# EDGAR Filing Document

**Accession Number:** 0001327811
**File Stem:** 0001327811-23-000022
**Filing Date:** 2023-2
**Character Count:** 45385
**Document Hash:** 3d91eec4fd81d1ea49614dbb73e9bb11
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001327811-23-000022.hdr.sgml**: 20230227

**ACCESSION NUMBER**: 0001327811-23-000022

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230227

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230227

**DATE AS OF CHANGE**: 20230227

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Workday, Inc.
- **CENTRAL INDEX KEY:** 0001327811
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374]
- **IRS NUMBER:** 202480422
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0131

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-35680
- **FILM NUMBER:** 23674765

**BUSINESS ADDRESS:**
- **STREET 1:** 6110 STONERIDGE MALL ROAD
- **CITY:** PLEASANTON
- **STATE:** CA
- **ZIP:** 94588
- **BUSINESS PHONE:** 925-951-9000

**MAIL ADDRESS:**
- **STREET 1:** 6110 STONERIDGE MALL ROAD
- **CITY:** PLEASANTON
- **STATE:** CA
- **ZIP:** 94588

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Workday Inc
- **DATE OF NAME CHANGE:** 20050519

?xml version="1.0" ? wday-20230227

    

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**Date of Report (date of earliest event reported): February 27, 2023**

 

**WORKDAY, INC.**

**(Exact name of registrant as specified in its charter)**

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-35680** | **20-2480422** |
| **(State or other jurisdiction<br>of incorporation)** | **(Commission<br>File Number)** | **(I.R.S. Employer<br>Identification No.)** |

---

**6110 Stoneridge Mall Road**

**Pleasanton, California 94588**

**(Address of principal executive offices)**

**Registrant's telephone number, including area code: (925) 951-9000**

**N/A**

**(Former name or former address, if changed since last report)**

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| **Class A Common Stock, par value $0.001** | **WDAY** | **The Nasdaq Stock Market LLC** |
|  |  | **(Nasdaq Global Select Market)** |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

    

------

**Section 2 – Financial Information**

***Item 2.02 – Results of Operations and Financial Condition***

On February 27, 2023, Workday, Inc. ("Workday") issued a press release announcing its results for its fiscal fourth quarter and full year ended January 31, 2023. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.

Workday uses its blogs.workday.com website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

The information in this current report on Form 8-K and the exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

**Section 9 – Financial Statements and Exhibits**

***Item 9.01 – Financial Statements and Exhibits***

(d) Exhibits

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 99.1 | <u>[Press release entitled "Workday Announces Fiscal 2023 Fourth Quarter and Full Year Financial Results" dated February 27, 2023](wday-01312023x991.htm)</u> |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |

---

------

**Signature**

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 27, 2023

---

| |
|:---|
| **Workday, Inc.** |
| /s/ Barbara Larson |
| Barbara Larson<br>Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

**Workday Announces Fiscal 2023 Fourth Quarter and Full Year Financial Results**

*Fiscal Fourth Quarter Total Revenues of $1.65 Billion, Up 19.6% Year Over Year*

*Subscription Revenues of $1.50 Billion, Up 21.7% Year Over Year*

*24-Month Subscription Revenue Backlog of $9.68 Billion, Up 21.3% Year Over Year*

*Total Subscription Revenue Backlog of $16.45 Billion, Up 28.4% Year Over Year*

*Fiscal Year 2023 Total Revenues of $6.22 Billion, Up 21.0% Year Over Year*

*Subscription Revenues of $5.57 Billion, Up 22.5% Year Over Year*

*Operating Cash Flows of $1.66 Billion, Up 0.4% Year Over Year*

**PLEASANTON, Calif.,** February 27, 2023 -- <u>Workday, Inc.</u> (NASDAQ: WDAY), a leader in enterprise cloud applications for <u>finance</u> and <u>human resources</u>, today announced results for the fiscal 2023 fourth quarter and full year ended January 31, 2023.

