What changed in this filing

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Item 1. Financial Statements

2024-08-28 compared with 2024-05-29 · 157 added, 106 removed, 618 unchanged (30% of the section changed)

3 unchanged sentences

(in millions)

April 30, 2024 January 31, 2024

July 31, 2024 January 31, 2024

Current assets:

38 unchanged sentences

(in millions, except number of shares which are reflected in thousands and per share data)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Subscription services $ 1,903 $ 1,624 $ 3,719 $ 3,152

18 unchanged sentences

(1) Costs and expenses include share-based compensation expenses as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Costs of subscription services $ 35 $ 30 $ 73 $ 59

8 unchanged sentences

(in millions)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Net income (loss) $ 132 $ 79 $ 239 $ 79

2 unchanged sentences

Net change in unrealized gains (losses) on available-for-sale debt securities, net of tax provision (benefit) of $ 10 , $ 0 , $ 1 , and $ 0 , respectively

27 ( 18 ) 2 ( 12 )

Net change in unrealized gains (losses) on cash flow hedges, net of tax provision of $( 1 ), $( 1 ), $ 0 , and $ 2 , respectively

( 24 ) ( 33 ) ( 1 ) ( 49 )

Other comprehensive income (loss), net of tax 2 ( 50 ) ( 2 ) ( 60 )

4 unchanged sentences

(in millions, except number of shares which are reflected in thousands)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Common stock:

22 unchanged sentences

Total stockholders’ equity $ 8,345 $ 6,274 $ 8,345 $ 6,274

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Common stock shares:

8 unchanged sentences

(in millions)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Cash flows from operating activities:

25 unchanged sentences

Purchases of non-marketable equity and other investments ( 7 ) 0 ( 7 ) ( 11 )

Sales and maturities of non-marketable equity and other investments 5 0 5 0

Net cash provided by (used in) investing activities ( 346 ) ( 385 ) ( 603 ) ( 1,098 )

9 unchanged sentences

See Notes to Condensed Consolidated Financial Statements

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Supplemental cash flow data:

4 unchanged sentences

Accrued taxes related to net share settlement of equity awards

As of April 30,

As of July 31,

Reconciliation of cash, cash equivalents, and restricted cash as shown in the Condensed Consolidated Statements of Cash Flows:

11 unchanged sentences

Description of the Business

Workday delivers applications for financial management, spend management, human capital management, planning, and analytics.

With Workday, our customers have 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 is a leading provider of cloud-based applications for financial management, human capital management (“HCM”), planning, spend management, and analytics.

With Workday, our customers have a unified platform with artificial intelligence (“AI”) built into its core that helps them manage their two most important assets – their people and money.

Basis of Presentation

6 unchanged sentences

All such adjustments are of a normal, recurring nature.

The results of operations for the three months ended April 30, 2024, shown in this report are not necessarily indicative of the results to be expected for the full fiscal year ending January 31, 2025.

The results of operations for the three and six months ended July 31, 2024, shown in this report are not necessarily indicative of the results to be expected for the full fiscal year ending January 31, 2025.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the SEC on March 8, 2024.

14 unchanged sentences

Our deposits exceed federally insured limits.

No customer individually accounted for more than 10% of trade and other receivables, net as of April 30, 2024, or January 31, 2024.

No customer individually accounted for more than 10% of total revenues during the three months ended April 30, 2024, or 2023.

Other than the United States, no country individually accounted for more than 10% of total revenues during the three months ended April 30, 2024, or 2023.

No customer individually accounted for more than 10% of trade and other receivables, net as of July 31, 2024, or January 31, 2024.

No customer individually accounted for more than 10% of total revenues during the three and six months ended July 31, 2024, or 2023.

Other than the United States, no country individually accounted for more than 10% of total revenues during the three and six months ended July 31, 2024, or 2023.

In order to reduce the risk of disruption of our cloud applications, we have established data centers in various geographic regions.

18 unchanged sentences

Debt Securities

As of April 30, 2024, debt securities consisted of the following (in millions):

As of July 31, 2024, debt securities consisted of the following (in millions):

Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value

16 unchanged sentences

The fair values of debt securities, by remaining contractual maturity, were as follows (in millions):

April 30, 2024

July 31, 2024

Due within 1 year $ 3,206

4 unchanged sentences

Debt securities included in Marketable securities on the Condensed Consolidated Balance Sheets consist of securities with original maturities at the time of purchase greater than three months, and the remaining securities are included in Cash and cash equivalents.

