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Workday, Inc. WDAY reported strong fourth-quarter fiscal 2026 results, with both bottom and top lines beating the Zacks Consensus Estimate.
The company reported year-over-year revenue growth, driven by strong subscription demand, new customer wins and rising adoption of AI solutions. Management’s focus on innovation, product growth and international expansion remains positive.
Net income, on a GAAP basis, was $145 million or 55 cents per share compared with $94 million or 35 cents per share in the year-ago quarter. Healthy top-line growth boosted GAAP earnings during the quarter.
Non-GAAP net income per share was $2.47 compared with $1.92 in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 17 cents.
For fiscal 2026, Workday reported GAAP net income of $693 million or $2.59 per share compared with $526 million or $1.95 per share in fiscal 2025. Non-GAAP net income per share was $9.23 compared with $7.30 in fiscal 2025.
Workday, Inc. price-consensus-eps-surprise-chart | Workday, Inc. Quote
Net sales during the quarter were $2.53 billion, up from $2.21 billion in the year-ago quarter, backed by solid growth in the Subscription services revenues segment. The top line beat the Zacks Consensus Estimate of $2.52 billion. For fiscal 2026, revenues increased to $9.55 billion from $8.45 billion in fiscal 2025.
Subscription services revenues contributed $2.36 billion, up from $2.04 billion in the year-ago quarter. Net sales beat our estimate of $2.355 billion. Revenues from professional services were $172 million compared with $171 million in the prior-year quarter. The top line beat our estimate of $167.9 million.
At the end of fiscal 2026, the 12-month subscription revenue backlog was $8.83 billion, up 15.8%. The total subscription revenue backlog was $28.1 billion, up 12.2% year over year.
During the quarter, the company’s total costs and expenses totaled $2.36 billion compared with $2.14 billion in the year-ago quarter. Operating income during the quarter was $174 million compared with $75 million in the year-ago quarter, with respective margins of 6.9% and 3.4%. Non-GAAP operating income was $774 million, up from $584 million a year ago, with respective margins of 30.6% and 26.4%.
During the fourth quarter of fiscal 2026, the company generated $1.28 billion of cash from operating activities compared with $1.11 billion in the prior-year quarter. For fiscal 2026, the company generated $2.94 billion of cash from operating activities compared with $2.46 billion in fiscal 2025.
As of Jan. 31, 2026, it had cash and cash equivalents and marketable securities of $5.44 billion, with long-term debt of $2.99 billion compared with respective tallies of $8.02 billion and $2.98 million a year ago.
For the first quarter of fiscal 2027, Workday expects revenues to be $2.52 billion, indicating growth of 12% year over year. Subscription revenues are expected to be $2.34 billion, suggesting growth of 13% year over year. Management expects non-GAAP operating margin to be 30.5%.
For fiscal 2027, the company expects revenues to be between $10.64 billion and $10.66 billion, indicating 11-12% year-over-year growth. Subscription revenues are projected to be in the range of $9.93-$9.95 billion, indicating growth of 12-13% year over year. Non-GAAP operating margin is anticipated to be 30%. Capital expenditure is approximated to be around $270 million. Operating cash flow is forecasted to be $3.45 billion.
Workday currently carries a Zacks Rank #3 (Hold).
Analog Devices, Inc. ADI sports a Zacks Rank #1 (Strong Buy) at present. In the last reported quarter, it delivered an earnings surprise of 6.96%. You can see the complete list of today’s Zacks #1 Rank stocks here.
With rising AI and industrial demand, Analog Devices is strongly positioned to drive future growth from the semiconductor upcycle. Its expanding data-center power portfolio, resilient industrial exposure, and strong analog expertise help maintain solid margins and deliver scalable, high-performance solutions across key end markets.
Celestica Inc. CLS carries a Zacks Rank #2 (Buy) at present. In the last reported quarter, it delivered an earnings surprise of 8.62%.
Celestica is well-positioned to benefit from the rising demand for AI and cloud infrastructure. Its focus on higher-margin markets, diversified portfolio, and strong engineering capabilities support scalable production of complex electronic and data-center solutions. Its strong research and development capabilities enable it to produce high-volume electronics manufacturing across multiple industries.
Ubiquiti Inc. UI currently holds a Zacks Rank #2. It delivered an earnings surprise of 38.08% in the last reported quarter.
It offers a broad portfolio of networking solutions for enterprises and service providers. Its efficient and flexible business model supports healthy margins and scalable expansion. The company continues to invest in research and development to launch innovative networking products and advanced technologies. Strong channel management and a wide global distributor network improve demand visibility and inventory control.
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This article originally published on Zacks Investment Research (zacks.com).
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