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Workday, Inc. 8-K Report, Financial Results (Nov 26, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed November 26, 2024
Period End
November 26, 2024
Security
WDAY
In the record · 2016–202610-K1110-Q328-K112

WDAY filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 112 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Aug ’18Aug ’18
  2. Leadership change8-K · Aug ’20Aug ’20
  3. Leadership change8-K · Dec ’22Dec ’22
  4. Material agreement8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 8-K filed November 26, 2024. Cited figures are marked; the original filing is the authoritative source.

Workday's fiscal 2025 third quarter (ended October 31, 2024) showed strong top-line growth and margin expansion.

Total revenues were $2.160 billiona, up 15.8% year over year, and subscription revenues were $1.959 billion, also up 15.8%. GAAP operating income rose to $165 million (7.6% of revenue) from $88 million (4.7%), while non-GAAP operating income reached $569 million (26.3% margin) versus $462 million (24.8%). GAAP diluted EPS was $0.72, compared with $0.43 a year earlier, and non-GAAP diluted EPS was $1.89, compared with $1.56.

Note that Workday changed its non-GAAP definitions starting fiscal 2025 to also exclude certain acquisition-related costs, realignment costs, and strategic investment gains and losses, and prior-period figures were recast only for strategic investments. Forward-looking guidance was updated. For the fourth quarter (ending January 31, 2025), management expects subscription revenue of $2.025 billionb (15% growth) and a non-GAAP operating margin of 25.0%.

For full-year fiscal 2025, it now guides to subscription revenue of $7.703 billionc (17% growth) and a non-GAAP operating margin of 25.5%. Cash flow was more mixed: quarterly operating cash flow fell to $406 million from $451 million, and free cash flow declined to $359 million from $391 million. Nine-month unearned revenue dropped to $3.447 billion current from $4.057 billion at fiscal year-end, a normal seasonal pattern, but investors should watch billings and cash conversion.

Capital allocation and balance sheet activity were significant. Workday repurchased about 0.6 million Class A shares for $157 milliond in the quarter, and nine-month repurchases totaled $597 million. Cash and marketable securities stood at $7.16 billion.

Goodwill rose to $3.479 billion from $2.846 billion following the Evisort acquisition, and acquisition-related spending was $824 million for the nine months. Taxes paid on net share settlement of equity awards rose sharply to $505 million for the nine months, which reduces cash available to shareholders. Management also highlighted product launches such as Workday Illuminate and new AI agents, plus analyst recognition in three Gartner Magic Quadrant reports.

02—Key points

Key Highlights

  1. Total revenue of $2.160B grew 15.8% YoY; subscription revenue of $1.959B also grew 15.8%.
  2. GAAP operating margin expanded to 7.6% from 4.7%; non-GAAP operating margin reached 26.3% vs. 24.8% a year ago.
  3. GAAP diluted EPS of $0.72 (vs. $0.43) and non-GAAP diluted EPS of $1.89 (vs. $1.56), with non-GAAP definitions broadened for fiscal 2025.
  4. FY2025 guidance raised/updated to subscription revenue of $7.703B (17% growth) and non-GAAP operating margin of 25.5%; Q4 guide is $2.025B subscription revenue (15% growth) at a 25.0% non-GAAP margin.
  5. Quarterly operating cash flow of $406M (down from $451M) and free cash flow of $359M (down from $391M) indicate softer cash generation in the quarter.
  6. Total subscription revenue backlog of $22.19B (up 20.3%) and 12-month backlog of $6.98B (up 15.3%) point to continued demand visibility.
  7. Capital deployment: $157M of Q3 buybacks, $824M of nine-month acquisition spend (including Evisort), and $7.16B in cash and marketable securities.

03—Questions

Frequently Asked Questions

  1. How did Workday perform in fiscal Q3 2025?

    Workday reported total revenues of $2.160 billion, up 15.8% year over year, with subscription revenue of $1.959 billion, also up 15.8%. GAAP operating income was $165 million (7.6% margin), up from $88 million, and non-GAAP operating income was $569 million (26.3% margin).

  2. What is Workday's updated full-year guidance?

    For fiscal 2025, Workday expects subscription revenue of $7.703 billion (17% growth) and a non-GAAP operating margin of 25.5%. For Q4 alone, it guides to $2.025 billion in subscription revenue (15% growth) and a 25.0% non-GAAP operating margin.

  3. Did Workday's non-GAAP definitions change?

    Yes. Beginning in fiscal 2025, Workday also excludes certain acquisition-related costs, realignment costs, and gains or losses on strategic investments from non-GAAP results. Prior-period figures were recast only for strategic investments, since no acquisition or realignment costs were incurred in the prior-year first three quarters, so comparisons with the earlier definitions should be made carefully.

  4. Is Workday generating cash effectively?

    Operating cash flow was $406 million in the quarter, down from $451 million, and free cash flow was $359 million, down from $391 million. For the nine months, operating cash flow was $1.349 billion and free cash flow was $1.166 billion. Unearned revenue declined seasonally, and taxes paid on net share settlement of equity awards reached $505 million for the nine months, which weighs on cash available to shareholders.

  5. What did Workday do with its capital in the quarter?

    Workday repurchased about 0.6 million Class A shares for $157 million in the quarter and $597 million over nine months. It closed the Evisort acquisition, which helped lift goodwill to $3.479 billion from $2.846 billion, and ended the quarter with $7.16 billion in cash and marketable securities.

04—Continue

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