**Fiscal 2023 Fourth Quarter Results**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total revenues were $1.65 billion, an increase of 19.6% from the fourth quarter of fiscal 2022. Subscription revenues were $1.50 billion, an increase of 21.7% from the same period last year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Operating loss was $89.0 million, or negative 5.4% of revenues, compared to an operating loss of $101.0 million, or negative 7.3% of revenues, in the same period last year. Non-GAAP operating income for the fourth quarter was $305.3 million, or 18.5% of revenues, compared to a non-GAAP operating income of $237.1 million, or 17.2% of revenues, in the same period last year.<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Basic and diluted net loss per share was $0.49, compared to basic and diluted net loss per share of $0.29 in the fourth quarter of fiscal 2022. Non-GAAP basic and diluted net income per share was $1.00 and $0.99, respectively, compared to non-GAAP basic and diluted net income per share of $0.82 and $0.78, respectively, in the same period last year.<sup>2</sup>

**Fiscal Year 2023 Results**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total revenues were $6.22 billion, an increase of 21.0% from fiscal 2022. Subscription revenues were $5.57 billion, an increase of 22.5% from the prior year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Operating loss was $222.2 million, or negative 3.6% of revenues, compared to an operating loss of $116.5 million, or negative 2.3% of revenues, in fiscal 2022. Non-GAAP operating income was $1.21 billion, or 19.5% of revenues, compared to a non-GAAP operating income of $1.15 billion, or 22.4% of revenues, in the prior year.<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Basic and diluted net loss per share was $1.44, compared to basic and diluted net income per share of $0.12 in fiscal 2022. Non-GAAP basic and diluted net income per share was $3.73 and $3.64, respectively, compared to non-GAAP basic and diluted net income per share of $4.20 and $3.99, respectively, in the prior year.<sup>2</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Operating cash flows were $1.66 billion compared to $1.65 billion in the prior year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cash, cash equivalents, and marketable securities were $6.12 billion as of January 31, 2023.

**Comments on the News**

"We closed our fiscal year with another solid quarter, further reinforcing the strength of our value proposition as more organizations continue to select Workday to help manage their people and finances," said Aneel Bhusri, co-founder, co-CEO, and chair, Workday. "Despite the unpredictable environment, we remain well-positioned to drive the future of work for our more than 10,000 customers thanks to our amazing employees and unique approach to embedding artificial intelligence and machine learning into the very core of our platform."

"We have a clear strategy in place heading into fiscal 2024, and our land opportunity with net new finance and HR customers is wide open as we continue to gain ground with both large and medium-sized enterprises across the globe," said Carl Eschenbach, co-CEO, Workday. "We are doubling down in strategic growth areas by investing in our customer base, focusing on key industries, evolving and investing in our partner ecosystem, and relentlessly focusing on innovation. I am excited for the year ahead as we work together to execute on Workday's path to becoming one of the largest and most profitable software companies in the world."

------

"Our solid fourth quarter and full-year fiscal 2023 results underscore the durable demand for our solutions, as organizations of all sizes continue to prioritize finance and HR modernization," said Barbara Larson, chief financial officer, Workday. "We are maintaining the midpoint of our preliminary fiscal year 2024 subscription revenue guidance while increasing our fiscal 2024 non-GAAP operating margin outlook to the high end. We now expect subscription revenue of $6.525 billion to $6.575 billion, growth of 17% to 18%, and non-GAAP operating margin of 23.0%, which includes a 150 basis point increase resulting from a change in our useful life policy for servers and network equipment. Our outlook reflects our strong fourth quarter execution and the scale of our model, balanced with our expectation that the environment will remain uncertain in the near-term."<sup>1</sup>

