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
Revenue
Increasing
2.09B
QoQ: 5.20% | YoY: 17.83%
Gross Profit
Increasing
1.57B
75.49% margin
QoQ: 5.28% | YoY: 19.12%
Operating Income
Increasing
111.00M
QoQ: 91.38% | YoY: 484.49%
Net Income
Increasing
132.00M
QoQ: 23.36% | YoY: 67.09%
EPS
Increasing
0.50
QoQ: 25.00% | YoY: 66.67%
Revenue Trend
Margin Analysis
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
Gross Profit Margin
Excellent
75.50%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Fair
5.32%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Fair
6.33%
Net profit margin is moderate, room for improvement in cost management
Return on Assets
Weak
0.81%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
1.58%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
2.04
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
Moderate
0.40
Debt-to-equity indicates balanced capital structure with manageable debt
P/E Ratio
High Growth
114.79x
Very high P/E indicates aggressive growth expectations, higher risk
Price to Book
High Premium
7.26x
Very high premium suggests asset-light business model or lofty expectations
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