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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
☒Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended July 31, 2024
OR
☐Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For transition period from                     to                     
Commission File Number: 001-35680
WORKDAY, INC.
(Exact name of registrant as specified in its charter) 
Delaware20-2480422
(State or other jurisdiction of
incorporation or organization)		 (I.R.S Employer
Identification No.)
6110 Stoneridge Mall Road
Pleasanton, California 94588
(Address of principal executive offices, including zip code)
(925) 951-9000
(Registrant’s telephone number, including area code) 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.001WDAYThe Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒ No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒  No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No  ☒
As of August 26, 2024, there were approximately 213 million shares of the registrant’s Class A common stock, net of treasury stock, and 52 million shares of the registrant’s Class B common stock outstanding.

Workday, Inc.
  Page No.
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Workday, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
July 31, 2024January 31, 2024
Assets
Current assets:
Cash and cash equivalents$1,635 $2,012 
Marketable securities5,738 5,801 
Trade and other receivables, net1,292 1,639 
Deferred costs237 232 
Prepaid expenses and other current assets298 255 
Total current assets9,200 9,939 
Property and equipment, net1,259 1,234 
Operating lease right-of-use assets339 289 
Deferred costs, noncurrent487 509 
Acquisition-related intangible assets, net331 233 
Deferred tax assets1,022 1,065 
Goodwill3,257 2,846 
Other assets339 337 
Total assets$16,234 $16,452 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$87 $78 
Accrued expenses and other current liabilities292 287 
Accrued compensation487 544 
Unearned revenue3,549 4,057 
Operating lease liabilities98 89 
Total current liabilities4,513 5,055 
Debt, noncurrent2,982 2,980 
Unearned revenue, noncurrent62 70 
Operating lease liabilities, noncurrent284 227 
Other liabilities48 38 
Total liabilities7,889 8,370 
Stockholders’ equity:
Common stock0 0 
Additional paid-in capital10,869 10,400 
Treasury stock(1,051)(608)
Accumulated other comprehensive income (loss)19 21 
Accumulated deficit(1,492)(1,731)
Total stockholders’ equity8,345 8,082 
Total liabilities and stockholders’ equity$16,234 $16,452 
See Notes to Condensed Consolidated Financial Statements
3
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 July 31, Six Months Ended July 31,
2024202320242023
Revenues:
Subscription services$1,903 $1,624 $3,719 $3,152 
Professional services182 163 356 319 
Total revenues2,085 1,787 4,075 3,471 
Costs and expenses (1):
Costs of subscription services304 256 594 495 
Costs of professional services207 192 406 371 
Product development649 610 1,305 1,210 
Sales and marketing611 524 1,184 1,043 
General and administrative203 169 411 336 
Total costs and expenses1,974 1,751 3,900 3,455 
Operating income (loss)111 36 175 16 
Other income (expense), net57 46 116 73 
Income (loss) before provision for (benefit from) income taxes168 82 291 89 
Provision for (benefit from) income taxes36 3 52 10 
Net income (loss)$132 $79 $239 $79 
Net income (loss) per share, basic$0.50 $0.30 $0.90 $0.30 
Net income (loss) per share, diluted$0.49 $0.30 $0.89 $0.30 
Weighted-average shares used to compute net income (loss) per share, basic 265,317 261,191 264,885 260,026 
Weighted-average shares used to compute net income (loss) per share, diluted267,949 264,435 269,128 262,923 
(1) Costs and expenses include share-based compensation expenses as follows:
Three Months Ended July 31, Six Months Ended July 31,
2024202320242023
Costs of subscription services$35 $30 $73 $59 
Costs of professional services28 29 59 59 
Product development163 162 336 332 
Sales and marketing77 67 149 147 
General and administrative67 64 138 125 
Total share-based compensation expenses$370 $352 $755 $722 
See Notes to Condensed Consolidated Financial Statements
4
Workday, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in millions)
(unaudited)
Three Months Ended July 31, Six Months Ended July 31,
2024202320242023