**Recent Highlights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Workday <u>announced</u> the appointment of Carl Eschenbach to co-CEO to serve alongside Aneel Bhusri through January 2024, at which time Carl is expected to assume sole CEO responsibilities and Aneel will assume a full-time role as executive chair and will remain as chair of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Workday appointed Sayan Chakraborty to co-president, Robynne Sisco to vice chair, and elected Mark Hawkins as an independent director of its Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Workday now serves the financial management and HR needs of more than 10,000 customers globally, which includes over 50% of the *Fortune* 500 and more than 25% of the Global 2000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Workday's continued industry focus continues to pay off with <u>growing momentum</u> within the retail industry, with more than 50% of the retail organizations in the *Fortune* 500 having selected Workday, and able to benefit from the newly introduced AI and ML-based demand forecasting, which helps drive greater accuracy and cost effectiveness in the retail space.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Workday <u>announced</u> a $250 million expansion of its Workday Ventures fund to power innovation in AI and ML.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Workday <u>released</u> its first-ever commercial at the Big Game on Sunday, February 12, focused on what it means to be a "rock star" in the workplace.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Workday was <u>listed</u> on JUST Capital's 2023 JUST 100, which ranks America's largest publicly traded companies on the most important issues as determined by the American public, including the environment, how companies treat employees and customers, and how they support their communities.

**Earnings Call Details**

Workday plans to host a conference call today to review its fiscal 2023 fourth quarter and full year 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 <u>webcast</u>. 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 <u>Workday Blog</u> as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

<sup>1</sup>Non-GAAP operating income and non-GAAP operating margin exclude share-based compensation expenses, employer payroll tax-related items on employee stock transactions, and amortization expense for acquisition-related intangible assets. See the section titled "About Non-GAAP Financial Measures" in the accompanying financial tables for further details.

<sup>2</sup>Non-GAAP net income per share excludes share-based compensation expenses, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, and income tax effects. See the section titled "About Non-GAAP Financial Measures" in the accompanying financial tables for further details.

**About Workday**

<u>Workday</u> is a leading provider of enterprise cloud applications for <u>finance</u> and <u>human resources</u>, helping customers adapt and thrive in a changing world. Workday applications for financial management, human resources, planning, spend management, and analytics are built with artificial intelligence and machine learning at the core to help organizations around the world embrace the future of work. Workday is used by more than 10,000 organizations around the world and across industries – from medium-sized businesses to more than 50% of the *Fortune* 500. For more information about Workday, visit <u>workday.com</u>.

<br>© 2023 Workday, Inc. All rights reserved. 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.

------

**Use of Non-GAAP Financial Measures**

Reconciliations of non-GAAP financial measures to Workday's financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled "About Non-GAAP Financial Measures." The 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, without unreasonable efforts, to quantify share-based compensation expense, which is excluded from our non-GAAP operating margin, as it requires additional inputs such as the number of shares granted and market prices that are not ascertainable.

**Forward-Looking Statements**

This press release contains forward-looking statements including, among other things, statements regarding the timing and impact of Workday's future leadership structure, Workday's full-year fiscal 2024 subscription revenues and non-GAAP operating margin, growth, innovation, opportunities, demand, strategy, and investments. 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) the impact of recent macroeconomic events, including inflation and rising interest rates, on our business, as well as our customers, prospects, partners, and service providers; (iv) our ability to manage our growth effectively; (v) competitive factors, including pricing pressures, industry consolidation, entry of new competitors and new applications, advancements in technology, and marketing initiatives by our competitors; (vi) the development of the market for enterprise cloud applications and services; (vii) acceptance of our applications and services by customers and individuals, including any new features, enhancements, and modifications, as well as the acceptance of any underlying technology such as machine learning and artificial intelligence; (viii) our ability to implement our plans, objectives, and other expectations with respect to any of our acquired companies; (ix) adverse changes in general economic or market conditions; (x) the regulatory, economic, and political risks associated with our domestic and international operations; (xi) the regulatory risks related to new and evolving technologies such as machine learning and artificial intelligence; (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 Form 10-K for the fiscal year ended January 31, 2023, 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.

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.