As of April 30, 2024, and January 31, 2024, the fair value of debt securities in an unrealized loss position totaled $ 4.6 billion and $ 2.4 billion, respectively, the majority of which had been in a continuous unrealized loss position for less than 12 months.

Interest receivable of $ 44 million and $ 35 million is included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets as of July 31, 2024, and January 31, 2024, respectively.

The following tables summarize the aggregate fair value and gross unrealized losses for all debt securities in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):

As of July 31, 2024

Less than 12 Months

12 Months or Greater

Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss

treasury securities $ 581 $ ( 1 ) $ 303 $ 0 $ 884 $ ( 1 )

agency obligations 214 0 40 0 254 0

Corporate bonds 561 ( 1 ) 588 ( 3 ) 1,149 ( 4 )

Commercial paper

20 0 0 0 20 0

$ 1,376 $ ( 2 ) $ 931 $ ( 3 ) $ 2,307 $ ( 5 )

As of January 31, 2024

Less than 12 Months

12 Months or Greater

Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss

treasury securities $ 921 $ ( 2 ) $ 78 $ ( 1 ) $ 999 $ ( 3 )

agency obligations 234 0 100 ( 1 ) 334 ( 1 )

Corporate bonds 921 ( 3 ) 171 ( 1 ) 1,092 ( 4 )

Commercial paper

$ 2,081 $ ( 5 ) $ 349 $ ( 3 ) $ 2,430 $ ( 8 )

Unrealized losses on debt securities primarily resulted from changes in market interest rates.

1 unchanged sentence

We did not recognize any credit or non-credit related losses related to our debt securities during the periods presented.

We sold $ 17 million and $ 12 million of debt securities during the three months ended April 30, 2024, and 2023, respectively.

We sold $ 53 million and $ 6 million of debt securities during the three months ended July 31, 2024, and 2023, respectively.

We sold $ 70 million and $ 18 million of debt securities during the six months ended July 31, 2024, and 2023, respectively.

The realized gains and losses from the sales were immaterial.

1 unchanged sentence

Equity investments consisted of the following (in millions):

Condensed Consolidated Balance Sheets Location April 30, 2024 January 31, 2024

Condensed Consolidated Balance Sheets Location July 31, 2024 January 31, 2024

Money market funds Cash and cash equivalents $ 756 $ 1,017

2 unchanged sentences

Total realized and unrealized gains and losses associated with our equity investments consisted of the following (in millions):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Net realized gains (losses) recognized on equity investments sold (1)

$ ( 3 ) $ 2 $ ( 3 ) $ 1

Net unrealized gains (losses) recognized on equity investments held as of the end of the period 0 ( 1 ) ( 7 ) ( 8 )

5 unchanged sentences

The carrying values for our non-marketable equity investments are summarized below (in millions):

April 30, 2024 January 31, 2024

July 31, 2024 January 31, 2024

Total initial cost $ 207 $ 213

1 unchanged sentence

Carrying value $ 237 $ 248

During the three months ended April 30, 2024, and 2023, we recorded impairment losses on our non-marketable equity investments of $ 8 million and $ 3 million, respectively.

During the three months ended July 31, 2024, we recorded a loss of $ 3 million upon exit of a non-marketable equity investment.

During the three months ended July 31, 2023, we recorded impairment losses of $ 10 million to the carrying value of non-marketable equity investments.

During the six months ended July 31, 2024, we recorded losses of $ 10 million related to impairments and exits of non-marketable equity investments.

During the six months ended July 31, 2023, we recorded impairment losses of $ 12 million.

Marketable Equity Investments

We may hold marketable equity investments with readily determinable fair values over which we do not own a controlling interest or exercise significant influence.

As of April 30, 2024, and January 31, 2024, we did not hold any such investments.

During the three months ended April 30, 2023, we recorded unrealized net losses of $ 5 million on our marketable equity investment balance held as of the end of the period of $ 66 million.

Additionally, we sold marketable equity investments for proceeds of $ 10 million with an immaterial corresponding realized gain.

As of July 31, 2024, and January 31, 2024, we did not hold any such investments.

