Workday (WDAY) 10-K risk factor changes: FY2022 vs FY2021

- the ongoing COVID-19 pandemic, the resulting global economic volatility, and measures taken in response to the pandemic may materially and adversely affect our business, [removed: operating results,] financial condition, [added: operating results,] and earnings guidance that we may issue from time to time;

- if our security measures [added: or the security measures of our service partners] are breached or unauthorized access to customer or user data is otherwise obtained, our applications may be perceived as not being secure, customers and end users may reduce the use of or stop using our applications, and we may incur significant liabilities;

- privacy concerns and evolving domestic or foreign laws and regulations may reduce the [removed: effectiveness] [added: adoption] of our applications, result in significant costs and compliance challenges, and adversely affect our business and operating results;

- we may lose key employees or be unable to attract, [removed: train] [added: train,] and retain highly skilled employees, which may adversely affect our business and future growth prospects;

- because we encounter long sales cycles when selling to large customers and we recognize subscription services [removed: revenue] [added: revenues] over the term of the contract, downturns or upturns in new sales will not be immediately reflected in our operating results and it may be difficult to predict a negative impact on our operating and financial results; additionally, our ability to predict the rate of customer subscription renewals or adoptions is limited;

- we have a history of cumulative [removed: net] losses and we may not [removed: be profitable] [added: achieve or sustain profitability] on a basis prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) [removed: for] [added: in] the [removed: foreseeable] future;

- the dual class structure of our common stock has the effect of concentrating voting control with our [removed: Chairman and co-CEO,] [added: Co-Founders,] as well as with other executive officers, directors, and affiliates, which gives our [removed: Chairman and co-CEO] [added: Co-Founders] and other members of management control over key decisions and limits or precludes the ability of non-affiliates to influence corporate matters;

The extent to which the ongoing COVID-19 pandemic, the resulting global economic volatility, and measures taken in response to the pandemic will continue to impact our business, [removed: operating results, and] financial [removed: condition] [added: condition, and operating results] will depend on future developments, which are highly uncertain and difficult to predict.

It is especially difficult to predict the impact on the global economic markets, which have been and will continue to be highly dependent upon the actions of governments, businesses, and other enterprises in response to the pandemic, [removed: as well as] the effectiveness of those [removed: actions.][added: actions, and vaccine availability, distribution, and adoption.]

As a result of the COVID-19 pandemic, [added: we have experienced volatility in] the trading prices for our Class A common [removed: stock and the stock of other technology companies have been highly volatile,] [added: stock,] and such volatility may continue [removed: for the duration of and possibly] beyond the COVID-19 pandemic.

Any sustained adverse impacts from the continued spread of COVID-19 could materially and adversely affect our business, [removed: operating results,] financial condition, [added: operating results,] and earnings guidance that we may issue from time to time, which could have a material effect on the value of our Class A common stock.

In response to COVID-19, as many other companies have done, we [removed: have] temporarily closed the majority of our global offices; required most of our employees to [removed: continue to] work remotely; implemented travel restrictions; and postponed or canceled certain of our customer, industry, implementation partner, analyst, investor, and employee events, and converted other events to virtual-only experiences.

[removed: These precautionary] [added: As the pandemic persists, these] measures could have increasingly negative effects on our [added: employee productivity and morale,] sales and marketing efforts, customer success efforts, and revenue growth rates or other financial metrics, or create operational or other challenges, any of which could adversely impact our business, [removed: operating results, and] financial [removed: condition] [added: condition, and operating results] in any given period.

The COVID-19 pandemic may also have long-term effects on the nature of the office environment and remote working, which may present risks for our real estate portfolio, as well as strategy, operational, [added: talent recruiting] and [added: retention, and] workplace culture challenges that may adversely affect our business.

Our future revenues rely on continued demand by existing customers and the acquisition of new [removed: customers.][added: customers who may be subject to labor shortages and global supply chain disruptions due to the COVID-19 pandemic.]

[removed: We have] [added: During the COVID-19 pandemic, we] experienced [removed: and may continue to experience increased] delays in purchasing decisions from prospective customers and a reduction in customer demand, particularly in the industries most impacted by the COVID-19 pandemic, such as travel and [removed: hospitality and healthcare.][added: hospitality.]

[removed: We may also continue to experience] [added: Similarly, we experienced] a reduction in renewal rates, particularly within our subset of small and medium-sized planning customers, as well as reduced customer spend and delayed [removed: payments, which could materially impact our business, operating results, and financial condition in future periods.][added: payments.]

While our subscription services [removed: revenue is] [added: revenues are] relatively predictable in the near term as a result of our subscription-based business model, the effect of the COVID-19 pandemic may not be fully reflected in our operating results and overall financial performance until future periods.

It is not possible for us to estimate the duration or magnitude of the adverse results of the COVID-19 pandemic and its effects on our business, [removed: operating results, or] financial [removed: condition] [added: condition, or operating results] at this time, as the impact will depend on future developments, which are highly uncertain and difficult to predict.

To the extent the COVID-19 pandemic adversely affects our business, [removed: operating results, and] financial condition, [added: and operating results,] it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.

If we are unable to renew these agreements on commercially reasonable terms, or if any of these data center operators are [removed: acquired or] [added: acquired,] cease to do business, [added: or stop providing contracted services,] we may be required to transfer our servers and other infrastructure to new data center facilities, and we may incur significant costs and experience possible service interruptions in connection with doing so.

In addition, we [removed: also] rely upon third-party hosted infrastructure partners globally, including Amazon Web Services (“AWS”), [removed: Dimension Data, Microsoft Corporation, and] Google LLC, [added: and Microsoft Corporation,] to serve customers and operate certain aspects of our [removed: services, such as environments for development and testing, training, sales demonstrations, and production usage.][added: services.]

Any changes in third-party service levels at these data centers or at our hosted infrastructure partners, or any errors, defects, disruptions, or other performance problems with our applications or the infrastructure on which they run, [added: including those related to cybersecurity threats or attacks,] could adversely affect our reputation and may damage our customers’ or other users’ stored files or result in lengthy interruptions in our services.

[removed: In the technology industry,] [added: Our ability to compete] and [removed: particularly] [added: succeed] in [removed: the San Francisco Bay Area, the competition] [added: a highly competitive environment] is [removed: intense for] [added: directly correlated to our ability to recruit] highly skilled employees, especially [removed: for] [added: in the areas of product development,] engineers with significant experience in designing and developing software and internet-related services, including in the areas of machine learning and artificial intelligence; for cybersecurity professionals; and for senior sales executives.

[removed: From time to time, we] [added: We] have experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications, and we may not be able to fill positions in desired geographic areas or at [added: all and may not be successful in achieving the workforce growth goals on the timeline we have publicly announced or at] all.

We believe that a critical component of our success has been our corporate culture, as reflected in our core values: employees, customer service, innovation, integrity, [removed: inclusion,] fun, and profitability.

Any failure to [removed: preserve] [added: maintain or adapt] our culture could negatively affect our future success, including our ability to retain and recruit personnel and to achieve our corporate objectives, including our ability to quickly develop and deliver new and innovative products.

The work performed by us or these third parties that we rely on, including any work related to the on-site components of deployment services requested by a customer, might be adversely impacted directly or indirectly by the ongoing COVID-19 pandemic, including as a result of restrictions in accessing customer [removed: sites.][added: sites, and by increased attrition.]

As the markets for our applications mature, or as new competitors introduce new products or services that compete with ours, we may be unable to attract new customers at the same [removed: price] [added: pace] or based on the same pricing model as we have used historically.

As a result of the COVID-19 pandemic, some of our existing and potential customers [removed: have deferred, and may continue to defer,] [added: deferred] purchasing decisions, [removed: request] [added: requested] price concessions and delayed payment terms, and [removed: request] [added: requested] other terms and conditions.

[removed: As] [added: If these conditions were to return, whether as] a [removed: result, in the future] [added: result of a resurgence of COVID-19 or otherwise,] we may be required to reduce our prices or accept onerous terms and conditions, including delayed payment terms, which could adversely affect our revenues, profitability, financial position, and cash flows in any given period.

Furthermore, because our future revenue growth relies, in large part, on new customer acquisition, any inability of our sales force to establish relationships with potential customers during the current environment or prospects deferring buying decisions due to the economic [removed: uncertainty] [added: uncertainty,] is likely to have a negative impact on our future revenue growth and other financial measures.

Our quarterly operating results, including our revenues, [added: subscription revenue backlog,] operating margin, profitability, [added: and] cash flow, [removed: unearned revenue, and remaining subscription services revenue performance obligations, or backlog,] may vary significantly in the future and period-to-period comparisons of our operating results may not be meaningful.

- the changes in payment terms and timing of customer payments and payment defaults by customers, including those [removed: significantly] impacted by the ongoing COVID-19 pandemic;

For example, we [removed: did not hold] [added: held a virtual event, Conversations for a Changing World, in both fiscal 2021 and 2022, in place of] our two largest annual customer [removed: conferences for fiscal year 2021,] [added: conferences,] Workday Rising and Workday Rising Europe.

We also transitioned [removed: Adaptive Live, our customer experience for] Workday [removed: Adaptive Planning customers as well as] [added: Elevate,] our global event series, [removed: Workday Elevate,] from [added: an] in-person to digital event [removed: experiences.][added: experience.]

Our shift to [removed: creating] virtual customer, industry, partner, analyst, investor and employee events may not be [removed: successful, and we may not be able to] [added: as successful or] showcase our products as well, [removed: or] [added: and ultimately] generate [removed: similar] [added: lower] levels of customer interest, opportunities, and [removed: leads through these virtual events as we have historically done through in-person events.][added: leads.]