------

**Workday, Inc.**

**Condensed Consolidated Balance Sheets**

(in thousands)

(unaudited)

---

| | | |
|:---|:---|:---|
| | **January 31, 2023** | **January 31, 2022** |
| **Assets** | | |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1886311 | $1534273 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketable securities | 4235083 | 2109888 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade and other receivables, net | 1570086 | 1242545 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred costs | 191054 | 152957 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 225690 | 174402 |
| Total current assets | 8108224 | 5214065 |
| Property and equipment, net | 1201254 | 1123075 |
| Operating lease right-of-use assets | 249278 | 247808 |
| Deferred costs, noncurrent | 420988 | 341259 |
| Acquisition-related intangible assets, net | 305465 | 391002 |
| Goodwill | 2840044 | 2840044 |
| Other assets | 360985 | 341252 |
| **Total assets** | $13486238 | $10498505 |
| **Liabilities and stockholders' equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $153751 | $55487 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 260131 | 195590 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | 563548 | 402885 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unearned revenue | 3559393 | 3110947 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | 91343 | 80503 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt, current |  | 1222443 |
| Total current liabilities | 4628166 | 5067855 |
| Debt, noncurrent | 2975934 | 617354 |
| Unearned revenue, noncurrent | 74540 | 71533 |
| Operating lease liabilities, noncurrent | 181799 | 182456 |
| Other liabilities | 40231 | 24225 |
| Total liabilities | 7900670 | 5963423 |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock | 259 | 251 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 8828639 | 7284174 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury stock | (185047) | (12467) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | 53051 | 7709 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (3111334) | (2744585) |
| Total stockholders' equity | 5585568 | 4535082 |
| **Total liabilities and stockholders' equity** | $13486238 | $10498505 |

---

------

**Workday, Inc.**

**Condensed Consolidated Statements of Operations**

(in thousands, except per share data)

(unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended January 31,** | **Three Months Ended January 31,** | **Year Ended January 31,** | **Year Ended January 31,** |
| | **2023** | **2022** | **2023** | **2022** |
| **Revenues:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subscription services | $1495402 | $1229173 | $5567206 | $4546313 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional services | 150858 | 146968 | 648612 | 592485 |
| Total revenues | 1646260 | 1376141 | 6215818 | 5138798 |
| **Costs and expenses** <sup>(1)</sup>**:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Costs of subscription services | 274146 | 220208 | 1011447 | 795854 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Costs of professional services | 179333 | 169589 | 703731 | 632241 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Product development | 615589 | 537738 | 2270660 | 1879220 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 489895 | 410947 | 1848093 | 1461921 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 176255 | 138621 | 604087 | 486012 |
| Total costs and expenses | 1735218 | 1477103 | 6438018 | 5255248 |
| Operating income (loss) | (88958) | (100962) | (222200) | (116450) |
| Other income (expense), net | 11039 | 17141 | (37750) | 132632 |
| Income (loss) before provision for (benefit from) income taxes | (77919) | (83821) | (259950) | 16182 |
| Provision for (benefit from) income taxes | 47778 | (10568) | 106799 | (13191) |
| **Net income (loss)** | $(125697) | $(73253) | $(366749) | $29373 |
| Net income (loss) per share, basic | $(0.49) | $(0.29) | $(1.44) | $0.12 |
| Net income (loss) per share, diluted | $(0.49) | $(0.29) | $(1.44) | $0.12 |
| Weighted-average shares used to compute net income (loss) per share, basic | 257322 | 250043 | 254819 | 247249 |
| Weighted-average shares used to compute net income (loss) per share, diluted | 257322 | 250043 | 254819 | 254032 |

---

&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | |
|:---|:---|:---|:---|:---|
| (1) Costs and expenses include share-based compensation expenses as follows: | (1) Costs and expenses include share-based compensation expenses as follows: | (1) Costs and expenses include share-based compensation expenses as follows: |  |  |
|  | **Three Months Ended January 31,** | **Three Months Ended January 31,** | **Year Ended January 31,** | **Year Ended January 31,** |
|  | **2023** | **2022** | **2023** | **2022** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Costs of subscription services | $29201 | $23235 | $106119 | $85713 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Costs of professional services | 30217 | 30112 | 110216 | 113443 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Product development | 169209 | 147790 | 618973 | 543135 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 69015 | 57571 | 249248 | 215692 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 63271 | 43225 | 210066 | 154422 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total share-based compensation expenses | $360913 | $301933 | $1294622 | $1112405 |

