Workday Inc (0M18.L) Q3 2025 Earnings Report

Workday Inc delivered solid top-line growth in QQ3 2025 with Revenue of $2.16 billion, up 16.8% year over year and 3.6% quarter over quarter. The gross margin remained highly robust at 84.77%, supported by a large recurring software services mix, though operating profitability showed margin-constructive signals with an operating margin of 7.64% and net income of $193 million. Free cash flow reached $357 million, underpinning a strong cash generation profile and a net cash position after considering debt and investments. The company maintained a conservative balance sheet with substantial liquidity (cash and short-term investments totaling $7.16 billion) and a net debt position of approximately -$2.05 billion, signaling ample flexibility to fund product development, go-to-market initiatives, and potential M&A or strategic partnerships.

Key growth drivers include continued penetration of Workday’s Human Capital Management (HCM), Financial Management, and Planning Analytics suites, plus expanding cloud spend management and augmented analytics capabilities. The period reflects a favorable mix of high-margin revenue and ongoing investments in R&D and GTM initiatives. Investors should monitor revenue resilience, customer retention, and operating leverage as scale increases, along with any changes in discounting, deal duration, or mix between new logos and expansion bookings. Overall, QQ3 2025 positions Workday as a durable software-as-a-service player with attractive cash flow, though the valuation remains premium relative to broader software peers.