Workday Inc. (NASDAQ:WDAY)

The financial data reveals several notable trends in the intangible assets and related components over the examined periods.

Goodwill

Goodwill remained relatively stable around USD 1,819 million to 1,820 million between January 2020 and January 2021, then increased significantly to 2,840 million in January 2022 and maintained at a similar level through January 2023. Thereafter, it showed a moderate increase to 2,846 million in January 2024 and a more pronounced rise to 3,478 million by January 2025. This pattern suggests notable acquisition activity or asset revaluations contributing to increased goodwill starting in 2022 and continuing upward into 2025.

Developed Technology

The value of developed technology showed a steady increase from USD 218 million in January 2020 to a peak of 346 million in January 2022. It slightly declined in the subsequent two years, reaching 318 million in January 2024, but then rebounded sharply to 473 million by January 2025. This reflects investment or capitalization fluctuations in developed technology assets, with a strong renewal or acquisition evident in the final period.

Customer Relationships

Customer relationships demonstrated moderate growth from USD 224 million in January 2020 to 311 million by January 2022, maintaining that level through January 2024 before increasing further to 362 million in January 2025. The steady value in the middle years may indicate a stabilization in customer base valuation, with recent upward movement possibly signalling enhanced customer acquisition or retention value.

Backlog

The backlog remained constant at USD 11 million through to January 2021 and then increased slightly to USD 15 million in January 2022, maintaining that level until January 2025. This stability suggests a consistent level of contracted work pending realization over the recent years.

Trade Name

The trade name asset showed a gradual increase from USD 12 million in January 2020 to 14 million by January 2025. This modest appreciation indicates slow but steady brand value recognition or capitalization.

Acquisition-Related Intangible Assets, Gross

Gross acquisition-related intangible assets rose sharply from USD 466 million in January 2020 to a peak of 685 million in January 2022, followed by a slight decline in the subsequent two years to 657 million in January 2024 before rising again to 864 million by January 2025. The fluctuations suggest episodic acquisitions with some asset disposals or amortization impact moderated by new asset recognition in the latest period.

Accumulated Amortization

Accumulated amortization steadily increased in absolute terms (noting it is recorded as a negative figure) from USD -157 million in January 2020 to -503 million in January 2025, indicating ongoing systematic expense recognition against intangible assets over the periods.

Acquisition-Related Intangible Assets, Net

The net acquisition-related intangible assets peaked at USD 391 million in January 2022, then declined significantly to 233 million by January 2024 before recovering to 361 million in January 2025. This volatile pattern reflects the combined effects of new acquisitions, amortization expenses, and potential disposals or write-downs.

Goodwill and Acquisition-Related Intangible Assets Combined

The total of goodwill and acquisition-related intangible assets exhibited a substantial increase from USD 2,128 million in January 2020 to a peak of 3,231 million in January 2022. It then declined modestly across the following two years, reaching 3,079 million in January 2024, before rising sharply again to 3,839 million by January 2025. This aggregate trend highlights significant investment and acquisition activity driving growth in intangible asset bases, tempered by amortization impacts and possible asset disposals during the middle years.

The analysis of the financial data reveals several important trends in the company's asset base and equity position over the six-year period from January 31, 2020, to January 31, 2025.

Total Assets

Both reported and goodwill adjusted total assets show a consistent upward trajectory across the years. Reported total assets increased from US$6,816 million in 2020 to US$17,977 million in 2025, marking a substantial growth of approximately 164%. The adjusted total assets, which exclude goodwill, followed a similar pattern but grew at a somewhat slower pace, rising from US$4,997 million to US$14,499 million over the same period. This divergence suggests a growing proportion of goodwill in the total asset base as time progresses.

Stockholders’ Equity

The reported stockholders’ equity also presents a clear growth trend, increasing from US$2,487 million in 2020 to US$9,034 million in 2025. This indicates a strong enhancement of the equity base, with an approximate 263% increase over the period. Adjusted stockholders’ equity, which corrects for goodwill, mirrors this positive upward trend, growing from US$667 million to US$5,556 million. The difference between reported and adjusted equity narrows over time, signifying adjustments related to intangible assets are increasingly impacting the equity composition.

Comparative Insights

The gap between reported and adjusted figures for both assets and equity is significant but changes over time. Initially, the adjustments reduce total assets and equity by a large margin, reflecting substantial goodwill or intangible asset values. However, the reduced gap toward the later periods may indicate either goodwill impairments, amortizations, or changes in accounting treatments. The data collectively point to an expanding asset and equity base, with underlying growth not solely driven by intangible assets.

The analysis of the financial metrics over the reported periods reveals several noteworthy trends and fluctuations in the company's operational efficiency and profitability, both on a reported and goodwill-adjusted basis.

