Summary
Workday closed fiscal 2024 with steady top-line momentum. Fourth-quarter revenue was $1.92 billion, up 16.8% from the prior-year quarter, and full-year revenue was $7.26 billion, also up 16.8% from fiscal 2023. GAAP operating income was $78.69 million in the quarter, swinging to a profit, and $183.00 million for the full year, also swinging to a profit. GAAP net income reached $1.19 billion in the quarter and $1.38 billion for the full year, both swinging to profits. The quarter's GAAP net income included a valuation allowance release related to all U.S. federal and state deferred tax assets, excluding certain state tax credits. Full-year diluted EPS was $5.21, up from a loss in the prior year. GAAP operating margin was 4.1% in the quarter and 2.5% for the full year, both up from negative levels in the prior-year periods.
Cash generation remained a bright spot. Operating cash flow was $995.64 million in the quarter, up 43.4%, and $2.15 billion for the full year, up 29.7%. Non-GAAP free cash flow was $1.9 billion for the full year, compared with $1.3 billion in the prior year. Capital expenditures were $49.00 million in the quarter, and full-year capital expenditures were $232 million, down 36.3% from the prior year. Deferred revenue was $4.13 billion, up 13.6% from the prior-year quarter. Total subscription revenue backlog was $20.9 billion, up 27%, with 12-month backlog of $6.6 billion and 24-month backlog of $11.7 billion both up 20% year over year. Headcount was 18,824, up 6% from 17,744.
Profitability on a non-GAAP basis also improved. Fourth-quarter non-GAAP operating income was $461 million, or 23.9% of revenues, compared with $305 million, or 18.5% of revenues, in the prior-year quarter. Full-year non-GAAP operating income was $1.7 billion, or 24.0% of revenues, compared with $1.2 billion, or 19.5% of revenues, in the prior year. For the full fiscal year 2025, management reiterated subscription revenue guidance of $7.725 billion to $7.775 billion, representing growth of 17% to 18%, and expects a non-GAAP operating margin of approximately 24.5%. The outlook calls for incremental investments while still anticipating margin expansion as the business scales.
Operational news was active. Workday named Carl Eschenbach CEO effective February 1, 2024, while Aneel Bhusri remains co-founder and executive chair. The company announced a definitive agreement to acquire HiredScore, an AI-powered talent orchestration provider, and an exclusive strategic partnership with Insperity to develop and sell an HR solution for small and midsize businesses. Workday also announced a new share repurchase program. New full platform customers included HHS, Randstad, UHS of Delaware, and VXI Global Solutions. The company was named a Leader in the 2023 Gartner Magic Quadrant for Financial Planning Software and Best in KLAS 2024 in enterprise resource planning for the seventh consecutive year.
Risks remain familiar. Management pointed to macroeconomic uncertainty, including higher inflation and interest rates and geopolitical conflicts such as Russia-Ukraine and Israel-Hamas, which have created volatility and disruption. Workday has seen lengthening sales cycles and moderation of revenue growth rates, particularly within net new opportunities, and has given some customers more flexible payment terms. If conditions persist, renewals, collections, sales and marketing efforts, customer deployments, and product development could be hurt. The press release also lists risks tied to security breaches, service outages, privacy laws, key employee retention, competition, partner reliance, AI regulation, acquisition integration including HiredScore, delays in the transaction, and reductions in IT spending. Workday's subscription model can also delay the impact of sales changes on reported results.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.92B | $1.87B | +3.0% | $1.65B | +16.8% |
| Research & development | $635.1M | $618.7M | +2.6% | $615.6M | +3.2% |
| Sales & marketing | $558.4M | $537.8M | +3.8% | $489.9M | +14.0% |
| General & administrative | $189.9M | $176.0M | +7.9% | $176.3M | +7.7% |
| Total operating expenses | $1.84B | $1.78B | +3.7% | $1.74B | +6.2% |
| Operating income (loss) | $78.7M | $87.9M | -10.4% | -$89.0M | +188.5% |
| Operating margin | 4.1% | 4.7% | -0.6 pp | -5.4% | +9.5 pp |
| Net income (loss) | $1.19B | $113.7M | +945.2% | -$125.7M | +1045.5% |
| Net margin | 61.8% | 6.1% | +55.7 pp | -7.6% | +69.5 pp |
| Diluted EPS | $4.48 | $0.43 | +$4.05 | -$0.49 | +$4.97 |
| Net retention rate | 95.0% | 95.0% | ±0.0 pp | 95.0% | ±0.0 pp |
Risks
Recent macroeconomic events including higher inflation and interest rates and geopolitical conflicts have negatively impacted the global economy, and Workday has experienced lengthening sales cycles and moderation of revenue growth rates, particularly within net new opportunities, along with more flexible payment terms. Continued uncertainty could harm renewals, collections, sales and marketing, and customer deployments.
