Workday Inc. (NASDAQ:WDAY)

The financial data indicates several notable trends over the examined periods. Net operating profit after taxes (NOPAT) demonstrates a general upward trajectory, moving from a negative figure in the earliest period to increasingly positive results. Specifically, the NOPAT shifted from -113 million to a peak of 860 million in the latest period, despite an intermittent drop observed in the fiscal year ending January 31, 2023.

The cost of capital remains relatively stable throughout the periods, fluctuating narrowly around the range of 16.6% to 16.9%, indicating consistent capital expense expectations or risk assessments.

Invested capital exhibits a steady growth pattern, rising from 5,129 million to 9,420 million over the time frame. This increase suggests ongoing investments or asset expansions aimed at supporting the company’s operations and growth.

Economic profit shows a persistently negative trend, with values ranging from -969 million to -724 million. Although the absolute figures indicate significant deficits each year, there is a slight improvement in economic profit in the final periods compared to earlier years. The persistent negative economic profit, despite positive NOPAT in later years, suggests that the returns generated have not consistently exceeded the cost of capital.

Net Operating Profit After Taxes (NOPAT)

Improved from a loss to a substantial profit, with a temporary decline in the 2023 period.

Cost of Capital

Remained stable, with minimal variations around 16.7%.

Invested Capital

Increased steadily, indicating ongoing capital investment.

Economic Profit

Consistently negative but showed marginal improvement in the most recent periods.

The financial data reveals notable fluctuations in both net income and net operating profit after taxes (NOPAT) over the six-year period under review.

Net Income (Loss)

The net income figures exhibit significant volatility. In the initial two years, there are substantial losses of US$481 million and US$282 million, respectively. This trend reverses in the third year with a modest net income of US$29 million, followed by another loss of US$367 million in the fourth year. The final two years show a marked improvement, with net income surging to US$1,381 million in the fifth year before moderating to US$526 million in the sixth year. This pattern indicates a recovery trajectory with considerable ups and downs, culminating in positive and substantially higher profitability compared to the initial years.

Net Operating Profit After Taxes (NOPAT)

NOPAT shows a consistent upward trend overall despite a minor dip in the fourth year. Starting from a significant negative value of US$113 million in the first year, NOPAT shifts to positive territory at US$84 million in the second year and climbs further to US$506 million in the third year. Although it declines to US$102 million in the fourth year, the metric rebounds strongly to US$673 million and US$860 million in the final two years. This trend corresponds with improving operational efficiency and profitability before tax considerations, underscoring enhanced operating performance over time.

In summary, the data reflects a company experiencing initial financial challenges with losses and negative operating profits that progressively improve, culminating in positive net income and solid operational profitability in the most recent years. The fluctuations observed in net income suggest episodic impacts beyond operational capabilities, while the upward trend in NOPAT demonstrates strengthening core business performance.

Provision for (benefit from) income taxes

The provision for income taxes demonstrates considerable volatility over the analyzed periods. It begins with a negative value of -2 million USD in early 2020, indicating a tax benefit or credit. This shifts to a modest positive provision of 7 million USD in 2021, before returning to a larger benefit of -13 million USD in 2022. A significant increase to 107 million USD is observed in 2023, followed by a sharp reversal to a substantial tax benefit of -1025 million USD in 2024. The latest figure in 2025 reflects a positive provision again at 112 million USD. These fluctuations suggest an irregular tax expense pattern, possibly influenced by varying taxable income, deferred tax adjustments, or extraordinary items across the years.

Cash operating taxes

Cash operating taxes show a generally increasing trend with notable irregularities. Starting at 13 million USD in 2020, this figure rises to 20 million USD in 2021, then unexpectedly falls to a negative value of -4 million USD in 2022, indicating a refund or credit situation. The amount then spikes sharply to 118 million USD in 2023. However, similar to previous volatility, it drops again to -3 million USD in 2024 before rising to 34 million USD in 2025. This pattern points to inconsistent cash tax payments possibly due to timing differences, utilization of tax credits, or adjustments in prior year tax liabilities.

Total reported debt & leases

The total reported debt and leases value exhibited an overall upward trend over the observed periods. Starting at 1,570 million USD in early 2020, the figure increased to 2,238 million USD by early 2021, followed by a slight decrease to 2,103 million USD in early 2022. Subsequent years saw a marked increase with values reaching 3,249 million USD in early 2023, then increasing gradually to 3,296 million USD in early 2024 and 3,362 million USD in early 2025. This pattern indicates a growing reliance on debt and lease obligations, particularly notable from 2022 onward.

