Workday Inc. (NASDAQ:WDAY)

Receivables Turnover

The receivables turnover ratio exhibits a fluctuating pattern over the observed periods. Initially, it starts at 6.54, declines to a low point near 4.14, then rebounds to values around 6.9–6.7 in several quarters, followed by intermittent decreases around 3.96 to 4.43. Overall, the trend demonstrates cyclical variations without a clear consistent upward or downward direction, suggesting periodic changes in the efficiency of collecting receivables.

Payables Turnover

Payables turnover shows significant volatility, beginning at an elevated level above 31.8 and then declining sharply to as low as 11.16 in some quarters. The metric fluctuates between mid-teens to mid-twenties in most periods, reflecting varied payment speeds to suppliers. The occasional high values indicate more frequent payments, whereas the lower ratios suggest slower payables settlement. The inconsistency reveals adjustments in working capital management or supplier payment terms.

Working Capital Turnover

Working capital turnover is characterized by pronounced irregularity. Early on, the ratio displays spikes such as 12.5 and 24.99, and even 35.15 in one quarter, suggesting extreme fluctuations in how efficiently working capital is used to generate sales. However, in later periods, values stabilize at considerably lower levels around 1.5 to 1.75, indicating a substantial reduction in turnover activity and potentially a more conservative or stable working capital management approach.

Average Receivable Collection Period

The average receivable collection period varies inversely with the receivables turnover, ranging from about 53 to 92 days. It is generally shorter when turnover is higher and lengthens when turnover falls. The period repeatedly increases to near 90 days, indicating slower collections in some quarters, followed by improvements to approximately 55 days. This cyclical behavior points to irregularities in collecting customer payments in a timely manner.

Average Payables Payment Period

The average payables payment period demonstrates an overall increasing trend with significant fluctuations. Starting near 11 days, it rises to more than 30 days during some quarters, indicating slower payment to suppliers in certain periods. However, it frequently returns to values around 15–20 days. The elongation of payable periods suggests attempts at extending credit from suppliers or managing cash flow more conservatively during specific intervals.

The financial data reveals a consistent growth in revenues over the observed periods, rising from approximately $1,018 million in April 2020 to $2,348 million in July 2025. This upward trajectory indicates a strong expansion in sales or service delivery, with no significant declines or plateaus noted, demonstrating sustained demand or market penetration.

Trade and other receivables exhibit notable volatility throughout the periods. Beginning at $584 million, receivables increase sharply in several quarters, such as in January 2021 ($1,032 million) and January 2023 ($1,570 million), followed by subsequent decreases. This fluctuation suggests variability in credit sales or collection timing. The pattern of increases followed by partial reductions might reflect changes in credit policy, billing cycles, or customer payment behavior.

The receivables turnover ratio, which measures the efficiency of collecting trade receivables, shows a cyclical pattern that correlates inversely with the level of trade receivables. Higher turnover ratios correspond to quarters with relatively lower receivables, indicating faster collections, while lower ratios align with higher receivables, implying slower collection periods. The ratio ranges broadly from just below 4.0 to nearly 7.0, hinting at varying collection efficiency across quarters. Periods with turnover ratios around or below 4.0 may signal potential issues with receivables management or credit risk.

Overall, the combination of steady revenue growth with fluctuating receivables and receivables turnover ratios highlights the importance of monitoring receivables management closely to sustain cash flow and credit health. The data suggests that while sales are expanding steadily, maintaining consistent collection efficiency remains a challenge that could impact liquidity if not addressed effectively.

The financial data reveals several notable trends for Workday Inc. across recent quarters. The costs of revenues have exhibited a generally upward trajectory. Beginning at 306 million US dollars in April 2020, the figure has steadily increased, reaching 582 million US dollars in July 2025. This reflects a consistent rise in the company's expenditure on delivering its products or services, suggesting expanding operational scale or increasing cost pressures over time.

Accounts payable values have fluctuated more irregularly compared to the costs of revenues. Initial values were relatively low, for instance, 35 million US dollars in April 2020, followed by periods of increase and decrease. A significant spike occurred in April 2022 at 123 million US dollars, followed by another peak of 154 million in January 2023. After these peaks, accounts payable generally stabilized with some variations but remained higher than the initial periods, ending at 100 million US dollars in July 2025. These variations may indicate changes in supplier payment practices or timing of liabilities settlement.

The payables turnover ratio has demonstrated considerable volatility across the reporting periods. The ratio started at a high level of 31.83 in April 2020, dropped to a low of 11.16 in January 2023, and then fluctuated within a broad range. These fluctuations suggest inconsistent efficiency in managing accounts payable relative to the costs of revenues. Periods with lower payables turnover ratios correspond to slower payment cycles or extended credit terms with suppliers, whereas higher ratios imply more rapid payments or shorter credit periods. Overall, no clear long-term trend is observed, but rather a pattern of alternating efficiency levels in accounts payable management.

