Workday FY2025 Q3: $2.16 Billion Revenue Marks 15.8% Growth, Fueled by Subscription Success and AI Innovation
Workday has reported strong Q3 FY2025 results, with total revenues of $2.16 billion (+15.8% YoY) and subscription revenues of $1.959 billion (+15.8% YoY). Operating income rose to $165 million, and non-GAAP diluted EPS reached $1.89, showcasing profitability and momentum. Key drivers include AI-powered tools like Workday Illuminate, strategic acquisitions such as Evisort, and a growing customer base. Workday projects 17% subscription revenue growth for FY2025, reaffirming its leadership in HR and financial management technology.
PLEASANTON, Calif., November 26, 2024 – Workday, Inc. (NASDAQ: WDAY), a leading provider of solutions to help organizations manage their people and money, today announced results for the fiscal 2025 third quarter ended October 31, 2024.
Fiscal 2025 Third Quarter Results
•Total revenues were $2.160 billion, an increase of 15.8% from the third quarter of fiscal 2024. Subscription revenues were $1.959 billion, an increase of 15.8% from the same period last year.
•Operating income was $165 million, or 7.6% of revenues, compared to an operating income of $88 million, or 4.7% of revenues, in the same period last year. Non-GAAP operating income for the third quarter was $569 million, or 26.3% of revenues, compared to a non-GAAP operating income of $462 million, or 24.8% of revenues, in the same period last year.1
•Diluted net income per share was $0.72, compared to diluted net income per share of $0.43 in the third quarter of fiscal 2024. Non-GAAP diluted net income per share was $1.89, compared to non-GAAP diluted net income per share of $1.56 in the same period last year.1
•12-month subscription revenue backlog was $6.98 billion, up 15.3% from the same period last year. Total subscription revenue backlog was $22.19 billion, increasing 20.3% year-over-year.
•Operating cash flows were $406 million compared to $451 million in the prior year. Free cash flows were $359 million compared to $391 million in the prior year.1
•Workday repurchased approximately 0.6 million shares of Class A common stock for $157 million as part of its share repurchase programs.
•Cash, cash equivalents, and marketable securities were $7.16 billion as of October 31, 2024.
1See the section titled “About Non-GAAP Financial Measures” in the accompanying financial tables for further details.
Comments on the News
“Workday’s solid performance in Q3 reflects the trust our customers place in us across industries, the global momentum around our AI-driven innovations, and the strength of our partner ecosystem,” said Carl Eschenbach, CEO, Workday. “Organizations are increasingly consolidating on the Workday platform to reduce total cost of ownership, simplify their operations, and to unlock the power of our best-in-class AI solutions. Workday gives them the ultimate advantage – and that positions our business for long-term success.”
“In Q3, we once again made good progress across a number of our key growth areas,” said Zane Rowe, CFO, Workday. “Looking ahead, we expect fiscal 2025 subscription revenue of $7.703 billion, growth of 17%, and fiscal 2025 non-GAAP operating margin of 25.5%. We are focused on executing in our seasonally strongest quarter, as we lay the foundation for durable, profitable growth at scale.”
Recent Highlights
•Workday unveiled Workday Illuminate, the next generation of Workday AI, at its annual customer conference, Workday Rising.
•Workday introduced a set of new AI agents and a new Workday Assistant to streamline and simplify common HR and finance processes.
•Workday added several full suite customers for Workday Financial Management and Workday Human Capital Management (HCM), including CommonSpirit Health, Fitness and Lifestyle Group in Australia, New Jersey Institute of Technology, and The Department for Science, Innovation and Technology in the UK.
•Workday appointed Rob Enslin president, chief commercial officer.
•Workday announced updates to its partner ecosystem, including 12 new Industry Accelerators; Workday Wellness; AI momentum with Workday Ventures; and a partnership with Compa.
•Workday closed the acquisition of leading AI-native document intelligence platform, Evisort.
•Workday was named a Leader in the 2024 Gartner® Magic Quadrants™ for Cloud HCM Suites for 1,000+ Employee Enterprises1, Cloud ERP for Service-Centric Enterprises2, and Financial Planning Software3.
1Gartner Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises, Ranadip Chandra, Sam Grinter, Ron Hanscome, Chris Pang, Anand Chouksey, Josie Xing, Harsh Kundulli, David Bobo, Laura Gardiner, Hiten Sheth, Emi Chiba, Travis Wickesberg, and Michelle Shapiro, 23 October 2024.
