WDAY Set to Report Q3 Results: Will Revenue Growth Boost Earnings?

Workday, Inc. WDAY is set to release third-quarter fiscal 2026 results on Nov. 25, after the closing bell. In the trailing four quarters, the company delivered an earnings surprise of 9.35%, while in the last reported quarter, it delivered an earnings surprise of 5.74%.

Based in Pleasanton, CA, WDAY is expected to have recorded higher revenues on the back of solid demand for its human capital management and financial management solutions across different end markets. A strong focus on AI integration across the portfolio is a positive.

Factors at Play

During the quarter, Workday acquired Floewise, an industry-leading AI agent builder. The acquisition will bolster Workday’s strong AI ecosystem and enable its customers to develop AI agents tailored to their unique requirements. It has also completed the acquisition of Paradox. Integration of Paradox’s AI agents that streamline the hiring process will significantly boost WDAY’s portfolio.

In the quarter under review, Workday formed a strategic partnership with Kinaxis Inc., a leader in AI-powered supply chain orchestration, to deliver a connected solution that integrates Kinaxis Maestro with Workday Adaptive Planning. This collaboration brings together an AI-enabled, agentic framework, giving organizations a unified view of their operational, financial and workforce data. 

Workday has also joined forces with Microsoft to help organizations securely manage their people and AI agents across their platforms. The company has also introduced a new customer AI model library for the Workday Contract Intelligence Agent. Integrated with more than 120 pre-built AI models, the solution empowers customers to conduct a quick analysis of contracts, flag risks and generate insights in HR, finance, IT and other sectors. Such strategic collaboration with industry leaders and innovative product launches are expected to have a positive impact on the third quarter revenues.

In the to be reported quarter, Elliott investment management L.P. has made an investment of more than $2 billion in Workday. The cash infusion is driving innovation across Workday’s portfolio. This is likely to have a favorable impact on third-quarter earnings.

Overall Expectations

Our estimate for Subscription Services revenues is pegged at $2.23 billion, suggesting 14.1% year-over-year growth. Our estimate for Professional Services revenues is pegged at $180.1 million.

For the October quarter, the Zacks Consensus Estimate for revenues is pegged at $2.41 billion, suggesting an increase from the year-ago quarter’s reported figure of $2.16 billion. The consensus estimate for adjusted earnings per share is pegged at $2.12, indicating an increase from $1.89 reported in the prior year.

Earnings Whispers for Workday Stock

Our proven model does not conclusively predict an earnings beat for Workday for the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, this is not the case here.

WDAY’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $2.12. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Workday currently carries a Zacks Rank 3.

Stocks to Consider

The Earnings ESP for Marvell Technology MRVL is +11.04% and carries a Zacks Rank of 3 currently. The company is scheduled to report quarterly numbers on Dec. 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Best Buy Company Inc. BBY has an Earnings ESP of +2.04% and carries a Zacks Rank of 3 currently. The company is scheduled to report quarterly numbers on Nov 25. 

The Campbell's Company CPB has an Earnings ESP of +0.28% and carries a Zacks Rank of 3 currently. The company is scheduled to report quarterly numbers on Dec. 2.

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This article originally published on Zacks Investment Research (zacks.com).

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