During the three and six months ended July 31, 2023, we recorded unrealized net gains of $ 8 million and $ 4 million, respectively, on our marketable equity investment balance held as of the end of the period of $ 56 million.

Additionally, during the three and six months ended July 31, 2023, we sold marketable equity investments for proceeds of $ 20 million and $ 30 million, respectively, with immaterial corresponding realized gains.

Fair Value Measurements

6 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of April 30, 2024 (in millions):

Level 1 Level 2 Level 3 Total

24 unchanged sentences

We carry our debt at face value less unamortized debt discount and issuance costs on our Condensed Consolidated Balance Sheets and present the fair value for disclosure purposes only.

All of our debt obligations are categorized as Level 2 financial instruments.

The fair values of all of our debt obligations are categorized as Level 2 financial instruments.

For further information on the fair values of our debt and the inputs used in the calculations, see Note 11, Debt .

Deferred Costs

Deferred costs, which consist of deferred sales commissions, were $ 721 million and $ 741 million as of April 30, 2024, and January 31, 2024, respectively.

Amortization expense for the deferred costs was $ 59 million and $ 49 million for the three months ended April 30, 2024, and 2023, respectively.

Deferred costs, which consist of deferred sales commissions, were $ 724 million and $ 741 million as of July 31, 2024, and January 31, 2024, respectively.

Amortization expense for the deferred costs was $ 62 million and $ 52 million for the three months ended July 31, 2024, and 2023, respectively, and $ 121 million and $ 101 million for the six months ended July 31, 2024, and 2023, respectively.

There was no impairment loss in relation to the costs capitalized for the periods presented.

1 unchanged sentence

Property and equipment, net consisted of the following (in millions):

April 30, 2024 January 31, 2024

July 31, 2024 January 31, 2024

Computers, equipment, and software $ 1,390 $ 1,387

6 unchanged sentences

Property and equipment, net $ 1,259 $ 1,234

Depre ciati on expense totaled $ 56 million and $ 48 million for the three months ended April 30, 2024, and 2023 .

Depreciation expense totaled $ 58 million and $ 49 million for the three months ended July 31, 2024, and 2023, respectively, and $ 115 million and $ 97 million for the six months ended July 31, 2024, and 2023, respectively.

Business Combination

21 unchanged sentences

Acquisition-Related Intangible Assets, Net

Acquisition-related intangible assets, net consisted of the following as of April 30, 2024 (in millions):

Gross Carrying Amount

Accumulated Amortization

Net Book Value

Acquisition-related intangible assets, net consisted of the following as of July 31, 2024 (in millions):

Gross Carrying Amount Accumulated Amortization Net Book Value

Developed technology $ 429 $ ( 278 ) $ 151

4 unchanged sentences

Acquisition-related intangible assets, net consisted of the following as of January 31, 2024 (in millions):

Gross Carrying Amount

Accumulated Amortization

Net Book Value

Gross Carrying Amount Accumulated Amortization Net Book Value

Developed technology $ 318 $ ( 256 ) $ 62

3 unchanged sentences

$ 657 $ ( 424 ) $ 233

Amortization expense related to acquisition-related intangible assets was $ 17 million and $ 21 million for the three months ended April 30, 2024, and 2023, respectively.

As of April 30, 2024, the future estimated amortization expense related to acquisition-related intangible assets was as follows (in millions):

Amortization expense related to acquisition-related intangible assets was $ 20 million and $ 21 million for the three months ended July 31, 2024, and 2023, respectively, and $ 37 million and $ 42 million for the six months ended July 31, 2024, and 2023, respectively.

As of July 31, 2024, the future estimated amortization expense related to acquisition-related intangible assets was as follows (in millions):

Fiscal Period:

2 unchanged sentences

Other assets consisted of the following (in millions):

April 30, 2024 January 31, 2024

July 31, 2024 January 31, 2024

Non-marketable equity and other investments $ 239 $ 248

Contract assets 31 21

Technology patents and other intangible assets, net 26 26

Derivative assets 24 14

Contract assets 24 21

Prepayments for goods and services 16 14

Derivative assets 15 14

Total other assets $ 339 $ 337

Technology patents and other intangible assets with estimable useful lives are amortized on a straight-line basis.

