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Item 1. Financial Statements

2025-05-23 compared with 2024-12-05 · 211 added, 302 removed, 490 unchanged (51% of the section changed)

3 unchanged sentences

(in millions)

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

Current assets:

38 unchanged sentences

(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

Three Months Ended April 30,

Subscription services $ 2,059 $ 1,815

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General and administrative 212 200

Restructuring 166 8

Total costs and expenses 2,201 1,926

Operating income (loss) 165 88 340 104

Other income (expense), net 62 41 178 114

Income (loss) before provision for (benefit from) income taxes 227 129 518 218

Provision for (benefit from) income taxes 34 15 86 25

Net income (loss) $ 193 $ 114 $ 432 $ 193

Net income (loss) per share, basic $ 0.73 $ 0.43 $ 1.63 $ 0.74

Net income (loss) per share, diluted $ 0.72 $ 0.43 $ 1.61 $ 0.73

Weighted-average shares used to compute net income (loss) per share, basic 265,411 262,153 265,062 260,747

Weighted-average shares used to compute net income (loss) per share, diluted 268,549 266,377 268,936 264,087

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

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

2024 2023 2024 2023

Operating income 39 64

Other income, net 64 59

Income before provision for income taxes 103 123

Provision for income taxes 35 16

Net income $ 68 $ 107

Net income per share, basic $ 0.25 $ 0.40

Net income per share, diluted $ 0.25 $ 0.40

Weighted-average shares used to compute net income per share, basic 266,516 264,444

Weighted-average shares used to compute net income per share, diluted 270,296 270,298

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

Three Months Ended April 30,

Costs of subscription services $ 42 $ 38

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General and administrative 70 71

Total share-based compensation expenses $ 368 $ 349 $ 1,122 $ 1,071

Restructuring 42 0

Total share-based compensation expense $ 459 $ 385

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(in millions)

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

2024 2023 2024 2023

Net income (loss) $ 193 $ 114 $ 432 $ 193

Other comprehensive income (loss), net of tax:

Three Months Ended April 30,

Net income $ 68 $ 107

Other comprehensive loss, net of tax:

Net change in foreign currency translation adjustment 2 ( 2 )

Net change in unrealized gains (losses) on available-for-sale debt securities, net of tax provision (benefit) of $ 10 and $( 9 ), respectively

5 ( 4 ) 7 ( 16 )

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

( 9 ) 48 ( 10 ) ( 1 )

Other comprehensive income (loss), net of tax ( 3 ) 40 ( 5 ) ( 20 )

Other comprehensive loss, net of tax ( 128 ) ( 4 )

Comprehensive income (loss) $ ( 60 ) $ 103

3 unchanged sentences

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

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

2024 2023 2024 2023

Three Months Ended April 30,

Common stock:

15 unchanged sentences

Balance, beginning of period 84 21

Other comprehensive income (loss) ( 3 ) 40 ( 5 ) ( 20 )

Other comprehensive loss ( 128 ) ( 4 )

Balance, end of period ( 44 ) 17

1 unchanged sentence

Balance, beginning of period ( 1,205 ) ( 1,731 )

Net income (loss) 193 114 432 193

Net income 68 107

Balance, end of period ( 1,137 ) ( 1,624 )

Total stockholders’ equity $ 8,919 $ 8,163

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

2024 2023 2024 2023

Three Months Ended April 30,

Common stock shares:

1 unchanged sentence

Issuance of common stock under employee equity plans 2,537 2,876

Issuance of common stock in business combination

Shares withheld related to net share settlement of equity awards ( 1,003 ) ( 1,018 )

5 unchanged sentences

(in millions)

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

2024 2023 2024 2023

Three Months Ended April 30,

Cash flows from operating activities:

Net income (loss) $ 193 $ 114 $ 432 $ 193

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net income $ 68 $ 107

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 84 75

Share-based compensation expenses 368 349 1,122 1,071

Share-based compensation expense 459 385

Amortization of deferred costs 68 59

Non-cash lease expense 27 25

(Gains) losses on investments ( 4 ) 9 6 17

Losses on investments, net 1 7

Accretion of discounts on marketable debt securities, net ( 20 ) ( 33 )

Deferred income taxes 18 6

Other ( 8 ) ( 13 ) 4 ( 28 )

