Executive Summary
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.
Key Performance Indicators
QoQ: 48.65% | YoY:128.44%
Key Insights
Revenue: $2.16B, YoY +16.75%, QoQ +3.60%
Gross Profit: $1.831B, Gross Margin 84.77%, YoY +30.34%, QoQ +16.33%
Operating Income: $165.0M, Operating Margin 7.64%, YoY +128.44%, QoQ +48.65%
Net Income: $193.0M, Net Margin 8.93%, YoY +69.73%, QoQ +46.21%
Earnings Per Share (GAAP): $0.73, Diluted: $0.72, YoY +69.77%, QoQ +46.00%
Free Cash Flow: $357.0M; Operating Cash Flow: $406.0M; Capital Expenditures: $49.0M
Cash and Investments: $7.157B total (Cash $1.311B, Short-Term Investments $5.847B)
Total D...
Financial Highlights
Revenue: $2.16B, YoY +16.75%, QoQ +3.60%
Gross Profit: $1.831B, Gross Margin 84.77%, YoY +30.34%, QoQ +16.33%
Operating Income: $165.0M, Operating Margin 7.64%, YoY +128.44%, QoQ +48.65%
Net Income: $193.0M, Net Margin 8.93%, YoY +69.73%, QoQ +46.21%
Earnings Per Share (GAAP): $0.73, Diluted: $0.72, YoY +69.77%, QoQ +46.00%
Free Cash Flow: $357.0M; Operating Cash Flow: $406.0M; Capital Expenditures: $49.0M
Cash and Investments: $7.157B total (Cash $1.311B, Short-Term Investments $5.847B)
Total Debt: $3.363B; Net Debt: -$2.052B (net cash)
Current Ratio: 2.00; Quick Ratio: 2.00; Cash Ratio: 0.30
Weighted Average Shares Outstanding (GAAP): 265.4M; Diluted: 268.5M
Valuation Indicators (as provided): P/S ~29.23x, P/E ~81.5x, EV/Revenue ~192.83x, Price/Book ~7.30x
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.16B |
16.75% |
3.60% |
| Gross Profit |
1.83B |
30.34% |
16.33% |
| Operating Income |
165.00M |
128.44% |
48.65% |
| Net Income |
193.00M |
69.73% |
46.21% |
| EPS |
0.73 |
69.77% |
46.00% |
Key Financial Ratios
operatingProfitMargin
7.66%
operatingCashFlowPerShare
$1.53
freeCashFlowPerShare
$1.35
Management Commentary
No earnings call transcript data was provided in the input. As a result, thematic management insights or verbatim quotes could not be extracted and summarized from an earnings call.
Forward Guidance
No formal forward guidance was included in the provided transcript/data. Based on QQ3 2025 results, Workday demonstrates solid revenue growth and robust cash generation, suggesting a favorable trajectory for operating leverage as scale improves. Risks to outlook include macroeconomic softness affecting enterprise IT budgets, competitive pricing pressure in cloud ERP and HCM spaces, and potential delays in large-scale deals or longer renewal cycles. Key factors to monitor for the forward view: trajectory of annual recurring revenue growth, retention/Net Revenue Retention, expansion velocity within existing customers, R&D investment intensity versus margin progression, and any shifts in deal duration or mix between new logos and expansions.