Workday, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS Workday, Inc. Condensed Consolidated Balance Sheets (in millions) (unaudited) April 30, 2026 January 31, 2026 Assets Current assets: Cash and cash equivalents $ 559 $ 1,501 Marketable securities 3,794 3,942 Trade and other receivables, net 1,575 2,332 Deferred costs 307 306 Prepaid expenses and other current assets 357 348 Total current assets 6,592 8,429 Property and equipment, net 1,121 1,093 Operating lease right-of-use assets 706 719 Deferred costs, noncurrent 619 634 Acquisition-related intangible assets, net 645 681 Deferred tax assets 745 829 Goodwill 5,228 5,229 Other assets 435 460 Total assets $ 16,091 $ 18,074 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 116 $ 142 Accrued expenses and other current liabilities 457 454 Accrued compensation 508 642 Unearned revenue 4,325 5,010 Operating lease liabilities 131 130 Debt, current 998 0 Total current liabilities 6,535 6,378 Debt, noncurrent 1,990 2,987 Unearned revenue, noncurrent 70 71 Operating lease liabilities, noncurrent 686 704 Other liabilities 127 129 Total liabilities 9,408 10,269 Stockholders’ equity: Common stock 0 0 Additional paid-in capital 12,932 12,673 Treasury stock ( 5,834 ) ( 4,220 ) Accumulated other comprehensive loss ( 125 ) ( 136 ) Accumulated deficit ( 290 ) ( 512 ) Total stockholders’ equity 6,683 7,805 Total liabilities and stockholders’ equity $ 16,091 $ 18,074 See Notes to Condensed Consolidated Financial Statements 3 Table of Cont ents Workday, Inc. Condensed Consolidated Statements of Operations (in millions, except number of shares which are reflected in thousands and per share data) (unaudited) Three Months Ended April 30, 2026 2025 Revenues: Subscription services $ 2,354 $ 2,059 Professional services 188 181 Total revenues 2,542 2,240 Costs and expenses (1) : Costs of subscription services 412 350 Costs of professional services 192 187 Product development 705 663 Sales and marketing 679 623 General and administrative 216 212 Restructuring 0 166 Total costs and expenses 2,204 2,201 Operating income 338 39 Other income, net 17 64 Income before provision for income taxes 355 103 Provision for income taxes 133 35 Net income $ 222 $ 68 Net income per share, basic $ 0.87 $ 0.25 Net income per share, diluted $ 0.87 $ 0.25 Weighted-average shares used to compute net income per share, basic 253,891 266,516 Weighted-average shares used to compute net income per share, diluted 254,313 270,296 (1) Costs and expenses include share-based compensation expense as follows: Three Months Ended April 30, 2026 2025 Costs of subscription services $ 37 $ 42 Costs of professional services 26 30 Product development 184 183 Sales and marketing 90 92 General and administrative 72 70 Restructuring 0 42 Total share-based compensation expense $ 409 $ 459 See Notes to Condensed Consolidated Financial Statements 4 Table of Cont ents Workday, Inc. Condensed Consolidated Statements of Comprehensive Income (Loss) (in millions) (unaudited) Three Months Ended April 30, 2026 2025 Net income $ 222 $ 68 Other comprehensive income (loss), net of tax: Net change in foreign currency translation adjustment ( 1 ) 2 Net change in unrealized gains (losses) on available-for-sale debt securities, net of tax provision (benefit) of $( 6 ) and $ 10 , respectively ( 18 ) 30 Net change in unrealized gains (losses) on cash flow hedges, net of tax provision (benefit) of $( 2 ) and $( 4 ), respectively 30 ( 160 ) Other comprehensive income (loss), net of tax 11 ( 128 ) Comprehensive income (loss) $ 233 $ ( 60 ) See Notes to Condensed Consolidated Financial Statements 5 Table of Cont ents Workday, Inc. Condensed Consolidated Statements of Stockholders’ Equity (in millions, except number of shares which are reflected in thousands) (unaudited) Three Months Ended April 30, 2026 2025 Common stock: Balance, beginning of period $ 0 $ 0 Issuance of common stock under employee equity plans 0 0 Shares withheld related to net share settlement of equity awards 0 0 Balance, end of period 0 0 Additional paid-in capital: Balance, beginning of period 12,673 11,463 Issuance of common stock under employee equity plans 0 0 Shares withheld related to net share settlement of equity awards ( 151 ) ( 223 ) Share-based compensation 410 461 Balance, end of period 12,932 11,701 Treasury stock: Balance, beginning of period ( 4,220 ) ( 1,308 ) Common stock repurchases under share repurchase programs ( 1,614 ) ( 293 ) Balance, end of period ( 5,834 ) ( 1,601 ) Accumulated other comprehensive income (loss): Balance, beginning of period ( 136 ) 84 Other comprehensive income (loss) 11 ( 128 ) Balance, end of period ( 125 ) ( 44 ) Accumulated deficit: Balance, beginning of period ( 512 ) ( 1,205 ) Net income 222 68 Balance, end of period ( 290 ) ( 1,137 ) Total stockholders’ equity $ 6,683 $ 8,919 Three Months Ended April 30, 2026 2025 Common stock shares: Balance, beginning of period 259,131 266,352 Issuance of common stock under employee equity plans 2,734 2,537 Shares withheld related to net share settlement of equity awards ( 1,110 ) ( 1,003 ) Common stock repurchased ( 12,025 ) ( 1,290 ) Balance, end of period 248,730 266,596 See Notes to Condensed Consolidated Financial Statements 6 Table of Cont ents Workday, Inc. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) Three Months Ended April 30, 2026 2025 Cash flows from operating activities: Net income $ 222 $ 68 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 92 84 Share-based compensation expense 409 459 Amortization of deferred costs 79 68 Non-cash lease expense 32 27 Net losses on investments 8 1 Accretion of discounts on marketable debt securities, net ( 9 ) ( 20 ) Deferred income taxes 93 18 Asset impairments 0 34 Other 5 13 Changes in operating assets and liabilities: Trade and other receivables, net 747 601 Deferred costs ( 65 ) ( 53 ) Prepaid expenses and other assets ( 31 ) ( 38 ) Accounts payable ( 1 ) ( 4 ) Accrued expenses and other liabilities ( 200 ) ( 131 ) Unearned revenue ( 685 ) ( 670 ) Net cash provided by operating activities 696 457 Cash flows from investing activities: Purchases of marketable securities ( 200 ) ( 1,345 ) Maturities of marketable securities 231 722 Sales of marketable securities 96 140 Capital expenditures ( 80 ) ( 36 ) Purchases of non-marketable equity and other investments 0 ( 4 ) Sales of non-marketable equity and other investments 41 0 Other 9 0 Net cash provided by (used in) investing activities 97 ( 523 ) Cash flows from financing activities: Repurchases of common stock ( 1,587 ) ( 290 ) Taxes paid related to net share settlement of equity awards ( 146 ) ( 211 ) Net cash used in financing activities ( 1,733 ) ( 501 ) Effect of exchange rate changes ( 1 ) 1 Net decrease in cash, cash equivalents, and restricted cash ( 941 ) ( 566 ) Cash, cash equivalents, and restricted cash at the beginning of period 1,509 1,554 Cash, cash equivalents, and restricted cash at the end of period $ 568 $ 988 See Notes to Condensed Consolidated Financial Statements 7 Table of Cont ents Three Months Ended April 30, 2026 2025 Supplemental cash flow data: Cash paid for interest, net of amounts capitalized $ 52 $ 55 Cash paid for income taxes, net of refunds 15 10 Non-cash investing and financing activities: Purchases of property and equipment, accrued but not paid 62 8 Repurchases of common stock, including excise tax, accrued but not paid 44 3 Taxes related to net share settlement of equity awards, accrued but not paid 16 25 As of April 30, 2026 2025 Reconciliation of cash, cash equivalents, and restricted cash as shown in the Condensed Consolidated Statements of Cash Flows: Cash and cash equivalents $ 559 $ 972 Restricted cash included in Prepaid expenses and other current assets 9 16 Total cash, cash equivalents, and restricted cash $ 568 $ 988 See Notes to Condensed Consolidated Financial Statements 8 Table of Cont ents Workday, Inc. Notes to Condensed Consolidated Financial Statements As used in this report, the terms “Workday,” “registrant,” “we,” “us,” and “our” mean Workday, Inc. and its subsidiaries unless the context indicates otherwise. Amounts in this report may not recalculate due to rounding. Year-over-year comparisons, operating margin, and net income per share are calculated using unrounded data. Note 1. Overview and Basis of Presentation Description of the Business Workday is a leading enterprise AI platform that operates at the core of human resources, finance, and information technology, providing solutions for human capital management, financial management, spend management, and planning. Workday couples AI with the context, guardrails, and trusted processes that run the enterprise, delivering both AI that assists with work and agents that are capable of driving measurable outcomes for our customers. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements include the results of Workday, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of our management, the information contained herein reflects all adjustments necessary for a fair presentation of Workday’s financial position, results of operations, stockholders’ equity, and cash flows. All such adjustments are of a normal, recurring nature. The results of operations for the three months ended April 30, 2026, shown in this report are not necessarily indicative of the results to be expected for the full fiscal year ending January 31, 2027. 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, 2026, filed with the SEC on March 6, 2026. Certain prior period amounts reported in our unaudited condensed consolidated financial statements and notes thereto have been reclassified to conform to current period presentation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates, judgments, and assumptions include, but are not limited to, the identification of distinct performance obligations for revenue recognition, the determination of the period of benefit for deferred commissions, the realizability of deferred tax assets, the measurement of uncertain tax positions, the fair value and useful lives of assets acquired and liabilities assumed through business combinations, the measurement of share-based compensation expense, and the valuation of non-marketable equity investments. Actual results could differ from those estimates, judgments, and assumptions, and such differences could be material to our condensed consolidated financial statements. Segment Information 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. 9 Table of Cont ents Our CODM assesses performance and decides how to allocate resources based on Net income, as reported on the Condensed 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 Condensed Consolidated Balance Sheets, and Capital expenditures, as reported on the Condensed Consolidated Statements of Cash Flows. Significant segment expenses include the costs and expenses presented on the Condensed Consolidated Statements of Operations. Other segment items include Other income, net and Provision for income taxes. Note 2. Significant Accounting Policies and Accounting Standards Significant Accounting Policies There have been no material changes in our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 . Concentrations of Risk and Significant Customers Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, debt securities, derivative instruments, and trade and other receivables. Our deposits exceed federally insured limits. No customer individually accounted for more than 10% of trade and other receivables, net as of April 30, 2026, or January 31, 2026. No customer individually accounted for more than 10% of total revenues during the three months ended April 30, 2026, or 2025. Other than the United States (“U.S.”), no country individually accounted for more than 10% of total revenues during the three months ended April 30, 2026, or 2025. 