Common-Size Income Statement
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- Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Selected Financial Data since 2013
- Operating Profit Margin since 2013
- Return on Equity (ROE) since 2013
- Total Asset Turnover since 2013
- Price to Operating Profit (P/OP) since 2013
- Aggregate Accruals
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Workday Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2026-01-31), 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31).
The common-size income statement reveals a significant shift in the company’s profitability profile over the analyzed period. Initially, the company experienced losses, but demonstrated a substantial improvement in financial performance culminating in consistent profitability by the end of the forecast period. Revenue composition shifted notably, with a growing reliance on subscription services and a decreasing contribution from professional services.
- Revenue Composition
- Subscription services consistently increased as a percentage of total revenues, rising from 87.74% in 2021 to 92.47% in 2026. Conversely, professional services decreased from 12.26% to 7.53% over the same period. This indicates a strategic focus on recurring revenue streams.
- Cost Structure
- Costs of subscription services generally increased as a percentage of revenue between 2021 and 2023, then decreased slightly in 2024 before increasing again in 2025 and 2026. Costs of professional services consistently decreased as a percentage of revenue, mirroring the decline in professional services revenue. Overall, costs of revenues decreased as a percentage of revenue, improving gross profit margins.
- Profitability
- Gross profit as a percentage of revenues remained relatively stable in the early years, around 72%, before increasing to 75.60% in 2024 and remaining around that level through 2026. Operating income (loss) transitioned from a loss of -5.76% in 2021 to a profit of 7.55% in 2026, demonstrating significant operational improvement. Net income (loss) followed a similar trajectory, moving from -6.54% to 7.26% over the period.
- Operating Expenses
- Product development expenses were a substantial portion of revenue, decreasing from 39.86% in 2021 to 28.05% in 2026. Sales and marketing expenses also decreased, from 28.56% to 27.39%. General and administrative expenses remained relatively stable, fluctuating between 9.46% and 9.72%. Restructuring expenses were not present until 2025, increasing significantly in 2026.
- Non-Operating Items
- Interest income increased significantly as a percentage of revenues, from 0.44% to 3.33%. Interest expense decreased as a percentage of revenues. Other income (expense), net, fluctuated, but generally increased over the period. The (provision for) benefit from income taxes showed considerable volatility, with a benefit in 2022 and a significant provision in 2024, before returning to a benefit in 2025 and 2026.
In summary, the company demonstrated a successful transition towards a more profitable and sustainable business model, driven by a shift in revenue composition and improved operational efficiency. While non-operating items exhibited some volatility, the overall trend indicates strengthening financial performance.