING Bank, and Tandem Bank.”
… we delivered solid performance across EMEA, APAC, and Japan in Q3. We just wrapped up our largest EMEA rising yet. There we announced the new Workday EU Sovereign Cloud, which will let customers run our AI-powered HR and finance solutions entirely within the EU, keeping their data local, secure, and fully controlled. Also in Q3, we established a new AI Center of Excellence in Dublin, which is one of our major R&D hubs, and we announced a new office in Dubai. A few of the great wins we had across EMEA in Q3 included Bayer, ING Bank, and Tandem Bank. APAC also had a strong quarter with wins at Genesis Energy, DBS Bank, and MGM Grand Paradise. And we continued to build on our success in Japan with new and expanded relationships with Pioneer Corporation, Hoshino Resorts, and ISAI. Our partners continue to play a critical role in our success. Once again in Q3, more than 20% of our net new ACV was sourced from partners, a testament to the strength of our ecosystem. In Q3, we brought on new Workday Wellness partners, including Chime, Spring Health, and Strata, to expand the value we deliver to our joint customers. We also expanded our partnership with Microsoft, to help joint customers …
DBS Bank was a key win for Workday in the APAC region, indicating strong traction in the financial services sector.
“APAC also had a strong quarter with wins at Genesis Energy, DBS Bank, and MGM Grand Paradise.”
… EMEA rising yet. There we announced the new Workday EU Sovereign Cloud, which will let customers run our AI-powered HR and finance solutions entirely within the EU, keeping their data local, secure, and fully controlled. Also in Q3, we established a new AI Center of Excellence in Dublin, which is one of our major R&D hubs, and we announced a new office in Dubai. A few of the great wins we had across EMEA in Q3 included Bayer, ING Bank, and Tandem Bank. APAC also had a strong quarter with wins at Genesis Energy, DBS Bank, and MGM Grand Paradise. And we continued to build on our success in Japan with new and expanded relationships with Pioneer Corporation, Hoshino Resorts, and ISAI. Our partners continue to play a critical role in our success. Once again in Q3, more than 20% of our net new ACV was sourced from partners, a testament to the strength of our ecosystem. In Q3, we brought on new Workday Wellness partners, including Chime, Spring Health, and Strata, to expand the value we deliver to our joint customers. We also expanded our partnership with Microsoft, to help joint customers securely manage their people and agents across both of our platforms. We're living in a new …
Novartis expanded its relationship with Workday, demonstrating the platform's value and stickiness in the pharmaceutical sector.
… to our customer highlights for the quarter. In Q3, we continued to grow across industries, segments, and geographies. In HCM, we added new customers, including Sunnybrook Health Sciences Center, Fuji Electric, and the Magnum Ice Cream Company. Four financials also performed well, driving strong full suite adoption. In fact, half of all net new global deals in Q3 included both HR and finance, with key wins such as Arden Health, Kelly Services, and Specialized. We also expanded with customers such as Common Spirit Health, Levi Strauss, and Novartis. And consistent with recent quarters, our customers' headcount levels continue to grow modestly. And our momentum isn't just from large enterprises. Workday Go is helping us drive strong new customer growth and continued ACV momentum in the medium enterprise. Just last week, we announced a major expansion of Workday Go, including global payroll, an expanded partner network, and a new AI-powered deployment agent that can cut implementation time by up to 25%. Customers of all sizes and industries tell us that an investment in Workday is an investment in their AI strategy. More than 75% of our core customers are using Workday Illuminate …
Databricks is positioned as a key partner for Workday's new Data Cloud offering, suggesting continued strategic alignment and potential joint customer wins.
… are powered by our unmatched HR and financial data and context, which is what makes them highly accurate, actionable, and trusted. And now, we have more than 150 customers, including Target, Accenture, and Netflix, using our agents and agent system of record in early access. At the same time, we're opening up our platform so customers and partners can create their own AI-powered apps and agents with Workday Build. And with Workday Data Cloud, along with our partners, including Databricks, Salesforce, Snowflake, and now Google Cloud, customers can unlock even more insight and value from their Workday data. We're also accelerating our innovation through strategic acquisitions. We just closed our acquisition of Sana, an AI native platform with an incredible team. They're going to help us completely reimagine our user experience for the age of AI. Our vision is very simple and straightforward. Make Workday the new front door to work by bringing together enterprise knowledge, AI agents, and all the HR and finance processes our customers run every day. This will make it easier than ever to find answers, take action, and learn right in Workday. Customer feedback on this vision has …
Workday is betting on AI-powered agents to replace traditional UI, positioning itself to be the 'new front door' to work for managing digital and human workers. — The shift to AI agents could redefine how enterprise software is used and create significant disruption for existing interfaces.
… quarter with wins at Genesis Energy, DBS Bank, and MGM Grand Paradise. And we continued to build on our success in Japan with new and expanded relationships with Pioneer Corporation, Hoshino Resorts, and ISAI. Our partners continue to play a critical role in our success. Once again in Q3, more than 20% of our net new ACV was sourced from partners, a testament to the strength of our ecosystem. In Q3, we brought on new Workday Wellness partners, including Chime, Spring Health, and Strata, to expand the value we deliver to our joint customers. We also expanded our partnership with Microsoft, to help joint customers securely manage their people and agents across both of our platforms. We're living in a new era of work, powered by AI and built on trust, and Workday is made for this moment. The momentum in our business and the energy I'm seeing across our customer community gives me a ton of confidence in what's ahead. A huge thank you to our global workmates our customers, and our partners for helping us deliver another solid quarter. As we head into Q4, we're focused on finishing strong and setting ourselves up for an even more impactful FY27. With that, I'll turn it over to Zane.
