Summary
Workday, Inc. (WDAY) reported solid financial results for the quarter ended October 31, 2025, demonstrating continued revenue growth driven primarily by its subscription services. Total revenues increased by 13% year-over-year for both the three and nine-month periods, with subscription services growing at a robust 15% and 14% respectively. This growth was supported by strong expansion within existing customers and the addition of new clients. The company also highlighted a healthy gross revenue retention rate of 97%, indicating strong customer satisfaction and loyalty. Operationally, Workday saw significant improvements in profitability. GAAP operating income increased substantially, with operating margin expanding from 7.6% to 10.7% for the quarter and from 5.5% to 7.8% for the nine-month period, year-over-year. This improvement was attributed to revenue growth outpacing headcount growth and cost management initiatives, including those from a recent restructuring. The company also reported a strong increase in operating cash flow and free cash flow, underscoring its financial health and operational efficiency. Strategic investments in AI and recent acquisitions are positioning Workday for future growth, although the company continues to navigate macroeconomic uncertainties and potential impacts on sales cycles and customer spending.
Financial Highlights
50 data points| Revenue | $2.43B |
| R&D Expenses | $666.00M |
| Operating Expenses | $2.17B |
| Operating Income | $259.00M |
| Interest Expense | $29.00M |
| Net Income | $252.00M |
| EPS (Basic) | $0.95 |
| EPS (Diluted) | $0.94 |
| Shares Outstanding (Basic) | 265.87M |
| Shares Outstanding (Diluted) | 268.63M |
Key Highlights
- 1Total revenues grew 13% year-over-year for both the three and nine months ended October 31, 2025.
- 2Subscription services revenues showed strong performance, increasing 15% for the quarter and 14% for the nine-month period.
- 3Gross revenue retention rate remained high at 97%, indicating strong customer satisfaction.
- 4Significant improvement in GAAP operating income and operating margin, reflecting effective cost management and revenue growth.
- 5Operating cash flow increased by 23% and free cash flow by 34% for the nine months ended October 31, 2025, compared to the prior year.
- 6The company completed the acquisition of Paradox, Inc. in September 2025, integrating AI capabilities into its product portfolio, and subsequently announced the acquisition of Sana Labs AB in November 2025.
- 7Total subscription revenue backlog grew 17% to $26.0 billion as of October 31, 2025, providing strong visibility into future revenue.