These precautionary measures that have been adopted, particularly if extended for prolonged periods, could have increasingly negative effects on our ability to develop and maintain widespread positive awareness of our brand, which could harm our business, [removed: operating results, and] financial [removed: condition.][added: condition, and operating results.]

In addition, positions we take on environmental, social, [removed: governance,] [added: governance (“ESG”),] and ethical issues from time to time may impact our brand, reputation, or ability to attract or retain customers.

If we fail to successfully promote and maintain our brand, [added: or] we [added: fail to expand awareness of our newer solutions or products, we] may fail to attract or retain customers necessary to realize a sufficient return on our brand-building efforts, or to achieve the widespread brand awareness that is critical for broad customer adoption of our applications.

- our brand promotion activities may not generate the customer awareness or increased revenues we anticipate, and even if they do, any increase in revenues may not offset the significant expenses we incur in building our brand;

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- adverse litigation results could have a material adverse impact on our business;

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Starting in the second quarter of fiscal 2022, a limited number of employees returned to our offices in certain locations, taking into consideration government restrictions, employee safety, and health risks.

Our approach may vary among geographies depending on appropriate health protocols, and may change at any time.

Additionally, our efforts to reopen our offices safely may not be successful, could expose our employees to health risks, and could involve additional costs or liability.

While vaccines have become widely available in certain countries, and businesses and economies have reopened, the status of global economic recovery remains uncertain and unpredictable, and will continue to be impacted by developments in the pandemic including any subsequent waves of outbreak or new variant strains of the COVID-19 virus which may require re-closures or other preventative measures.

If these conditions were to return, whether as a result of a resurgence of COVID-19 or otherwise, our business, financial condition, and operating results could be negatively impacted in future periods.

As a federal contractor, we are subject to the U.S. Government’s Safer Federal Workforce Task Force’s guidelines on vaccination requirements for our employees (the “Federal Contractor Mandate”), which is currently on a nationwide stay by trial courts.

We anticipate that if the Federal Contractor Mandate goes into effect, or if similar regulations are subsequently implemented, we would be required to comply.

In addition to any federal vaccine mandates, it is possible that additional, more protective vaccine mandates may be announced by state or local jurisdictions that could impact our workforce and operations.

Although we cannot predict with certainty the impact that the Federal Contractor Mandate or any other similar or related measures will have on our workforce and operations, these requirements and any future requirements may result in attrition and impede our ability to recruit and retain our workforce.

Additionally, our implementation of these vaccine mandates may impact our ability to maintain satisfactory arrangements with third-party vendors and service providers, to the extent they are subject to the mandates.

These measures may also result in increased labor costs and further disrupt the national supply chain, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

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In addition, certain countries have implemented or may implement legislative and technological actions that either do or can effectively regulate access to the internet, including the ability of internet service providers to limit access to specific websites or content.

Other countries have attempted or are attempting to change or limit the legal protections available to businesses that depend on the internet for the delivery of their services.

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During this period of the “great resignation,” we have faced and may continue to face higher attrition.

The market for skilled personnel in the software industry is very competitive, and we have seen these pressures increase significantly through the COVID-19 pandemic.

As we are headquartered in the San Francisco Bay Area, we face intense competition among large and small firms in the Silicon Valley market.

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The challenges we face in recruiting and hiring qualified personnel may be compounded by a decreased willingness of candidates to leave their current employment due to various factors including economic uncertainty caused by the COVID-19 pandemic and uncertainty regarding immigration policies.

As the economic uncertainty related to the COVID-19 pandemic eases, we may face additional challenges in recruiting and retaining qualified personnel as other companies increase the pace of hiring.

Further, our current and future office environments or flexible work policies may not meet the expectations of our employees or prospective employees.

Moreover, our flexible work policies require significant action to preserve culture with some of the employee base working remotely.

Furthermore, we substantially grew our employee base in fiscal 2022, and we must be able to effectively integrate, develop, and motivate a large number of new employees, while maintaining the effectiveness of our business execution and the beneficial aspects of our corporate culture.

Implementation of our applications may be technically complicated because they are designed to enable complex and varied business processes across large organizations, integrate data from a broad and complex range of workflows and systems, and may involve deployment in a variety of environments.

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In order for our customers to successfully implement our applications, they need access to highly skilled and trained service professionals.

Attrition of key personnel at our customers has impacted and may continue to impact our direct sales efforts.

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Additionally, as we typically sign a significantly higher percentage of agreements with new customers as well as renewal agreements with existing customers in the fourth quarter of each year, we may experience a greater impact on our business and quarterly results due to the prolonged uncertainty.

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Statements about our ESG initiatives and goals, and progress against those goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

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- the failure of strategic acquisitions to perform as expected or to meet financial projections; and

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Additionally, global events as well as geopolitical developments, fluctuating commodity prices, trade tariff developments, and inflation have caused, and may in the future cause, global economic uncertainty, and uncertainty about the interest rate environment, which could amplify the volatility of currency fluctuations.

In addition, some of our competitors may offer their products and services at a lower price, or may offer delayed payment terms, financing terms, or other terms and conditions that are more enticing to potential customers.

Furthermore, these data center operators or hosted infrastructure partners could decide to close their facilities, cease operations without adequate notice, or stop providing contracted services.

Moreover, the COVID-19 pandemic requires significant action to preserve culture with an employee base temporarily working remotely and facing unique personal and professional challenges.

For example, beginning in March 2020, we began experiencing and continue to experience unfavorable impacts to our new subscription bookings, causing us to reduce our fiscal 2021 subscription revenue outlook.

- inability to integrate or benefit from an acquisition in a profitable manner;

- difficulty in integrating and retaining the personnel of the acquired business, including integration of the culture of the acquired company with Workday;

- use of resources that are needed in other parts of our business; and

Our customers can use our applications to collect, use, and store personal or identifying information regarding a variety of individuals in connection with their operations, including but not limited to their employees, contractors, students, job applicants, customers, and suppliers.

Additionally, individuals using our WayToTM by Workday application may store, manage, and share with certain organizations credentials such as employment history, education, skills, and compensation information.

National, state and local governments and agencies in the countries in which our customers operate have adopted, are considering adopting, or may adopt laws and regulations regarding the collection, use, storage, transfer, processing, protection, and disclosure of personal information obtained from consumers and individuals, which could impact our ability to offer our services in certain jurisdictions or our customers’ ability to deploy our solutions globally.

We have been requested to, and may continue to need to develop features, enhancements, or modifications to our products to support our customers’ evolving compliance obligations.

This may require us to divert development and other resources from other areas, incur significant expenditures, or, if we are unsuccessful in delivering these features, enhancements, or modifications, result in monetary damages, loss of revenue or customers, reputational harm, or other adverse impacts to our business.

Moreover, if we or our subprocessors fail to adhere to adequate data protection practices around the usage of and access to our customers’ and other users’ personal data or fail to report a data breach or other loss of data within timeframes mandated by law or our customer contracts, we may be liable for certain losses, and it may damage our reputation and brand.

Additionally, we expect that existing laws, regulations, and standards may be interpreted in new and differing manners in the future and may be inconsistent among jurisdictions.

Future laws, regulations, standards, and other obligations, and changes in the interpretation of existing laws, regulations, standards, and other obligations could result in increased regulation, increased costs of compliance and penalties for non-compliance, and limitations on data collection, use, disclosure, and transfer for Workday and our customers.

In 2016, the European Union (“EU”) adopted a new regulation governing data privacy called the General Data Protection Regulation (“GDPR”), which became effective in May 2018.

The GDPR established new requirements applicable to the handling of personal data and imposes penalties for non-compliance of the greater of €20 million or 4% of worldwide revenue.

Customers, particularly in the EU, are seeking assurances from their suppliers, including us, that their processing of personal data of EU nationals is in accordance with the GDPR.

If we are unable to provide adequate assurances to such customers, demand for our applications could be adversely affected.

In addition, we must continue to seek assurances from our subprocessors that they are handling personal data in accordance with GDPR requirements in order to meet our own obligations under the GDPR.

Additionally, the UK implemented the Data Protection Act effective in May 2018 and statutorily amended in 2019, that substantially implements the GDPR and contains provisions, including UK-specific derogations, for how GDPR is applied in the UK.

The Data Protection Act also imposes fines of up to the greater of £17 million or 4% of global turnover, in addition to the fines under the GDPR.

The UK and the EU reached a Trade Cooperation Agreement in December 2020 that allows continued transfers for a period of up to six months.

Beyond that, transfers of data from the European Economic Area to the UK will require use of Standard Contractual Clauses (“SCCs”) absent an EU determination that UK data protection law is “adequate” under EU standards.

The CCPA and CPRA give California consumers certain rights similar to those provided by the GDPR, and customers and other users may seek similar assurances from suppliers regarding compliance.

Moreover, there are a number of other legislative proposals worldwide, including in the United States at both the federal and state level, that could impose additional and potentially conflicting obligations in areas affecting our business.

Our customers may expect us to meet voluntary certifications or adhere to other standards established by third parties.

If we are unable to maintain these certifications or meet these standards, it could reduce demand for our applications and adversely affect our business and operating results.

The costs of compliance with, and other burdens imposed by, privacy laws and regulations that are applicable to the businesses of our customers may adversely affect our customers’ ability and willingness to process, handle, store, use, and transmit demographic and personal data, which in turn could limit the use, effectiveness, and adoption of our applications and reduce overall demand.

In addition, the other bases on which we and our customers rely for the transfer of data, such as model contracts, continue to be subjected to regulatory and judicial scrutiny.

