Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Net Profit Margin since 2013
- Return on Assets (ROA) since 2013
- Total Asset Turnover since 2013
- Price to Operating Profit (P/OP) since 2013
- Price to Sales (P/S) since 2013
- Analysis of Debt
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Profitability Ratios (Summary)
Workday Inc., profitability ratios
Based on: 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), 10-K (reporting date: 2020-01-31).
- Gross Profit Margin
- The gross profit margin shows a generally stable and slightly increasing trend over the periods observed. Beginning at 70.63% in early 2020, it increased gradually to 72.25% in 2021 and then remained relatively constant around 72.2% through 2023. A notable improvement is observed in the last two years, reaching 75.6% in 2024 and slightly decreasing to 75.5% in 2025, indicating enhanced efficiency or pricing power in core operations.
- Operating Profit Margin
- This margin started with a significant negative value of -13.85% in 2020, reflecting operational challenges. It improved steadily over the next few years, moving to -5.76% in 2021, and further to -2.27% in 2022. Despite a slight setback to -3.57% in 2023, the company achieved a positive turnaround by 2024, reaching 2.52%, and improved further to 4.91% in 2025. This progression suggests a strengthening operational performance and controlled costs.
- Net Profit Margin
- The net profit margin exhibited volatility across the timeline. Initially, the company faced losses, with margins of -13.25% in 2020 and -6.54% in 2021. It briefly achieved profitability in 2022 with a margin of 0.57%, but this was followed by a decline to -5.9% in 2023. A substantial recovery is apparent in 2024, where the margin rose sharply to 19.02%, before decreasing to 6.23% in 2025. This indicates fluctuating bottom-line profitability possibly influenced by extraordinary factors or shifts in non-operating costs and tax impacts.
- Return on Equity (ROE)
- ROE mirrors the overall profitability trends with negative returns in the early periods: -19.33% in 2020 and -8.62% in 2021. The company slightly turned positive in 2022 (0.65%), but declined again to -6.57% in 2023. A significant positive shift occurred in 2024 with ROE reaching 17.09%, though it diminished to 5.82% in 2025. The fluctuation signals varying effectiveness in generating shareholder returns, with notable improvement in the latter years.
- Return on Assets (ROA)
- ROA follows a similar pattern to ROE, starting with negative values (-7.05% in 2020 and -3.24% in 2021), marginally positive in 2022 (0.28%), then falling to -2.72% in 2023. Thereafter, it improved significantly to 8.39% in 2024 before declining to 2.93% in 2025. This indicator highlights the company’s increasing but inconsistent ability to generate earnings from its asset base.
Return on Sales
Return on Investment
Gross Profit Margin
Workday Inc., gross profit margin calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross profit | |||||||
| Revenues | |||||||
| Profitability Ratio | |||||||
| Gross profit margin1 | |||||||
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Accenture PLC | |||||||
| Adobe Inc. | |||||||
| Cadence Design Systems Inc. | |||||||
| CrowdStrike Holdings Inc. | |||||||
| Fair Isaac Corp. | |||||||
| International Business Machines Corp. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
Based on: 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), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Gross Profit
- The gross profit exhibited a consistent upward trend over the analyzed period. Starting at $2,562 million in 2020, it steadily increased each year, reaching $6,377 million by 2025. This represents a more than doubling of gross profit over five years, indicating strong growth and effective cost management relative to revenue generation.
- Revenues
- Revenues followed a similar positive trajectory, rising from $3,627 million in 2020 to $8,446 million in 2025. The consistent annual increases reflect ongoing expansion and growing market presence. The growth rate aligns closely with the increase in gross profit, suggesting proportional growth in both top-line and associated cost of goods sold.
- Gross Profit Margin
- The gross profit margin showed stability with a slight improving trend during the period. It started at 70.63% in 2020 and gradually increased, peaking at 75.6% in 2024 and slightly adjusting to 75.5% in 2025. This improvement in margin indicates enhanced operational efficiency or favorable pricing strategies, allowing the company to retain a higher portion of revenue as gross profit.