Changes in operating assets and liabilities, net of business combinations:

5 unchanged sentences

Unearned revenue ( 670 ) ( 525 )

Net cash provided by (used in) operating activities 406 451 1,349 1,153

Net cash provided by operating activities 457 372

Cash flows from investing activities:

4 unchanged sentences

Business combinations, net of cash acquired 0 ( 512 )

Purchase of other intangible assets ( 2 ) ( 1 ) ( 3 ) ( 10 )

Purchases of non-marketable equity and other investments ( 4 ) 0

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

Net cash provided by (used in) investing activities ( 450 ) ( 172 ) ( 1,054 ) ( 1,270 )

Net cash used in investing activities ( 523 ) ( 258 )

Cash flows from financing activities:

Repurchases of common stock ( 290 ) ( 128 )

Proceeds from issuance of common stock from employee equity plans 0 0 106 95

Taxes paid related to net share settlement of equity awards ( 211 ) ( 239 )

Net cash provided by (used in) financing activities ( 282 ) ( 150 ) ( 996 ) ( 201 )

Net cash used in financing activities ( 501 ) ( 367 )

Effect of exchange rate changes 1 0

Net increase (decrease) in cash, cash equivalents, and restricted cash ( 326 ) 128 ( 701 ) ( 319 )

Net decrease in cash, cash equivalents, and restricted cash ( 566 ) ( 253 )

Cash, cash equivalents, and restricted cash at the beginning of period 1,554 2,024

1 unchanged sentence

See Notes to Condensed Consolidated Financial Statements

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

2024 2023 2024 2023

Three Months Ended April 30,

Supplemental cash flow data:

Cash paid for interest

$ 55 $ 55 $ 110 $ 110

Cash paid for income taxes, net of refunds 10 6

2 unchanged sentences

Accrued taxes related to net share settlement of equity awards

As of October 31,

As of April 30,

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

8 unchanged sentences

Amounts in this report may not recalculate due to rounding.

Year-over-year comparisons, operating margin, and net income (loss) per share are calculated using unrounded data.

Year-over-year comparisons, operating margin, and net income per share are calculated using unrounded data.

Overview and Basis of Presentation

Description of the Business

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 most important assets – their people and money.

Workday is a leading enterprise platform that provides organizations with solutions for financial management, human capital management (“HCM”), planning, spend management, and analytics.

With Workday, our customers have an artificial intelligence (“AI”)-powered cloud platform to help manage their people, money, and agents.

Basis of Presentation

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All such adjustments are of a normal, recurring nature.

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 results of operations for the three months ended April 30, 2025, shown in this report are not necessarily indicative of the results to be expected for the full fiscal year ending January 31, 2026.

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, 2025, filed with the SEC on March 11, 2025.

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Segment Information

We operate in one operating segment, cloud applications.

Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance.

Our CODM, the Chief Executive Officer, allocates resources and assesses performance based upon discrete financial information at the consolidated level.

We operate as a single operating and reportable segment:

cloud applications.

Although we offer a variety of enterprise cloud solutions to a diverse global customer base, we operate in one operating segment because our business activities are managed on a consolidated basis, our service offerings all operate on the Workday platform and are deployed in a similar manner, and our Chief Operating Decision Maker (“CODM”), who is our Chief Executive Officer, allocates resources and assesses performance based upon discrete financial information at the consolidated level.

Our CODM assesses performance and decides how to allocate resources based on Net income, as reported on the Consolidated Statements of Operations.

Net income is used to evaluate the overall profitability of the business and to guide decisions on how to invest in and grow the business.

Our CODM also reviews Total assets, as reported on the Consolidated Balance Sheets, and Capital expenditures, as reported on the Consolidated Statements of Cash Flows.

Significant segment expenses include the costs and expenses presented on the Consolidated Statements of Operations.

Other segment items include Other income, net and Provision for income taxes.

Significant Accounting Policies and Accounting Standards

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Our deposits exceed federally insured limits.

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.

We serve our customers and users from data center facilities operated by third parties, located in North America and Europe.

We have internal procedures to restore services in the event of disruption at one of our data center facilities.

No customer individually accounted for more than 10% of trade and other receivables, net as of April 30, 2025, or January 31, 2025.

No customer individually accounted for more than 10% of total revenues during the three months ended April 30, 2025, or 2024.

