Common-Size Income Statement
Quarterly Data
Workday Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2026-07-31), 10-Q (reporting date: 2026-04-30), 10-K (reporting date: 2026-01-31), 10-Q (reporting date: 2025-10-31), 10-Q (reporting date: 2025-07-31), 10-Q (reporting date: 2025-04-30), 10-K (reporting date: 2025-01-31), 10-Q (reporting date: 2024-10-31), 10-Q (reporting date: 2024-07-31), 10-Q (reporting date: 2024-04-30), 10-K (reporting date: 2024-01-31), 10-Q (reporting date: 2023-10-31), 10-Q (reporting date: 2023-07-31), 10-Q (reporting date: 2023-04-30), 10-K (reporting date: 2023-01-31), 10-Q (reporting date: 2022-10-31), 10-Q (reporting date: 2022-07-31), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-31), 10-Q (reporting date: 2021-10-31), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-04-30), 10-K (reporting date: 2021-01-31), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-04-30).
Analysis of the common-size income statement reveals a strategic shift toward high-margin recurring revenue and a successful transition from operational losses to sustained profitability over the analyzed period.
- Revenue Composition and Gross Margin
- A consistent migration toward a subscription-based model is observed. Subscription services increased from 86.60% of total revenues in April 2020 to 93.28% by July 2026. Simultaneously, professional services declined from 13.40% to 6.72%. This shift has positively impacted gross profit margins, which expanded from 69.99% to a peak of 76.24% in January 2026. The improvement is largely attributed to the reduction in the costs of professional services as a percentage of revenue, which fell from 15.75% to 8.15%.
- Operational Expense Trends
- Operating expenses have decreased as a percentage of revenue, indicating improved economies of scale. Product development costs saw a significant downward trend, dropping from 43.55% in April 2020 to 28.20% in July 2026. Sales and marketing expenses also declined from a high of 31.28% to approximately 26.65%. General and administrative expenses remained relatively stable, fluctuating between 8.50% and 10.71%.
- Operating Income and Profitability
- The company transitioned from significant operating losses to consistent profitability. Operating income as a percentage of revenue improved from -14.18% in April 2020 to a high of 13.30% in January 2026. While some volatility was introduced by restructuring charges—most notably in January 2025 (-3.39%) and January 2026 (-5.17%)—the underlying operating trend remains positive.
- Net Income and Tax Impacts
- Net income margins exhibit high volatility due to non-operational items and tax provisions. An anomalous spike in net income to 61.83% occurred in January 2024, resulting from a substantial tax benefit of 54.65% of revenue. Excluding this outlier, the net income trend shows a recovery from deep losses in 2020 to consistent positive margins in the 2024–2026 period, concluding with a margin of 23.86% in April 2026.
AI Ask an analyst for more