Operating Profit Margin
Workday Inc., operating profit margin calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Operating income (loss) | |||||||
| Revenues | |||||||
| Profitability Ratio | |||||||
| Operating profit margin1 | |||||||
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Accenture PLC | |||||||
| Adobe Inc. | |||||||
| Cadence Design Systems Inc. | |||||||
| CrowdStrike Holdings Inc. | |||||||
| Fair Isaac Corp. | |||||||
| International Business Machines Corp. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
| Operating Profit Margin, Sector | |||||||
| Software & Services | |||||||
| Operating Profit Margin, Industry | |||||||
| Information Technology | |||||||
Based on: 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), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Operating profit margin = 100 × Operating income (loss) ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- The revenues have demonstrated consistent growth over the analyzed periods, rising from $3,627 million in January 2020 to $8,446 million in January 2025. This indicates a strong and steady upward trajectory, more than doubling over the five-year span.
- Operating Income (Loss) Patterns
- Operating income showed a notable improvement from a loss of $502 million in January 2020 to a positive $415 million by January 2025. Despite fluctuations, including a decline to a loss of $222 million in January 2023, the overall trend reflects a transition from significant operating losses to profitability.
- Operating Profit Margin Analysis
- The operating profit margin moved from a negative -13.85% in January 2020 to a positive margin of 4.91% by January 2025. Margins improved steadily despite some volatility, particularly a decline to -3.57% in January 2023 before turning positive in subsequent years. This shift from negative to positive margins aligns with the company's return to operating profitability.
- Overall Insights
- The data illustrates a company experiencing strong revenue growth accompanied by operational improvements leading to eventual profitability. The shift from operating losses and negative margins to positive figures suggests enhanced operational efficiency and effective cost management over time. The progress observed points towards a strengthening financial position and improved business performance.
Net Profit Margin
Workday Inc., net profit margin calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income (loss) | |||||||
| Revenues | |||||||
| Profitability Ratio | |||||||
| Net profit margin1 | |||||||
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Accenture PLC | |||||||
| Adobe Inc. | |||||||
| Cadence Design Systems Inc. | |||||||
| CrowdStrike Holdings Inc. | |||||||
| Fair Isaac Corp. | |||||||
| International Business Machines Corp. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
| Net Profit Margin, Sector | |||||||
| Software & Services | |||||||
| Net Profit Margin, Industry | |||||||
| Information Technology | |||||||
Based on: 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), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Net profit margin = 100 × Net income (loss) ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenue
- The revenues demonstrated a consistent upward trajectory from January 31, 2020, to January 31, 2025. Starting at 3,627 million USD, revenues increased steadily each year, reaching 8,446 million USD by the end of the period. This represents a significant and continuous growth trend, reflecting expanding business activity and market presence.
- Net Income (Loss)
- Net income exhibited considerable volatility throughout the examined period. Initially, the figure was negative at -481 million USD in 2020, decreasing in magnitude to -282 million USD in 2021, followed by a shift to a positive net income of 29 million USD in 2022. However, it reverted to a loss in 2023, with net income at -367 million USD. Notably, there was a substantial positive turnaround in 2024 with net income rising sharply to 1,381 million USD, before declining to 526 million USD in 2025. These fluctuations suggest varying profitability influenced by potentially changing cost structures, investments, or other financial factors.
- Net Profit Margin
- The net profit margin correspondingly reflected the instability seen in net income. Starting with a negative margin of -13.25% in 2020, it improved to -6.54% in 2021 and turned positive at 0.57% in 2022. The margin then declined again to -5.9% in 2023, followed by a sharp increase to 19.02% in 2024, and settling at a lower yet positive 6.23% in 2025. The positive margin in several years implies periods of operational profitability, while the fluctuations reveal challenges in maintaining consistent profit levels relative to revenues.
- Summary Insights
- Overall, the data depict a company experiencing strong and consistent revenue growth alongside oscillating profitability. The significant variability in net income and profit margin underscores periods of financial instability, possibly due to strategic investments, market conditions, or operational efficiencies. Importantly, the marked improvement in profitability in 2024 indicates a potential shift to more sustainable earnings, although the subsequent decline in 2025 suggests continued challenges in maintaining high profit margins.