---

------

**Workday, Inc.**

**Condensed Consolidated Statements of Cash Flows**

(in thousands)

(unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended January 31,** | **Three Months Ended January 31,** | **Year Ended January 31,** | **Year Ended January 31,** |
| | **2023** | **2022** | **2023** | **2022** |
| **Cash flows from operating activities:** |  |  |  |  |
| Net income (loss) | $(125697) | $(73253) | $(366749) | $29373 |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 89962 | 88750 | 364357 | 343723 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation expenses | 360913 | 292235 | 1294622 | 1100584 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred costs | 48096 | 37953 | 174611 | 138797 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization and writeoff of debt discount and issuance costs | 955 | 997 | 6955 | 3988 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash lease expense | 23432 | 21529 | 91750 | 86235 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gains) losses on investments | 10034 | (20366) | 30780 | (145845) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 3272 | (6997) | 12645 | (14213) |
| Changes in operating assets and liabilities, net of business combinations: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade and other receivables, net | (518608) | (379190) | (318600) | (207933) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred costs | (129414) | (108695) | (292437) | (238453) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 17377 | (14106) | (14070) | (35153) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 64889 | 13531 | 85773 | 9414 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 94712 | 74780 | 135965 | 50671 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unearned revenue | 754529 | 687981 | 451593 | 529516 |
| Net cash provided by (used in) operating activities | 694452 | 615149 | 1657195 | 1650704 |
| **Cash flows from investing activities:** |  |  |  |  |
| Purchases of marketable securities | (1531956) | (541689) | (7182961) | (2858729) |
| Maturities of marketable securities | 1181324 | 500625 | 4948833 | 2804103 |
| Sales of marketable securities | 50969 | 171730 | 104324 | 199016 |
| Owned real estate projects | (3790) | (3) | (4236) | (171501) |
| Capital expenditures, excluding owned real estate projects | (73539) | (73355) | (359552) | (264267) |
| Business combinations, net of cash acquired |  | (450334) |  | (1190199) |
| Purchase of other intangible assets |  | (8007) | (700) | (8007) |
| Purchases of non-marketable equity and other investments | (3000) | (38485) | (23173) | (123011) |
| Sales and maturities of non-marketable equity and other investments | (135) |  | 11539 | 5169 |
| Other |  | (1) |  |  |
| Net cash provided by (used in) investing activities | (380127) | (439519) | (2505926) | (1607426) |
| **Cash flows from financing activities:** |  |  |  |  |
| Proceeds from issuance of debt, net of debt discount |  |  | 2978077 |  |
| Repayments and extinguishment of debt |  | (9409) | (1843605) | (37614) |
| Payments for debt issuance costs |  |  | (7220) |  |
| Repurchases of common stock | (74666) |  | (74666) |  |
| Proceeds from issuance of common stock from employee equity plans, net of taxes paid for shares withheld | 66972 | 71947 | 151974 | 148328 |
| Other | (201) | (54) | (739) | (463) |
| Net cash provided by (used in) financing activities | (7895) | 62484 | 1203821 | 110251 |
| Effect of exchange rate changes | 1155 | (620) | (595) | (705) |
| **Net increase (decrease) in cash, cash equivalents, and restricted cash** | 307585 | 237494 | 354495 | 152824 |
| **Cash, cash equivalents, and restricted cash at the beginning of period** | 1587655 | 1303251 | 1540745 | 1387921 |
| **Cash, cash equivalents, and restricted cash at the end of period** | $1895240 | $1540745 | $1895240 | $1540745 |