While the same court upheld the use of SCCs, which we offer to our customers to enable data transfers, the decision has led to some uncertainty regarding the use of SCCs as the mechanism for data transfers to the United States and the court made clear that reliance on SCCs alone may not necessarily be sufficient in all circumstances.

Use of SCCs must now be assessed on a case-by-case basis, taking into account the legal regime applicable in the destination country.

In November 2020, the European Data Protection Board issued draft recommendations, which may impose higher burdens on the use of SCCs for cross-border data transfers, including transfers to cloud service providers, and create challenging technical issues.

To comply with these recommendations, we may need to implement additional contractual and technical safeguards for any personal data transferred out of the European Economic Area, which could increase our compliance costs, expose us to further regulatory scrutiny and liability, and adversely affect our business.

At the same time in November 2020, the European Commission released a draft of revised SCCs.

If adopted, these could make aspects of contracting around cross-border transfers easier, particularly in relation to use of subprocessors.

Ultimately, if we or our customers are unable to transfer data between and among countries and regions in which we operate, it could decrease demand for our applications, require us to restrict our business operations, and impair our ability to maintain and grow our customer base and increase our revenue.

The federal net operating losses generated in and after fiscal 2018 do not expire and may be carried forward indefinitely.

These net operating loss and research tax credit carryforwards could expire unused and be unavailable to reduce future income tax liabilities, which could adversely affect our profitability.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, our ability to utilize net operating loss carryforwards or other tax attributes, such as research tax credits, in any taxable year may be limited if we experience an “ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.

Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report, particularly in “Risk Factors” included in Part I, Item 1A of this [removed: Annual Report on Form 10-K.*][added: report.*]

*The following discussion of our financial condition and results of operations covers fiscal [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] items and year-over-year comparisons between fiscal [removed: 2021] [added: 2022] and [removed: 2020.][added: 2021.]

Discussions of fiscal [removed: 2019] [added: 2020] items and year-over-year comparisons between fiscal [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, [removed: 2020,] [added: 2021,] that was filed with the SEC on March [removed: 3, 2020.*][added: 2, 2021.*]

Workday delivers [added: applications for] financial management, spend management, human capital management, planning, and [removed: analytics and benchmarking applications designed for the world’s largest companies, educational institutions, and government agencies.][added: analytics.]

With Workday, our customers have a unified system that can help them plan, execute, analyze, and extend to other applications and environments, thereby helping them continuously adapt how they manage their [removed: businesses] [added: business] and operations.

Our diverse customer base includes medium-sized and large, global [removed: companies] [added: organizations] within numerous industry categories, including [removed: technology, financial services, business and] professional [removed: services, healthcare] and [removed: life sciences, manufacturing,] [added: business services, financial services, healthcare, education, government, technology, media,] retail, and [removed: hospitality, as well as educational institutions, government agencies, and nonprofit organizations.][added: hospitality.]

We have achieved significant growth [added: since our inception] in [removed: a relatively short period of time,] [added: 2005,] with a substantial amount of our growth coming from new customers.

Our current financial focus is on growing our revenues and expanding [added: both] our customer [removed: base.][added: base and our footprint within our existing customers.]

While we have [removed: incurred net losses on] a [added: history of] GAAP [removed: basis in each period since our inception in 2005,] [added: operating losses,] we strive to invest in a disciplined manner across all of our functional areas to sustain continued near-term revenue growth and support our long-term initiatives.

We have invested and expect to continue to invest heavily in our product development efforts to deliver additional compelling [removed: applications] [added: applications, enhance existing applications,] and to address customers’ evolving needs.

In addition, we plan to continue to expand our ability to sell our applications globally, particularly in Europe and [removed: Asia,] [added: Asia-Pacific,] by investing in product development and customer support to address the business needs of local markets, increasing our sales and marketing organizations, acquiring and leasing additional office space, and expanding our ecosystem of service partners to support local deployments.

We expect to make further significant investments in our data center capacity and equipment [added: and third-party hosted infrastructure platforms] as we plan for future growth.

While we remain focused on improving operating [removed: margins,] [added: margin,] these acquisitions and investments will increase our costs on an absolute basis in the near term.

Additionally, we continue to expand our professional [removed: service] [added: services] partner ecosystem to further support our customers.

The COVID-19 pandemic is having [removed: widespread, rapidly evolving, and] unpredictable impacts on global societies, economies, financial markets, and business practices.

In response to [removed: COVID-19,] [added: the COVID-19 pandemic,] we [removed: have] temporarily closed the majority of our offices; required most of our employees to work remotely; implemented travel restrictions; and postponed certain of our customer, industry, implementation partner, analyst, investor, and employee events and converted others to virtual-only experiences.

Despite the [removed: economic challenges brought on by] [added: continuing uncertainty associated with] the COVID-19 pandemic, we [added: continue to achieve solid new subscription bookings as demand for our products remains strong, and we] are confident in the long-term overall health of our business, the strength of our product offerings, and our ability to continue to execute on our strategy.

Our operating [removed: margins for] [added: margin in] fiscal [added: 2022 and] 2021 [removed: have been] [added: was] favorably impacted by [removed: our revenue growth outpacing headcount growth as well as] the moderation of operating expenses in response to the COVID-19 pandemic.

We do not anticipate the extent of the favorable margin impact [removed: experienced during fiscal 2021] to continue long-term as we remain committed to investing in our business to drive top line growth and to support our customer base.

However, if the economic uncertainty [removed: persists,] [added: increases,] we may [removed: continue to] experience a negative impact on new business, customer renewals, sales and marketing efforts, revenue growth rates, customer deployments, customer solvency, product development, or other financial metrics, [removed: any] [added: similar to what we experienced at the onset] of [removed: which could harm our business, operating results, and financial condition.][added: the pandemic.]

For further discussion of the potential impacts of the COVID-19 pandemic on our business, [removed: operating results, and] financial condition, [added: and operating results,] see “Risk Factors” included in Part I, Item 1A of this [removed: Annual Report on Form 10-K.][added: report.]

Subscription services [removed: revenue] [added: revenues] primarily [removed: consists] [added: consist] of fees that give our customers access to our cloud applications, which include related customer support.

Professional services [removed: revenue includes] [added: revenues include] fees for deployment services, optimization services, and training.

Subscription services [removed: revenue] [added: revenues] accounted for 88% of our total revenues during fiscal [removed: 2021,] [added: 2022,] and represented 96% of our total unearned revenue as of January 31, [removed: 2021.][added: 2022.]

Subscription services [removed: revenue is] [added: revenues are] driven primarily by the number of customers, the number of workers at each customer, the specific applications subscribed to by each customer, and the price of our applications.

The mix of [removed: the] applications to which a customer subscribes can affect our financial performance due to price differentials in our applications.

Subscription services [removed: revenue is] [added: revenues are] recognized over time as services are delivered and consumed concurrently over the contractual term, beginning on the date our service is made available to the customer.

Our consulting engagements are [removed: generally] billed on a time and materials basis or a fixed price basis.

For contracts billed on a time and materials basis, [removed: revenue is] [added: revenues are] recognized over time as the professional services are performed.

For contracts billed on a fixed price basis, [removed: revenue is] [added: revenues are] recognized over time based on the proportion of the professional services performed.

As [removed: our professional services organization and] the Workday-related consulting practices of our partner firms [removed: continue] [added: continues] to develop, we expect these partners to increasingly contract directly with our subscription customers.

As a result of this trend, and the increase of our subscription services [removed: revenue,] [added: revenues,] we expect our professional services [removed: revenue] [added: revenues] as a percentage of total revenues to [added: continue to] decline over time.

*Costs of subscription services [removed: revenue.*] [added: revenues.*] Costs of subscription services [removed: revenue] [added: revenues] consist primarily of employee-related expenses associated with hosting our applications and providing customer support, [added: expenses related to] data [removed: center expenses,] [added: centers] and [added: computing infrastructure operated by third parties, and] depreciation of computer equipment and software.

*Costs of professional services [removed: revenue*.][added: revenues*.]

Costs of professional services [removed: revenue] [added: revenues] consist primarily of employee-related expenses associated with these services, subcontractor expenses, and travel expenses.

Marketing programs consist of advertising, events, corporate communications, brand awareness, [added: brand ambassador campaigns,] and product marketing activities.

Sales commissions are considered incremental costs of obtaining a contract with a [removed: customer and are deferred and amortized.][added: customer.]

Sales commissions for [removed: initial] [added: new revenue] contracts are [removed: deferred] [added: capitalized] and then amortized on a straight-line basis over a period of benefit that we have determined to be five years.

Our total revenues [removed: for fiscal 2021, 2020, and 2019] were as follows (in thousands):

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

For example, we acquired Peakon, Zimit, and VNDLY in fiscal 2022, and Scout in fiscal 2020.

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Most of these operational changes remain in effect and we continue to prioritize the health and safety of our employees, customers, and partners.

While the majority of our employees continue to work remotely, we began to reopen our offices in fiscal 2022 and are allowing employees to return to the office on a voluntary basis with enhanced safety protocols in place.

Any of these factors could harm our business, financial condition, and operating results.