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 U.S., Europe, Canada, and the Asia-Pacific region. These data centers include third-party hosted infrastructure, including Amazon Web Services and Google Cloud, and co-location data centers. Procedures are in place 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. Recently Issued Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“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 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 effect the updated standard will have on our financial statement disclosures. In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for Internal-Use Software , which modernizes the internal-use software costs capitalization model by eliminating stage-based rules and replacing them with a principles-based framework to be more aligned with modern software development practices. This ASU is effective for interim and annual reporting periods beginning in the first quarter of our fiscal 2029, with early adoption permitted as of the beginning of an annual reporting period. Entities may adopt the guidance using prospective application, retrospective application, or a modified transition approach. We are currently evaluating the effect the updated standard will have on our consolidated financial statements and related disclosures. 10 Table of Cont ents Note 3. Investments Debt Securities As of April 30, 2026, debt securities consisted of the following (in millions): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value U.S. treasury securities $ 1,491 $ 5 $ 0 $ 1,496 U.S. agency obligations 215 0 0 215 Corporate bonds 1,890 10 ( 3 ) 1,897 Asset-backed securities 158 0 0 158 Supranational securities 28 0 0 28 Total debt securities $ 3,782 $ 15 $ ( 3 ) $ 3,794 Included in Cash and cash equivalents $ 0 $ 0 $ 0 $ 0 Included in Marketable securities $ 3,782 $ 15 $ ( 3 ) $ 3,794 As of January 31, 2026, debt securities consisted of the following (in millions): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value U.S. treasury securities $ 1,820 $ 11 $ 0 $ 1,831 U.S. agency obligations 265 1 0 266 Corporate bonds 1,874 22 0 1,896 Commercial paper 164 0 0 164 Asset-backed securities 155 2 0 157 Supranational securities 26 0 0 26 Total debt securities $ 4,304 $ 36 $ 0 $ 4,340 Included in Cash and cash equivalents $ 398 $ 0 $ 0 $ 398 Included in Marketable securities $ 3,906 $ 36 $ 0 $ 3,942 The following table presents the fair values of debt securities as of April 30, 2026, by remaining contractual maturity (in millions). Actual maturities may differ from contractual maturities because borrowers may have certain prepayment conditions. April 30, 2026 Due within 1 year $ 1,431 Due 1 year through 5 years 2,302 Due 5 years through 10 years 36 Due after 10 years 25 Total debt securities $ 3,794 We classify our debt securities as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. We consider all debt securities as funds available for use in current operations, including those with maturity dates beyond one year, and therefore classify these securities as current assets on the Condensed Consolidated Balance Sheets. 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 $ 34 million and $ 33 million was included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets as of April 30, 2026, and January 31, 2026, respectively. As of April 30, 2026, and January 31, 2026, 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 $ 96 million and $ 140 million of debt securities during the three months ended April 30, 2026, and 2025, respectively. The realized gains and losses from the sales were immaterial . 11 Table of Cont ents Equity Investments Equity investments consisted of the following (in millions): Condensed Consolidated Balance Sheets Location April 30, 2026 January 31, 2026 Money market funds Cash and cash equivalents $ 204 $ 694 Non-marketable equity investments measured using the measurement alternative Other assets 220 230 Total equity investments $ 424 $ 924 Non-Marketable Equity Investments Measured Using the Measurement Alternative Non-marketable equity investments measured using the measurement alternative include investments in privately held companies without readily determinable fair values in which we do not own a controlling interest or exercise significant influence. These investments are recorded at cost and are adjusted for observable transactions for same or similar securities of the same issuer or impairment events. The carrying values for our non-marketable equity investments are summarized below (in millions): April 30, 2026 January 31, 2026 Total initial cost $ 198 $ 205 Cumulative net unrealized gains 22 25 Carrying value $ 220 $ 230 During the three months ended April 30, 2026, and 2025, we recognized net losses on our non-marketable equity investments of $ 8 million and $ 1 million, respectively. Note 4. Fair Value Measurements We use a fair value hierarchy that requires that we maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs that are supported by little or no market activity. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of April 30, 2026 (in millions): Level 1 Level 2 Level 3 Total U.S. treasury securities $ 1,496 $ 0 $ 0 $ 1,496 U.S. agency obligations 0 215 0 215 Corporate bonds 0 1,897 0 1,897 Asset-backed securities 0 158 0 158 Supranational securities 0 28 0 28 Money market funds 204 0 0 204 Foreign currency derivative assets 0 27 0 27 Total assets $ 1,700 $ 2,325 $ 0 $ 4,025 Foreign currency derivative liabilities $ 0 $ 128 $ 0 $ 128 Total liabilities $ 0 $ 128 $ 0 $ 128 12 Table of Cont ents 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 January 31, 2026 (in millions): Level 1 Level 2 Level 3 Total U.S. treasury securities $ 1,831 $ 0 $ 0 $ 1,831 U.S. agency obligations 0 266 0 266 Corporate bonds 0 1,896 0 1,896 Commercial paper 0 164 0 164 Asset-backed securities 0 157 0 157 Supranational securities 0 26 0 26 Money market funds 694 0 0 694 Foreign currency derivative assets 0 21 0 21 Total assets $ 2,525 $ 2,530 $ 0 $ 5,055 Foreign currency derivative liabilities $ 0 $ 148 $ 0 $ 148 Total liabilities $ 0 $ 148 $ 0 $ 148 Non-Marketable Equity Investments Measured at Fair Value on a Non-Recurring Basis Non-marketable equity investments that have been remeasured due to an observable event or impairment are classified within Level 3 in the fair value hierarchy because we estimate the value based on valuation methods which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the investments we hold. For further information, see Note 3, Investments . Fair Value Measurements of Other Financial Instruments We carry our debt at face value less unamortized debt discount and issuance costs on the Condensed Consolidated Balance Sheets and present the fair value for disclosure purposes only. The fair values of all of our debt obligations are categorized as Level 2 financial instruments. For further information on the fair values of our debt and the inputs used in the calculations, see Note 10, Debt . Note 5. Deferred Costs Deferred costs, which consist of deferred sales commissions, were $ 926 million and $ 940 million as of April 30, 2026, and January 31, 2026, respectively. Amortization expense for the deferred costs was $ 79 million and $ 68 million for the three months ended April 30, 2026, and 2025, respectively. There was no impairment loss in relation to the costs capitalized for the periods presented. Note 6. Property and Equipment, Net Property and equipment, net consisted of the following (in millions): April 30, 2026 January 31, 2026 Computers, equipment, and software $ 1,271 $ 1,285 Buildings 698 690 Leasehold improvements 385 334 Furniture, fixtures, and transportation equipment 119 112 Land and land improvements 74 74 Property and equipment, gross 2,547 2,495 Less accumulated depreciation and amortization ( 1,426 ) ( 1,402 ) Property and equipment, net $ 1,121 $ 1,093 Depreciation expense totaled $ 55 million and $ 62 million for the three months ended April 30, 2026, and 2025, respectively. There were no impairment charges recognized on property and equipment during the three months ended April 30, 2026. We recognized impairment charges of $ 34 million for the three months ended April 30, 2025, related to certain property and equipment as a result of our restructuring activities. For further information, see Note 19, Restructuring . 13 Table of Cont ents Note 7. Acquisition-Related Intangible Assets, Net Acquisition-related intangible assets, net consisted of the following as of April 30, 2026 (in millions): Gross Carrying Value Accumulated Amortization Net Book Value Developed technology $ 742 $ ( 384 ) $ 358 Customer relationships 506 ( 222 ) 284 Backlog 17 ( 15 ) 2 Trade name 17 ( 16 ) 1 Total $ 1,282 $ ( 637 ) $ 645 Acquisition-related intangible assets, net consisted of the following as of January 31, 2026 (in millions): Gross Carrying Value Accumulated Amortization Net Book Value Developed technology $ 742 $ ( 362 ) $ 380 Customer relationships 506 ( 210 ) 296 Backlog 17 ( 15 ) 2 Trade name 17 ( 14 ) 3 Total $ 1,282 $ ( 601 ) $ 681 Amortization expense related to acquisition-related intangible assets was $ 36 million and $ 21 million for the three months ended April 30, 2026, and 2025, respectively. As of April 30, 2026, our future estimated amortization expense related to acquisition-related intangible assets was as follows (in millions): Fiscal Period: Remainder of 2027 $ 103 2028 132 2029 122 2030 106 2031 60 Thereafter 122 Total $ 645 Note 8. Other Assets Other assets consisted of the following (in millions): April 30, 2026 January 31, 2026 Non-marketable equity and other investments $ 223 $ 233 Contract assets 65 59 Prepayments for goods and services 46 64 Technology patents and other intangible assets, net 20 21 Deposits 15 14 Derivative assets 9 2 Other 57 67 Total other assets $ 435 $ 460 14 Table of Cont ents Technology patents and other intangible assets with estimable useful lives are amortized on a straight-line basis. As of April 30, 2026, our future estimated amortization expense was as follows (in millions): Fiscal Period: Remainder of 2027 $ 3 2028 3 2029 3 2030 2 2031 2 Thereafter 7 Total $ 20 Note 9. Derivative Instruments We conduct business on a global basis in multiple foreign currencies, subjecting Workday to foreign currency exchange risk. To mitigate this risk, we utilize derivative hedging contracts as described below. We do not enter into any derivatives for trading or speculative purposes. Our foreign currency contracts are classified within Level 2 of the fair value hierarchy because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates. Cash Flow Hedges We enter into foreign currency forward contracts to hedge a portion of our forecasted revenue and expense transactions (“cash flow hedges”). We designate these forward contracts as cash flow hedging instruments since the accounting criteria for such designation has been met. Cash flow hedges are recorded on the Condensed Consolidated Balance Sheets at fair value. Cash flows from the settlement of these forward contracts are classified as operating activities on the Condensed Consolidated Statements of Cash Flows. Gains and losses resulting from changes in the fair value of these