Executive Summary
Workday reported robust Q2 2025 results, underscoring durable demand for its cloud-based enterprise applications. Revenue reached $2.085 billion, up 17.8% year over year, supported by strong gross margins (approximately 75.5%) and an improving operating envelope, culminating in a Q2 net income of $132 million and diluted EPS of $0.49–$0.50. Free cash flow totaled $516 million, aided by a healthy operating cash flow of $571 million, and the company closed the period with substantial liquidity (cash and short-term investments around $7.37 billion against about $3.36 billion in total debt). These dynamics reflect a subscription-led model with high retention characteristics and meaningful leverage in profitability as scale expands.
Key Performance Indicators
QoQ: 91.38% | YoY:484.49%
Key Insights
Revenue: $2.085B; YoY +17.83%; QoQ +5.20%. Gross Profit: $1.574B; YoY +19.12%; QoQ +5.28%; Gross Margin: 75.49%. Operating Income: $111.0M; YoY +484.49%; QoQ +91.38%; Operating Margin: 5.32%. Net Income: $132.0M; YoY +67.09%; QoQ +23.36%; Net Margin: 6.33%. EBITDA: $190.0M; EBITDA Margin: 9.11%. EPS (basic/diluted): $0.50 / $0.49; YoY EPS +66.67%; QoQ +25.00%. Free Cash Flow: $516.0M; FCF Margin ~24.8% (FCF/Revenues). Operating Cash Flow: $571.0M. Cash, Cash Equivalents & Investments: $7.373...
Financial Highlights
Revenue: $2.085B; YoY +17.83%; QoQ +5.20%. Gross Profit: $1.574B; YoY +19.12%; QoQ +5.28%; Gross Margin: 75.49%. Operating Income: $111.0M; YoY +484.49%; QoQ +91.38%; Operating Margin: 5.32%. Net Income: $132.0M; YoY +67.09%; QoQ +23.36%; Net Margin: 6.33%. EBITDA: $190.0M; EBITDA Margin: 9.11%. EPS (basic/diluted): $0.50 / $0.49; YoY EPS +66.67%; QoQ +25.00%. Free Cash Flow: $516.0M; FCF Margin ~24.8% (FCF/Revenues). Operating Cash Flow: $571.0M. Cash, Cash Equivalents & Investments: $7.373B (cash and short-term investments); Total Debt: $3.364B; Net Cash Position (approx.) favorable given cash reserves vs debt. DSO: 55.77 days; CCC: 40.45 days. Current ratio/QoQ: ~2.04. Share count: weighted average Shs Out 265.3M; Shs Out Diluted 267.9M. Dividend yield: 0%. Valuation signals indicate a premium SaaS multiple relative to broader industry benchmarks.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.09B |
17.83% |
5.20% |
| Gross Profit |
1.57B |
19.12% |
5.28% |
| Operating Income |
111.00M |
484.49% |
91.38% |
| Net Income |
132.00M |
67.09% |
23.36% |
| EPS |
0.50 |
66.67% |
25.00% |
Key Financial Ratios
operatingProfitMargin
5.32%
operatingCashFlowPerShare
$2.15
freeCashFlowPerShare
$1.95
priceEarningsRatio
114.79
Management Commentary
No earnings call transcript was provided in the data set. As a result, there are no management quotes or verbatim themes to reference. Based on the quarter’s financials, typical discussion themes from a QQ2 2025 call would likely include confirmation of durable ARR growth, progress on Workday Planning and Analytics monetization, customer retention and cross-sell momentum across HCM and financials, and commentary on go-to-market efficiency and cadence of investments in AI-enabled capabilities. Investors should seek transcripts for explicit guidance, commentary on bookings cadence, and any formal forward-looking targets.
Forward Guidance
The dataset does not include formal management guidance for QQ3/Q4 2025. Given Workday’s SaaS-centric model, continued ARR growth and high gross margins support a constructive long-term trajectory, contingent on the company’s ability to sustain renewal rates, expand product usage (Planning, Analytics, HCM, Spend Management), and manage operating expenses as a function of revenue scale. Monitoring points for investors include: net revenue retention, new logo acceleration, cross-sell penetration into existing customers, expansion of international deployments, and the pace of operating margin improvement driven by scale and optimization of SG&A. In a scenario where ARR growth remains in the mid-teens to low-20s percentage, margin expansion could follow with continued efficiency gains and mix improvement. Risks to watch include competitive pricing pressure, macro slowdown affecting discretionary enterprise spending, and potential increases in R&D/S&M investments to defend product leadership.