Workday's typical sales cycles for new customers are six to twelve months but can extend for eighteen months or more, and the company has seen increased customer scrutiny and lengthening of certain sales cycles. Longer sales cycles could cause operating and financial results to suffer in a given period and delay the impact of downturns in sales.
Workday is increasingly building AI and generative AI into its core offerings, which may increase research and development costs and expose it to evolving regulation, reputational harm, and litigation, including a pending lawsuit alleging its products enable discrimination. Competitors' generative AI offerings are expected to intensify competition.
Workday faces intense competition from Oracle and SAP, which have larger customer bases and resources, as well as other cloud and regional vendors. Legacy vendors are expanding cloud offerings through acquisitions and alliances, and generative AI is expected to further intensify competition and pressure pricing.
In November 2023, Workday discovered that an issue in its product caused document notifications and PDF documents to be sent to unintended recipients within the same organization. The company has experienced other security events and faces risks of liabilities, customer loss, and reputational damage from such incidents.
Workday has experienced disruptions at certain U.S. data centers due to high temperatures and power outages that caused a brief temporary outage for a subset of customers. It relies on third-party data centers and hosted infrastructure, and any future disruption could harm reputation, cause refunds or service credits, and reduce renewal rates.
Effective February 1, 2024, Aneel Bhusri stepped down as Co-CEO to become Executive Chair, with Carl Eschenbach assuming the sole CEO role. Key employee changes could disrupt the business, impact culture, and harm Workday's ability to attract and retain talent.
Workday depends on its network of partners to drive additional revenue growth and professional services, and if partners fail to perform, favor competitors, or are acquired, its ability to sell and distribute products could be harmed. Partner training and go-to-market changes may also create friction.
Workday has $3.0 billion of Senior Notes outstanding and a $1.0 billion revolving credit facility that includes a financial covenant requiring maintenance of a specific leverage ratio. Rising interest rates could make refinancing more difficult or costly, and breach of covenants could accelerate repayment.
Workday invests in early to late stage companies and may not realize a return, with potential partial or complete loss of invested capital. Volatility in public and private markets could cause material changes in fair value, and it recorded net losses of $24 million on equity investments in fiscal 2024.
The OECD's Pillar Two model rules define a 15% global minimum tax, and while Workday does not currently expect a material impact, its analysis is ongoing and incomplete. Changes to tax laws or adverse interpretations could increase its effective tax rate and cash tax obligations.
Workday faces evolving privacy and data protection laws, including GDPR, CCPA, and CPRA, with potential fines of up to 4% of worldwide revenue for GDPR noncompliance. Cross-border data transfer uncertainty and data residency requirements could increase costs and reduce demand.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Total Subscription Revenue Backlog
Non-GAAP Operating Income
24-Month Subscription Revenue Backlog
12-Month Subscription Revenue Backlog
Free Cash Flow
Summary, forecast, risks and KPIs are extracted from Workday, Inc.'s SEC filings for Q4 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.