In summary, while costs of revenues have steadily increased, reflecting growth or rising operational costs, accounts payable and its turnover ratio display more pronounced variability. This indicates changing dynamics in supplier relationships and payment policies, which could impact working capital management and cash flow timing for the company.

Working Capital

The working capital figures demonstrate notable volatility over the observed periods. Initially, there is a general fluctuation between positive and negative values, with a significant dip to -305 million US dollars around April 30, 2021. Post this period, working capital exhibits a pronounced upward trend, increasing substantially from 2662 million US dollars in April 2022 to a peak of 5462 million US dollars by July 2025. This suggests improved liquidity and an expanding buffer of current assets over liabilities in more recent quarters.

Revenues

Revenue growth presents a consistent upward trajectory throughout the entire timeframe. Starting at 1018 million US dollars in April 2020, revenues steadily rise each quarter, reaching 2348 million US dollars by July 2025. The progression indicates solid sales growth, with no evident periods of decline or stagnation, reflecting continuous business expansion or increased market demand.

Working Capital Turnover Ratio

The working capital turnover ratio exhibits significant fluctuations in the earlier periods, reaching exceptionally high values such as 24.99 and 35.15, which may be influenced by negative or low working capital figures. From around April 2022 onwards, the ratio stabilizes within a narrower range between approximately 1.5 and 1.75. This stabilization indicates a more consistent relationship between revenues and working capital, suggesting increasingly efficient use of working capital in generating revenue in the latter periods compared to the earlier volatile phase.

Summary

The data reflects a transition from initial volatility in liquidity management, evidenced by fluctuating working capital and turnover ratios, to a more stabilized and healthy financial position. Continuous revenue growth combined with increasing working capital and a stabilized turnover ratio highlights enhanced operational stability and financial efficiency over the observed quarters.

The analysis of receivables turnover and average receivable collection period over the observed quarters reveals notable fluctuations and cyclical tendencies in the company's credit management and collection efficiency.

Receivables Turnover Ratio

The receivables turnover ratio displays variability with no consistent upward or downward trend, oscillating between approximately 3.96 and 6.94 across the periods. The ratio tends to peak around certain quarters, with higher values typically observed in the second and third quarters of several years, indicating periods when receivables were converted into cash more rapidly. Conversely, the turnover ratio dips during the first quarters, reaching near or below 4 in some instances, suggesting slower collections.

Average Receivable Collection Period

The average receivable collection period inversely mirrors the turnover ratio, ranging roughly from 53 to 92 days. Typically, when the turnover ratio decreases, the collection period extends, sometimes reaching values above 80 days, particularly in the first quarters of several years. Shorter collection periods are observed when turnover peaks, usually coinciding with mid-year quarters.

Pattern and Seasonal Insights

The data exhibits a seasonal pattern where the efficiency in receivables collection tends to decline at the beginning of the year and improve in mid-year quarters. This is evidenced by recurring spikes in collection days and dips in turnover ratios in early quarters, followed by reversals in subsequent quarters. This seasonality may reflect operational or industry-specific cycles affecting payment behaviors by customers.

Implications for Credit and Cash Management

The observed fluctuations suggest that the company's receivables management experiences periodic challenges in maintaining consistent collection efficiency. The lengthening of collection periods in certain quarters may impact cash flow timing and liquidity. The company should evaluate underlying causes for these cyclical trends and consider strategies to stabilize receivables turnover and reduce collection days to enhance working capital management.

The payables turnover ratio demonstrates significant fluctuations over the observed periods, ranging from a high of 31.83 to a low of 11.16. Initially, there is a sharp decline from 31.83 to 15.85 within the first year, followed by an erratic pattern exhibiting alternating rises and falls. The ratio reaches points of recovery, such as 28.2 and 26.89, but also experiences notable dips near or below 15 on multiple occasions. This variability indicates inconsistent efficiency in managing payables across quarters.

The average payables payment period closely reflects this volatility, varying between 11 and 33 days. There is a noticeable increase from 11 days to 23 days early in the timeline, followed by multiple oscillations. Some peaks, such as 30 and 33 days, suggest periods where the company took longer to settle its payables. Conversely, troughs around 14–16 days indicate periods of faster payment. The inverse relationship between these two metrics—payables turnover ratio and average payment period—is evident, as higher turnover ratios correspond with shorter payment periods and vice versa.

Overall, the financial pattern suggests variable management of supplier payments without a clear trend towards consistent improvement or deterioration. This may reflect changes in operational strategy, cash flow management, or supplier negotiations over time. The absence of a stable trend alerts to the need for closer monitoring and possibly enhanced control mechanisms to optimize payable cycles consistently throughout fiscal quarters.