Other than the United States, no country individually accounted for more than 10% of total revenues during the three months ended April 30, 2025, or 2024.

In order to reduce the risk of disruption of our cloud applications, we host our applications in data centers operated by third parties located in the United States, Europe, Canada, and the Asia-Pacific region.

These data centers include third-party hosted infrastructure, including Amazon Web Services (“AWS”) and Google Cloud, and co-location data centers.

We have internal procedures to restore services in the event of disruption at one of these data center facilities.

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, 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.

Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires disclosure of incremental segment information on an annual and interim basis.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

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

We are currently evaluating the impacts of the new standard.

In December 2023, the FASB issued ASU No.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Disclosures , which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.

This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The standard allows for adoption on a prospective basis, with a retrospective option.

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

This ASU is effective for annual periods beginning in our fiscal 2026.

The updated standard allows for adoption on a prospective basis, with a retrospective option.

We are currently evaluating the impacts of the updated standard.

In November 2024, the FASB issued ASU No.

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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.

This ASU is effective for annual periods beginning in our fiscal 2028, and interim periods beginning in the first quarter of our fiscal 2029, with early adoption permitted.

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

We are currently evaluating the impacts of the updated standard.

Debt Securities

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

As of April 30, 2025, debt securities consisted of the following (in millions):

Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value

3 unchanged sentences

Commercial paper 208 0 0 208

Asset-backed securities 279 2 0 281

Other debt securities

Total debt securities $ 7,149 $ 53 $ 0 $ 7,202

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Commercial paper 294 0 0 294

Asset-backed securities 104 0 0 104

Other debt securities

Total debt securities $ 6,638 $ 17 $ ( 4 ) $ 6,651

1 unchanged sentence

Included in Marketable securities $ 6,461 $ 17 $ ( 4 ) $ 6,474

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

October 31, 2024

As of April 30, 2025, the fair values of debt securities, by remaining contractual maturity, were as follows (in millions):

Due within 1 year $ 2,519

Due in 1 year through 5 years 3,011

Due 1 year through 5 years 4,463

Due 5 years through 10 years

Due after 10 years

Total debt securities $ 7,202

Actual maturities may differ from contractual maturities because borrowers may have certain prepayment conditions.

We classify our debt securities as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date.

1 unchanged sentence

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 $ 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 October 31, 2024

Less than 12 Months

12 Months or Greater

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

treasury securities $ 266 $ ( 1 ) $ 120 $ 0 $ 386 $ ( 1 )

agency obligations 142 0 15 0 157 0

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

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

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 )

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.

Interest receivable of $ 63 million and $ 53 million is included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets as of April 30, 2025, and January 31, 2025, respectively.

As of April 30, 2025, and January 31, 2025, unrealized losses on our debt securities were not material.

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

We sold $ 140 million and $ 17 million of debt securities during the three months ended April 30, 2025, and 2024, respectively.

The realized gains and losses from the sales were immaterial.

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Equity investments consisted of the following (in millions):

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

Condensed Consolidated Balance Sheets Location April 30, 2025 January 31, 2025

Money market funds Cash and cash equivalents $ 550 $ 988

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Total equity investments $ 797 $ 1,232

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

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

$ 0 $ ( 1 ) $ ( 3 ) $ 2

Net unrealized gains (losses) recognized on equity investments held as of the end of the period 3 ( 13 ) ( 4 ) ( 24 )

Total net gains (losses) recognized in Other income (expense), net $ 3 $ ( 14 ) $ ( 7 ) $ ( 22 )

(1) Reflects the difference between the sale proceeds and the carrying value of the equity investments at the beginning of the period.

Non-Marketable Equity Investments Measured Using the Measurement Alternative

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

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

Total initial cost $ 219 $ 217

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Carrying value $ 247 $ 244

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 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.

During the three months ended April 30, 2025, and 2024, we recognized net unrealized losses on equity investments of $ 1 million and $ 8 million, respectively.

Fair Value Measurements

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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 October 31, 2024 (in millions):

Level 1 Level 2 Level 3 Total

3 unchanged sentences

Commercial paper 0 208 0 208

Asset-backed securities 0 281 0 281

Other debt securities

Money market funds 550 0 0 550

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Commercial paper 0 294 0 294

Asset-backed securities 0 104 0 104

Other debt securities

Money market funds 988 0 0 988

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Deferred Costs

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.