Financial Results Overview

The following table provides an overview of our key metrics (in thousands, except percentages and headcount data):

| | | | As of and for the Years Ended January 31, | | | | | | | | | | | | | | | | | | | | |

| | | | 2022 | | | | | | 2021 | | | | | | $ Change | | | | | | % Change | | |

| Total revenues | | | $ | 5,138,798 | | | | | $ | 4,317,996 | | | | | $ | 820,802 | | | | | 19 | | % |

| Subscription services revenues | | | $ | 4,546,313 | | | | | $ | 3,788,452 | | | | | $ | 757,861 | | | | | 20 | | % |

| Total subscription revenue backlog | | | $ | 12,806,855 | | | | | $ | 10,088,634 | | | | | $ | 2,718,221 | | | | | 27 | | % |

| 24-month subscription revenue backlog | | | $ | 7,975,554 | | | | | $ | 6,526,074 | | | | | $ | 1,449,480 | | | | | 22 | | % |

| GAAP operating income (loss) | | | $ | (116,450) | | | | | $ | (248,599) | | | | | $ | 132,149 | | | | | (53) | | % |

| Non-GAAP operating income (1) | | | $ | 1,149,704 | | | | | $ | 867,241 | | | | | $ | 282,463 | | | | | 33 | | % |

| GAAP operating margin | | | (2.3) | | % | | | | (5.8) | | % | | | | | | | | | | 4 | | % |

| Non-GAAP operating margin (1) | | | 22.4 | | % | | | | 20.1 | | % | | | | | | | | | | 2 | | % |

| Operating cash flows | | | $ | 1,650,704 | | | | | $ | 1,268,441 | | | | | $ | 382,263 | | | | | 30 | | % |

| Cash, cash equivalents, and marketable securities | | | $ | 3,644,161 | | | | | $ | 3,535,653 | | | | | $ | 108,508 | | | | | 3 | | % |

| | | | | | | | | | | | | | | | | | | | | | | | |

| Headcount | | | 15,204 | | | | | | 12,524 | | | | | | 2,680 | | | | | | 21 | | % |

(1) See “Non-GAAP Financial Measures” below for further information.

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Our subscription revenue backlog, which is also referred to as remaining performance obligations for subscription contracts, represents contracted subscription services revenues that have not yet been recognized and includes billed and unbilled amounts.

Subscription revenue backlog may fluctuate from period to period due to a number of factors, including the timing of renewals and overall renewal rates, new business growth, average contract duration, and seasonality.

Sales commissions for new revenue contracts are capitalized and amortized on a straight-line basis over a period of benefit that we have determined to be five years.

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Professional services revenues were $592 million for fiscal 2022, compared to $530 million for fiscal 2021, an increase of $63 million, or 12%.

Subscription Revenue Backlog

As of January 31, 2022, our total subscription revenue backlog was $12.8 billion, with $8.0 billion expected to be recognized in revenues over the next 24 months.

As of January 31, 2021, our total subscription revenue backlog was $10.1 billion, with $6.5 billion expected to be recognized in revenues over the next 24 months.

The increase in subscription revenue backlog during fiscal 2022 was primarily driven by the addition of new customers, expansion of our product offerings with existing customers, and the timing of renewals.

GAAP operating expenses were $5.3 billion for fiscal 2022, compared to $4.6 billion for fiscal 2021, an increase of $689 million, or 15%, which was primarily related to an increase of $517 million in employee-related expenses, including share-based compensation, due to higher average headcount.

The increase in employee-related expenses also included $32 million for a performance-based cash bonus program that was expanded to all employees in the fourth quarter of fiscal 2022.

Non-GAAP operating expenses were $4.0 billion for fiscal 2022, compared to $3.5 billion for fiscal 2021, an increase of $538 million, or 16%, which was primarily related to an increase of $385 million in employee-related expenses due to higher average headcount.

The increase in employee-related expenses also included $32 million for a performance-based cash bonus program that was expanded to all employees in the fourth quarter of fiscal 2022.

Additionally, there were increases of $59 million related to marketing programs, $51 million in professional services and subcontractor expenses, $44 million in third-party expenses for hardware maintenance and data center capacity, and $37 million in depreciation expense related to equipment in our data centers, offset by a decrease of $79 million related to the COVID-19 one-time employee bonus.

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| | | | | | | | | | | | | | | | | | | | | | | | |

| Costs of subscription services | | | $ | 795,854 | | | | | $ | (85,713) | | | | | $ | (54,551) | | | | | $ | 655,590 | |

For example, we acquired Adaptive Insights in fiscal 2019 and Scout in fiscal 2020, and we recently announced our intent to acquire Peakon in fiscal 2022.

In December 2019, a novel strain of coronavirus disease was reported, and in March 2020, the World Health Organization characterized COVID-19 as a pandemic.

The COVID-19 pandemic created uncertainty in most industries and impacted our ability to generate new business during fiscal 2021.

Despite this, we achieved solid new subscription bookings as demand for our products remained strong.

Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period.

Professional services revenue was $530 million for fiscal 2021, compared to $531 million for fiscal 2020, a decrease of $1 million, or 0.2%.

| Costs of subscription services | | | $ | 379,877 | | | | | $ | (36,754) | | | | | $ | (31,395) | | | | | $ | 311,728 | |

| Costs of professional services | | | 455,073 | | | | | | (55,535) | | | | | | (3,653) | | | | | | 395,885 | | |

| Product development | | | 1,211,832 | | | | | | (320,876) | | | | | | (21,230) | | | | | | 869,726 | | |

| Sales and marketing | | | 891,345 | | | | | | (132,810) | | | | | | (19,725) | | | | | | 738,810 | | |

| General and administrative | | | 347,337 | | | | | | (127,443) | | | | | | (5,120) | | | | | | 214,774 | | |

| Total costs and expenses | | | $ | 3,285,464 | | | | | $ | (673,418) | | | | | $ | (81,123) | | | | | $ | 2,530,923 | |

The increase in costs of subscription services included increases of $41 million in employee-related expenses driven by higher average headcount, $26 million in depreciation expense related to equipment in our data centers, $20 million in third-party expenses for hardware maintenance and data center capacity, and $18 million in facilities and IT related expenses.

GAAP operating expenses in general and administrative were $414 million for fiscal 2021, compared to $368 million for fiscal 2020, an increase of $46 million, or 13%.

The increase in general and administrative expenses included increases of $24 million in employee-related expenses driven by higher average headcount, $21 million in charitable donations, and $6 million related to the COVID-19 one-time employee bonus, partially offset by a decrease of $6 million from reduced travel.

Non-GAAP operating expenses in general and administrative were $276 million for fiscal 2021, compared to $241 million for fiscal 2020, an increase of $36 million, or 15%.

The increase in general and administrative expenses included increases of $21 million in charitable donations, $13 million in employee-related expenses driven by higher average headcount, and $6 million related to the COVID-19 one-time employee bonus, partially offset by a decrease of $6 million from reduced travel.

Operating Margins

| Operating margin | | | (5.8)% | | | | | | 23.3% | | | | | | 2.6% | | | | | | 20.1% | | |

| Operating margin | | | (13.8)% | | | | | | 23.7% | | | | | | 3.5% | | | | | | 13.4% | | |

| Operating margin | | | (16.4)% | | | | | | 23.8% | | | | | | 2.9% | | | | | | 10.3% | | |

The decrease of $46 million in other income, net for fiscal 2021 compared to fiscal 2020 was primarily due to a decrease of $22 million in interest income on marketable securities from lower prevailing interest rates, a $20 million non-cash gain on our existing Scout investment recorded in prior year as part of the Scout acquisition, and an increase of $10 million in interest expense related to debt.

The decrease was offset by an unrealized gain of $14 million on marketable equity investments in the current fiscal year.

We expect capital expenditures for owned real estate projects to be approximately $170 million for fiscal 2022.

This capital outlay is related to the purchase of the leased properties discussed in Note 12, Leases, and Note 22, Subsequent Events, of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

We expect capital expenditures, excluding owned real estate projects, to be approximately $270 million for fiscal 2022.

These capital outlays will largely be used to expand the infrastructure of our data centers and to build out additional office space to support our growth.

As of January 31, 2021, our principal contractual cash obligations consisted of the following (in thousands):

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Total | | | | | | Less than 1 Year | | | | | | 1-3 Years | | | | | | 3-5 Years | | | | | | More than 5 Years | | |

| Term Loan (1) | | | $ | 768,608 | | | | | $ | 48,365 | | | | | $ | 167,631 | | | | | $ | 552,612 | | | | | $ | — | |

| 0.25% Convertible senior notes due 2022 (2) | | | 1,154,734 | | | | | | 2,875 | | | | | | 1,151,859 | | | | | | — | | | | | | — | | |

| Operating leases (3) | | | 482,439 | | | | | | 100,678 | | | | | | 170,599 | | | | | | 115,484 | | | | | | 95,678 | | |

| Third-party hosted infrastructure platform obligations | | | 423,730 | | | | | | 41,000 | | | | | | 91,000 | | | | | | 291,730 | | | | | | — | | |

| Purchase obligations (4) | | | 323,144 | | | | | | 194,892 | | | | | | 86,284 | | | | | | 41,968 | | | | | | — | | |

| Total | | | $ | 3,152,655 | | | | | $ | 387,810 | | | | | $ | 1,667,373 | | | | | $ | 1,001,794 | | | | | $ | 95,678 | |

(2)Consists of principal and interest payments on the 2022 Notes.

(3)We have entered into operating lease agreements for our office space, data centers, and other property and equipment with various expiration dates.

These lease agreements often provide us with an option to renew.

For further discussion of the potential impacts of the COVID-19 pandemic on our business, [removed: operating results, and] financial condition, [added: and operating results,] see “Risk Factors” included in Part I, Item 1A of this [removed: Annual Report on Form 10-K.][added: report.]

As of January 31, [removed: 2021,] [added: 2022,] our most significant currency exposures were the euro, [removed: Canadian dollar,] British pound, [added: Canadian dollar,] and Australian dollar.