2Gartner Magic Quadrant for Cloud ERP for Service-Centric Enterprises, Robert Anderson, Denis Torii, Sam Grinter, Naveen Mahendra, Tomas Kienast, Johan Jartelius, 4 November 2024.
3Gartner Magic Quadrant for Financial Planning Software, Regina Crowder, Vaughan Archer, Matthew Mowrey, Michelle Carlsen, 18 November 2024.
Financial Outlook
Workday is providing guidance for the fiscal 2025 fourth quarter ending January 31, 2025 as follows:
•Subscription revenue of $2.025 billion, representing growth of 15%
•Non-GAAP operating margin of 25.0%1
Workday is updating its guidance for the fiscal 2025 full year ending January 31, 2025 as follows:
•Subscription revenue of $7.703 billion, representing growth of 17%
•Non-GAAP operating margin of 25.5%1
1The Company has not provided a reconciliation of its forward outlook for non-GAAP operating margin with its forward-looking GAAP operating margin in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company is unable to predict with reasonable certainty the amount and timing of adjustments that are used to calculate this non-GAAP financial measure, particularly related to stock-based compensation and its related tax effects, acquisition-related costs, and realignment costs.
Earnings Call Details
Workday plans to host a conference call today to review its fiscal 2025 third quarter financial results and to discuss its financial outlook. The call is scheduled to begin at 1:30 p.m. PT/4:30 p.m. ET and can be accessed via webcast. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 90 days.
Workday uses the Workday Blog as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
About Workday
Workday is a leading enterprise platform that helps organizations manage their most important assets – their people and money. The Workday platform is built with AI at the core to help customers elevate people, supercharge work, and move their business forever forward. Workday is used by more than 10,500 organizations around the world and across industries – from medium-sized businesses to more than 60% of the Fortune 500. For more information about Workday, visit workday.com.
© 2024 Workday, Inc. All rights reserved. Evisort, Workday, and the Workday logo are registered trademarks of Workday, Inc. All other brand and product names are trademarks or registered trademarks of their respective holders.
Forward-Looking Statements
This press release contains forward-looking statements including, among other things, statements regarding Workday’s fourth quarter and full-year fiscal 2025 subscription revenue and non-GAAP operating margin, growth, momentum, and innovation. These forward-looking statements are based only on currently available information and our current beliefs, expectations, and assumptions. Because forward-looking statements relate to the future, they are subject to risks, uncertainties, assumptions, and changes in circumstances that are difficult to predict and many of which are outside of our control. If the risks materialize, assumptions prove incorrect, or we experience unexpected changes in circumstances, actual results could differ materially from the results implied by these forward-looking statements, and therefore you should not rely on any forward-looking statements. Risks include, but are not limited to: (i) breaches in our security measures or those of our third-party providers, unauthorized access to our customers’ or other users’ personal data, or disruptions in our data center or computing infrastructure operations; (ii) service outages, delays in the deployment of our applications, and the failure of our applications to perform properly; (iii) privacy concerns and evolving domestic or foreign laws and regulations; (iv) the impact of continuing global economic and geopolitical volatility on our business, as well as on our customers, prospects, partners, and service providers; (v) any loss of key employees or the inability to attract, train, and retain highly skilled employees; (vi) competitive factors, including pricing pressures, industry consolidation, entry of new competitors and new applications, advancements in technology, and marketing initiatives by our competitors; (vii) our reliance on our network of partners to drive additional growth of our revenues; (viii) the regulatory, economic, and political risks associated with our domestic and international operations; (ix) adoption of our applications and services by customers and individuals, including any new features, enhancements, and modifications, as well as our customers’ and users’ satisfaction with the deployment, training, and support services they receive; (x) the regulatory risks related to new and evolving technologies such as AI and our ability to realize a return on our development efforts; (xi) our ability to realize the expected business or financial benefits of any acquisitions of or investments in companies; (xii) delays or reductions in information technology spending; and (xiii) changes in sales, which may not be immediately reflected in our results due to our subscription model. Further information on these and additional risks that could affect Workday’s results is included in our filings with the Securities and Exchange Commission (“SEC”), including our most recent report on Form 10-Q or Form 10-K and other reports that we have filed and will file with the SEC from time to time, which could cause actual results to vary from expectations. Workday assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release, except as required by law.
Any unreleased services, features, or functions referenced in this document, our website, or other press releases or public statements that are not currently available are subject to change at Workday’s discretion and may not be delivered as planned or at all. Customers who purchase Workday services should make their purchase decisions based upon services, features, and functions that are currently available.
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