Stock Analysis on Net
Stock Analysis on Net

Workday Inc. (NASDAQ:WDAY)

Common-Size Income Statement 

Workday Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Jan 31, 2026 Jan 31, 2025 Jan 31, 2024 Jan 31, 2023 Jan 31, 2022 Jan 31, 2021
Subscription services 92.47 91.38 90.96 89.57 88.47 87.74
Professional services 7.53 8.62 9.04 10.43 11.53 12.26
Revenues 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Costs of subscription services -16.03 -14.99 -14.20 -16.27 -15.49 -14.17
Costs of professional services -8.27 -9.51 -10.19 -11.32 -12.30 -13.58
Costs of revenues -24.30% -24.50% -24.40% -27.59% -27.79% -27.75%
Gross profit 75.70% 75.50% 75.60% 72.41% 72.21% 72.25%
Product development -28.05 -31.09 -33.94 -36.53 -36.57 -39.86
Sales and marketing -27.39 -28.79 -29.47 -29.73 -28.45 -28.56
General and administrative -9.55 -9.71 -9.67 -9.72 -9.46 -9.59
Restructuring -3.17 -0.99 0.00 0.00 0.00 0.00
Operating income (loss) 7.55% 4.91% 2.52% -3.57% -2.27% -5.76%
Interest income 3.33 4.14 4.15 1.57 0.11 0.44
Interest expense -1.19 -1.35 -1.57 -1.65 -0.32 -1.59
Other 0.88 -0.15 -0.19 -0.53 2.80 0.54
Other income (expense), net 3.02% 2.64% 2.38% -0.61% 2.58% -0.61%
Income (loss) before (provision for) benefit from income taxes 10.56% 7.55% 4.90% -4.18% 0.31% -6.37%
(Provision for) benefit from income taxes -3.31 -1.33 14.12 -1.72 0.26 -0.17
Net income (loss) 7.26% 6.23% 19.02% -5.90% 0.57% -6.54%

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.

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