For further information, see [removed: Note] [added: [Note] 10, Derivative [removed: Instruments,] [added: Instruments](#i8120124135ef44039511818d0a4d3edd_121),] of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this [removed: Annual Report on Form 10-K.][added: report.]

We had cash, cash equivalents, and marketable securities totaling [removed: $3.5] [added: $3.6] billion and [removed: $1.9] [added: $3.5] billion as of January 31, [removed: 2021,] [added: 2022,] and [removed: 2020,] [added: 2021,] respectively.

Cash equivalents and marketable securities were invested primarily in U.S. treasury securities, U.S. agency obligations, corporate bonds, commercial paper, [removed: and] money market [removed: funds.][added: funds, and marketable equity investments.]

Our debt securities are classified as “available-for-sale.” When the fair value of the security declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the impaired security, is recognized on the [removed: consolidated statement] [added: Consolidated Statements] of [removed: operations.][added: Operations.]

An immediate increase of 100 basis points in interest rates would have resulted in [removed: a $10] [added: an $11] million and [removed: $7] [added: $10] million market value reduction in our investment portfolio as of January 31, [removed: 2021,] [added: 2022,] and [removed: 2020,] [added: 2021,] respectively.

In April 2020, we entered into a Credit Agreement pursuant to which the lenders [removed: would extend] [added: extended] to Workday a senior unsecured Term Loan in an aggregate principal amount of $750 million and an unsecured Revolving Credit Facility in an aggregate principal amount of $750 million.

As of January 31, [added: 2022, and] 2021, the Term Loan had a carrying value of [removed: $729] [added: $692] million and [added: $729 million, respectively, and] there were no outstanding borrowings under the Revolving Credit Facility.

The interest rate on the Term Loan was [added: 1.30% and] 1.38% as of January 31, [removed: 2021.][added: 2022, and 2021, respectively.]

The carrying value of the 2022 Notes was $1.1 billion as of January 31, [removed: 2021.][added: 2022, and 2021, and the estimated fair value of the 2022 Notes was $1.9 billion and $1.8 billion as of January 31, 2022, and 2021, respectively.]

The estimated fair value was determined based on the quoted bid price of the 2022 Notes in an over-the-counter market as of the last trading day [removed: for fiscal 2021,] [added: of each reporting period,] which was [removed: $159.87.][added: $167.00 and $159.87, respectively.]

For further information, see [removed: Note] [added: [Note] 11, [removed: Debt,] [added: Debt](#i8120124135ef44039511818d0a4d3edd_124),] of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this [removed: Annual Report on Form 10-K.][added: report.]

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[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

The carrying value represents the liability component of the principal balance of the 2022 Notes as of January 31, 2021.

The estimated fair value of the 2022 Notes was $1.8 billion as of January 31, 2021.

Workday provides more than [removed: 8,000] [added: 9,500] organizations with software-as-a-service solutions to help solve some of today’s most complex business challenges, including supporting and empowering their workforce, managing their finances and spend in an ever-changing environment, and planning for the unexpected.

We strive to make the world of work and business better, and hope to empower customers to do the same through an innovative suite of solutions adopted by thousands of organizations around the world and across industries – from medium-sized businesses to more than [removed: 45 percent] [added: 50%] of the *Fortune* 500.

Workday provides organizations with a unified system that can help them plan, execute, analyze, and extend to other applications and environments, thereby helping them continuously adapt how they manage their [removed: businesses.][added: business and operations.]

We also offer professional services, both directly and through our Workday Services Partners, to help customers deploy our [removed: solutions.][added: solutions and continually adopt new capabilities.]

In the changing world of finance, Workday helps finance leaders accelerate their journeys towards becoming a truly digital finance operation by giving them the tools they need to manage the strategic direction of their [removed: companies] [added: organizations] while also supporting growth, profitability, and compliance and regulatory requirements.

Workday offers a set of cloud spend management solutions that help [removed: companies] [added: organizations] streamline supplier selection and contracts, manage indirect spend, and build and execute sourcing events, such as requests for proposals.

In the changing world of human resources (“HR”), Workday helps [removed: companies] [added: organizations] identify and respond to rapidly changing conditions, whether they stem from shifting talent needs or a renewed focus on belonging and diversity.

Workday’s suite of HCM applications allows organizations to manage the entire employee lifecycle – from recruitment to retirement – enabling HR teams to hire, onboard, pay, develop and reskill, and provide meaningful employee experiences that are [removed: personalized, helpful,] [added: personalized] and [removed: meet] [added: helpful, based on listening to] the diverse needs of today’s workforce.

Workday provides an active planning process that can model across finance, workforce, sales, and operational data, helping [removed: companies] [added: organizations] make more informed decisions and respond quickly to changing situations.

Workday provides applications for analytics and reporting, including augmented analytics to surface insights to the line of business in simple-to-understand stories, machine learning to drive efficiency and automation, and benchmarks to compare performance against other [removed: companies.][added: organizations.]

As of January 31, [removed: 2021,] [added: 2022,] our global workforce consisted of approximately [removed: 12,500] [added: 15,200] employees in 32 countries.

Our Chief People Officer and Co-CEOs regularly update our Board of Directors and Compensation Committee on human capital [removed: matters,] [added: matters] and seek their input on subjects such as succession planning, executive compensation, and our company-wide equity programs.

Additionally, our total rewards package includes [removed: market-competitive pay,] an employee stock purchase plan, healthcare and retirement benefits, paid time off, [removed: and] family [removed: leave.][added: leave, and other wellness programs.]

In the wake of the COVID-19 pandemic, we felt that it was important for employees to have a safe, convenient way to access healthcare and [removed: the time] [added: have introduced a global virtual healthcare network] and [removed: resources necessary to address their individual] [added: onsite healthcare resources, including COVID-19 vaccine] and [removed: family] [added: testing drive-thru clinics and flu shot clinics, in addition to expanded] healthcare [removed: needs.][added: benefits.]

Each [removed: year during our annual compensation cycle,] [added: year,] we conduct a company-wide pay equity analysis to help ensure pay equity between men and women as well as a US-based analysis with respect to people of different races.

In support of our efforts, we have created our own unique approach to diversity called [removed: VIBETM,] [added: VIBE,] which stands for Value Inclusion, Belonging, and [removed: Equity.][added: Equity for all.]

[removed: In addition, we] [added: We] have [removed: announced] [added: made solid progress towards our ongoing] company commitments that map to these global guiding principles.

These are complimented by Career Building at Workday, journeys designed to deepen expertise, grow capabilities, and make meaningful [removed: connections, and] [added: connections;] Leading at Workday, journeys that help employees understand our leadership identity and prepare them to take on increasing leadership [removed: responsibilities.][added: responsibilities; and The VIBE Way at Workday, journeys designed to equip and empower all employees with the tools and resources to incorporate VIBE into everything we do - from the language we use every day, to how we approach our work and each other, to the way we recruit and hire diverse talent at Workday.]

Workday leverages multiple communication channels to engage and inform employees, including company meetings, town halls, internal websites, [added: and] social collaboration [removed: tools, and targeted engagement surveys.][added: tools.]

Buoyed by the opportunities offered by our own technology, our talent [removed: strategy, called Performance Enablement,] [added: strategy philosophy] puts employees at the center of their own career and performance journey.

[removed: Performance Enablement] [added: Our talent philosophy] is centered on five factors that fuel employee success: enable contribution, grow capabilities, empower career, deepen connections, and align compensation and recognition.

[removed: The] [added: Our talent and performance] dashboard [removed: also] [added: includes a summary of an employee’s five factors and] provides a snapshot view of performance-related tasks, with a visual summary of goals, [removed: connections, strengths,] [added: feedback,] and growth opportunities.

Specific to the COVID-19 pandemic, we [removed: have taken] [added: continue to take] precautions to help support the health and safety of the Workday community, including our employees.

To help keep health and mental wellness top of [removed: mind during a particularly challenging year,] [added: mind,] we [removed: created] [added: offer] a series of programs and communications focused on mental health.

[removed: Our] [added: In support of our efforts to give back to the communities where we live and work, our] employees donate time and expertise as mentors and volunteers to help close the skills gap.

We encourage and support employee giving and volunteering through programs such as our charitable donation matching gift [removed: program] [added: program, our paid time off benefit for employees to volunteer] and [added: give back to their communities, and] our team volunteer experience, where employee teams of five or more can volunteer with a charity partner of their choice and receive a $5,000 grant.

We primarily sell to medium-sized and large, global [removed: companies] [added: organizations] that span numerous industry categories, including [removed: technology, financial services, business and] professional [removed: services, healthcare] and [removed: life sciences, manufacturing,] [added: business services, financial services, healthcare, education, government, technology, media,] retail, and [removed: hospitality, as well as to educational institutions, government agencies, and nonprofit organizations.][added: hospitality.]

This includes 24/7 support; training; a [removed: professional services ecosystem of trained Workday consulting teams and system integrators; a] Customer Success Management group to assist customers in production; and Workday Community, an online portal where customers can collaborate and share knowledge and best practices.

These vendors include UKG Inc. (formerly The Ultimate Software Group, Inc.); Automatic Data Processing, Inc.; Infor, Inc.; Ceridian HCM Holding Inc.; Microsoft Corporation; Anaplan, Inc.; [added: and] Coupa Software [removed: Inc.; and Unit4.][added: Inc.]

For more information regarding the competitive risks we face, see “Risk Factors” included in Part I, Item 1A of this [removed: Annual Report on Form 10-K.][added: report.]

Presently, costs and accruals incurred to comply with these governmental regulations are not material to our [removed: capital expenditures, results of operations, and competitive position.][added: financial condition or operating results.]