Total Asset Turnover

The reported total asset turnover ratio exhibits a gradual decline from 0.53 in 2020 to a low of 0.44 in 2024, with a slight recovery to 0.47 in 2025. On an adjusted basis, the ratio starts higher at 0.73 in 2020 but follows a generally downward trajectory, declining to 0.53 by 2024 before a modest rebound to 0.58 in 2025. This pattern indicates a decreasing efficiency in using assets to generate revenue over the years, although the adjustment for goodwill shows a consistently higher turnover, reflecting the impact of asset revaluation.

Financial Leverage

Reported financial leverage ratios show a declining trend from 2.74 in 2020 to 1.99 in 2025, suggesting a reduction in the reliance on debt financing or an increase in equity relative to debt. The adjusted financial leverage, which is significantly higher initially at 7.49 in 2020, also decreases over time to 2.61 in 2025. This sharp decline in adjusted leverage points towards a substantial reduction in leverage after considering goodwill adjustments, indicating a cleaner capital structure and possibly improved risk profile over the period.

Return on Equity (ROE)

The reported ROE demonstrates considerable volatility, starting with negative values of -19.33% in 2020 and improving gradually to positive territory by 2022 (0.65%), but falling again to negative -6.57% in 2023 before peaking at 17.09% in 2024 and declining to 5.82% in 2025. The adjusted ROE follows a similar volatile pattern but with more extreme values, starting at -72.03% in 2020, improving to positive 1.73% in 2022, dropping to -13.36% in 2023, then surging to a peak of 26.38% in 2024 before declining to 9.47% in 2025. This volatility highlights fluctuations in profitability relative to equity, which are amplified when goodwill adjustments are considered, reflecting underlying challenges and recovery phases in generating shareholder returns.

Return on Assets (ROA)

Reported ROA follows a pattern similar to ROE, beginning with negative returns (-7.05% in 2020), improving to slightly positive (0.28% in 2022), but dipping back into negative territory in 2023 (-2.72%), followed by an increase to 8.39% in 2024 and a decrease to 2.93% in 2025. The adjusted ROA reflects more pronounced negative starting points (-9.62% in 2020), a marginal positive return in 2022 (0.38%), a subsequent decline to -3.44% in 2023, and a recovery to 10.15% in 2024 with a reduced return of 3.63% in 2025. These values indicate the company’s asset efficiency in generating earnings is fluctuating, with notable improvements in 2024 that are partially sustained into 2025, yet overall remaining relatively modest.

Over the analyzed periods, reported total assets exhibit a consistent upward trajectory, increasing from US$ 6,816 million in early 2020 to US$ 17,977 million by early 2025. This growth represents more than a twofold increase over the six-year span. Adjusted total assets, which presumably exclude goodwill or other intangible asset adjustments, also show a rising trend, growing from US$ 4,997 million in 2020 to US$ 14,499 million in 2025. The adjusted figures indicate a substantial asset base but at lower levels compared to the reported amounts, reflecting the impact of goodwill and similar adjustments.

Regarding asset efficiency, the reported total asset turnover ratio demonstrates a gradual decline from 0.53 in 2020 to a low point of 0.44 in 2024, followed by a slight rebound to 0.47 in 2025. This pattern suggests that the company’s ability to generate revenue per unit of reported asset has generally weakened over time but shows some recovery in the most recent period.

The adjusted total asset turnover ratio starts at a higher level of 0.73 in 2020, decreasing steadily to 0.53 by 2024, with a subsequent improvement to 0.58 in 2025. This decline followed by a minor rebound mirrors the trend observed in the reported figures but at a consistently higher efficiency level when goodwill adjustments are excluded.

Overall, the data reveals that while total assets (both reported and adjusted) have grown substantially, asset turnover ratios have declined over most of the observed periods, indicating reduced asset productivity. The recent uptick in turnover ratios could suggest initiatives to enhance asset utilization or structural changes impacting efficiency metrics. The difference between reported and adjusted figures highlights the material influence of goodwill or intangible assets on the company’s balance sheet and performance ratios.

Assets

The reported total assets show a consistent upward trend, increasing steadily from US$6,816 million in January 2020 to US$17,977 million in January 2025. This represents significant growth over five years. Adjusted total assets, which likely exclude goodwill and other intangible assets, also display an increasing pattern, albeit at a slower pace, rising from US$4,997 million to US$14,499 million in the same period.

Stockholders’ Equity

Reported stockholders’ equity likewise demonstrates steady growth, increasing from US$2,487 million in January 2020 to US$9,034 million in January 2025. Adjusted stockholders’ equity, which factors out goodwill, reveals a similar upward trajectory but starts from a much lower base of US$667 million and grows to US$5,556 million by January 2025. The substantial difference between reported and adjusted equity indicates a significant portion of equity is tied to goodwill or intangible assets.

Financial Leverage

Reported financial leverage ratios have generally decreased from 2.74 in 2020 to 1.99 in 2025, suggesting a gradual reduction in reliance on debt relative to equity. Adjusted financial leverage, which uses adjusted equity figures, shows a more marked decline from 7.49 in 2020 to approximately 2.61 in 2025. Though the trend is downward, the starting point and decline rate for adjusted leverage are more pronounced than for reported leverage, reflecting changes in the capital structure when goodwill is excluded.

