What changed in this filing

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Item 1. Business

2023-02-27 compared with 2022-02-28 · 44 added, 52 removed, 164 unchanged (37% of the section changed)

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Workday provides organizations with a unified system that can help them plan, execute, analyze, and extend to other applications and environments, thereby helping them continuously adapt how they manage their business and operations.

Workday embeds artificial intelligence (“AI”) and machine learning (“ML”) into the very core of our platform, enabling our applications to natively leverage AI and ML as part of the workflow.

As a result, our AI and ML technology helps deliver better employee experiences, improve operational efficiencies, and provide insights for faster, data-driven decision-making.

To support this, Workday delivers weekly product updates in addition to major feature releases twice a year.

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We sell our solutions worldwide primarily through direct sales.

We also offer professional services, both directly and through our Workday Services Partners, to help customers deploy our solutions and continually adopt new capabilities.

Table of Conten t s

We also offer professional services, as do our Workday Services Partners, to help customers deploy our solutions and continually adopt new capabilities.

In fiscal 2023, we announced a new Industry Accelerator program that combines Workday partners, solutions, and services to help speed cloud transformation efforts initially targeted at banking, healthcare, insurance, and technology companies.

With these initiatives, we expect that Workday customers will benefit from a robust ecosystem, helping deliver additional innovation and solutions.

To grow our unified suite of Workday applications, we primarily invest in research and development, but we also selectively acquire companies that are consistent with our design principles, existing product set, corporate strategy, and company culture.

For example, in fiscal 2022, we acquired Peakon ApS (“Peakon”), a continuous listening platform that captures real-time employee sentiment;

We engage in acquisitions to augment our suite of applications, such as Peakon ApS (“Peakon”), a continuous listening platform that captures real-time employee sentiment;

Zimit, a configure, price, quote (“CPQ”) solution built for services industries;

and VNDLY, a cloud-based external workforce and vendor management technology.

and in fiscal 2020, we acquired Scout RFP (“Scout”), a strategic sourcing company.

Our Capabilities

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In the changing world of finance, Workday helps finance leaders accelerate their journeys towards becoming a truly digital finance operation by giving them the tools they need to manage the strategic direction of their organizations while also supporting growth, profitability, and compliance and regulatory requirements.

Workday’s suite of financial management applications helps enable CFOs to maintain accounting information in the general ledger;

Workday’s suite of financial management applications, built on a foundation with AI and ML at the core, helps enable CFOs to maintain accounting information in the general ledger;

manage core financial processes such as payables and receivables;

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Workday’s suite of HCM applications allows organizations to manage the entire employee lifecycle – from recruitment to retirement – enabling HR teams to hire, onboard, pay, develop and reskill, and provide meaningful employee experiences that are personalized and helpful, based on listening to the diverse needs of today’s workforce.

For example, our skills technology, built on an AI and ML foundation, helps organizations make the important shift to a skills-first approach, helping them prepare today for the jobs of tomorrow.

Solutions for the Offices of the CFO and CHRO

In today’s dynamic business environment, businesses are continuously planning to model various scenarios and prepare to quickly respond to change.

In today’s dynamic business environment, businesses are continuously planning to model various scenarios and preparing to quickly respond to change.

Workday provides an active planning process that can model across finance, workforce, sales, and operational data, helping organizations make more informed decisions and respond quickly to changing situations.

Workday leverages AI and ML to assist in creating forecasts that incorporate historical and third-party data, like economic data and labor statistics.

When combined with Workday’s financial management and HCM solutions, organizations are able to leverage real-time transactional data to dynamically adjust and recalibrate their plans.

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In addition, Workday enables the development of extension applications and integration tooling that can accommodate our customers’ unique ways of doing business.

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Solutions for the Offices of the CIO, CFO, and CHRO

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For example, Workday provides supply chain and inventory solutions to healthcare organizations, allowing them to purchase, stock, track, and replenish their inventory to help support patient care.

In addition, higher education institutions can deploy our solution to manage the e nd-to-end student and faculty lifecycle .

Moreover, with our solution, professional services organizations can optimize and manage their client-facing projects.

In addition, higher education institutions can deploy Workday’s solutions to manage the e nd-to-end student and faculty lifecycle .

