What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-12-05 compared with 2024-08-28 · 140 added, 123 removed, 652 unchanged (29% of the section changed)

3 unchanged sentences

(in millions)

July 31, 2024 January 31, 2024

October 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 July 31, Six Months Ended July 31,

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

19 unchanged sentences

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

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

9 unchanged sentences

(in millions)

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

4 unchanged sentences

5 ( 4 ) 7 ( 16 )

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

Net change in unrealized gains (losses) on cash flow hedges, net of tax provision (benefit) of $( 1 ), $ 2 , $ 0 , and $ 4 , respectively

( 9 ) 48 ( 10 ) ( 1 )

5 unchanged sentences

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

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

23 unchanged sentences

Total stockholders’ equity $ 8,624 $ 6,625 $ 8,624 $ 6,625

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

2 unchanged sentences

Issuance of common stock under employee equity plans 1,340 1,383 6,179 5,926

Issuance of common stock in business combination

Shares withheld related to net share settlement of equity awards ( 506 ) ( 20 ) ( 2,058 ) ( 61 )

5 unchanged sentences

(in millions)

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

38 unchanged sentences

See Notes to Condensed Consolidated Financial Statements

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

1 unchanged sentence

Cash paid for interest

$ 55 $ 55 $ 110 $ 110

Cash paid for income taxes, net of refunds 13 3 48 35

2 unchanged sentences

Accrued taxes related to net share settlement of equity awards

As of July 31,

As of October 31,

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

12 unchanged sentences

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.

With Workday, our customers have a unified platform with artificial intelligence (“AI”) built into its core that helps them manage their 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 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 results of operations for the three and nine months ended October 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 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.

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

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

Other than the United States, no country individually accounted for more than 10% of total revenues during the three and nine months ended October 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.

2 unchanged sentences

Even with these procedures for disaster recovery in place, our cloud applications could be significantly interrupted during the implementation of the procedures to restore services.

In addition, we rely upon third-party hosted infrastructure partners globally, including Amazon Web Services (“AWS”) and Google LLC, to serve customers and operate certain aspects of our services.

In addition, we rely upon third-party hosted infrastructure partners, including Amazon Web Services (“AWS”) and Google LLC, to serve customers globally and operate certain aspects of our services.

Given this, any disruption of or interference at our hosted infrastructure partners may impact our operations and our business could be adversely impacted.

5 unchanged sentences

The standard requires retrospective application to all prior periods presented in the financial statements.

We do not intend to early adopt, and are currently evaluating the impacts of the new standard.

We are currently evaluating the impacts of the new standard.

In December 2023, the FASB issued ASU No.

4 unchanged sentences

We do not intend to early adopt, and are currently evaluating the impacts of the new standard.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires the disclosure of additional information about specific expense categories in the notes to the financial statements.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The standard allows for adoption on a prospective or retrospective basis.

We are currently evaluating the impacts of the new standard.

Debt Securities

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

As of October 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):

July 31, 2024

October 31, 2024

Due within 1 year $ 2,983

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.

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.

Interest receivable of $ 48 million and $ 35 million is included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets as of October 31, 2024, and January 31, 2024, respectively.

The unrealized losses on our debt securities primarily resulted from changes in market interest rates.

We do not intend to sell these debt securities and it is not more likely than not that we will be required to sell the debt securities before recovery of their amortized cost bases, which may be at maturity.

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

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

As of October 31, 2024

Less than 12 Months

4 unchanged sentences

Corporate bonds 640 ( 2 ) 184 0 824 ( 2 )

Commercial paper

$ 1,048 $ ( 3 ) $ 319 $ 0 $ 1,367 $ ( 3 )

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

As of January 31, 2024

7 unchanged sentences

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

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

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

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.

We sold $ 48 million and $ 24 million of debt securities during the three months ended October 31, 2024, and 2023, respectively.

We sold $ 115 million and $ 42 million of debt securities during the nine months ended October 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 July 31, 2024 January 31, 2024

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

Money market funds Cash and cash equivalents $ 849 $ 1,017

1 unchanged sentence

Total equity investments $ 1,091 $ 1,265

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

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

Total realized and unrealized gains and losses associated with our equity investments were as follows (in millions):

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

8 unchanged sentences

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

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

Total initial cost $ 210 $ 213

1 unchanged sentence

Carrying value $ 242 $ 248

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.

During the three months ended October 31, 2024, we recorded upward adjustments of $ 5 million to the carrying value of non-marketable equity investments and impairment losses of $ 2 million.

During the three months ended October 31, 2023, we recorded impairment losses of $ 9 million.

During the nine months ended October 31, 2024, we recorded losses related to impairments and exits of $ 13 million and upward adjustments of $ 6 million to the carrying value of non-marketable equity investments.

During the nine months ended October 31, 2023, we recorded impairment losses of $ 22 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 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.