Deferred costs, which consist of deferred sales commissions, were $ 812 million and $ 828 million as of April 30, 2025, and January 31, 2025, respectively.

Amortization expense for the deferred costs was $ 68 million and $ 59 million for the three months ended April 30, 2025, and 2024, 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):

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

Computers, equipment, and software $ 1,311 $ 1,370

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Property and equipment, net $ 1,140 $ 1,239

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

On March 29, 2024, we acquired all outstanding stock of HiredScore, Inc.

(“HiredScore”), a provider of AI-powered talent orchestration solutions.

With HiredScore, Workday provides customers with a comprehensive, transparent, and intelligent talent acquisition and internal mobility offering, helping them better address their ever-evolving people needs.

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

The total acquisition-date fair value of the purchase consideration was $ 530 million, which was paid in cash.

The purchase consideration was preliminarily allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill.

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 primary areas that are subject to change include income taxes payable and deferred taxes.

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

The preliminary fair values of the assets acquired and liabilities assumed as of the date of acquisition were as follows (in millions):

Acquisition-related intangible assets 135

Other liabilities

The fair values and weighted-average useful lives of the acquired intangible assets by category were as follows (in millions, except years):

Estimated Fair Values Weighted-Average Useful Lives (in Years)

Developed technology $ 111 8

Customer relationships 23 14

Total acquisition-related intangible assets

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

The goodwill is not deductible for income tax purposes.

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

Depreciation expense totaled $ 62 million and $ 56 million for the three months ended April 30, 2025, and 2024, respectively.

Acquisition-Related Intangible Assets, Net

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

Acquisition-related intangible assets, net consisted of the following as of April 30, 2025 (in millions):

Gross Carrying Amount Accumulated Amortization Net Book Value

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$ 864 $ ( 503 ) $ 361

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):

Amortization expense related to acquisition-related intangible assets was $ 21 million and $ 17 million for the three months ended April 30, 2025, and 2024, respectively.

As of April 30, 2025, our future estimated amortization expense related to acquisition-related intangible assets was as follows (in millions):

Fiscal Period:

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Other assets consisted of the following (in millions):

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

Non-marketable equity and other investments $ 249 $ 247

2 unchanged sentences

Prepayments for goods and services 14 16

Derivative assets 13 14

Deposits 11 10

Derivative assets 4 52

Total other assets $ 379 $ 418

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

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

As of April 30, 2025, our future estimated amortization expense was as follows (in millions):

Fiscal Period:

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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 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.

As of April 30, 2025, we estimate that $ 20 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, 2025, and January 31, 2025, the notional values of the cash flow hedges that we held to buy U.S.

dollars in exchange for other currencies were $ 3.1 billion and $ 2.8 billion, respectively, and the notional values of the cash flow hedges that we held to sell U.S.

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These forward contracts are intended to offset foreign currency gains or losses associated with the underlying monetary assets and liabilities and are recorded on the Condensed Consolidated Balance Sheets at fair value.

These forward contracts are not designated as hedging instruments under applicable accounting guidance, and therefore all changes in the fair value of these forward contracts are recorded in Other income (expense), net on the Condensed Consolidated Statements of Operations.

These forward contracts are not designated as hedging instruments under applicable accounting guidance, and therefore all changes in the fair value of these forward contracts are recorded in Other income, net on the Condensed Consolidated Statements of Operations.

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

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

As of April 30, 2025, and January 31, 2025, the notional values of the non-designated hedges that we held to buy U.S.

dollars in exchange for other currencies were $ 181 million and $ 242 million, respectively, and the notional values of the non-designated hedges that we held to sell U.S.

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

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

Condensed Consolidated Balance Sheets Location April 30, 2025 January 31, 2025

Derivative assets:

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Non-designated hedges Accrued expenses and other current liabilities 3 1

Non-designated hedges Other liabilities 1 0

Total derivative liabilities $ 112 $ 26

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

Three Months Ended October 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 $ 2,160 $ 7 $ 1,866 $ 16

Costs and expenses 1,995 3 1,778 1

Nine Months Ended October 31,

Three Months Ended April 30,

Condensed Consolidated Statements of Operations Location 2025 2024

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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 October 31, Nine Months Ended October 31,

2024 2023 2024 2023

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

Gains (losses) recognized in OCI Net change in unrealized gains (losses) on cash flow hedges $ ( 162 ) $ 30

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

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

2024 2023 2024 2023

Gains (losses) related to non-designated hedges Other income (expense), net $ 0 $ 6 $ ( 2 ) $ 8

We are subject to netting agreements with all of the counterparties of the foreign exchange contracts, under which we are permitted to net settle transactions of the same currency with a single net amount payable by one party to the other.