Our customers can use our applications to collect, use, and store [removed: personally identifiable information (“PII”)] [added: personal data] regarding a variety of individuals in connection with their operations, including but not limited to their employees, contractors, students, job applicants, customers, and suppliers.

National, state, and local governments and agencies in the countries in which we or our customers operate have adopted, are considering adopting, or may adopt laws and regulations regarding the collection, use, storage, transfer, processing, protection, and disclosure of [removed: PII obtained from individuals.][added: personal data.]

Additionally, we [removed: have been requested to, and] may [removed: continue to] need [removed: to,] [added: to] develop features, enhancements, or modifications to our products to help our customers comply with the privacy and data protection laws in their jurisdictions.

[removed: Privacy and data protection laws are particularly stringent, and the] [added: The] costs of compliance with and other burdens imposed by such laws, regulations, and standards, or any alleged or actual violation, may limit the use and adoption of our services, reduce overall demand for our services, lead to significant fines, penalties, or liabilities for noncompliance, slow the pace at which we close sales transactions, require us to divert development and other resources, or result in reputational harm or other adverse impacts to our business.

For a further discussion of the risks associated with government regulations that may materially impact us, see “Risk Factors” included in Part I, Item 1A of this [removed: Annual Report on Form 10-K.][added: report.]

We were incorporated in March 2005 in Nevada, and in June [removed: 2012] [added: 2012,] we reincorporated in Delaware.

Workday, the Workday logo, VIBE, [removed: WayTo, Adaptive Planning, Adaptive Insights,] [added: Peakon, Zimit, VNDLY,] Scout, and Opportunity Onramps are trademarks of Workday, Inc., which may be registered in the United States and elsewhere.

Information contained on or accessible through any website reference herein is not part of, or incorporated by reference in, this [removed: Annual Report on] Form 10-K, and the inclusion of such website addresses [removed: in this Annual Report on Form 10-K] is as inactive textual references only.

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

For example, in fiscal 2022, we acquired Peakon ApS (“Peakon”), a continuous listening platform that captures real-time employee sentiment; Zimit, a configure, price, quote (“CPQ”) solution built for services industries; and VNDLY, a cloud-based external workforce and vendor management technology; and in fiscal 2020, we acquired Scout RFP (“Scout”), a strategic sourcing company.

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

Starting in the fourth quarter of fiscal 2022, we have extended our key employee cash bonus program to all employees not covered under an existing sales or customer experience incentive plan.

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

Looking at our diversity data, we continue to make strides in our representation.

As of January 31, 2022, women represented 41.2% of our global employees, and underrepresented minorities (defined as those who identify as Alaskan native, American Indian, Black, Latinx, Native Hawaiian, Other Pacific Islander, and/or two or more races) represent 13.7% of our U.S. employees.

We also use Workday Peakon Employee Voice to collect feedback in real time from our employees and turn that feedback into dialog and action.

We receive data points from these surveys that help us identify actions to take to improve our company and our culture.

Employees can take action to update their contributions, capabilities, career, and connections using the quick links provided in the dashboard.

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

As part of our support in fiscal 2022, we announced that the majority of employees will not be required to return to their Workday office before April 2022, introduced flexible work options, enhanced the healthcare resources provided to our employees, and offered new employees a $500 equipment stipend to enable them to have a comfortable work-from-home environment.

We believe that talent is everywhere, but opportunity is not.

Additionally, we offer extensive customer training opportunities and a professional services ecosystem of experienced Workday consultants and system integrators to help customers not only achieve a timely adoption of Workday but continue to get value out of our applications over the life of their subscription.

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

We acquired Adaptive Insights, a business planning company, in fiscal 2019; Scout RFP (“Scout”), a strategic sourcing company, in fiscal 2020; and we recently announced our intent to acquire Peakon ApS (“Peakon”), an employee success platform that converts feedback into actionable insights, in fiscal 2022.

To that end, we introduced a global virtual healthcare network, expanded our sick leave policy, and offered additional support for caregivers.

In the first half of fiscal 2022, we expect to launch the VIBE Way at Workday - journeys that explore why it is important to value inclusion, belonging, and equity and equip employees with the tools and resources to put VIBE into action.

Our talent and performance dashboard measures performance and includes a summary of an employee’s five factors, valuable data, and a better indication of where they stand in terms of performance.

As part of our support, we provided the majority of our employees with a one-time payment—equivalent to two-weeks’ pay—to help accommodate any unforeseen costs; announced that the majority of employees will not be required to return to their Workday office before August 2021; made an additional $1 million investment in the Workday Employee Relief Fund, through which employees around the world may be eligible for up to $5,000 USD for reasonable expenses caused by the COVID-19 pandemic; and provided a $500 per employee equipment stipend to enable employees to have a comfortable work-from-home environment.

In support of our efforts to give back to the communities where we live and work, we believe that talent is everywhere, but opportunity is not.

We have supported our customers navigating the COVID-19 pandemic with the delivery of solutions and partnerships focused on assisting organizations through the changing world of work.

For example, our Workday Return to Workplace offerings help enable organizations to plan return to workplace scenarios, support worker well-being, and understand critical health, vaccine, and safety risk information.

We have also shifted all training, deployments, and support to be virtual.

We also launched a COVID-19 customer information center on our Workday Community site, which provides access to resources about our business continuity plans, product configuration, reports for managing the impact of COVID-19, and regulatory developments.

As a result, our billings and subscription revenue backlog have been highest in the fourth quarter.

We are regularly involved with claims, suits, [added: purported class or representative actions, and may be involved in] regulatory and government [removed: investigations,] [added: investigations] and other [removed: proceedings] [added: proceedings,] involving competition, intellectual property, data security and privacy, [added: bankruptcy,] tax and related compliance, labor and employment, commercial disputes, and other matters.

Such claims, suits, [added: actions,] regulatory and government investigations, and other proceedings can impose a significant burden on management and employees, could prevent us from offering one or more of our applications, services, or features to others, could require us to change our technology or business practices, or could result in monetary damages, fines, civil or criminal penalties, reputational harm, or other adverse consequences.

These claims, suits, [added: actions,] regulatory and government investigations, and other proceedings may include speculative, substantial, or indeterminate monetary amounts.

With respect to our outstanding matters, based on our current knowledge, we believe that the amount or range of reasonably possible liability will not, either individually or in aggregate, have a material adverse effect on our business, [added: financial condition,] operating results, [removed: cash flows,] or [removed: financial condition.][added: cash flows.]

For the fiscal year ended January 31, [removed: 2021][added: 2022]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 [removed: days: Yes ý No ¨][added: days.]

The aggregate market value of the voting and non-voting stock of the registrant as of July 31, [removed: 2020] [added: 2021] (based on a closing price of [removed: $180.92] [added: $234.40] per share) held by non-affiliates was approximately [removed: $32.1] [added: $44.7] billion.

As of February [removed: 26, 2021,] [added: 24, 2022,] there were approximately [removed: 184] [added: 196] million shares of the registrant’s Class A common stock, net of treasury stock, and [removed: 59] [added: 55] million shares of the registrant’s Class B common stock outstanding.

Portions of the [removed: registrant's] [added: registrant’s] definitive proxy statement for its [removed: 2021] [added: 2022] Annual Meeting of Stockholders (“Proxy Statement”), to be filed within 120 days of the [removed: registrant's] [added: registrant’s] fiscal year ended January 31, [removed: 2021,] [added: 2022,] are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

| Item 1. | | | [removed: [Business](#i696761e9974347db9bfa4dba7a4aacc7_13)] [added: [Business](#i8120124135ef44039511818d0a4d3edd_13)] | | | [removed: [1](#i696761e9974347db9bfa4dba7a4aacc7_13)] [added: [1](#i8120124135ef44039511818d0a4d3edd_13)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i696761e9974347db9bfa4dba7a4aacc7_16)] [added: Factors](#i8120124135ef44039511818d0a4d3edd_16)] | | | [removed: [8](#i696761e9974347db9bfa4dba7a4aacc7_16)] [added: [8](#i8120124135ef44039511818d0a4d3edd_16)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i696761e9974347db9bfa4dba7a4aacc7_22)] [added: Comments](#i8120124135ef44039511818d0a4d3edd_40)] | | | [removed: [31](#i696761e9974347db9bfa4dba7a4aacc7_22)] [added: [32](#i8120124135ef44039511818d0a4d3edd_40)] | | |

| Item 2. | | | [removed: [Properties](#i696761e9974347db9bfa4dba7a4aacc7_25)] [added: [Properties](#i8120124135ef44039511818d0a4d3edd_43)] | | | [removed: [31](#i696761e9974347db9bfa4dba7a4aacc7_25)] [added: [33](#i8120124135ef44039511818d0a4d3edd_43)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i696761e9974347db9bfa4dba7a4aacc7_28)] [added: Proceedings](#i8120124135ef44039511818d0a4d3edd_46)] | | | [removed: [32](#i696761e9974347db9bfa4dba7a4aacc7_28)] [added: [33](#i8120124135ef44039511818d0a4d3edd_46)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i696761e9974347db9bfa4dba7a4aacc7_31)] [added: Disclosures](#i8120124135ef44039511818d0a4d3edd_49)] | | | [removed: [32](#i696761e9974347db9bfa4dba7a4aacc7_31)] [added: [33](#i8120124135ef44039511818d0a4d3edd_49)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity [removed: Securities](#i696761e9974347db9bfa4dba7a4aacc7_37)] [added: Securities](#i8120124135ef44039511818d0a4d3edd_55)] | | | [removed: [33](#i696761e9974347db9bfa4dba7a4aacc7_37)] [added: [34](#i8120124135ef44039511818d0a4d3edd_55)] | | |