Net income (loss)$132 $79 $239 $79 
Other comprehensive income (loss), net of tax:
Net change in foreign currency translation adjustment(1)1 (3)1 
Net change in unrealized gains (losses) on available-for-sale debt securities, net of tax provision (benefit) of $10, $0, $1, and $0, respectively
27 (18)2 (12)
Net change in unrealized gains (losses) on cash flow hedges, net of tax provision of $(1), $(1), $0, and $2, respectively
(24)(33)(1)(49)
Other comprehensive income (loss), net of tax2 (50)(2)(60)
Comprehensive income (loss)$134 $29 $237 $19 
See Notes to Condensed Consolidated Financial Statements
5
Workday, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in millions, except number of shares which are reflected in thousands)
(unaudited)
Three Months Ended July 31, Six Months Ended July 31,
2024202320242023
Common stock:
Balance, beginning of period$0 $0 $0 $0 
Issuance of common stock under employee equity plans0 0 0 0 
Shares withheld related to net share settlement of equity awards0 0 0 0 
Balance, end of period0 0 0 0 
Additional paid-in capital:
Balance, beginning of period10,512 9,196 10,400 8,829 
Issuance of common stock under employee equity plans106 95 106 95 
Shares withheld related to net share settlement of equity awards(121)(5)(395)(8)
Share-based compensation372 352 758 722 
Balance, end of period10,869 9,638 10,869 9,638 
Treasury stock:
Balance, beginning of period(742)(185)(608)(185)
Common stock repurchases under share repurchase programs(309)(139)(443)(139)
Balance, end of period(1,051)(324)(1,051)(324)
Accumulated other comprehensive income (loss):
Balance, beginning of period17 43 21 53 
Other comprehensive income (loss)2 (50)(2)(60)
Balance, end of period19 (7)19 (7)
Accumulated deficit:
Balance, beginning of period(1,624)(3,112)(1,731)(3,112)
Net income (loss)132 79 239 79 
Balance, end of period(1,492)(3,033)(1,492)(3,033)
Total stockholders’ equity$8,345 $6,274 $8,345 $6,274 

Three Months Ended July 31, Six Months Ended July 31,
2024202320242023
Common stock shares:
Balance, beginning of period265,218 260,408 263,862 257,991 
Issuance of common stock under employee equity plans1,959 2,109 4,835 4,543 
Shares withheld related to net share settlement of equity awards(530)(24)(1,548)(41)
Common stock repurchased(1,387)(635)(1,889)(635)
Balance, end of period265,260 261,858 265,260 261,858 
See Notes to Condensed Consolidated Financial Statements
6
Workday, Inc.
Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Three Months Ended July 31, Six Months Ended July 31,
2024202320242023
Cash flows from operating activities:
Net income (loss)$132 $79 $239 $79 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization79 71 154 142 
Share-based compensation expenses370 352 755 722 
Amortization of deferred costs62 52 121 101 
Non-cash lease expense25 24 51 48 
(Gains) losses on investments3 (1)10 7 
Accretion of discounts on marketable debt securities, net(29)(38)(62)(72)
Deferred income taxes27 0 33 2 
Other9 (6)11 (12)
Changes in operating assets and liabilities, net of business combinations:
Trade and other receivables, net(157)(183)351 290 
Deferred costs(64)(68)(104)(103)
Prepaid expenses and other assets46 25 24 7 
Accounts payable2 2 12 (56)
Accrued expenses and other liabilities69 36 (124)(187)
Unearned revenue(3)80 (528)(265)
Net cash provided by (used in) operating activities571 425 943 703 
Cash flows from investing activities:
Purchases of marketable securities(1,365)(1,585)(2,143)(3,473)
Maturities of marketable securities1,035 1,240 2,132 2,471 
Sales of marketable securities51 25 68 48 
Capital expenditures(55)(65)(136)(124)
Business combinations, net of cash acquired(10)0 (522)0 
Purchase of other intangible assets0 0 0 (9)
Purchases of non-marketable equity and other investments(7)0 (7)(11)
Sales and maturities of non-marketable equity and other investments5 0 5 0 
Net cash provided by (used in) investing activities(346)(385)(603)(1,098)
Cash flows from financing activities:
Repurchases of common stock(312)(139)(440)(139)
Proceeds from issuance of common stock from employee equity plans106 95 106 95 
Taxes paid related to net share settlement of equity awards(141)(5)(381)(8)
Net cash provided by (used in) financing activities(347)(49)(715)(52)
Effect of exchange rate changes0 1 0 0 
Net increase (decrease) in cash, cash equivalents, and restricted cash(122)(8)(375)(447)