It is our policy to present the derivatives gross on the Condensed Consolidated Balance Sheets.

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

Gains (losses) related to non-designated hedges Other income, net

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

We are subject to netting agreements with all of these counterparties, under which we are permitted to net settle transactions of the same currency with a single net amount payable by one party to the other.

After consideration of these netting arrangements, the total net settlement amount related to our foreign currency forward contracts is an asset position of $ 3 million and a liability position of $ 79 million as of April 30, 2025, and an asset position of $ 86 million as of January 31, 2025.

Although legally enforceable master netting arrangements exist between Workday and each counterparty, it is our policy to present the derivatives gross on the Condensed Consolidated Balance Sheets.

Our foreign currency forward contracts are not subject to any credit contingent features or collateral requirements.

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 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

Financial Instruments Cash Collateral Received

Derivative assets:

Counterparty A $ 13 $ 0 $ 13 $ ( 4 ) $ 0 $ 9

Counterparty B 9 0 9 ( 6 ) 0 3

Counterparty C 3 0 3 ( 1 ) 0 2

Counterparty D 17 0 17 ( 13 ) 0 4

Counterparty E 1 0 1 0 0 1

Counterparty F 2 0 2 ( 1 ) 0 1

Counterparty G

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

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

Financial Instruments Cash Collateral Pledged

Derivative liabilities:

Counterparty A $ 4 $ 0 $ 4 $ ( 4 ) $ 0 $ 0

Counterparty B 6 0 6 ( 6 ) 0 0

Counterparty C 1 0 1 ( 1 ) 0 0

Counterparty D 13 0 13 ( 13 ) 0 0

Counterparty F 1 0 1 ( 1 ) 0 0

Total $ 25 $ 0 $ 25 $ ( 25 ) $ 0 $ 0

Outstanding debt consisted of the following (in millions):

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

2027 Notes $ 1,000 $ 1,000

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Debt, noncurrent $ 2,985 $ 2,984

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

As of April 30, 2025, our future principal payments for the outstanding debt were as follows (in millions):

Fiscal Period:

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Total principal amount $ 3,000

In April 2022, we issued $ 3.0 billion aggregate principal amount of senior notes, consisting of $ 1.0 billion aggregate principal amount of 3.500 % notes due April 1, 2027 (“2027 Notes”), $ 750 million aggregate principal amount of 3.700 % notes due April 1, 2029 (“2029 Notes”), and $ 1.25 billion aggregate principal amount of 3.800 % notes due April 1, 2032 (“2032 Notes,” and together with the 2027 Notes and the 2029 Notes, “Senior Notes”).

In fiscal 2023, we issued $ 3.0 billion aggregate principal amount of senior notes, consisting of $ 1.0 billion aggregate principal amount of 3.500 % notes due April 1, 2027 (“2027 Notes”), $ 750 million aggregate principal amount of 3.700 % notes due April 1, 2029 (“2029 Notes”), and $ 1.25 billion aggregate principal amount of 3.800 % notes due April 1, 2032 (“2032 Notes,” and together with the 2027 Notes and the 2029 Notes, “Senior Notes”).

Interest is payable semi-annually in arrears on April 1 and October 1 of each year.

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

As of April 30, 2025, and January 31, 2025, 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.

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

As of April 30, 2025, and January 31, 2025, the total estimated fair value of the Senior Notes was $ 2.9 billion and $ 2.8 billion, respectively.

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.

Credit Agreement

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

In fiscal 2023, 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, 2025, and January 31, 2025 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.

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

As of April 30, 2025, and January 31, 2025, we were in compliance with all covenants included in the 2022 Credit Agreement.

Interest Expense on Debt

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

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

Three Months Ended April 30,

Contractual interest expense $ 28 $ 28

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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 $ 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.