Return on Equity (ROE)
Workday Inc., ROE calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income (loss) | |||||||
| Stockholders’ equity | |||||||
| Profitability Ratio | |||||||
| ROE1 | |||||||
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Accenture PLC | |||||||
| Adobe Inc. | |||||||
| Cadence Design Systems Inc. | |||||||
| CrowdStrike Holdings Inc. | |||||||
| Fair Isaac Corp. | |||||||
| International Business Machines Corp. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
| ROE, Sector | |||||||
| Software & Services | |||||||
| ROE, Industry | |||||||
| Information Technology | |||||||
Based on: 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), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
ROE = 100 × Net income (loss) ÷ Stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss)
- The net income exhibits significant volatility over the analyzed periods. It began with a substantial loss of $481 million in 2020, followed by a reduced loss of $282 million in 2021. In 2022, the company achieved a modest positive net income of $29 million. However, this was reversed in 2023 with a considerable loss of $367 million. Notably, the company experienced a strong recovery in 2024 with a net income of $1,381 million, before decreasing to $526 million in 2025, though still maintaining profitability.
- Stockholders’ Equity
- Stockholders’ equity shows a consistent and steady increase throughout the period. It grew from $2,487 million in 2020 to $9,034 million in 2025. This growth indicates a strengthening equity base, reflecting either retained earnings accumulation or additional capital infusion, supporting the company’s financial stability despite fluctuations in profitability.
- Return on Equity (ROE)
- The ROE demonstrates a fluctuating pattern that mirrors the net income trends and equity growth. It was negative at -19.33% in 2020 and improved to -8.62% in 2021, turning slightly positive to 0.65% in 2022. The ROE dipped again to -6.57% in 2023 but then surged to 17.09% in 2024, corresponding with the spike in net income. In 2025, ROE declined to 5.82%, indicating a reduction in profit efficiency relative to equity, yet it remained positive.
Return on Assets (ROA)
Workday Inc., ROA calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income (loss) | |||||||
| Total assets | |||||||
| Profitability Ratio | |||||||
| ROA1 | |||||||
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Accenture PLC | |||||||
| Adobe Inc. | |||||||
| Cadence Design Systems Inc. | |||||||
| CrowdStrike Holdings Inc. | |||||||
| Fair Isaac Corp. | |||||||
| International Business Machines Corp. | |||||||
| Intuit Inc. | |||||||
| Microsoft Corp. | |||||||
| Oracle Corp. | |||||||
| Palantir Technologies Inc. | |||||||
| Palo Alto Networks Inc. | |||||||
| Salesforce Inc. | |||||||
| ServiceNow Inc. | |||||||
| Synopsys Inc. | |||||||
| ROA, Sector | |||||||
| Software & Services | |||||||
| ROA, Industry | |||||||
| Information Technology | |||||||
Based on: 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), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
ROA = 100 × Net income (loss) ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss)
- The net income experienced significant volatility over the observed periods. Initially, a substantial loss of $481 million was recorded, which improved to a loss of $282 million the following year. The trend shifted to a slight profit of $29 million in 2022, but then reverted to a loss of $367 million in 2023. In the latest years, there was a marked turnaround with net income rising significantly to $1,381 million in 2024 and then declining to $526 million in 2025, although remaining positive.
- Total Assets
- Total assets displayed consistent growth throughout the timeframe. Starting at $6,816 million, assets increased steadily each year, reaching $17,977 million by 2025. This upward trend signifies ongoing expansion and asset accumulation over the period.
- Return on Assets (ROA)
- Return on assets mirrored the fluctuation observed in net income, moving from negative values to occasional positive returns. Initially, ROA was -7.05%, improving to -3.24% in 2021 and turning slightly positive at 0.28% in 2022. However, it declined again to -2.72% in 2023 before sharply increasing to 8.39% in 2024. The latest figure is 2.93% in 2025, indicating a reduction from the previous year but still reflecting profitable asset utilization.
- Overall Financial Performance
- The data indicates that the company experienced a challenging start with sustained losses and negative returns on assets. Despite fluctuations, the period concludes with significant improvement in profitability and asset efficiency. The consistent growth in total assets suggests expansion efforts, while the improvement in ROA and net income highlights a potential recovery phase and enhanced operational effectiveness in recent years.