Cash, cash equivalents, and restricted cash at the beginning of period1,771 1,456 2,024 1,895 
Cash, cash equivalents, and restricted cash at the end of period$1,649 $1,448 $1,649 $1,448 
See Notes to Condensed Consolidated Financial Statements
7
Three Months Ended July 31, Six Months Ended July 31,
2024202320242023
Supplemental cash flow data:
Cash paid for interest$0 $0 $55 $55 
Cash paid for income taxes, net of refunds29 21 35 32 
Non-cash investing and financing activities:
Purchases of property and equipment, accrued but not paid56 41 56 41 
Accrued taxes related to net share settlement of equity awards
14 0 14 0 

As of July 31,
20242023
Reconciliation of cash, cash equivalents, and restricted cash as shown in the Condensed Consolidated Statements of Cash Flows:
Cash and cash equivalents$1,635 $1,436 
Restricted cash included in Prepaid expenses and other current assets14 12 
Total cash, cash equivalents, and restricted cash$1,649 $1,448 
See Notes to Condensed Consolidated Financial Statements
8
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 (loss) per share are calculated using unrounded data.
Note 1. 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 two most important assets – their people and money.
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 and six months ended July 31, 2024, shown in this report are not necessarily indicative of the results to be expected for the full fiscal year ending January 31, 2025. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the SEC on March 8, 2024.
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, 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 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.
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, 2024.
9
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 July 31, 2024, or January 31, 2024. No customer individually accounted for more than 10% of total revenues during the three and six months ended July 31, 2024, or 2023.
Other than the United States, no country individually accounted for more than 10% of total revenues during the three and six months ended July 31, 2024, or 2023.
In order to reduce the risk of disruption of our cloud applications, we have established data centers in various geographic regions. 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. Even with these procedures for disaster recovery in place, our cloud applications could be significantly interrupted during the implementation of the procedures to restore services.
In addition, we rely upon third-party hosted infrastructure partners globally, including Amazon Web Services (“AWS”) and Google LLC, to serve customers and operate certain aspects of our services. 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 do not intend to early adopt, and are currently evaluating the impacts of the new standard.
In December 2023, the FASB issued 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.
Note 3. Investments
Debt Securities
As of July 31, 2024, debt securities consisted of the following (in millions):
Amortized CostUnrealized GainsUnrealized LossesAggregate Fair Value
U.S. treasury securities$1,615 $3 $(1)$1,617 
U.S. agency obligations599 1 0 600 
Corporate bonds3,016 11 (4)3,023 
Commercial paper1,029 0 0 1,029 
Total debt securities$6,259 $15 $(5)$6,269 
Included in Cash and cash equivalents$531 $0 $0 $531 
Included in Marketable securities$5,728 $15 $(5)$5,738 
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As of January 31, 2024, debt securities consisted of the following (in millions):
Amortized CostUnrealized GainsUnrealized LossesAggregate Fair Value
U.S. treasury securities$2,072 $4 $(2)$2,074 
U.S. agency obligations753 2 (1)754 
Corporate bonds2,496 9 (5)2,500 
Commercial paper1,232 0 0 1,232 
Total debt securities$6,553 $15 $(8)$6,560 
Included in Cash and cash equivalents$759 $0 $0 $759 
Included in Marketable securities$5,794 $15 $(8)$5,801 
The fair values of debt securities, by remaining contractual maturity, were as follows (in millions):
July 31, 2024
Due within 1 year$3,206 
Due in 1 year through 5 years3,063 
Total debt securities$6,269 
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 $44 million and $35 million is included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets as of July 31, 2024, and January 31, 2024, respectively.