Moreover, with W orkday’s solutions, professional services organizations can optimize and manage their client-facing projects.

Product Development

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Workday was founded with the idea of putting people at the center of enterprise software, which is why employees are our number one core value.

Our core values continue to serve as our guide as we navigate recent events, such as the global pandemic and the social justice movement.

As of January 31, 2023, our global workforce consisted of approximately 17,700 employees in 32 countries.

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Equity ownership is a key element of our compensation program, allowing employees to share in Workday’s successes and aligning the interests of our employees with our stockholders.

Starting in the fourth quarter of fiscal 2022, we have extended our key employee cash bonus program to all employees not covered under an existing sales or customer experience incentive plan.

Additionally, our total rewards package includes an employee stock purchase plan, healthcare and retirement benefits, paid time off, family leave, and other wellness programs.

It also offers specialized benefits such as support for fertility options and new parents, as well as reimbursement of adoption costs.

In the wake of the COVID-19 pandemic, we felt that it was important for employees to have a safe, convenient way to access healthcare and have introduced a global virtual healthcare network and onsite healthcare resources, including COVID-19 vaccine and testing drive-thru clinics and flu shot clinics, in addition to expanded healthcare benefits.

Additionally, our total rewards package includes a cash bonus program, an employee stock purchase plan, healthcare and retirement benefits, paid time off, family leave, and other wellness programs.

We also offer specialized benefits such as a holistic global mental and emotional health program, onsite and virtual healthcare resources, and support for fertility options and new parents, as well as reimbursement of adoption costs.

Our Commitment to Pay Parity

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We also have processes in place to make pay decisions based on internally consistent and fair criteria.

Each year, we conduct a company-wide pay equity analysis to help ensure pay equity between men and women as well as a US-based analysis with respect to people of different races.

Each year, we conduct a company-wide pay equity analysis to help ensure pay equity between men and women as well as a US-based analysis with respect to employees of different ethnicities.

If we identify differences in pay, we research those differences and, if appropriate, take action (including making adjustments to employees’ pay, when appropriate).

Table of Conten t s

Belonging and Diversity

We strive to be a workplace where all employees are valued for their unique perspectives and where we all collectively contribute to Workday’s success and innovation.

Belonging and Diversity (“B&D”) plays an integral part in that as we aim to provide our employees with programs and resources that strengthen our culture and empower our communities.

In support of our efforts, we have created our own unique approach to diversity called VIBE, which stands for Value Inclusion, Belonging, and Equity for all.

To further support equity in our workplace and in our communities, we have established four guiding principles:

hiring and developing diverse talent;

cultivating a culture of belonging;

strengthening our communities;

and building inclusive products and technology.

We have made solid progress towards our ongoing company commitments that map to these global guiding principles.

Belonging and Diversity (“B&D”) helps us cultivate an equitable and inclusive environment for all.

Whether it's through creating resources and initiatives that enable and strengthen our culture, building inclusive products and technology, or hiring and developing diverse talent, our vision is to Value Inclusion, Belonging, and Equity (“VIBE”) for all.

We have made significant progress towards our ongoing company commitments to B&D.

To track progress and plan for the future, we use internally developed products to bring diversity- and inclusion-related data into one centralized location and set our B&D strategy.

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Looking at our diversity data, we continue to make strides in our representation.

As of January 31, 2022, women represented 41.2% of our global employees, and underrepresented minorities (defined as those who identify as Alaskan native, American Indian, Black, Latinx, Native Hawaiian, Other Pacific Islander, and/or two or more races) represent 13.7% of our U.S.

To continue to improve employee representation, in 2020, we declared a set of company commitments to increase our overall representation of Black and Latinx employees in the U.S.

by 30% and to double the number of our Black and Latinx leaders in the U.S.

by the end of calendar year 2023.

We have successfully surpassed our overall representation goal and as of January 31, 2023, we are at 86% of our goal to double the number of Black and Latinx leaders in the U.S.

As of January 31, 2023, women represented 42% of our global employees and 37% of our leadership positions globally, and underrepresented minorities (defined as those who identify as Alaskan native, American Indian, Black, Latinx, Native Hawaiian, Other Pacific Islander, and/or two or more races) represented 14% of our U.S.

employees and 10% of our leadership positions in the U.S.