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

During the three and nine months ended October 31, 2023, we recorded unrealized net losses of $ 4 million and $ 2 million, respectively, on our marketable equity investment balance held as of the end of the period of $ 29 million.

Additionally, during the three and nine months ended October 31, 2023, we sold marketable equity investments for proceeds of $ 22 million and $ 52 million, respectively.

The realized gains and losses from the sales were immaterial.

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 July 31, 2024 (in millions):

Level 1 Level 2 Level 3 Total

27 unchanged sentences

Deferred Costs

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.

Deferred costs, which consist of deferred sales commissions, were $ 734 million and $ 741 million as of October 31, 2024, and January 31, 2024, respectively.

Amortization expense for the deferred costs was $ 64 million and $ 54 million for the three months ended October 31, 2024, and 2023, respectively, and $ 185 million and $ 155 million for the nine months ended October 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):

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

Computers, equipment, and software $ 1,402 $ 1,387

6 unchanged sentences

Property and equipment, net $ 1,263 $ 1,234

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

Depreciation expense totaled $ 60 million and $ 52 million for the three months ended October 31, 2024, and 2023, respectively, and $ 174 million and $ 149 million for the nine months ended October 31, 2024, and 2023, respectively.

Business Combinations

Evisort Acquisition

On October 8, 2024, we acquired all outstanding stock of Evisort Inc.

(“Evisort”), a provider of an AI-native document intelligence platform.

With Evisort, we intend to add AI-powered document intelligence solutions across our suite of finance and HCM applications.

We have included the financial results of Evisort in our condensed consolidated financial statements from the date of acquisition.

The total acquisition-date fair value of the purchase consideration was $ 311 million, which was paid in cash.

We recorded developed technology intangible assets of $ 44 million (to be amortized over an estimated useful life of 6 years), customer relationships intangible assets of $ 28 million (to be amortized over an estimated useful life of 14 years), and goodwill of $ 238 million.

The goodwill recognized was primarily attributable to the expected synergies from integrating Evisort’s technology into our product portfolio.

The goodwill is not deductible for income tax purposes.

The fair values of assets acquired and liabilities assumed may be subject to change over the measurement period as additional information is received and certain tax matters are finalized.

The measurement period will end no later than one year from the acquisition date.

Separate operating results and pro forma results of operations for Evisort have not been presented as the effect of this acquisition was not material to our financial results.

HiredScore Acquisition

20 unchanged sentences

Acquisition-Related Intangible Assets, Net

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

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

Gross Carrying Amount Accumulated Amortization Net Book Value

11 unchanged sentences

$ 657 $ ( 424 ) $ 233

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):

Amortization expense related to acquisition-related intangible assets was $ 20 million and $ 16 million for the three months ended October 31, 2024, and 2023, respectively, and $ 58 million for each of the nine month periods ended October 31, 2024, and 2023.

As of October 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):

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

Non-marketable equity and other investments $ 245 $ 248

Technology patents and other intangible assets, net 26 26

Contract assets 37 21

Technology patents and other intangible assets, net 26 26

Prepayments for goods and services 16 14

Derivative assets 13 14

Deposits 10 8

Total other assets $ 365 $ 337

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

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

As of October 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 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 $ 399 million as of both July 31, 2024, and January 31, 2024.

As of October 31, 2024, we estimate that $ 18 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 October 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 $ 2.8 billion and $ 2.5 billion, respectively, and the notional values of the cash flow hedges that we held to sell U.S.

dollars in exchange for other currencies were $ 412 million and $ 399 million, respectively.

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

As of October 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 $ 120 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 July 31, 2024 January 31, 2024

Condensed Consolidated Balance Sheets Location October 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 July 31,

Three Months Ended October 31,

Condensed Consolidated Statements of Operations Location 2024 2023

2 unchanged sentences

Costs and expenses 1,995 3 1,778 1

Six Months Ended July 31,

Nine Months Ended October 31,

Condensed Consolidated Statements of Operations Location 2024 2023

3 unchanged sentences

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 July 31, Six Months Ended July 31,

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

2024 2023 2024 2023

3 unchanged sentences

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

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

Condensed Consolidated Statements of Operations Location Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

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

As of October 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

7 unchanged sentences

Counterparty F 2 0 2 ( 1 ) 0 1

Counterparty G

Total $ 46 $ 0 $ 46 $ ( 25 ) $ 0 $ 21

6 unchanged sentences

Counterparty D 13 0 13 ( 13 ) 0 0

Counterparty E 0 0 0 0 0 0

Counterparty F 1 0 1 ( 1 ) 0 0

1 unchanged sentence

Outstanding debt consisted of the following (in millions):

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

2027 Notes $ 1,000 $ 1,000

4 unchanged sentences

Debt, noncurrent $ 2,983 $ 2,980

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

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

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

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

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

As of October 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 July 31, Six Months Ended July 31,

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

3 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 $ 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.