hedges are recorded in Accumulated other comprehensive income (loss) (“AOCI”) on the Condensed Consolidated Balance Sheets and are subsequently reclassified to the same line item as the hedged transaction on the Condensed Consolidated Statements of Operations in the same period that the hedged transaction affects earnings. As of April 30, 2026, we estimate that $ 48 million of net losses recorded in AOCI related to our cash flow hedges will be reclassified into earnings within the next 12 months. As of April 30, 2026, and January 31, 2026, the notional values of the cash flow hedges that we held to buy U.S. dollars in exchange for other currencies were $ 3.3 billion and $ 3.0 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 $ 867 million and $ 874 million, respectively. All contracts had maturities of less than 45 months. Non-Designated Hedges We also enter into foreign currency forward contracts to hedge a portion of our net outstanding monetary assets and liabilities (“non-designated hedges”). 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, net on the Condensed Consolidated Statements of Operations in the period incurred. Cash flows from the settlement of these forward contracts are classified as operating activities on the Condensed Consolidated Statements of Cash Flows. As of April 30, 2026, and January 31, 2026, the notional values of the non-designated hedges that we held to buy U.S. dollars in exchange for other currencies were $ 311 million and $ 442 million, respectively, and the notional values of the non-designated hedges that we held to sell U.S. dollars in exchange for other currencies were $ 619 million and $ 565 million, respectively. 15 Table of Cont ents The fair values of outstanding derivative instruments were as follows (in millions): Condensed Consolidated Balance Sheets Location April 30, 2026 January 31, 2026 Derivative assets: Cash flow hedges Prepaid expenses and other current assets $ 13 $ 15 Cash flow hedges Other assets 9 2 Non-designated hedges Prepaid expenses and other current assets 5 4 Total derivative assets $ 27 $ 21 Derivative liabilities: Cash flow hedges Accrued expenses and other current liabilities $ 65 $ 71 Cash flow hedges Other liabilities 49 65 Non-designated hedges Accrued expenses and other current liabilities 14 12 Total derivative liabilities $ 128 $ 148 The effect of cash flow hedges on the Condensed Consolidated Statements of Operations was as follows (in millions): Three Months Ended April 30, Condensed Consolidated Statements of Operations Location 2026 2025 Total Gains (losses) related to cash flow hedges Total Gains (losses) related to cash flow hedges Revenues $ 2,542 $ ( 9 ) $ 2,240 $ 8 Costs and expenses 2,204 2 2,201 ( 6 ) Pre-tax gains (losses) associated with cash flow hedges were as follows (in millions): Condensed Consolidated Statements of Operations and Statements of Comprehensive Income (Loss) Locations Three Months Ended April 30, 2026 2025 Gains (losses) recognized in OCI Net change in unrealized gains (losses) on cash flow hedges $ 21 $ ( 162 ) Gains (losses) reclassified from AOCI into income (effective portion) Revenues ( 9 ) 8 Gains (losses) reclassified from AOCI into income (effective portion) Costs and expenses 2 ( 6 ) Gains (losses) associated with non-designated hedges were as follows (in millions): Condensed Consolidated Statements of Operations Location Three Months Ended April 30, 2026 2025 Gains (losses) related to non-designated hedges Other income, net $ ( 4 ) $ 0 We manage our exposure to counterparty risk by entering into foreign currency forward contracts with a diversified group of nine 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 $ 4 million and a liability position of $ 105 million as of April 30, 2026, and an asset position of $ 1 million and a liability position of $ 128 million as of January 31, 2026. 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. 16 Table of Cont ents Note 10. Debt Outstanding debt consisted of the following (in millions): April 30, 2026 January 31, 2026 2027 Notes $ 1,000 $ 1,000 2029 Notes 750 750 2032 Notes 1,250 1,250 Total principal amount 3,000 3,000 Less: unamortized debt discount and issuance costs ( 12 ) ( 13 ) Net carrying amount 2,988 2,987 Less: debt, current ( 998 ) 0 Debt, noncurrent $ 1,990 $ 2,987 As of April 30, 2026, our future principal payments for the outstanding debt were as follows (in millions): Fiscal Period: Remainder of 2027 $ 0 2028 1,000 2029 0 2030 750 2031 0 Thereafter 1,250 Total principal amount $ 3,000 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. The Senior Notes are unsecured obligations and rank equally with all existing and future unsecured and unsubordinated indebtedness of Workday. We may redeem the Senior Notes in whole or in part at any time or from time to time, at specified redemption dates and prices. In addition, upon the occurrence of certain change of control triggering events, we may be required to repurchase the Senior Notes under specified terms. The indenture governing the Senior Notes also includes covenants (including certain limited covenants restricting our ability to incur certain liens and enter into certain sale and leaseback transactions), events of default, and other customary provisions. As of April 30, 2026, and January 31, 2026, 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. The debt discount and issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the contractual term of each arrangement. 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 April 30, 2026, and January 31, 2026, the total estimated fair value of the Senior Notes was $ 2.9 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. 