---

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**Workday, Inc.**

**Reconciliation of GAAP to Non-GAAP Data**

Three Months Ended January 31, 2023

(in thousands, except percentages and per share data)

(unaudited)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **GAAP** | **Share-Based Compensation Expenses** | **Other Operating Expenses** <sup>(2)</sup> | **Income Tax and Dilution Effects** <sup>(3)</sup> | **Non-GAAP** |
| Costs and expenses: |  |  |  |  |  |
| Costs of subscription services | $274146 | $(29201) | $(14747) | $— | $230198 |
| Costs of professional services | 179333 | (30217) | (1381) |  | 147735 |
| Product development | 615589 | (169209) | (6016) |  | 440364 |
| Sales and marketing | 489895 | (69015) | (9850) |  | 411030 |
| General and administrative | 176255 | (63271) | (1343) |  | 111641 |
| Operating income (loss) | (88958) | 360913 | 33337 |  | 305292 |
| Operating margin | *(5.4) %* | *21.9 %* | *2.0 %* | *— %* | *18.5 %* |
| Other income (expense), net | 11039 |  |  |  | 11039 |
| Income (loss) before provision for (benefit from) income taxes | (77919) | 360913 | 33337 |  | 316331 |
| Provision for (benefit from) income taxes | 47778 |  |  | 12325 | 60103 |
| Net income (loss) | $(125697) | $360913 | $33337 | $(12325) | $256228 |
| Net income (loss) per share, basic <sup>(1)</sup> | $(0.49) | $1.40 | $0.13 | $(0.04) | $1.00 |
| Net income (loss) per share, diluted <sup>(1)</sup> | $(0.49) | $1.40 | $0.13 | $(0.05) | $0.99 |

---

(1)GAAP net loss per share is calculated based upon 257,322 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 257,322 basic and 258,367 diluted weighted-average shares of common stock.

(2)Other operating expenses include amortization of acquisition-related intangible assets of $21.2 million and employer payroll tax-related items on employee stock transactions of $12.1 million.

(3)We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2023, the non-GAAP tax rate was 19%.

------

**Workday, Inc.**

**Reconciliation of GAAP to Non-GAAP Data**

Three Months Ended January 31, 2022

(in thousands, except percentages and per share data)

(unaudited)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **GAAP** | **Share-Based Compensation Expenses** | **Other Operating Expenses** <sup>(2)</sup> | **Income Tax and Dilution Effects** <sup>(3)</sup> | **Non-GAAP** |
| Costs and expenses: |  |  |  |  |  |
| Costs of subscription services | $220208 | $(23235) | $(14356) | $— | $182617 |
| Costs of professional services | 169589 | (30112) | (1970) |  | 137507 |
| Product development | 537738 | (147790) | (7362) |  | 382586 |
| Sales and marketing | 410947 | (57571) | (10945) |  | 342431 |
| General and administrative | 138621 | (43225) | (1534) |  | 93862 |
| Operating income (loss) | (100962) | 301933 | 36167 |  | 237138 |
| Operating margin | *(7.3) %* | *21.9 %* | *2.6 %* | *— %* | *17.2 %* |
| Other income (expense), net | 17141 |  |  |  | 17141 |
| Income (loss) before provision for (benefit from) income taxes | (83821) | 301933 | 36167 |  | 254279 |
| Provision for (benefit from) income taxes | (10568) |  |  | 58881 | 48313 |
| Net income (loss) | $(73253) | $301933 | $36167 | $(58881) | $205966 |
| Net income (loss) per share, basic <sup>(1)</sup> | $(0.29) | $1.21 | $0.14 | $(0.24) | $0.82 |
| Net income (loss) per share, diluted <sup>(1)</sup> | $(0.29) | $1.21 | $0.14 | $(0.28) | $0.78 |

---

(1)GAAP net loss per share is calculated based upon 250,043 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 250,043 basic and 264,581 diluted weighted-average shares of common stock. The numerator used to compute non-GAAP diluted net income per share was increased by $1.3 million for after-tax interest expense on our convertible senior notes in accordance with the if-converted method.