Operating lease right-of-use assets were $ 335 million and $ 289 million as of October 31, 2024, and January 31, 2024, respectively, and operating lease liabilities were $ 380 million and $ 316 million as of October 31, 2024, and January 31, 2024, respectively.

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

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

4 unchanged sentences

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

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

2 unchanged sentences

Other information related to our operating leases was as follows:

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

Weighted average remaining lease term (in years) 5 5

Weighted average discount rate 4.07 % 3.95 %

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

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

Fiscal Period:

4 unchanged sentences

Total operating lease liabilities $ 380

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 .

As of October 31, 2024 , we have additional operating leases for data centers and office space that had not yet commenced with total undiscounted lease payments of $ 90 million.

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

During the nine months ended October 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 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.

In our opinion, as of October 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 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.

As of October 31, 2024, there were 213 million shares of Class A common stock, net of treasury stock, and 52 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.

2 unchanged sentences

Share Repurchase Programs

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”).

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

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 (“February 2024 Share Repurchase Program”).

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 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.

In August 2024, our Board of Directors authorized the repurchase of up to $ 1.0 billion of our outstanding shares of Class A common stock (“August 2024 Share Repurchase Program”).

Under this program, in accordance with applicable securities laws and other restrictions, we may repurchase shares of our Class A common stock 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.

The timing and total amount of share 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, may be suspended or discontinued at any time, and does not obligate us to acquire any amount of Class A common stock.

Prior to the August 2024 Share Repurchase Program, our Board of Directors authorized a $ 500 million share repurchase program in February 2024, which we completed in the third quarter of fiscal 2025, and a $ 500 million share repurchase program in November 2022, which we completed in the first quarter of fiscal 2025.

The table below sets forth information regarding our share repurchase programs (in millions, except number of shares which are reflected in thousands, and per share data):

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

Total number of shares repurchased 649 677 2,538 1,312

Average price paid per share $ 242.42 $ 218.35 $ 236.73 $ 218.34

Amount repurchased

$ 157 $ 147 $ 600 $ 286

All repurchases were made in open market transactions.

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 .

As of October 31, 2024, we were authorized to repurchase a remaining $ 902 million of our outstanding shares of Class A common stock under the August 2024 Share Repurchase Program.

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

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

As of October 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 six months ended July 31, 2024, was as follows (in thousands, except per share data):

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

Number of Shares Weighted-Average Grant Date Fair Value

4 unchanged sentences

( 2,854 ) 206.65

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

Outstanding balance as of October 31, 2024 15,273 224.31

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

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 .

As of October 31, 2024, there was a total of $ 2.6 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

7 unchanged sentences

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

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 .

As of October 31, 2024, there was a total of $ 11 million in unrecognized compensation cost related to the PVU Award, which is expected to be recognized over approximately three years .

Stock Options

1 unchanged sentence

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 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.

As of October 31, 2024, there were 0.1 million options outstanding and exercisable with a weighted-average exercise price of $ 29.43 , and an aggregate intrinsic value of $ 16 million.

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

3 unchanged sentences

Condensed Consolidated Balance Sheets Location

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

Contract assets:

11 unchanged sentences

$ 3,511 $ 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 $ 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.

(1) Included in the unearned revenue balance are amounts related to professional services that are subject to cancellation and pro-rated refund rights of $ 69 million and $ 76 million as of October 31, 2024, and January 31, 2024, respectively.

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

Revenues of $ 3.6 billion and $ 3.1 billion were recognized during the nine months ended October 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 July 31, 2024, approximately $ 21.6 billion of revenues are expected to be recognized from remaining performance obligations for subscription contracts.

As of October 31, 2024, approximately $ 22.2 billion of revenues are expected to be recognized from remaining performance obligations for subscription contracts.

We expect to recognize revenues on approximately $ 7.0 billion and $ 12.3 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 July 31, 2024, were not material.

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

Other Income (Expense), Net

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

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

8 unchanged sentences

For further information, see Note 3, Investments .

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 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 reported an income tax provision of $ 86 million and $ 25 million for the nine months ended October 31, 2024, and 2023, respectively.

The income tax provision for the nine months ended October 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 and increase in research and development credits.

The income tax provision for the nine months ended October 31, 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.

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

4 unchanged sentences

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 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.

As of October 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.

7 unchanged sentences

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 July 31, Six Months Ended July 31,

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

16 unchanged sentences

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 July 31, Six Months Ended July 31,

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

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

Total weighted-average shares related to outstanding share-based awards

258 1,882 2,217 2,774

Geographic Information

3 unchanged sentences

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

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

7 unchanged sentences

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

July 31, 2024 January 31, 2024

October 31, 2024 January 31, 2024

United States $ 1,226 $ 1,199

2 unchanged sentences

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

13 unchanged sentences

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