17 Table of Cont ents 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, 2026, and January 31, 2026, 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. The revolving loans under the 2022 Credit Agreement will bear interest, at our option, at a base rate plus a margin of 0.000 % to 0.500 % or a secured overnight financing rate (“SOFR”) plus 10 basis points, plus a margin of 0.750 % to 1.500 %, with such margin being determined based on our consolidated leverage ratio or debt rating. We are also obligated to pay an ongoing commitment fee on undrawn amounts. The 2022 Credit Agreement contains customary representations, warranties, and affirmative and negative covenants, including a financial covenant, events of default, and indemnification provisions in favor of the lenders. The negative covenants include restrictions on the incurrence of liens and indebtedness, certain merger transactions, and other matters, all subject to certain exceptions. The financial covenant, based on a quarterly financial test, requires that we do not exceed a maximum leverage ratio of 3.50 :1.00, subject to a step-up to 4.50 :1.00 at our election for a certain period following an acquisition. As of April 30, 2026, and January 31, 2026, we were in compliance with all covenants included in the 2022 Credit Agreement. Interest Expense on Debt The following table sets forth total interest expense recognized related to our debt (in millions): Three Months Ended April 30, 2026 2025 Contractual interest expense $ 28 $ 28 Interest cost related to amortization of debt discount and issuance costs 1 1 Total interest expense $ 29 $ 29 Note 11. Leases 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 $ 706 million and $ 719 million as of April 30, 2026, and January 31, 2026, respectively, and operating lease liabilities were $ 817 million and $ 834 million as of April 30, 2026, and January 31, 2026, respectively. The components of operating lease expense were as follows (in millions): Three Months Ended April 30, 2026 2025 Operating lease cost $ 42 $ 31 Variable lease cost 14 11 Total operating lease cost $ 56 $ 42 Supplemental cash flow information related to our operating leases was as follows (in millions): Three Months Ended April 30, 2026 2025 Cash paid for operating lease liabilities $ 37 $ 33 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities 21 42 Other information related to our operating leases was as follows: April 30, 2026 January 31, 2026 Weighted average remaining lease term (in years) 11 11 Weighted average discount rate 4.2 % 4.2 % 18 Table of Cont ents As of April 30, 2026, maturities of operating lease liabilities were as follows (in millions): Fiscal Period: Remainder of 2027 $ 112 2028 159 2029 127 2030 90 2031 66 Thereafter 487 Total lease payments 1,041 Less imputed interest ( 224 ) Total operating lease liabilities $ 817 Note 12. Commitments and Contingencies Purchase Obligations Our purchase obligations are primarily related to agreements for third-party hosted infrastructure platforms, data center equipment and software, business technology software and support, and sales and marketing activities. During the three months ended April 30, 2026, 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, 2026. Legal Matters We are a party to various legal proceedings and claims that arise in the ordinary course of business. We make a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter. In our opinion, as of April 30, 2026, 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. Note 13. Stockholders’ Equity Common Stock As of April 30, 2026, there were 203 million shares of Class A common stock and 46 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. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to 10 votes per share. Each share of Class B common stock can be converted into a share of Class A common stock at any time at the option of the holder. Share Repurchase Programs We repurchase shares of our Class A common stock under share repurchase programs authorized by our Board of Directors. Under these programs, 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 share repurchase programs have no expiration date, may be suspended or discontinued at any time, and do not obligate us to acquire any amount of Class A common stock. 19 Table of Cont ents Share repurchase programs authorized by our Board of Directors that were in effect during the three months ended April 30, 2026, and 2025, were as follows (in millions): Authorization Date Amount Authorized Authorization Completion Date November 2022 $ 500 Q1 fiscal 2025 February 2024 500 Q3 fiscal 2025 August 2024 1,000 Q3 fiscal 2026 May 2025 1,000 Q4 fiscal 2026 September 2025 4,000 The table below sets forth information regarding repurchase of shares under our share repurchase programs (in millions, except number of shares which are reflected in thousands, and per share data): Three Months Ended April 30, 2026 2025 Total number of shares repurchased 12,025 1,290 Average price paid per share (1) $ 133.05 $ 227.20 Amount repurchased (1) $ 1,600 $ 293 (1) Amounts exclude excise tax and commissions. All repurchases were made in open market transactions. As of April 30, 2026, we were authorized to repurchase a remaining $ 1.3 billion of our outstanding shares of Class A common stock under our share repurchase programs. Employee Equity Plans 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”). Awards that are granted on or after the effective date of the 2022 Plan will be granted pursuant to and subject to the terms and provisions of the 2022 Plan. Prior awards granted under the 2012 Plan continue to be subject to the terms and provisions of the 2012 Plan. 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, 2026, 13 million shares of Class A common stock were available for future grants under the 2022 Plan. 