As of April 30, 2024, the future estimated amortization expense was as follows (in millions):

As of July 31, 2024, the future estimated amortization expense was as follows (in millions):

Fiscal Period:

12 unchanged sentences

Gains or losses resulting from changes in the fair value of these hedges are recorded in Accumulated other comprehensive income (loss) (“AOCI”) on the Condensed Consolidated Balance Sheets and are subsequently reclassified to the same line item as the hedged transaction on the Condensed Consolidated Statements of Operations in the same period that the hedged transaction affects earnings.

As of April 30, 2024, we estimate that $ 27 million of net gains recorded in AOCI related to our cash flow hedges will be reclassified into income within the next 12 months.

As of April 30, 2024, and January 31, 2024, the notional values of the cash flow hedges that we held to buy U.S.

As of July 31, 2024, we estimate that $ 25 million of net gains recorded in AOCI related to our cash flow hedges will be reclassified into income within the next 12 months.

As of July 31, 2024, and January 31, 2024, the notional values of the cash flow hedges that we held to buy U.S.

dollars in exchange for other currencies were $ 2.7 billion and $ 2.5 billion, respectively.

The notional values of the cash flow hedges that we held to sell U.S.

dollars in exchange for other currencies were $ 393 million and $ 399 million as of April 30, 2024, and January 31, 2024, respectively.

dollars in exchange for other currencies were $ 399 million as of both July 31, 2024, and January 31, 2024.

All contracts had maturities of less than 60 months.

4 unchanged sentences

Cash flows from the settlement of these forward contracts are classified as operating activities on the Condensed Consolidated Statements of Cash Flows.

As of April 30, 2024, and January 31, 2024, the notional values of the non-designated hedges that we held to buy U.S.

As of July 31, 2024, and January 31, 2024, the notional values of the non-designated hedges that we held to buy U.S.

dollars in exchange for other currencies were $ 131 million and, $ 237 million respectively, and the notional values of the non-designated hedges that we held to sell U.S.

1 unchanged sentence

The fair values of outstanding derivative instruments were as follows (in millions):

Condensed Consolidated Balance Sheets Location April 30, 2024 January 31, 2024

Condensed Consolidated Balance Sheets Location July 31, 2024 January 31, 2024

Derivative assets:

9 unchanged sentences

The effect of cash flow hedges on the Condensed Consolidated Statements of Operations was as follows (in millions):

Three Months Ended April 30,

Three Months Ended July 31,

Condensed Consolidated Statements of Operations Location 2024 2023

2 unchanged sentences

Costs and expenses 1,974 ( 3 ) 1,751 2

Six Months Ended July 31,

Condensed Consolidated Statements of Operations Location 2024 2023

Total Gains (losses) related to cash flow hedges Total Gains (losses) related to cash flow hedges

Revenues $ 4,075 $ 16 $ 3,471 $ 33

Costs and expenses 3,900 ( 4 ) 3,455 1

Pre-tax gains (losses) associated with cash flow hedges were as follows (in millions):

Condensed Consolidated Statements of Operations and Statements of Comprehensive Income (Loss) Locations Three Months Ended April 30,

Condensed Consolidated Statements of Operations and Statements of Comprehensive Income (Loss) Locations Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Gains (losses) recognized in OCI Net change in unrealized gains (losses) on cash flow hedges $ ( 20 ) $ ( 15 ) $ 11 $ ( 13 )

2 unchanged sentences

Gains (losses) associated with non-designated hedges were as follows (in millions):

Condensed Consolidated Statements of Operations Location Three Months Ended April 30,

Condensed Consolidated Statements of Operations Location Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Gains (losses) related to non-designated hedges Other income (expense), net $ ( 3 ) $ ( 1 ) $ ( 1 ) $ 1

3 unchanged sentences

We manage our exposure to counterparty risk by entering into contracts with a diversified group of major financial institutions and by actively monitoring outstanding positions.