The following tables summarize the aggregate fair value and gross unrealized losses for all debt securities in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in millions):
As of July 31, 2024
Less than 12 Months
12 Months or Greater
Total
Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
U.S. treasury securities$581 $(1)$303 $0 $884 $(1)
U.S. agency obligations214 0 40 0 254 0 
Corporate bonds561 (1)588 (3)1,149 (4)
Commercial paper
20 0 0 0 20 0 
Total
$1,376 $(2)$931 $(3)$2,307 $(5)
As of January 31, 2024
Less than 12 Months
12 Months or Greater
Total
Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
U.S. treasury securities$921 $(2)$78 $(1)$999 $(3)
U.S. agency obligations234 0 100 (1)334 (1)
Corporate bonds921 (3)171 (1)1,092 (4)
Commercial paper
5 0 0 0 5 0 
Total
$2,081 $(5)$349 $(3)$2,430 $(8)
Unrealized losses on 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 or non-credit related losses related to our debt securities during the periods presented.
11
We sold $53 million and $6 million of debt securities during the three months ended July 31, 2024, and 2023, respectively. We sold $70 million and $18 million of debt securities during the six months ended July 31, 2024, and 2023, respectively. The realized gains and losses from the sales were immaterial.
Equity Investments
Equity investments consisted of the following (in millions):
Condensed Consolidated Balance Sheets LocationJuly 31, 2024January 31, 2024
Money market funds Cash and cash equivalents$756 $1,017 
Non-marketable equity investments measured using the measurement alternative Other assets237 248 
Total equity investments$993 $1,265 
Total realized and unrealized gains and losses associated with our equity investments consisted of the following (in millions):
Three Months Ended July 31, Six Months Ended July 31,
2024202320242023
Net realized gains (losses) recognized on equity investments sold (1)
$(3)$2 $(3)$1 
Net unrealized gains (losses) recognized on equity investments held as of the end of the period0 (1)(7)(8)
Total net gains (losses) recognized in Other income (expense), net$(3)$1 $(10)$(7)
(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
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):
July 31, 2024January 31, 2024
Total initial cost$207 $213 
Cumulative net unrealized gains (losses)30 35 
Carrying value$237 $248 
During the three months ended July 31, 2024, we recorded a loss of $3 million upon exit of a non-marketable equity investment. During the three months ended July 31, 2023, we recorded impairment losses of $10 million to the carrying value of non-marketable equity investments.
During the six months ended July 31, 2024, we recorded losses of $10 million related to impairments and exits of non-marketable equity investments. During the six months ended July 31, 2023, we recorded impairment losses of $12 million.
Marketable Equity Investments
We may hold marketable equity investments with readily determinable fair values over which we do not own a controlling interest or exercise significant influence. As of July 31, 2024, and January 31, 2024, we did not hold any such investments.
During the three and six months ended July 31, 2023, we recorded unrealized net gains of $8 million and $4 million, respectively, on our marketable equity investment balance held as of the end of the period of $56 million. Additionally, during the three and six months ended July 31, 2023, we sold marketable equity investments for proceeds of $20 million and $30 million, respectively, with immaterial corresponding realized gains.