Summary of Trends

Overall, the company displays solid growth in total assets and equity over the five-year period, with a consistent increase in reported and adjusted figures. The adjusted metrics, which exclude goodwill, reveal a more conservative financial position with lower equity bases and higher leverage ratios initially, but improving steadily. The decline in both reported and adjusted financial leverage ratios implies an improving equity position relative to debt, enhancing financial stability over time.

The data reveals notable trends in both reported and adjusted measures of stockholders’ equity and return on equity (ROE) over the six-year period ending January 31, 2025.

Stockholders’ Equity Trends

Reported stockholders’ equity shows a consistent upward trajectory, increasing from US$2,487 million in 2020 to US$9,034 million in 2025. This growth is steady year-over-year, with particularly significant increases occurring in the final two reported years, where equity rose by approximately US$2.5 billion from 2023 to 2024 and by nearly US$1 billion from 2024 to 2025.

Adjusted stockholders’ equity, which likely accounts for goodwill adjustments, follows a similar upward trend but at a lower absolute value. It increased from US$667 million in 2020 to US$5,556 million in 2025. The growth pattern is also consistent, with particularly large jumps observed between 2023 and 2024 (approximately US$2.5 billion) and a slower increase from 2024 to 2025. The disparity between reported and adjusted figures suggests that goodwill comprises a substantial portion of the equity base.

Return on Equity (ROE) Trends

Reported ROE presents a volatile pattern. The company experienced negative returns in 2020 (-19.33%) and 2021 (-8.62%), followed by a positive but minimal return in 2022 (0.65%). However, ROE again turned negative in 2023 (-6.57%), before shifting to positive territory in the last two years with values of 17.09% in 2024 and 5.82% in 2025. This suggests fluctuating profitability performance with recent improvements.

Adjusted ROE, reflecting the impact of goodwill adjustment, demonstrates an even wider range and higher volatility. Starting from a deeply negative -72.03% in 2020, it improves to -19.37% in 2021 and crosses into positive in 2022 at 1.73%. The metric returns to a negative value in 2023 (-13.36%) before surging to 26.38% in 2024 and moderating to 9.47% in 2025. The larger swings in adjusted ROE imply more pronounced effects of intangible asset adjustments on profitability metrics.

Overall, the data indicates strong equity base growth accompanied by fluctuating profitability as measured by ROE. Both reported and adjusted metrics highlight an improving performance trend in the most recent two years, despite past negative returns. The sizable difference between reported and adjusted equity and ROE values suggests that goodwill and related adjustments materially affect the company’s financial profile and should be carefully considered in any comprehensive analysis.

Total Assets

The reported total assets exhibit a consistent upward trend over the six-year period, increasing from 6,816 million US dollars in 2020 to 17,977 million US dollars projected for 2025. This represents more than a twofold increase, indicating significant asset growth. Adjusted total assets, which exclude goodwill, also show growth but at a relatively slower pace, rising from 4,997 million to 14,499 million US dollars in the same timeframe. The gap between reported and adjusted assets suggests a notable amount of goodwill present in the company's recorded assets.

Return on Assets (ROA)

Reported ROA shows volatility and a general improvement trend across the period. Initially, it starts at a negative value of -7.05% in 2020, improving to 0.28% by 2022, before fluctuating again to -2.72% in 2023 and then turning positive with a substantial increase to 8.39% in 2024, followed by a decrease to 2.93% in 2025. The adjusted ROA follows a similar pattern but with more pronounced negative values early on and higher positive peaks in later years. It begins at -9.62% in 2020, improves to 0.38% in 2022, dips below zero to -3.44% in 2023, and then sharply increases to 10.15% in 2024, before decreasing to 3.63% in 2025. This pattern suggests that the company has experienced operational challenges reflected in negative returns but is showing signs of improving asset efficiency, especially when goodwill effects are excluded.

Comparative Insights

The discrepancy between reported and adjusted figures highlights the impact of goodwill on the asset base and profitability metrics. While reported asset values are higher, the more conservative adjusted asset figures provide insight into the core asset efficiency. The adjusted ROA generally portrays a more conservative and volatile profitability picture. The sharp increases in ROA, particularly in 2024, may indicate improved operational performance or one-time impacts that positively influenced returns during that period.

Overall Summary

The financial data reveals a company in a growth phase with increasing asset bases and fluctuating profitability. The trend toward improved ROA, especially post-2022, combined with rising assets, suggests a focus on scaling operations while managing profitability challenges. The adjustments for goodwill provide a clearer view of asset utilization and operational returns, indicating that underlying business performance experienced significant variation over the analyzed period. The most recent years, including projections, point toward recovering profitability but with caution warranted due to volatility.