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 April 30, 2026, 2 million shares of Class A common stock were available for issuance under the 2012 ESPP. 20 Table of Cont ents Restricted Stock Units and Performance-Based Restricted Stock Units 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 . Activity during the three months ended April 30, 2026, was as follows (in thousands, except per share data): Number of Shares Weighted-Average Grant Date Fair Value Outstanding balance as of January 31, 2026 14,128 $ 222.83 Granted- restricted stock units 1,664 151.83 Granted- performance-based restricted stock units (1) 21 127.94 Vested ( 1,596 ) 215.41 Forfeited and canceled (2) ( 1,993 ) 220.37 Outstanding balance as of April 30, 2026 12,224 214.37 (1) Includes approximately 21 thousand PSUs granted to executives in April 2026. The PSUs are subject to vesting based on the achievement of annual performance-based conditions determined at the beginning of each fiscal year. The PSUs will vest at the end of the two -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. (2) Includes shares withheld in connection with the net share settlement of RSUs and PSUs. As of April 30, 2026, there was a total of $ 2.3 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 the first quarter of fiscal 2027, 0.5 million shares of market-based RSUs were granted to Mr. Bhusri in connection with his appointment as 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”). We estimated the fair value of the PVU Award on the grant date using the Monte Carlo simulation model with the following assumptions: (i) expected volatility of 40 %, (ii) risk-free interest rate of 3.72 %, and (iii) total performance period of five years . The weighted-average grant date fair value of the PVU Award was $ 107.22 per share. We recognize expense for the PVU Award over the requisite service period of five years using the accelerated attribution method. Provided that the requisite service is rendered, the total fair value of the PVU Award at the date of grant is recognized as compensation expense even if the market condition is not achieved. However, the number of shares that ultimately vest can vary significantly with the achievement of the specified market criteria. As of April 30, 2026, there was a total of $ 55 million in unrecognized compensation cost related to the PVU Award, which is expected to be recognized over approximately five years . Note 14. Contract Balances and Performance Obligations Contract Balances Contract assets and unearned revenue balances were as follows (in millions): Condensed Consolidated Balance Sheets Location April 30, 2026 January 31, 2026 Contract assets: Contract assets, current Trade and other receivables, net $ 540 $ 443 Contract assets, noncurrent Other assets 65 59 Total contract assets $ 605 $ 502 Unearned revenue: Unearned revenue, current (1) Unearned revenue $ 4,325 $ 5,010 Unearned revenue, noncurrent Unearned revenue, noncurrent 70 71 Total unearned revenue $ 4,395 $ 5,081 (1) Included in this balance are amounts related to professional services that are subject to cancellation and pro-rated refund rights of $ 75 million and $ 89 million as of April 30, 2026, and January 31, 2026, respectively. 21 Table of Cont ents Revenues of $ 2.0 billion and $ 1.7 billion were recognized during the three months ended April 30, 2026, and 2025, respectively, that were included in the unearned revenue balances as of January 31, 2026, and 2025, respectively. Transaction Price Allocated to the Remaining Performance Obligations As of April 30, 2026, approximately $ 27.3 billion of revenues are expected to be recognized from remaining performance obligations for subscription contracts. We expect to recognize revenues on approximately $ 8.8 billion and $ 15.6 billion of these remaining performance obligations over the next 12 and 24 months, respectively, with the balance recognized thereafter. Revenues from remaining performance obligations for professional services contracts as of April 30, 2026, were not material. Note 15. Other Income, Net Other income, net consisted of the following (in millions): Three Months Ended April 30, 2026 2025 Interest income $ 52 $ 93 Interest expense (1) ( 26 ) ( 29 ) Other (2) ( 9 ) 0 Total other income, net $ 17 $ 64 (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, net of amounts capitalized. For further information, see Note 10, Debt . (2) Other primarily includes the realized net gains (losses) from sales of debt securities and net gains (losses) from our equity investments. For further information, see Note 3, Investments . Note 16. Income Taxes We reported an income tax provision of $ 133 million and $ 35 million for the three months ended April 30, 2026, and 2025, respectively. The income tax provision for the three months ended April 30, 2026, was primarily attributable to earnings in the U.S. and profitable foreign jurisdictions, and incremental tax expense from share-based compensation awards where the tax deduction realized was lower than the compensation expense recognized. 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. We are subject to income tax audits in the U.S. and foreign jurisdictions. We record liabilities related to uncertain tax positions and believe that we have provided adequate reserves for income tax uncertainties in all open tax years. Due to our history of tax losses, all years remain open to tax audit. 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 judgment and is performed in each of the applicable jurisdictions. As of April 30, 2026, 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. Note 17. 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. 