(2)Other operating expenses include amortization of acquisition-related intangible assets of $20.7 million and employer payroll tax-related items on employee stock transactions of $15.5 million.

(3)We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2022, the non-GAAP tax rate was 19%. Included in the per share amount is a dilution impact of $0.04 from the conversion of GAAP diluted net loss per share to non-GAAP diluted net income per share.

------

**Workday, Inc.**

**Reconciliation of GAAP to Non-GAAP Data**

Year Ended January 31, 2023

(in thousands, except percentages and per share data)

(unaudited)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **GAAP** | **Share-Based Compensation Expenses** | **Other Operating Expenses** <sup>(2)</sup> | **Income Tax and Dilution Effects** <sup>(3)</sup> | **Non-GAAP** |
| Costs and expenses: |  |  |  |  |  |
| Costs of subscription services | $1011447 | $(106119) | $(59769) | $— | $845559 |
| Costs of professional services | 703731 | (110216) | (6678) |  | 586837 |
| Product development | 2270660 | (618973) | (23162) |  | 1628525 |
| Sales and marketing | 1848093 | (249248) | (42490) |  | 1556355 |
| General and administrative | 604087 | (210066) | (5115) |  | 388906 |
| Operating income (loss) | (222200) | 1294622 | 137214 |  | 1209636 |
| Operating margin | *(3.6) %* | *20.8 %* | *2.3 %* | *— %* | *19.5 %* |
| Other income (expense), net | (37750) |  |  |  | (37750) |
| Income (loss) before provision for (benefit from) income taxes | (259950) | 1294622 | 137214 |  | 1171886 |
| Provision for (benefit from) income taxes | 106799 |  |  | 115859 | 222658 |
| Net income (loss) | $(366749) | $1294622 | $137214 | $(115859) | $949228 |
| Net income (loss) per share, basic <sup>(1)</sup> | $(1.44) | $5.08 | $0.54 | $(0.45) | $3.73 |
| Net income (loss) per share, diluted <sup>(1)</sup> | $(1.44) | $5.08 | $0.54 | $(0.54) | $3.64 |

---

(1)GAAP net loss per share is calculated based upon 254,819 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 254,819 basic and 261,641 diluted weighted-average shares of common stock. The numerator used to compute non-GAAP diluted net income per share was increased by $3.5 million for after-tax interest expense on our convertible senior notes in accordance with the if-converted method.

(2)Other operating expenses include amortization of acquisition-related intangible assets of $85.5 million and employer payroll tax-related items on employee stock transactions of $51.7 million.

(3)We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2023, the non-GAAP tax rate was 19%. Included in the per share amount is a dilution impact of $0.09 from the conversion of GAAP diluted net loss per share to non-GAAP diluted net income per share.

------

**Workday, Inc.**

**Reconciliation of GAAP to Non-GAAP Data**

Year Ended January 31, 2022

(in thousands, except percentages and per share data)

(unaudited)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **GAAP** | **Share-Based Compensation Expenses** | **Other Operating Expenses** <sup>(2)</sup> | **Income Tax and Dilution Effects** <sup>(3)</sup> | **Non-GAAP** |
| Costs and expenses: |  |  |  |  |  |
| Costs of subscription services | $795854 | $(85713) | $(54551) | $— | $655590 |
| Costs of professional services | 632241 | (113443) | (11181) |  | 507617 |
| Product development | 1879220 | (543135) | (32935) |  | 1303150 |
| Sales and marketing | 1461921 | (215692) | (47457) |  | 1198772 |
| General and administrative | 486012 | (154422) | (7625) |  | 323965 |
| Operating income (loss) | (116450) | 1112405 | 153749 |  | 1149704 |
| Operating margin | *(2.3) %* | *21.6 %* | *3.1 %* | *— %* | *22.4 %* |
| Other income (expense), net | 132632 |  |  |  | 132632 |
| Income (loss) before provision for (benefit from) income taxes | 16182 | 1112405 | 153749 |  | 1282336 |
| Provision for (benefit from) income taxes | (13191) |  |  | 256835 | 243644 |
| Net income (loss) | $29373 | $1112405 | $153749 | $(256835) | $1038692 |
| Net income (loss) per share, basic <sup>(1)</sup> | $0.12 | $4.50 | $0.62 | $(1.04) | $4.20 |
| Net income (loss) per share, diluted <sup>(1)</sup> | $0.12 | $4.38 | $0.61 | $(1.12) | $3.99 |

