"We've been delivering AI capabilities to our customers for nearly a decade... our customers trust Workday to help them navigate huge transformations." - Carl Eschenbach
— Carl Eschenbach
03Detailed Report
WDAY
Workday Inc
Period
Q1 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 5, 2026
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Executive Summary
In Q1 2025, Workday Inc (WDAY) reported solid financial performance across key metrics, notably a 19% year-over-year growth in subscription revenue, driven by strong demand in sectors like healthcare and public services. The company's 12-month subscription revenue backlog increased by 18%, indicating robust forward momentum. However, management expressed concerns regarding heightened scrutiny in deal processes, particularly in EMEA, and a slowdown in customer headcount growth impacting renewals. Despite these challenges, Workday's focus on innovation and strategic investments position the firm for long-term growth and margin expansion, underscoring a resilient business model despite macroeconomic pressures.
Key Performance Indicators
Revenue
Increasing
1.98B
QoQ: 3.81% | YoY: 17.67%
Gross Profit
Increasing
1.50B
75.43% margin
QoQ: 3.23% | YoY: 18.01%
Operating Income
Increasing
58.00M
QoQ: -12.41% | YoY: 392.93%
Net Income
Increasing
107.00M
QoQ: -91.00% | YoY: 78 576.47%
EPS
Increasing
0.40
QoQ: -91.15% | YoY: 79 900.00%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue Performance: Q1 2025 revenue reached $1.982 billion, a year-over-year increase of 18%. Subscription revenue, a key growth indicator, was $1.815 billion, reflecting a 19% year-over-year growth, benefiting from strong client retention metrics, with gross retention exceeding 95%.
Profitability: Workday reported a non-GAAP operating income of $515 million, yielding a non-GAAP operating margin of 25.9%. This was achieved through careful expense management amid revenue outperformance. The net income for the quarter was $107 million, translating to an EPS of $0.40.
Cash Flow: Operating cash flow was notably strong at $372 million, representing a 34% increase year-over-year as the company maintained discipline regarding capital expenditures of approximately $81 million.
Balance Sheet Health: Ending the quarter with $7.2 billion in cash and marketable securities positions Workday favorably, providing ample liquidity for strategic investments and acquisitions.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.98B
17.67%
3.81%
Gross Profit
1.50B
18.01%
3.23%
Operating Income
58.00M
392.93%
-12.41%
Net Income
107.00M
78 576.47%
-91.00%
EPS
0.40
79 900.00%
-91.15%
Key Financial Ratios
Gross Profit Margin
Excellent
75.40%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Weak
2.93%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Fair
5.40%
Net profit margin is moderate, room for improvement in cost management
Return on Assets
Weak
0.67%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
1.31%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
1.95
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
Moderate
0.41
Debt-to-equity indicates balanced capital structure with manageable debt
P/E Ratio
High Growth
151.21x
Very high P/E indicates aggressive growth expectations, higher risk
Price to Book
High Premium
7.93x
Very high premium suggests asset-light business model or lofty expectations
Management Insights Available for Members
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