As of April 30, 2024, information related to these offsetting arrangements was as follows (in millions):

As of July 31, 2024, information related to these offsetting arrangements was as follows (in millions):

Gross Amounts of Recognized Assets Gross Amounts Offset on the Condensed Consolidated Balance Sheets Net Amounts of Assets Presented on the Condensed Consolidated Balance Sheets Gross Amounts Not Offset on the Condensed Consolidated Balance Sheets Net Assets Exposed

19 unchanged sentences

Outstanding debt consisted of the following (in millions):

April 30, 2024 January 31, 2024

July 31, 2024 January 31, 2024

2027 Notes $ 1,000 $ 1,000

3 unchanged sentences

unamortized debt discount and issuance costs ( 18 ) ( 20 )

Net carrying amount 2,981 2,980

Debt, noncurrent $ 2,982 $ 2,980

As of April 30, 2024, the future principal payments for the outstanding debt were as follows (in millions):

As of July 31, 2024, the future principal payments for the outstanding debt were as follows (in millions):

Fiscal Period:

8 unchanged sentences

The indenture governing the Senior Notes also includes covenants (including certain limited covenants restricting our ability to incur certain liens and enter into certain sale and leaseback transactions), events of default, and other customary provisions.

As of April 30, 2024, we were in compliance with all covenants associated with the Senior Notes.

As of July 31, 2024, and January 31, 2024, we were in compliance with all covenants associated with the Senior Notes.

We incurred debt discount and issuance costs of approximately $ 27 million in connection with the Senior Notes offering, which were allocated on a pro rata basis to the 2027 Notes, 2029 Notes, and 2032 Notes.

1 unchanged sentence

The effective interest rates on the 2027 Notes, 2029 Notes, and 2032 Notes, which are calculated as the contractual interest rates adjusted for the debt discount and issuance costs, are 3.67 %, 3.82 %, and 3.90 %, respectively.

As of April 30, 2024, and January 31, 2024, the total estimated fair value of the Senior Notes was $ 2.7 billion and $ 2.8 billion, respectively.

As of both July 31, 2024, and January 31, 2024, the total estimated fair value of the Senior Notes was $ 2.8 billion.

The estimated fair values of the Senior Notes, which we have classified as Level 2 financial instruments, were determined based on quoted bid prices in an over-the-counter market on the last trading day of the reporting period.

1 unchanged sentence

In April 2022, we entered into a credit agreement (“2022 Credit Agreement”) which provides for a revolving credit facility in an aggregate principal amount of $ 1.0 billion.

As of April 30, 2024, we had no outstanding revolving loans under the 2022 Credit Agreement.

As of July 31, 2024, we had no outstanding revolving loans under the 2022 Credit Agreement.

The revolving loans under the 2022 Credit Agreement may be borrowed, repaid, and reborrowed until April 6, 2027, at which time all amounts borrowed must be repaid.

4 unchanged sentences

The financial covenant, based on a quarterly financial test, requires that we do not exceed a maximum leverage ratio of 3.50 :1.00, subject to a step-up to 4.50 :1.00 at our election for a certain period following an acquisition.

As of April 30, 2024 and January 31, 2024, we were in compliance with all covenants included in the 2022 Credit Agreement.

As of July 31, 2024, and January 31, 2024, we were in compliance with all covenants included in the 2022 Credit Agreement.

Interest Expense on Debt

The following table sets forth total interest expense recognized related to our debt (in millions):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Contractual interest expense $ 28 $ 28 $ 55 $ 55

2 unchanged sentences

We have entered into operating lease agreements for our office space, data centers, and other property and equipment.

Operating lease right-of-use assets were $ 323 million and $ 289 million as of April 30, 2024, and January 31, 2024, respectively, and operating lease liabilities were $ 363 million and $ 316 million as of April 30, 2024, and January 31, 2024, respectively.

Operating lease right-of-use assets were $ 339 million and $ 289 million as of July 31, 2024, and January 31, 2024, respectively, and operating lease liabilities were $ 382 million and $ 316 million as of July 31, 2024, and January 31, 2024, respectively.

The components of operating lease expense were as follows (in millions):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Operating lease cost $ 29 $ 27 $ 58 $ 55

3 unchanged sentences

Supplemental cash flow information related to our operating leases was as follows (in millions):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Cash paid for operating lease liabilities $ 28 $ 25 $ 51 $ 54

1 unchanged sentence

Other information related to our operating leases was as follows:

April 30, 2024 January 31, 2024

July 31, 2024 January 31, 2024

Weighted average remaining lease term (in years) 5 5

Weighted average discount rate 4.01 % 3.95 %

As of April 30, 2024, maturities of operating lease liabilities were as follows (in millions):

As of July 31, 2024, maturities of operating lease liabilities were as follows (in millions):

Fiscal Period:

4 unchanged sentences

Total operating lease liabilities $ 382

As of April 30, 2024 , we have additional operating leases for data centers and office space that had not yet commenced with total undiscounted lease payments of $ 41 million.