12
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 July 31, 2024 (in millions):
Level 1Level 2Level 3Total
U.S. treasury securities$1,617 $0 $0 $1,617 
U.S. agency obligations0 600 0 600 
Corporate bonds0 3,023 0 3,023 
Commercial paper0 1,029 0 1,029 
Money market funds756 0 0 756 
Foreign currency derivative assets0 44 0 44 
Total assets$2,373 $4,696 $0 $7,069 
Foreign currency derivative liabilities$0 $28 $0 $28 
Total liabilities$0 $28 $0 $28 
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, 2024 (in millions):
Level 1Level 2Level 3Total
U.S. treasury securities$2,074 $0 $0 $2,074 
U.S. agency obligations0 754 0 754 
Corporate bonds0 2,500 0 2,500 
Commercial paper0 1,232 0 1,232 
Money market funds1,017 0 0 1,017 
Foreign currency derivative assets0 46 0 46 
Total assets$3,091 $4,532 $0 $7,623 
Foreign currency derivative liabilities$0 $27 $0 $27 
Total liabilities$0 $27 $0 $27 
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 our 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 11, Debt.
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Note 5. Deferred Costs
Deferred costs, which consist of deferred sales commissions, were $724 million and $741 million as of July 31, 2024, and January 31, 2024, respectively. Amortization expense for the deferred costs was $62 million and $52 million for the three months ended July 31, 2024, and 2023, respectively, and $121 million and $101 million for the six months ended July 31, 2024, and 2023, respectively. 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):
July 31, 2024January 31, 2024
Computers, equipment, and software$1,390 $1,387 
Buildings727 726 
Leasehold improvements231 213 
Furniture, fixtures, and transportation equipment104 99 
Land and land improvements81 81 
Property and equipment, gross2,533 2,506 
Less accumulated depreciation and amortization(1,274)(1,272)
Property and equipment, net$1,259 $1,234 
Depreciation expense totaled $58 million and $49 million for the three months ended July 31, 2024, and 2023, respectively, and $115 million and $97 million for the six months ended July 31, 2024, and 2023, respectively.
Note 7. Business Combination
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):
Cash$11 
Acquisition-related intangible assets135 
Goodwill411 
Other assets
11 
Other liabilities
(38)
Total$530 
The fair values and weighted-average useful lives of the acquired intangible assets by category were as follows (in millions, except years):
Estimated Fair ValuesWeighted-Average Useful Lives (in Years)
Developed technology$111 8
Customer relationships23 14
Trade name
1 1
Total acquisition-related intangible assets
$135 9
14
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.
Note 8. Acquisition-Related Intangible Assets, Net
Acquisition-related intangible assets, net consisted of the following as of July 31, 2024 (in millions):
Gross Carrying AmountAccumulated AmortizationNet Book Value
Developed technology$429 $(278)$151 
Customer relationships334 (155)179 
Backlog15 (15)0 
Trade name14 (13)1 
Total
$792 $(461)$331 
Acquisition-related intangible assets, net consisted of the following as of January 31, 2024 (in millions):
Gross Carrying AmountAccumulated AmortizationNet Book Value
Developed technology$318 $(256)$62 
Customer relationships311 (140)171 
Backlog15 (15)0 
Trade name13 (13)0 
Total
$657 $(424)$233 
Amortization expense related to acquisition-related intangible assets was $20 million and $21 million for the three months ended July 31, 2024, and 2023, respectively, and $37 million and $42 million for the six months ended July 31, 2024, and 2023, respectively.
As of July 31, 2024, the future estimated amortization expense related to acquisition-related intangible assets was as follows (in millions):
Fiscal Period:
Remainder of 2025$39 
202672 
202747 
202843 
202933 
Thereafter97 
Total$331 
15
Note 9. Other Assets
Other assets consisted of the following (in millions):
July 31, 2024January 31, 2024
Non-marketable equity and other investments$239 $248 
Technology patents and other intangible assets, net26 26 
Contract assets24 21 
Prepayments for goods and services16 14 
Derivative assets15 14 
Deposits8 8 
Other11 6 
Total other assets$339 $337 
Technology patents and other intangible assets with estimable useful lives are amortized on a straight-line basis. As of July 31, 2024, the future estimated amortization expense was as follows (in millions):
Fiscal Period:
Remainder of 2025$2 
20264 
20273 
20283 
20293 
Thereafter11 
Total$26 
Note 10. 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 or losses resulting from changes in the fair value of these hedges are recorded in Accumulated other comprehensive income (loss) (“AOCI”) on the Condensed Consolidated Balance Sheets and are subsequently reclassified to the same line item as the hedged transaction on the Condensed Consolidated Statements of Operations in the same period that the hedged transaction affects earnings. As of July 31, 2024, we estimate that $25 million of net gains recorded in AOCI related to our cash flow hedges will be reclassified into income within the next 12 months.