We believe that talent is everywhere, but opportunity is not.

Skills, education, and experience are gained in a variety of ways that are often not recognized in the traditional recruiting process.

Talent acquisition at Workday ensures there is intentionality about weaving VIBE throughout our hiring practices to ensure an inclusive and equitable experience for all.

We also invest in leading workforce development organizations who provide direct training and employment opportunities for candidates facing barriers to employment through our Opportunity Onramps programs.

Learning and Development

Our employees tell us they are most engaged when they are continuously being exposed to new things, empowered to build new skills, and able to make an impact.

We offer a number of educational resources, development opportunities, and a support community to guide employees throughout their Workday careers, which we refer to as journeys.

These begin right from the moment employees start at Workday, with Learning at Workday, journeys designed to help new employees onboard and get acquainted with our culture, business, and technology.

These are complimented by Career Building at Workday, journeys designed to deepen expertise, grow capabilities, and make meaningful connections;

Leading at Workday, journeys that help employees understand our leadership identity and prepare them to take on increasing leadership responsibilities;

and The VIBE Way at Workday, journeys designed to equip and empower all employees with the tools and resources to incorporate VIBE into everything we do - from the language we use every day, to how we approach our work and each other, to the way we recruit and hire diverse talent at Workday.

Our employees have instant access to training via several industry-leading learning platforms, which provide our global workforce with convenient, timely access to content from subject matter experts.

We offer a number of educational resources, development opportunities, and a support community to guide employees throughout their Workday careers.

For example, we developed Career Hub which helps our employees share skills and interests and receive relevant connections, curated learning content, and recommended jobs to help them on their career journeys.

Using machine learning, Career Hub provides workers with suggestions to grow their skills and capabilities and encourages them to build a plan as they explore opportunities for continued career development.

Additionally, to foster a strong culture of compliance and ethics, we conduct annual compliance and ethics training of our Code of Conduct for all employees.

In fiscal 2023, we had a 100% completion rate for our annual Code of Conduct training.

Communication and Engagement

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We also use Workday Peakon Employee Voice to collect feedback in real time from our employees and turn that feedback into dialog and action.

Since we introduced Workday Peakon Employee Voice in fiscal 2022, we have had an average weekly participation rate of approximately 70% across our global employees, which reflects strong continuous participation by our employees.

We receive data points from these surveys that help us identify actions to take to improve our company and our culture.

Buoyed by the opportunities offered by our own technology, our talent strategy philosophy puts employees at the center of their own career and performance journey.

Buoyed by the opportunities offered by our own technology, our talent philosophy puts employees at the center of their own career and performance journey.

A fundamental tenet of this approach is the belief that we should provide employees with the tools and framework to enable their careers, putting them in the driver’s seat.

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These programs go beyond traditional medical benefits and wellness offerings and allow employees to focus on their chosen wellness goals as well as their mental health.

Table of Conten t s

Specific to the COVID-19 pandemic, we continue to take precautions to help support the health and safety of the Workday community, including our employees.

As part of our support in fiscal 2022, we announced that the majority of employees will not be required to return to their Workday office before April 2022, introduced flexible work options, enhanced the healthcare resources provided to our employees, and offered new employees a $500 equipment stipend to enable them to have a comfortable work-from-home environment.

In fiscal 2023, we transitioned to a hybrid work model to provide flexibility for our employees to work from home, while still bringing people together to foster collaboration and innovation.

We offer new remote-based employees a $300 equipment stipend to enable them to have a comfortable work-from-home environment.

To help keep health and mental wellness top of mind, we offer a series of programs and communications focused on mental health.

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Giving and Doing

We believe that talent is everywhere, but opportunity is not.

In support of our efforts to give back to the communities where we live and work, our employees donate time and expertise as mentors and volunteers to help close the skills gap.

We also invest in leading workforce development organizations and provide direct training and employment opportunities for candidates facing barriers to employment through our Opportunity Onramps programs.

On top of our strategic, company-led social impact and employee volunteerism efforts, we also believe that giving back is even more rewarding when people get to make an impact through their favorite causes.