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 holders of our Class A and Class B common stock have identical liquidation and dividend rights but different voting rights. Accordingly, we present net income per share for Class A and Class B common stock together as the two-class method does not result in a difference. 22 Table of Cont ents 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, 2026 2025 (1) Net income per share, basic: Numerator: Net income $ 222 $ 68 Denominator: Weighted-average shares outstanding, basic 253,891 266,516 Net income per share, basic $ 0.87 $ 0.25 Net income per share, diluted: Numerator: Net income $ 222 $ 68 Denominator: Weighted-average shares outstanding, basic 253,891 266,516 Dilutive effect of share-based awards 422 3,780 Weighted-average shares outstanding, diluted 254,313 270,296 Net income per share, diluted $ 0.87 $ 0.25 (1) The prior period net income per share for Class A and Class B common stock has been presented together to conform to current period presentation, which had no impact on our previously reported basic or diluted net income per share. The computation of diluted net income per share does not include the effect of the following potentially outstanding weighted-average shares of common stock because their effect would have been anti-dilutive (in thousands): Three Months Ended April 30, 2026 2025 Total weighted-average shares related to outstanding share-based awards 13,661 201 Note 18. Geographic Information Revenues We sell our subscription contracts and related services in two primary geographical markets: to customers located in the U.S. and to customers located outside of the U.S. Revenues by geography are generally based on the address of the customer as specified in our customer subscription agreement. The following table sets forth revenues by geographic area (in millions): Three Months Ended April 30, 2026 2025 U.S. $ 1,893 $ 1,681 Other countries 649 559 Total revenues $ 2,542 $ 2,240 23 Table of Cont ents Long-Lived Assets Our long-lived assets are attributed to a country based on the physical location of the assets. We define long-lived assets as property and equipment and operating lease right-of-use assets because many of these assets cannot be readily moved and are relatively illiquid, subjecting them to geographic risk. None of our other assets are subject to significant geographic risk. Aggregate Property and equipment, net and Operating lease right-of-use assets by geographic area were as follows (in millions): April 30, 2026 January 31, 2026 U.S. $ 1,046 $ 1,080 Ireland 566 531 Other countries 215 201 Total long-lived assets $ 1,827 $ 1,812 Note 19. Restructuring Fiscal 2027 Restructuring Plan In February 2026, we announced a restructuring plan (“Fiscal 2027 Restructuring Plan”) intended to better align our people and resources to our highest priorities in fiscal 2027. The plan resulted in the reduction of approximately 2 % of our workforce, and the impairment of certain office space and long-lived assets. The activities associated with this plan were substantially completed in the first quarter of fiscal 2027. The remaining liability was $ 5 million and $ 41 million as of April 30, 2026, and January 31, 2026, respectively. We incurred total charges of $ 135 million in connection with this plan in fiscal 2026. The charges consisted of $ 55 million related to employee transition, severance payments, employee benefits, and share-based compensation, and $ 80 million related to impairments of office space and certain long-lived assets. During the three months ended April 30, 2026, we did not record any additional charges under this plan. Fiscal 2026 Restructuring Plan 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 reduction of approximately 7.5 % of our workforce and the exit of certain owned office space. The activities associated with this plan were substantially completed in the second quarter of fiscal 2026, with no remaining liability as of January 31, 2026. We incurred total charges of $ 233 million in connection with this plan, consisting of $ 196 million related to employee transition, severance payments, employee benefits, and share-based compensation, and $ 37 million related to an impairment of office space. During the three months ended April 30, 2025, we recorded charges of $ 166 million under this plan. 24 Table of Cont ents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements, which are subject to safe harbor protection under the Private Securities Litigation Reform Act of 1995. All statements contained in this report other than statements of historical fact, including statements regarding our future financial condition and operating results, business strategy and plans, and objectives for future operations, are forward-looking statements. The words “ believe, ” “ may, ” “ will, ” “ estimate, ” “ continue, ” “ anticipate, ” “ intend, ” “ expect, ” “ seek, ” “ plan, ” and similar expressions are intended to identify forward-looking statements. 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 geopolitical instability, increased tariffs, elevated inflation and energy prices, 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. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, assumptions, and potential changes in circumstances, the future events, conditions, and trends discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied by the forward-looking statements. Accordingly, you should not rely upon any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activities, performance, or achievements. We are under no duty to update any of these forward-looking statements after the date of this report or to conform these statements to actual results or revised expectations, except as required by applicable law. If we do update any forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.