Operating lease right-of-use assets were $ 355 million and $ 336 million as of April 30, 2025, and January 31, 2025, respectively, and operating lease liabilities were $ 408 million and $ 378 million as of April 30, 2025, and January 31, 2025, respectively.

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

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

2024 2023 2024 2023

Three Months Ended April 30,

Operating lease cost $ 31 $ 29

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

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

2024 2023 2024 2023

Three Months Ended April 30,

Cash paid for operating lease liabilities $ 33 $ 23

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Other information related to our operating leases was as follows:

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

Weighted average remaining lease term (in years) 6 5

Weighted average discount rate 4.28 % 4.20 %

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

As of April 30, 2025, maturities of operating lease liabilities were as follows (in millions):

Fiscal Period:

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Total operating lease liabilities $ 408

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 .

During the first quarter of fiscal 2026, we entered into a new operating lease agreement for our European headquarters in Dublin, Ireland which has not yet commenced with total undiscounted lease payments of $ 468 million.

The operating lease is expected to commence in the second quarter of fiscal 2026 with a lease term of 20 years.

We had additional operating leases for data centers and office space that had not yet commenced as of April 30, 2025, with total undiscounted lease payments of $ 43 million.

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

Commitments and Contingencies

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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 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.

During the three months ended April 30, 2025, 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, 2025.

Legal Matters

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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 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.

In our opinion, as of April 30, 2025, 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 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.

As of April 30, 2025, there were 216 million shares of Class A common stock, net of treasury stock, and 51 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.

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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

Three Months Ended April 30,

Total number of shares repurchased 1,290 502

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Amount repurchased

$ 157 $ 147 $ 600 $ 286

All repurchases were made in open market transactions.

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.

As of April 30, 2025, we were authorized to repurchase a remaining $ 509 million of our outstanding shares of Class A common stock under the August 2024 Share Repurchase Program.

In May 2025, our Board of Directors authorized the repurchase of up to an additional $ 1.0 billion of our outstanding shares of Class A common stock (“May 2025 Share Repurchase Program”).

For further information, see Note 20, Subsequent Event .

Employee Equity Plans

In June 2022, our stockholders approved the 2022 Equity Incentive Plan (“2022 Plan”), with a reserve of 30 million shares for issuance.

In fiscal 2023, our stockholders approved the 2022 Equity Incentive Plan (“2022 Plan”), with a reserve of 30 million shares for issuance.

The 2022 Plan serves as the successor to our 2012 Equity Incentive Plan (“2012 Plan” and, together with the 2022 Plan, “Stock Plans”).

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Prior awards granted under the 2012 Plan continue to be subject to the terms and provisions of the 2012 Plan.

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 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”).

Shares that are forfeited or withheld in connection with the net share settlement of restricted stock units (“RSUs”) are added to the reserves of the 2022 Plan.

As of April 30, 2025, we had 12 million shares of Class A common stock available for future grants.

In fiscal 2023, our stockholders approved the Amended and Restated 2012 Employee Stock Purchase Plan (“2012 ESPP”).

Under the 2012 ESPP, eligible employees are granted options to purchase shares at the lower of 85 % of the fair market value of the stock at the time of grant or 85 % of the fair market value at the time of exercise.

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

As of April 30, 2025, 2 million shares of Class A common stock were available for issuance under the 2012 ESPP.

Restricted Stock Units

The Stock Plans provide for the issuance of restricted stock units (“RSUs”) to employees and non-employees.

The Stock Plans provide for the issuance of RSUs and performance-based restricted stock units (“PSUs”) to employees and non-employees.

RSUs generally vest over four years .

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

Activity during the three months ended April 30, 2025, was as follows (in thousands, except per share data):

Number of Shares Weighted-Average Grant Date Fair Value

Outstanding balance as of January 31, 2025 14,361 $ 226.52

RSUs granted 6,602 251.96

RSUs vested ( 3,495 ) 203.45

RSUs forfeited and canceled (1)

Granted- restricted stock units 5,939 216.28

Granted- performance-based restricted stock units 72 214.10

Vested ( 1,521 ) 235.39

Forfeited and canceled (1)

( 1,802 ) 225.85

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

Outstanding balance as of April 30, 2025 17,049 222.18

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

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 .