| Item [removed: 6.] [added: 8.] | | | [removed: [Selected Consolidated] [added: [Consolidated] Financial [removed: Data](#i696761e9974347db9bfa4dba7a4aacc7_40)] [added: Statements](#i8120124135ef44039511818d0a4d3edd_67) [and Supplementary Data](#i8120124135ef44039511818d0a4d3edd_67)] | | | [removed: [35](#i696761e9974347db9bfa4dba7a4aacc7_40)] [added: [51](#i8120124135ef44039511818d0a4d3edd_67)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i696761e9974347db9bfa4dba7a4aacc7_43)] [added: Operations](#i8120124135ef44039511818d0a4d3edd_61)] | | | [removed: [37](#i696761e9974347db9bfa4dba7a4aacc7_43)] [added: [37](#i8120124135ef44039511818d0a4d3edd_61)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#i696761e9974347db9bfa4dba7a4aacc7_46)] [added: Risk](#i8120124135ef44039511818d0a4d3edd_64)] | | | [removed: [48](#i696761e9974347db9bfa4dba7a4aacc7_46)] [added: [49](#i8120124135ef44039511818d0a4d3edd_64)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i696761e9974347db9bfa4dba7a4aacc7_139)] [added: Disclosure](#i8120124135ef44039511818d0a4d3edd_160)] | | | [removed: [90](#i696761e9974347db9bfa4dba7a4aacc7_139)] [added: [90](#i8120124135ef44039511818d0a4d3edd_160)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i696761e9974347db9bfa4dba7a4aacc7_142)] [added: Procedures](#i8120124135ef44039511818d0a4d3edd_163)] | | | [removed: [90](#i696761e9974347db9bfa4dba7a4aacc7_142)] [added: [90](#i8120124135ef44039511818d0a4d3edd_163)] | | |

| Item 9B. | | | [Other [removed: Information](#i696761e9974347db9bfa4dba7a4aacc7_145)] [added: Information](#i8120124135ef44039511818d0a4d3edd_166)] | | | [removed: [91](#i696761e9974347db9bfa4dba7a4aacc7_145)] [added: [91](#i8120124135ef44039511818d0a4d3edd_166)] | | |

| Item 10. | | | [Directors, Executive Officers, and Corporate [removed: Governance](#i696761e9974347db9bfa4dba7a4aacc7_151)] [added: Governance](#i8120124135ef44039511818d0a4d3edd_172)] | | | [removed: [92](#i696761e9974347db9bfa4dba7a4aacc7_151)] [added: [92](#i8120124135ef44039511818d0a4d3edd_172)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i696761e9974347db9bfa4dba7a4aacc7_154)] [added: Compensation](#i8120124135ef44039511818d0a4d3edd_175)] | | | [removed: [92](#i696761e9974347db9bfa4dba7a4aacc7_154)] [added: [92](#i8120124135ef44039511818d0a4d3edd_175)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i696761e9974347db9bfa4dba7a4aacc7_157)] [added: Matters](#i8120124135ef44039511818d0a4d3edd_178)] | | | [removed: [92](#i696761e9974347db9bfa4dba7a4aacc7_157)] [added: [92](#i8120124135ef44039511818d0a4d3edd_178)] | | |

| Item 13. | | | [Certain Relationships and Related [removed: Transactions] [added: Transactions,] and Director [removed: Independence](#i696761e9974347db9bfa4dba7a4aacc7_160)] [added: Independence](#i8120124135ef44039511818d0a4d3edd_181)] | | | [removed: [92](#i696761e9974347db9bfa4dba7a4aacc7_160)] [added: [92](#i8120124135ef44039511818d0a4d3edd_181)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#i696761e9974347db9bfa4dba7a4aacc7_163)] [added: Services](#i8120124135ef44039511818d0a4d3edd_184)] | | | [removed: [92](#i696761e9974347db9bfa4dba7a4aacc7_163)] [added: [92](#i8120124135ef44039511818d0a4d3edd_184)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#i696761e9974347db9bfa4dba7a4aacc7_169)] [added: Schedules](#i8120124135ef44039511818d0a4d3edd_190)] | | | [removed: [93](#i696761e9974347db9bfa4dba7a4aacc7_169)] [added: [93](#i8120124135ef44039511818d0a4d3edd_190)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#i696761e9974347db9bfa4dba7a4aacc7_172)] [added: Summary](#i8120124135ef44039511818d0a4d3edd_193)] | | | [removed: [96](#i696761e9974347db9bfa4dba7a4aacc7_172)] [added: [96](#i8120124135ef44039511818d0a4d3edd_193)] | | |

We have based these forward-looking statements largely on our current [removed: expectations] [added: expectations, beliefs,] and projections about future [removed: events] [added: events, conditions,] and trends that we believe may affect our financial condition, operating results, business strategy, short-term and long-term business operations and objectives, and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties, [removed: and] assumptions, [added: and changes in circumstances that are difficult to predict and many of which are outside of our control,] including those arising from the impact of the coronavirus pandemic (“COVID-19 pandemic”), as well as those described in the* “*Risk Factors*” *section, which we encourage you to read carefully.

*In light of these risks, uncertainties, [removed: and] assumptions, [added: and potential changes in circumstances,] the future events, [removed: circumstances,] [added: conditions,] and trends discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied by the forward-looking statements.

Accordingly, you should not rely upon [added: any] forward-looking [removed: statements as predictions of future events.][added: statements.]

References to fiscal [removed: 2021,] [added: 2022,] for example, refer to the year ended January 31, [removed: 2021*.][added: 2022*.]

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

Yes ý No ¨

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| Item 6. | | | [Reserved](#i8120124135ef44039511818d0a4d3edd_58) | | | [36](#i8120124135ef44039511818d0a4d3edd_58) | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i8120124135ef44039511818d0a4d3edd_4363) | | | [91](#i8120124135ef44039511818d0a4d3edd_4363) | | |

| | | | [Signatures](#i8120124135ef44039511818d0a4d3edd_196) | | | [97](#i8120124135ef44039511818d0a4d3edd_196) | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| Item 8. | | | [Consolidated Financial Statements and Supplementary Data](#i696761e9974347db9bfa4dba7a4aacc7_49) | | | [50](#i696761e9974347db9bfa4dba7a4aacc7_49) | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

It consists of approximately [removed: 516,000 square feet of leased facilities, 677,000] [added: 1.2 million] square feet of owned [removed: facilities,] [added: facilities] and a 6.9 acre parcel of leased land.

We believe that our facilities are suitable to meet our current needs.

In the future, we may expand our facilities or add new facilities as we add employees and enter new geographic markets, and we believe that suitable additional or alternative space will be available on commercially reasonable terms to accommodate any such growth.

We lease certain office space within our corporate headquarters from an affiliate of our Chairman, Mr. Duffield.

We obtained independent evaluations of current market rates at the time of lease negotiations with the goal of leasing at a rate comparable to the current market price.

During fiscal 2021, we entered into an agreement with this affiliated party for a fee of $1.5 million for an option to purchase these leased facilities at a price based on third-party appraisals and negotiation between Workday and the affiliated party (the “Leased Property Purchase Option”).

On February 23, 2021, our Board of Directors approved the exercise of the Leased Property Purchase Option.

The purchase of these leased facilities is expected to be completed in the first quarter of fiscal 2022.

For further information, see Note 12, Leases, and Note 22, Subsequent Events, of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

As of February [removed: 26, 2021,] [added: 24, 2022,] there were [removed: 17] [added: 16] stockholders of record of our Class A common stock, including The Depository Trust Company, which holds shares of our common stock on behalf of an indeterminate number of beneficial owners, as well as [removed: 77] [added: 71] stockholders of record of our Class B common stock.

See Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” [removed: of this Annual Report on Form 10-K] for more information regarding securities authorized for issuance.

The chart assumes $100 was invested at the close of market on January 31, [removed: 2016,] [added: 2017,] in our Class A common stock, the S&P 500 Index, and the S&P 1500 Application Software Index, and assumes the reinvestment of any dividends.

[removed: ][added: ]

| Company/Index | | | | | | [removed: 1/31/2016] [added: 1/31/2017] | | | | | | [removed: 1/31/2017] [added: 1/31/2018] | | | | | | [removed: 1/31/2018] [added: 1/31/2019] | | | | | | [removed: 1/31/2019] [added: 1/31/2020] | | | | | | [removed: 1/31/2020] [added: 1/31/2021] | | | | | | [removed: 1/31/2021] [added: 1/31/2022] | | |

For further [removed: information regarding the above transactions,] [added: information,] see [removed: Note] [added: [Note] 11, [removed: Debt,] [added: Debt](#i8120124135ef44039511818d0a4d3edd_124),] of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this [removed: Annual Report on Form 10-K.][added: report.]

These shares of our Class A common stock were issued in [removed: an exchange pursuant to] [added: reliance on the exemption from registration provided by] Section 3(a)(9) of the Securities Act.

The table below sets forth information regarding our purchases of our Class A common stock during the three months ended January 31, [removed: 2021:][added: 2022.]

[removed: (1)The] [added: The] shares purchased represent the exercise of the convertible note hedges relating to the partial early conversion of the 2022 Notes.

For further information, see [removed: Note] [added: [Note] 11, [removed: Debt,] [added: Debt](#i8120124135ef44039511818d0a4d3edd_124),] of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this [removed: Annual Report on Form 10-K.][added: report.]