Stockholders’ equity

Stockholders’ equity displayed a consistent and substantial growth trend throughout the periods analyzed. Beginning at 2,487 million USD in early 2020, it rose steadily each year: 3,278 million USD (2021), 4,535 million USD (2022), 5,586 million USD (2023), culminating at 8,082 million USD in early 2024 and 9,034 million USD by early 2025. The continuous increase in equity suggests positive retained earnings, additional capital contributions, or asset revaluations, strengthening the company’s net worth.

Invested capital

The invested capital increased at a diminishing yet overall positive rate across the reported years. Starting at 5,129 million USD in early 2020, it grew to 6,061 million USD by early 2021, then to 7,706 million USD in early 2022. Growth continued more slowly in subsequent years, reaching 8,178 million USD (2023), 8,631 million USD (2024), and 9,420 million USD (2025). This upward trend reflects increased resources committed to the business, likely in both equity and debt financing.

Summary of financial position trends

The increasing stockholders’ equity alongside a rising total debt and leases balance indicates that the company has been expanding its capital structure with a mixture of equity and debt. The growth in invested capital parallels these changes, showing an overall expansion in resource deployment. Notably, debt growth accelerated in later years, emphasizing a possible strategic leveraging to support business growth. The consistent equity increase suggests a solid financial foundation and potential profitability or capital inflows contributing to retained earnings and equity balance. These patterns demonstrate steady financial growth, with a balanced but gradually increasing leverage position.

Economic Profit

The economic profit exhibited a fluctuating downward trend over the analyzed periods. Starting at a loss of $969 million in January 2020, the loss slightly improved to $933 million in January 2021 and further to $782 million in January 2022. However, there was a notable deterioration in January 2023, with economic profit declining to a loss of $1,257 million. Following this decline, economic profit improved again to losses of $783 million and $724 million in January 2024 and January 2025, respectively. Overall, the company suffered persistent economic losses, indicating difficulty in generating profits beyond its cost of capital, with some volatility in performance.

Invested Capital

Invested capital demonstrated a consistent upward trend throughout the period. Beginning at $5,129 million in January 2020, it increased annually, reaching $6,061 million in January 2021, $7,706 million in January 2022, and continued rising to $8,178 million in January 2023. The growth persisted with $8,631 million and $9,420 million reported in January 2024 and January 2025, respectively. This steady expansion of invested capital suggests ongoing investments or asset accumulation, possibly aiming to support future growth initiatives or operational capacity increases.

Economic Spread Ratio

The economic spread ratio, which measures the return on invested capital relative to its cost, remained negative but showed a generally improving pattern over the years. The ratio started at -18.88% in January 2020 and improved to -15.40% in January 2021 and -10.14% in January 2022. Despite a setback to -15.37% in January 2023, the ratio improved again to -9.07% and then to -7.69% in January 2024 and January 2025, respectively. Although consistently negative, this improvement indicates a gradual reduction in value destruction, suggesting some progress in operational efficiency or returns, yet failing to achieve positive economic returns during the entire period.

The financial data indicates notable trends in the company's economic profit, adjusted revenues, and economic profit margin over the six-year period ending January 31, 2025.

Adjusted Revenues

There is a consistent and robust upward trend in adjusted revenues, increasing from $3,987 million in 2020 to $8,866 million in 2025. This reflects an annual growth trajectory, nearly doubling the revenue figure over the examined timeframe, indicating strong top-line expansion.

Economic Profit

Despite the revenue growth, economic profit remains negative throughout the period, signaling ongoing losses in value creation after accounting for the cost of capital. The losses decreased from -$969 million in 2020 to -$724 million in 2025. However, the trend is somewhat volatile with a peak loss of -$1,257 million in 2023, followed by improvement in subsequent years.

Economic Profit Margin

The economic profit margin, which represents economic profit as a percentage of adjusted revenues, mirrors the trend in economic profit. Starting at -24.29% in 2020, it improves steadily to -8.17% by 2025. This indicates the company is inching closer to breakeven on an economic profit basis, despite remaining in negative territory. The margin exhibits some fluctuation, notably deteriorating in 2023 to -18.85%, before resuming an improving trend.

Overall, the data reveals strong revenue growth accompanied by persistent economic losses, though these losses are diminishing proportionally. The company is demonstrating improved operational efficiency or capital management as reflected in the narrowing economic loss margins. Continued focus on cost control or value generation may be necessary to achieve positive economic profits in the future.