In April 2025, we granted PSUs to executives subject to vesting based on the achievement of annual performance-based conditions determined at the beginning of each fiscal year and a three -year service-based condition.

The PSUs will vest at the end of the three-year service period, with the number of shares vesting ranging from 0 % to 150 % of the target, based on the average attainment of the annual performance conditions.

As of April 30, 2025, there was a total of $ 3.2 billion in unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs and PSUs, which is expected to be recognized over a weighted-average period of approximately three years .

Market-Based Restricted Stock Units

In December 2022, 0.3 million shares of market-based RSUs were granted to Mr.

In fiscal 2023, 0.3 million shares of market-based RSUs were granted to Mr.

Eschenbach in connection with his appointment as Co-CEO that vest based on appreciation of the price of our Class A common stock over a multi-year period and upon continued service (“PVU Award”).

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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 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

The Stock Plans provide for the issuance of incentive and nonstatutory stock options to employees and non-employees.

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 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.

As of April 30, 2025, there was a total of $ 7 million in unrecognized compensation cost related to the PVU Award, which is expected to be recognized over approximately three years .

Contract Balances and Performance Obligations

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Condensed Consolidated Balance Sheets Location

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

Contract assets:

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$ 3,877 $ 4,547

(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.

(1) Included in this balance are amounts related to professional services that are subject to cancellation and pro-rated refund rights of $ 69 million and $ 83 million as of April 30, 2025, and January 31, 2025, respectively.

Revenues of $ 1.7 billion and $ 1.5 billion were recognized during the three months ended April 30, 2025, and 2024, respectively, that were included in the unearned revenue balances as of January 31, 2025, and 2024, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

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

As of April 30, 2025, approximately $ 24.6 billion of revenues are expected to be recognized from remaining performance obligations for subscription contracts.

We expect to recognize revenues on approximately $ 7.6 billion and $ 13.5 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 October 31, 2024, were not material.

Other Income (Expense), Net

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

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

2024 2023 2024 2023

Revenues from remaining performance obligations for professional services contracts as of April 30, 2025, were not material.

Other Income, Net

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

Three Months Ended April 30,

Interest income $ 93 $ 93

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( 29 ) ( 29 )

5 ( 10 ) ( 3 ) ( 14 )

Total other income (expense), net $ 62 $ 41 $ 178 $ 114

Total other income, net

(1) Interest expense primarily includes the contractual interest expense of our debt obligations, and the related non-cash interest expense attributable to amortization of the debt discount and issuance costs.

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For further information, see Note 3, Investments .

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 reported an income tax provision of $ 35 million and $ 16 million for the three months ended April 30, 2025, and 2024, respectively.

The income tax provision for the three months ended April 30, 2025, was primarily attributable to earnings in the U.S.

and profitable foreign jurisdictions.

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

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

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

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Due to our history of tax losses, all years remain open to tax audit.

We periodically evaluate the realizability of our net deferred tax assets based on all available evidence, both positive and negative.

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 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 periodically evaluate the realizability of our deferred tax assets based on all available evidence, both positive and negative, such as historic results, future reversals of existing deferred tax liabilities, and projected future taxable income, as well as prudent and feasible tax-planning strategies.

The assessment requires significant judgement and is performed in each of the applicable jurisdictions.

As of April 30, 2025, 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.

Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period, net of treasury stock.

Diluted net income (loss) per share is computed by giving effect to all potentially dilutive shares of common stock, including outstanding share-based awards consisting primarily of unvested RSUs and ESPP obligations and outstanding warrants related to the issuance of convertible senior notes.

We determine the dilutive effect of outstanding share-based awards and warrants using the treasury stock method.

The net income (loss) per share is allocated based on the contractual participation rights of the Class A common shares and Class B common shares as if the income (loss) for the period had been distributed.

As the liquidation and dividend rights are identical, the net income (loss) is allocated on a proportionate basis.

The computation of the diluted net income per share of Class A common stock assumes the conversion of our Class B common stock to Class A common stock, while the diluted net income (loss) per share of Class B common stock does not assume the conversion of those shares.

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 October 31, Nine Months Ended October 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:

Net income (loss) $ 155 $ 38 $ 90 $ 24 $ 346 $ 86 $ 152 $ 41

Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period, net of treasury stock.