These operating leases will commence in fiscal 2025 and fiscal 2026, with lease terms ranging from approximately two to seven years .

As of July 31, 2024 , we have additional operating leases for data centers and office space that had not yet commenced with total undiscounted lease payments of $ 42 million.

These operating leases will commence in fiscal 2025 and fiscal 2026, with lease terms ranging from approximately five to seven years .

Commitments and Contingencies

1 unchanged sentence

Our purchase obligations are primarily related to agreements for third-party hosted infrastructure platforms, data center equipment and software, business technology software and support, and sales and marketing activities.

During the three months ended April 30, 2024, there were no material changes outside the ordinary course of business to our non-cancelable purchase obligations disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024.

During the six months ended July 31, 2024, there were no material changes outside the ordinary course of business to our non-cancelable purchase obligations disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024.

Legal Matters

2 unchanged sentences

These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter.

In our opinion, as of April 30, 2024, there was not at least a reasonable possibility that we had incurred a material loss, or a material loss in excess of a recorded accrual, with respect to such loss contingencies.

In our opinion, as of July 31, 2024, there was not at least a reasonable possibility that we had incurred a material loss, or a material loss in excess of a recorded accrual, with respect to such loss contingencies.

Stockholders’ Equity

As of April 30, 2024, there were 212 million shares of Class A common stock, net of treasury stock, and 53 million shares of Class B common stock outstanding.

As of July 31, 2024, there were 213 million shares of Class A common stock, net of treasury stock, and 53 million shares of Class B common stock outstanding.

The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion.

3 unchanged sentences

In November 2022, our Board of Directors authorized the repurchase of up to $ 500 million of our outstanding shares of Class A common stock (“2022 Share Repurchase Program”).

As of April 30, 2024, we had completed the purchase authorization under this program.

In February 2024, our Board of Directors authorized a new program under which we may repurchase up to an additional $ 500 million of our outstanding shares of Class A common stock (“2024 Share Repurchase Program”).

We completed the purchase authorization under this program during the first quarter of fiscal 2025.

We may repurchase shares of Class A common stock from time to time through open market purchases, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, in privately negotiated transactions, or by other means, in accordance with applicable securities laws and other restrictions.

The timing and total amount of share repurchases under this program will depend upon business, economic, and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations.

The 2024 Share Repurchase Program has a term of 18 months, may be suspended or discontinued at any time, and does not obligate us to acquire any amount of Class A common stock.

During the three months ended April 30, 2024, we repurchased a total of approximately 0.5 million shares of Class A common stock for approximately $ 134 million at an average price per share of $ 267.09 .

Of the shares repurchased, $ 2 million were acquired under the 2022 Share Repurchase Program, with the remainder acquired under the 2024 Share Repurchase Program.

The February 2024 Share Repurchase Program has a term of 18 months, may be suspended or discontinued at any time, and does not obligate us to acquire any amount of Class A common stock.

During the three months ended July 31, 2024, and 2023, we repurchased a total of approximately 1.4 million and 0.6 million shares of Class A common stock for approximately $ 309 million and $ 139 million at an average price per share of $ 223.10 and $ 218.33 , respectively.

During the six months ended July 31, 2024, and 2023, we repurchased a total of approximately 1.9 million and 0.6 million shares of Class A common stock for approximately $ 443 million and $ 139 million at an average price per share of $ 234.78 and $ 218.33 , respectively.

All repurchases were made in open market transactions.

No shares were repurchased during the three months ended April 30, 2023.

As of April 30, 2024, we were authorized to repurchase a remaining $ 369 million of our outstanding shares of Class A common stock under the 2024 Share Repurchase Program.

As of July 31, 2024, we were authorized to repurchase a remaining $ 59 million of our outstanding shares of Class A common stock under the February 2024 Share Repurchase Program.

In August 2024, our Board of Directors authorized the August 2024 Share Repurchase Program, under which we may repurchase up to an additional $ 1.0 billion of our outstanding shares of Class A common stock.

For further information, see Note 20, Subsequent Events .

