Workday(WDAY) - 2025 Q3 - Quarterly Results

Financial Performance - Total revenues for Q3 fiscal 2025 were $2.160 billion, up 15.8% year-over-year[3] - Subscription revenues reached $1.959 billion, also reflecting a 15.8% increase from the previous year[3] - Operating income was $165 million, representing 7.6% of revenues, compared to $88 million (4.7% of revenues) in Q3 fiscal 2024[3] - Non-GAAP operating income for Q3 was $569 million, or 26.3% of revenues, up from $462 million (24.8% of revenues) year-over-year[3] - The 12-month subscription revenue backlog was $6.98 billion, an increase of 15.3% year-over-year[3] - Total revenues for the nine months ended October 31, 2024, were $6,235 million, compared to $5,337 million for the same period in 2023, reflecting a growth of 13.4%[17] - Operating income for Q3 2024 was $165 million, significantly higher than $88 million in Q3 2023, marking an increase of 87.5%[17] - Net income for the nine months ended October 31, 2024, was $432 million, compared to $193 million for the same period in 2023, representing a growth of 123.3%[17] Cash Flow and Investments - Cash provided by operating activities for the nine months ended October 31, 2024, was $1,349 million, compared to $1,153 million in the same period of 2023, an increase of 17%[19] - The company reported a net cash used in investing activities of $1,054 million for the nine months ended October 31, 2024, compared to $1,270 million in the same period of 2023[19] - The company experienced a net increase in cash and cash equivalents of $128 million for the nine months ended October 31, 2024, compared to a decrease of $319 million in the same period of 2023[19] - Free cash flows for the nine months ended October 31, 2024, were $1,166 million, compared to $970 million for the same period in 2023, indicating a 20.2% increase[25] Expenses and Margins - Workday plans to achieve a non-GAAP operating margin of 25.5% for fiscal 2025[8] - Workday's total costs and expenses for the nine months ended October 31, 2024, were $5,895 million, compared to $5,233 million for the same period in 2023, reflecting an increase of 12.7%[17] - Non-GAAP operating margin for the three months ended October 31, 2024, was 26.3%, compared to 24.8% in the same period of 2023[23] - Operating margin for the three months ended October 31, 2024, improved to 7.6%, up from 4.7% in the same period of 2023[23] - Share-based compensation expenses for Q3 2024 totaled $349 million, up from $349 million in Q3 2023[19] - Share-based compensation expenses for the three months ended October 31, 2024, were $368 million, compared to $349 million for the same period in 2023, reflecting a 5.4% increase[23] Future Projections and Strategic Initiatives - Workday expects fiscal 2025 subscription revenue to be $7.703 billion, indicating a growth of 17%[4] - The company announced the introduction of Workday Illuminate and new AI agents to enhance HR and finance processes[5] - Workday completed the acquisition of Evisort, an AI-native document intelligence platform[7] - The projected non-GAAP tax rate for fiscal 2024 and 2025 is set at 19%[30] - Workday plans to exclude certain acquisition-related costs and realignment costs from its non-GAAP results starting fiscal 2025[26] Shareholder Information - The weighted-average shares used to compute diluted net income per share increased to 268,549 thousand for Q3 2024 from 266,377 thousand in Q3 2023[17] - Non-GAAP diluted net income per share for the three months ended October 31, 2024, was $1.89, up from $1.56 in the same period of 2023, reflecting a 21.1% increase[23]