---

(1)GAAP net income per share is calculated based upon 247,249 basic and 254,032 diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 247,249 basic and 261,849 diluted weighted-average shares of common stock. The numerator used to compute non-GAAP diluted net income per share was increased by $5.2 million for after-tax interest expense on our convertible senior notes in accordance with the if-converted method.

(2)Other operating expenses include amortization of acquisition-related intangible assets of $78.1 million and employer payroll tax-related items on employee stock transactions of $75.6 million.

(3)We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2022, the non-GAAP tax rate was 19%. Included in the per share amount is a dilution impact of $0.11 from the conversion of GAAP diluted net income per share to non-GAAP diluted net income per share.

------

**About Non-GAAP Financial Measures**

To provide investors and others with additional information regarding Workday's results, we have disclosed the following non-GAAP financial measures: non-GAAP operating income (loss), non-GAAP operating margin, and non-GAAP net income (loss) per share. Workday has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. Non-GAAP operating income (loss) and non-GAAP operating margin differ from GAAP in that they exclude share-based compensation expenses, employer payroll tax-related items on employee stock transactions, and amortization expense for acquisition-related intangible assets. Non-GAAP net income (loss) per share differs from GAAP in that it excludes share-based compensation expenses, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, and income tax effects.

Workday's management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Workday's financial performance. Management believes these non-GAAP financial measures reflect Workday's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in Workday's business. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Workday's operating results and prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.

Management believes excluding the following items from the GAAP Condensed Consolidated Statements of Operations is useful to investors and others in assessing Workday's operating performance due to the following factors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Share-based compensation expenses.* Although share-based compensation is an important aspect of the compensation of our employees and executives, management believes it is useful to exclude share-based compensation expenses to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies. Share-based compensation expenses are determined using a number of factors, including our stock price, volatility, and forfeiture rates, that are beyond our control and generally unrelated to operational decisions and performance in any particular period. Further, share-based compensation expenses are not reflective of the value ultimately received by the grant recipients.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• Other operating expenses*. Other operating expenses includes employer payroll tax-related items on employee stock transactions and amortization of acquisition-related intangible assets. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of its related amortization can vary significantly and are unique to each acquisition and thus we do not believe it is reflective of ongoing operations. Although we exclude the amortization of acquisition-related intangible assets from these non-GAAP measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Income tax effects.* We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. In projecting this long-term non-GAAP tax rate, we utilize a three-year financial projection that excludes the direct impact of share-based compensation and related employer payroll taxes, amortization of acquisition-related intangible assets, and amortization of debt discount and issuance costs. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate. For fiscal 2024 and 2023, we determined the projected non-GAAP tax rate to be 19%, which reflects currently available information, as well as other factors and assumptions. We will periodically re-evaluate this tax rate, as necessary, for significant events, based on our ongoing analysis of the 2017 U.S. Tax Cuts and Jobs Act, relevant tax law changes, material changes in the forecasted geographic earnings mix, and any significant acquisitions.

The use of non-GAAP operating income (loss), non-GAAP operating margin, and non-GAAP net income (loss) per share measures have certain limitations as they do not reflect all items of expense that affect Workday's operations. Workday compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review Workday's financial information in its entirety and not rely on a single financial measure.

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For further information: Investor Relations Contact: Justin Furby, ir@workday.com; Media Contact: Sion Rogers, media@workday.com

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