Employee Equity Plans

4 unchanged sentences

Shares that are withheld in connection with the net share settlement of RSUs or forfeited are added to the reserves of the 2022 Plan.

As of April 30, 2024, we had 17 million shares of Class A common stock available for future grants.

As of July 31, 2024, we had 17 million shares of Class A common stock available for future grants.

In June 2022, our stockholders approved the Amended and Restated 2012 Employee Stock Purchase Plan (“ESPP”).

1 unchanged sentence

Options to purchase shares are granted twice yearly on or about June 1 and December 1, and are exercisable on or about the succeeding November 30 and May 31, respectively.

As of April 30, 2024, 4 million shares of Class A common stock were available for issuance under the ESPP.

As of July 31, 2024, 3 million shares of Class A common stock were available for issuance under the ESPP.

Restricted Stock Units

1 unchanged sentence

RSUs generally vest over four years .

RSU activity during the three months ended April 30, 2024, was as follows (in thousands, except per share data):

RSU activity during the six months ended July 31, 2024, was as follows (in thousands, except per share data):

Number of Shares Weighted-Average Grant Date Fair Value

4 unchanged sentences

( 2,046 ) 203.77

Outstanding balance as of April 30, 2024 17,509 221.07

Outstanding balance as of July 31, 2024 16,454 222.91

(1) Includes shares withheld in connection with the net share settlement of RSUs.

As of April 30, 2024, there was a total of $ 3.0 billion in unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately three years .

As of July 31, 2024, there was a total of $ 2.8 billion in unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately three years .

Market-Based Restricted Stock Units

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However, the number of shares that ultimately vest can vary significantly with the achievement of the specified market criteria.

As of April 30, 2024, there was a total of $ 16 million in unrecognized compensation cost related to the PVU Award, which is expected to be recognized over approximately four years .

As of July 31, 2024, there was a total of $ 14 million in unrecognized compensation cost related to the PVU Award, which is expected to be recognized over approximately three years .

Stock Options

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Stock options issued under the Stock Plans generally are exercisable for periods not to exceed ten years and generally vest over five years .

As of April 30, 2024, there were 0.1 million options outstanding and exercisable with a weighted-average exercise price of $ 29.18 , and an aggregate intrinsic value of $ 18 million.

As of July 31, 2024, there were 0.1 million options outstanding and exercisable with a weighted-average exercise price of $ 29.28 , and an aggregate intrinsic value of $ 16 million.

All stock options were fully vested, with no remaining unrecognized compensation cost.

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Condensed Consolidated Balance Sheets Location

April 30, 2024 January 31, 2024

July 31, 2024 January 31, 2024

Contract assets:

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$ 3,611 $ 4,127

(1) Included in the unearned revenue balance are amounts related to professional services that are subject to cancellation and pro-rated refund rights of $ 74 million and $ 76 million as of April 30, 2024, and January 31, 2024, respectively.

Revenues of $ 1.5 billion and $ 1.3 billion were recognized during the three months ended April 30, 2024, and 2023, respectively, that were included in the unearned revenue balances as of January 31, 2024, and 2023, respectively.

(1) Included in the unearned revenue balance are amounts related to professional services that are subject to cancellation and pro-rated refund rights of $ 84 million and $ 76 million as of July 31, 2024, and January 31, 2024, respectively.

Revenues of $ 1.6 billion and $ 1.4 billion were recognized during the three months ended July 31, 2024, and 2023, respectively, that were included in the unearned revenue balances as of April 30, 2024, and 2023, respectively.

Revenues of $ 2.8 billion and $ 2.4 billion were recognized during the six months ended July 31, 2024, and 2023, respectively, that were included in the unearned revenue balances as of January 31, 2024, and 2023, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

As of April 30, 2024, approximately $ 20.7 billion of revenues are expected to be recognized from remaining performance obligations for subscription contracts.

As of July 31, 2024, approximately $ 21.6 billion of revenues are expected to be recognized from remaining performance obligations for subscription contracts.

We expect to recognize revenues on approximately $ 6.8 billion and $ 12.0 billion of these remaining performance obligations over the next 12 and 24 months, respectively, with the balance recognized thereafter.

Revenues from remaining performance obligations for professional services contracts as of April 30, 2024, were not material.

Revenues from remaining performance obligations for professional services contracts as of July 31, 2024, were not material.