We encourage and support employee giving and volunteering through programs such as our charitable donation matching gift program, our paid time off benefit for employees to volunteer and give back to their communities, and our team volunteer experience, where employee teams of five or more can volunteer with a charity partner of their choice and receive a $5,000 grant.

We primarily sell to medium-sized and large, global organizations that span numerous industry categories, including professional and business services, financial services, healthcare, education, government, technology, media, retail, and hospitality.

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We generate customer leads, accelerate sales opportunities, and build brand awareness through our marketing programs and strategic relationships.

Our marketing programs target senior business leaders, including CFOs, CHROs, and CIOs.

Our marketing programs largely target senior business leaders, including CFOs, CHROs, and CIOs.

Our sales strategy also focuses on growing our relationships with our existing customers to expand the adoption of our suite of solutions over time.

As a core part of our sales and marketing strategy, we have developed a global ecosystem of partners to both broaden and complement our application offerings and to provide services that are outside of our area of focus.

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Although these seasonal factors are common in the technology industry, historical patterns should not be considered a reliable indicator of our future sales activity or performance.

Table of Conten t s

The overall market for enterprise application software is rapidly evolving, highly competitive, and subject to changing technology, shifting customer needs, and frequent introductions of new products.

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These vendors include UKG Inc.;

(formerly The Ultimate Software Group, Inc.);

Automatic Data Processing, Inc.;

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As a public company with global operations, we are subject to various federal, state, local, and foreign laws and regulations.

These laws and regulations, which may differ among jurisdictions, include, among others, those related to financial and other disclosures, accounting standards, privacy and data protection, intellectual property, corporate governance, tax, government contracting, trade, antitrust, employment, immigration and travel, import/export, and anti-corruption.

There is no assurance that existing or future laws and regulations applicable to our operations, products, and services will not have a material adverse effect on our business.

Presently, costs and accruals incurred to comply with these governmental regulations are not material to our financial condition or operating results.

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Privacy and Data Protection Laws

Our customers can use our applications to collect, use, and store personal data regarding a variety of individuals in connection with their operations, including but not limited to their employees, contractors, students, job applicants, customers, and suppliers.

National, state, and local governments and agencies in the countries in which we or our customers operate have adopted, are considering adopting, or may adopt laws and regulations regarding the collection, use, storage, transfer, processing, protection, and disclosure of personal data.

Additionally, we may need to develop features, enhancements, or modifications to our products to help our customers comply with the privacy and data protection laws in their jurisdictions.

The costs of compliance with and other burdens imposed by such laws, regulations, and standards, or any alleged or actual violation, may limit the use and adoption of our services, reduce overall demand for our services, lead to significant fines, penalties, or liabilities for noncompliance, slow the pace at which we close sales transactions, require us to divert development and other resources, or result in reputational harm or other adverse impacts to our business.

Moreover, if we or our sub-processors fail to report a data breach or other loss of data within timeframes mandated by law, we may be liable for certain fines, penalties, and other liabilities, and it may damage our reputation and brand.

These laws and regulations, which may differ among jurisdictions, include, among others, those related to financial and other disclosures, accounting standards, privacy and data protection, intellectual property, AI ethics and machine learning, corporate governance, tax, government contracting, trade, antitrust, employment, immigration and travel, import/export, and anti-corruption.

The costs to comply with these governmental regulations are not material to the understanding of our business.

For a further discussion of the risks associated with government regulations that may materially impact us, see “Risk Factors” included in Part I, Item 1A of this report.

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The information on, or that can be accessed through, our website is not part of this report.

Workday, the Workday logo, VIBE, Peakon, Zimit, VNDLY, Scout, and Opportunity Onramps are trademarks of Workday, Inc., which may be registered in the United States and elsewhere.

Workday, the Workday logo, VIBE, Peakon, Zimit, VNDLY, and Opportunity Onramps are trademarks of Workday, Inc., which may be registered in the United States and elsewhere.

Other trademarks, service marks, or trade names appearing in this report are the property of their respective owners.

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Information contained on or accessible through any website reference herein is not part of, or incorporated by reference in, this Form 10-K, and the inclusion of such website addresses is as inactive textual references only.

Table of Conten t s

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business