As of July 31, 2024, and January 31, 2024, the notional values of the cash flow hedges that we held to buy U.S. dollars in exchange for other currencies were $2.7 billion and $2.5 billion, respectively. The notional values of the cash flow hedges that we held to sell U.S. dollars in exchange for other currencies were $399 million as of both July 31, 2024, and January 31, 2024. All contracts had maturities of less than 60 months.
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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 (expense), 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 July 31, 2024, and January 31, 2024, the notional values of the non-designated hedges that we held to buy U.S. dollars in exchange for other currencies were $131 million and, $237 million respectively, and the notional values of the non-designated hedges that we held to sell U.S. dollars in exchange for other currencies were $22 million and $11 million, respectively.
The fair values of outstanding derivative instruments were as follows (in millions):
Condensed Consolidated Balance Sheets LocationJuly 31, 2024January 31, 2024
Derivative assets:
Cash flow hedgesPrepaid expenses and other current assets$29 $30 
Cash flow hedgesOther assets15 14 
Non-designated hedgesPrepaid expenses and other current assets0 2 
Total derivative assets$44 $46 
Derivative liabilities:
Cash flow hedgesAccrued expenses and other current liabilities$14 $14 
Cash flow hedgesOther liabilities12 12 
Non-designated hedgesAccrued expenses and other current liabilities2 1 
Total derivative liabilities$28 $27 
The effect of cash flow hedges on the Condensed Consolidated Statements of Operations was as follows (in millions):
Three Months Ended July 31,
Condensed Consolidated Statements of Operations Location20242023
TotalGains (losses) related to cash flow hedgesTotalGains (losses) related to cash flow hedges
Revenues$2,085 $8 $1,787 $17 
Costs and expenses1,974 (3)1,751 2 
Six Months Ended July 31,
Condensed Consolidated Statements of Operations Location20242023
TotalGains (losses) related to cash flow hedgesTotalGains (losses) related to cash flow hedges
Revenues$4,075 $16 $3,471 $33 
Costs and expenses3,900 (4)3,455 1 
17
Pre-tax gains (losses) associated with cash flow hedges were as follows (in millions):
Condensed Consolidated Statements of Operations and Statements of Comprehensive Income (Loss) LocationsThree Months Ended July 31, Six Months Ended July 31,
2024202320242023
Gains (losses) recognized in OCINet change in unrealized gains (losses) on cash flow hedges$(20)$(15)$11 $(13)
Gains (losses) reclassified from AOCI into income (effective portion)Revenues8 17 16 33 
Gains (losses) reclassified from AOCI into income (effective portion)Costs and expenses(3)2 (4)1 
Gains (losses) associated with non-designated hedges were as follows (in millions):
Condensed Consolidated Statements of Operations LocationThree Months Ended July 31, Six Months Ended July 31,
2024202320242023
Gains (losses) related to non-designated hedgesOther income (expense), net$(3)$(1)$(1)$1 
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. 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 July 31, 2024, information related to these offsetting arrangements was as follows (in millions):
Gross Amounts of Recognized AssetsGross Amounts Offset on the Condensed Consolidated Balance SheetsNet Amounts of Assets Presented on the Condensed Consolidated Balance SheetsGross Amounts Not Offset on the Condensed Consolidated Balance SheetsNet Assets Exposed
Financial InstrumentsCash Collateral Received
Derivative assets:
Counterparty A$14 $0 $14 $(4)$0 $10 
Counterparty B8 0 8 (8)0