PipeDream's connectors to Asana and Jira will be integrated into Workday's agent ecosystem, potentially increasing the value and utility of these tools for mutual customers.
… alone. And adoption keeps growing. More than three-quarters of net new deals and 35% of customer expansions included one or more AI products. Among the standouts, Eversort delivered another record quarter. and XtendPro grew net new ACV by more than 50% year-over-year. Altogether, our AI products added more than 1.5 points of ARR growth this quarter. That doesn't include Paradox, which we closed in Q3 and is already off to a strong start. And with the rollout of FlexCredits early next year, we're making it even easier for our customers to adopt our AI and platform innovation. Our customer footprint spans every major industry. Tech and media and financial services, two of our billion-dollar industries, were standout performers in the quarter. And in Q3, healthcare became our sixth industry to exceed one billion in ARR, with strategic wins like Arden Health, Ascendian, and Northeast Georgia Medical Center. One of my favorites this quarter was a major win back at a large U.S. health insurer. They were a long-time Workday customer that moved to a competitor several years ago and quickly regretted it. Now, they're back with Workday in choosing our full suite with a 10-year …
The acquisition of Paradox is already adding over a point of CRPO growth and is expected to contribute significantly to Q4 subscription revenue growth, indicating that the combination is off to a strong start. — This indicates that the acquisitions are already flowing into the numbers, potentially boosting Workday's growth and putting pressure on HCM competitors.
Thanks. Just with Paradox, I know that SAP and other ERP and cell bases are using that. Is your vision that you can sell this anywhere, that you're going to be agnostic to whatever platform is running in the back? How are you thinking about that from a go-to-market?
Yeah, thanks, Brett. We are super excited about the go-to-market capabilities we have around Paradox. Number one, We can sell it back into our customers as an attachment to our already strong recruiting platform, including something like HiredScore. Now we have Paradox. We have the industry-leading AI recruiting platform out there today. At the same time, this is now a new product that is a land-only product for our sales force who can now go and sell Paradox not only on top of Workday or back into our install base, but also into our competitors' environment. In fact, a significant portion of their... existing customers aren't Workday today. And we're going to continue to leverage that go-to-market model so it gives us another land product without someone having to decide completely on Workday, HR, or finance. They can go just with Paradox. And I've seen that come up multiple times just in the first 60 days of us having this great asset.
The acquisition of Paradox is already adding over a point of CRPO growth and is expected to contribute significantly to Q4 subscription revenue growth, indicating that the combination is off to a strong start. — This indicates that the acquisitions are already flowing into the numbers, potentially boosting Workday's growth and putting pressure on HCM competitors.
There is some isolated impact on institutions relying heavily on federal grants, primarily in higher ed, despite overall public sector momentum. — This suggests that while the demand environment is strong, some segments are feeling pressure from government budget constraints, which could affect other providers targeting similar institutions.
… of our work with the DIA. This opens up an important long-term opportunity, both with the agency and across the intelligence community and Department of War. In SLED, we welcome new customers including the County of San Luis Obispo, the City of Concord, and Cleveland State University. and we expanded with Cornell University, which added both core financials and student. While we had a number of successes across our Fed, SLED, and healthcare teams, we also saw some isolated impacts within institutions that rely heavily on federal grants, primarily in higher ed. However, When they are ready to move forward, our win rates are very strong, and we're excited by the long-term opportunity ahead. Across all of these industries, we're delivering innovation that's changing how work gets done, and the market is taking notice. Gartner just named Workday a leader in three magic quadrants, including Cloud ERP for service-centric enterprises, Cloud HCM Suite for 1,000-plus employee enterprises, and the first-ever MQ for Cloud ERP Finance, giving us the highest placement for both ability to execute and completeness of vision. If you joined us at Workday Rising, you saw how our organic …
AI products added more than 1.5 points of ARR growth, with a notable $2.50 of AI product revenue (like HiredScore) for every $1 of recruiting revenue sold.
… Workday is an investment in their AI strategy. More than 75% of our core customers are using Workday Illuminate AI, driving well over 1 billion AI actions on the Workday platform this year alone. And adoption keeps growing. More than three-quarters of net new deals and 35% of customer expansions included one or more AI products. Among the standouts, Eversort delivered another record quarter. and XtendPro grew net new ACV by more than 50% year-over-year. Altogether, our AI products added more than 1.5 points of ARR growth this quarter. That doesn't include Paradox, which we closed in Q3 and is already off to a strong start. And with the rollout of FlexCredits early next year, we're making it even easier for our customers to adopt our AI and platform innovation. Our customer footprint spans every major industry. Tech and media and financial services, two of our billion-dollar industries, were standout performers in the quarter. And in Q3, healthcare became our sixth industry to exceed one billion in ARR, with strategic wins like Arden Health, Ascendian, and Northeast Georgia Medical Center. One of my favorites this quarter was a major win back at a large U.S. health insurer. They …