Diluted net income per share is computed by giving effect to all potentially dilutive shares of common stock, including outstanding share-based awards consisting primarily of unvested RSUs and ESPP obligations.

We determine the dilutive effect of outstanding share-based awards using the treasury stock method.

The net income per share is allocated based on the contractual participation rights of the Class A common shares and Class B common shares as if the income for the period had been distributed.

As the liquidation and dividend rights are identical, the net income is allocated on a proportionate basis.

The computation of the diluted net income per share of Class A common stock assumes the conversion of our Class B common stock to Class A common stock, while the diluted net income per share of Class B common stock does not assume the conversion of those shares.

The following table presents the calculation of basic and diluted net income 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

Net income per share, basic:

Net income $ 55 $ 13 $ 85 $ 22

Weighted-average shares outstanding, basic 215,409 51,107 211,369 53,075

Net income (loss) per share, basic $ 0.73 $ 0.73 $ 0.43 $ 0.43 $ 1.63 $ 1.63 $ 0.74 $ 0.74

Net income (loss) per share, diluted:

Net income (loss) $ 155 $ 38 $ 90 $ 24 $ 346 $ 86 $ 152 $ 41

Net income per share, basic $ 0.25 $ 0.25 $ 0.40 $ 0.40

Net income per share, diluted:

Net income $ 55 $ 13 $ 85 $ 22

Reallocation of net income as a result of conversion of Class B to Class A common stock 13 0 22 0

Reallocation of net income to Class B common stock 0 0 0 ( 1 )

Net income (loss) for diluted calculation 193 38 114 23 432 85 193 40

Net income for diluted calculation 68 13 107 21

Weighted-average shares outstanding, basic 215,409 51,107 211,369 53,075

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Weighted-average shares outstanding, diluted 270,296 51,107 270,298 53,075

Net income (loss) per share, diluted $ 0.72 $ 0.72 $ 0.43 $ 0.43 $ 1.61 $ 1.61 $ 0.73 $ 0.73

The computation of diluted net income (loss) per share does not include the effect of the following potentially outstanding weighted-average shares of common stock.

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 October 31, Nine Months Ended October 31,

2024 2023 2024 2023

Net income per share, diluted $ 0.25 $ 0.25 $ 0.40 $ 0.40

The computation of diluted net income per share does not include the effect of the following potentially outstanding weighted-average shares of common stock.

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

Three Months Ended April 30,

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

258 1,882 2,217 2,774

Geographic Information

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

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

2024 2023 2024 2023

Three Months Ended April 30,

United States $ 1,681 $ 1,493

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

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

United States $ 1,116 $ 1,197

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Total long-lived assets $ 1,495 $ 1,575

Restructuring

In February 2025, we announced a restructuring plan (“Fiscal 2026 Restructuring Plan”) intended to prioritize our investments and continue advancing our ongoing focus on durable growth.

This plan resulted in the elimination of approximately 7.5 % of our workforce.

In connection with this plan, we have exited certain owned office space.

The activities associated with this plan are expected to be substantially complete by the second quarter of fiscal 2026, subject to local law and consultation requirements.

We incurred $ 231 million in charges in connection with this plan, of which $ 65 million was recognized in the fourth quarter of fiscal 2025, and the remainder was recognized in the first quarter of fiscal 2026.

The total charges consisted of $ 197 million related to employee transition, severance payments, employee benefits, and share-based compensation, and $ 34 million related to an impairment of office space.

Fiscal 2026 Restructuring Plan activity during the three months ended April 30, 2025, was as follows (in millions):

Workforce Reduction

Office Space Reduction Total

Restructuring liability as of January 31, 2025

$ 57 $ 0 $ 57

Payments ( 63 ) 0 ( 63 )

Non-cash items

( 40 ) ( 34 ) ( 74 )

Restructuring liability as of April 30, 2025 $ 86 $ 0 $ 86

Additionally, we recorded exit charges of $ 8 million associated with office space reductions under a separate restructuring plan during the three months ended April 30, 2024.

Subsequent Event

In May 2025, our Board of Directors authorized the May 2025 Share Repurchase Program, under which we may purchase up to an additional $ 1.0 billion of our outstanding shares of Class A common stock.

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 May 2025 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.

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, fluctuating 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 geopolitical instability, increased tariffs, elevated inflation, and fluctuating interest rates and foreign currency exchange rates, 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