Other Income (Expense), Net

Other income (expense), net consisted of the following (in millions):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Interest income $ 88 $ 72 $ 181 $ 134

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( 28 ) ( 29 ) ( 57 ) ( 57 )

( 3 ) 3 ( 8 ) ( 4 )

Total other income (expense), net $ 57 $ 46 $ 116 $ 73

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For further information, see Note 3, Investments .

We reported an income tax provision of $ 16 million and $ 7 million for the three months ended April 30, 2024, and 2023, respectively.

The income tax provision for the three months ended April 30, 2024, was primarily attributable to earnings in U.S.

We reported an income tax provision of $ 52 million and $ 10 million for the six months ended July 31, 2024, and 2023, respectively.

The income tax provision for the six months ended July 31, 2024, was primarily attributable to earnings in the U.S.

and profitable foreign jurisdictions, offset by the excess tax benefit from stock-based compensation.

The income tax provision for the three months ended April 30, 2023, was primarily attributable to income tax expenses in profitable foreign jurisdictions and an increase in U.S.

taxes due to capitalized research and development expenditures.

The income tax provision for the six months ended July 31, 2023, was primarily attributable to income tax expenses in profitable foreign jurisdictions and capitalized research and development expenditures in the U.S.

We are subject to income tax audits in the U.S.

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The realization of net deferred tax assets is dependent on our ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets.

As of April 30, 2024, we continue to maintain valuation allowances related to tax credits in certain state jurisdictions and net operating loss in certain foreign jurisdictions.

As of July 31, 2024, we continue to maintain valuation allowances related to tax credits in certain state jurisdictions and net operating loss in certain foreign jurisdictions.

We will continue to evaluate the need for valuation allowances for our deferred tax assets.

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The following table presents the calculation of basic and diluted net income (loss) per share (in millions, except number of shares, which are reflected in thousands, and per share data):

Three Months Ended April 30,

Class A Class B Class A Class B

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Class A Class B Class A Class B Class A Class B Class A Class B

Net income (loss) per share, basic:

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The effects of these potentially outstanding shares were not included in the calculation of diluted net income (loss) per share because the effect would have been anti-dilutive (in thousands):

Three Months Ended April 30,

Shares related to outstanding share-based awards 72 3,909

Shares subject to warrants related to the issuance of convertible senior notes 0 2,108

Total 72 6,017

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

Total shares related to outstanding share-based awards 6,321 2,531 3,196 3,220

Geographic Information

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The following table sets forth revenues by geographic area (in millions):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2024 2023 2024 2023

United States $ 1,561 $ 1,345 $ 3,054 $ 2,609

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Aggregate Property and equipment, net and Operating lease right-of-use assets by geographic area was as follows (in millions):

April 30, 2024 January 31, 2024

July 31, 2024 January 31, 2024

United States $ 1,212 $ 1,199

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Total long-lived assets $ 1,598 $ 1,523

Subsequent Events

August 2024 Share Repurchase Program

In August 2024, our Board of Directors authorized the August 2024 Share Repurchase Program, under which we may purchase up to $ 1.0 billion of our outstanding shares of Class A common stock.

We may repurchase shares of Class A common stock from time to time through open market purchases, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions.

The timing and total amount of stock repurchases will depend upon business, economic, and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations.

The August 2024 Share Repurchase Program has no expiration date, but may be suspended or discontinued at any time, and does not obligate us to acquire any amount of Class A common stock.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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We have based these forward-looking statements largely on our current expectations, beliefs, and projections about future events, conditions, and trends that we believe may affect our financial condition, operating results, business strategy, short-term and long-term business operations and objectives, and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties, assumptions, and changes in circumstances that are difficult to predict and many of which are outside of our control, such as those arising from the impact of recent macroeconomic events, including inflation, increased interest rates, and geopolitical factors, as well as those described in the “ Risk Factors ” section, which we encourage you to read carefully.

These forward-looking statements are subject to a number of risks, uncertainties, assumptions, and changes in circumstances that are difficult to predict and many of which are outside of our control, such as those arising from the impact of recent macroeconomic events, including inflation, fluctuating interest rates, and geopolitical factors, as well as those described in the “ Risk Factors ” section, which we encourage you to read carefully.

Moreover, we operate in a very competitive and rapidly changing environment.

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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-Q

Item 1. Financial Statements