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| Workday, Inc. | | | | | | $ | 100.00 | | | | | $ | 144.29 | | | | | $ | 218.47 | | | | | $ | 222.20 | | | | | $ | 273.84 | | | | | $ | 304.50 | |

| S&P 500 Index | | | | | | 100.00 | | | | | | 126.40 | | | | | | 123.46 | | | | | | 150.22 | | | | | | 176.11 | | | | | | 217.09 | | |

| S&P 1500 Application Software Index | | | | | | 100.00 | | | | | | 147.68 | | | | | | 178.21 | | | | | | 238.09 | | | | | | 314.13 | | | | | | 348.38 | | |

During the three months ended January 31, 2022, we issued 109 shares of our unregistered Class A common stock to holders of our 2022 Notes upon settlement of conversion of an immaterial aggregate principal amount of such notes.

This share amount represents the conversion value of the 2022 Notes in excess of the principal amount converted.

Additionally, in connection with our acquisition of VNDLY during the three months ended January 31, 2022, we agreed to issue 152,384 shares of our Class A common stock to certain key VNDLY employees (“VNDLY reserved shares”), with 50% of such shares to be issued following the first anniversary of the closing date of the acquisition and the remaining 50% to be issued following the second anniversary of the closing date, subject to service conditions.

These shares of our Class A common stock will be issued in reliance on one or more of the following exemptions or exclusions from the registration requirements of the Securities Act: Section 4(a)(2) of the Securities Act, Regulation D promulgated under the Securities Act, and Regulation S promulgated under the Securities Act.

For further information, see [Note 7, Business Combinations](#i8120124135ef44039511818d0a4d3edd_112), of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this report.

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| November 1, 2021 - November 30, 2021 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | — | | |

| December 1, 2021 - December 31, 2021 | | | | | | 108 | | | | | | 272.49 | | | | | | — | | | | | | — | | |

| January 1, 2022 - January 31, 2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| Total | | | | | | 108 | | | | | | | | | | | | — | | | | | | | | |

| Workday, Inc. | | | | | | $ | 100.00 | | | | | $ | 131.87 | | | | | $ | 190.27 | | | | | $ | 288.10 | | | | | $ | 293.02 | | | | | $ | 361.10 | |

| S&P 500 Index | | | | | | 100.00 | | | | | | 120.03 | | | | | | 151.72 | | | | | | 148.20 | | | | | | 180.31 | | | | | | 211.39 | | |

| S&P 1500 Application Software Index | | | | | | 100.00 | | | | | | 127.01 | | | | | | 187.57 | | | | | | 226.35 | | | | | | 302.40 | | | | | | 398.98 | | |

During the three months ended January 31, 2021, we issued 1.4 million shares of our unregistered Class A common stock to warrant holders who net exercised their warrants related to our 1.50% convertible senior notes due July 15, 2020 (“2020 Notes”).

This share amount represents the number of warrants exercised multiplied by the difference between the exercise price of the warrants and their daily volume weighted-average stock price.

We did not receive any proceeds from the warrant exercises, nor were they subject to underwriting discounts or commissions.

| November 1, 2020 - November 30, 2020 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | — | | |

| December 1, 2020 - December 31, 2020 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| January 1, 2021 - January 31, 2021(1) | | | | | | 164 | | | | | | 228.56 | | | | | | — | | | | | | — | | |

| Total | | | | | | 164 | | | | | | $ | 228.56 | | | | | — | | | | | | — | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

The consolidated statements of operations data and the consolidated balance sheets data are derived from our audited consolidated financial statements and should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements, and the related notes included elsewhere in this filing.

Our historical results are not necessarily indicative of our results in any future period.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Year Ended January 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2021 | | | | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | |

| | | | | | | | | | | | | | | | As Adjusted(2) | | | | | | | | | | | | | | |

| | | | (in thousands, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Consolidated Statements of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Subscription services | | | $ | 3,788,452 | | | | | $ | 3,096,389 | | | | | $ | 2,385,769 | | | | | $ | 1,787,833 | | | | | $ | 1,290,733 | |

| Professional services | | | 529,544 | | | | | | 530,817 | | | | | | 436,411 | | | | | | 355,217 | | | | | | 283,707 | | |

| Total revenues | | | 4,317,996 | | | | | | 3,627,206 | | | | | | 2,822,180 | | | | | | 2,143,050 | | | | | | 1,574,440 | | |

| Costs and expenses (1): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Costs of subscription services | | | 611,912 | | | | | | 488,513 | | | | | | 379,877 | | | | | | 273,461 | | | | | | 213,389 | | |

| Costs of professional services | | | 586,220 | | | | | | 576,745 | | | | | | 455,073 | | | | | | 355,952 | | | | | | 270,156 | | |

| Product development | | | 1,721,222 | | | | | | 1,549,906 | | | | | | 1,211,832 | | | | | | 910,584 | | | | | | 680,531 | | |

| Sales and marketing | | | 1,233,173 | | | | | | 1,146,548 | | | | | | 891,345 | | | | | | 683,367 | | | | | | 565,328 | | |

| General and administrative | | | 414,068 | | | | | | 367,724 | | | | | | 347,337 | | | | | | 222,909 | | | | | | 198,122 | | |

| Total costs and expenses | | | 4,566,595 | | | | | | 4,129,436 | | | | | | 3,285,464 | | | | | | 2,446,273 | | | | | | 1,927,526 | | |

| Operating income (loss) | | | (248,599) | | | | | | (502,230) | | | | | | (463,284) | | | | | | (303,223) | | | | | | (353,086) | | |

| Other income (expense), net | | | (26,535) | | | | | | 19,783 | | | | | | 39,532 | | | | | | (11,563) | | | | | | (32,427) | | |

| Loss before provision for (benefit from) income taxes | | | (275,134) | | | | | | (482,447) | | | | | | (423,752) | | | | | | (314,786) | | | | | | (385,513) | | |

| Provision for (benefit from) income taxes | | | 7,297 | | | | | | (1,773) | | | | | | (5,494) | | | | | | 6,436 | | | | | | (814) | | |

| Net loss | | | $ | (282,431) | | | | | $ | (480,674) | | | | | $ | (418,258) | | | | | $ | (321,222) | | | | | $ | (384,699) | |

| Net loss per share attributable to Class A and Class B common stockholders, basic and diluted | | | $ | (1.19) | | | | | $ | (2.12) | | | | | $ | (1.93) | | | | | $ | (1.55) | | | | | $ | (1.94) | |

| Weighted-average shares used to compute net loss per share attributable to Class A and Class B common stockholders | | | 237,019 | | | | | | 227,185 | | | | | | 216,789 | | | | | | 207,774 | | | | | | 198,214 | | |

(1)Costs and expenses include share-based compensation expenses as follows (in thousands):

| Costs of subscription services | | | $ | 63,253 | | | | | $ | 49,919 | | | | | $ | 36,754 | | | | | $ | 26,280 | | | | | $ | 20,773 | |

| Costs of professional services | | | 101,869 | | | | | | 80,401 | | | | | | 55,535 | | | | | | 37,592 | | | | | | 26,833 | | |

| Product development | | | 505,376 | | | | | | 434,188 | | | | | | 320,876 | | | | | | 229,819 | | | | | | 166,529 | | |

| Sales and marketing | | | 202,819 | | | | | | 176,758 | | | | | | 132,810 | | | | | | 100,762 | | | | | | 86,229 | | |

| General and administrative | | | 131,537 | | | | | | 118,614 | | | | | | 127,443 | | | | | | 83,972 | | | | | | 78,265 | | |

(2)The summary consolidated statement of operations data for the year ended January 31, 2017, reflects the adoption of Accounting Standards Update (“ASU”) No. 2014-09, *Revenue from Contracts with Customers (Topic 606)*.

| | | | As of January 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | As Adjusted(3) | | | | | | | | | | | | | | |

| | | | | | | | | | (in thousands) | | | | | | | | | | | | | | | | | | | | |

| Consolidated Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cash and cash equivalents | | | $ | 1,384,181 | | | | | $ | 731,141 | | | | | $ | 638,554 | | | | | $ | 1,134,355 | | | | | $ | 539,923 | |

| Marketable securities | | | 2,151,472 | | | | | | 1,213,432 | | | | | | 1,139,864 | | | | | | 2,133,495 | | | | | | 1,456,822 | | |

| [Reports of Independent Registered Public Accounting [removed: Firm](#i696761e9974347db9bfa4dba7a4aacc7_52)] [added: Firm](#i8120124135ef44039511818d0a4d3edd_70)] | | | [removed: [51](#i696761e9974347db9bfa4dba7a4aacc7_52)] [added: (PCAOB ID: 42)] | | | [added: | | | [52](#i8120124135ef44039511818d0a4d3edd_70) | | |]

| [Consolidated Balance [removed: Sheets](#i696761e9974347db9bfa4dba7a4aacc7_55)] [added: Sheets](#i8120124135ef44039511818d0a4d3edd_73)] | | | [removed: [54](#i696761e9974347db9bfa4dba7a4aacc7_55)] | | | [added: | | | [55](#i8120124135ef44039511818d0a4d3edd_73) | | |]

| [Consolidated Statements of [removed: Operations](#i696761e9974347db9bfa4dba7a4aacc7_58)] [added: Operations](#i8120124135ef44039511818d0a4d3edd_76)] | | | [removed: [55](#i696761e9974347db9bfa4dba7a4aacc7_58)] | | | [added: | | | [56](#i8120124135ef44039511818d0a4d3edd_76) | | |]

[removed: | [Consolidated Statements of Comprehensive Loss](#i696761e9974347db9bfa4dba7a4aacc7_64) | | | [56](#i696761e9974347db9bfa4dba7a4aacc7_64) | | |][added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)]

| [Consolidated Statements of Stockholders’ [removed: Equity](#i696761e9974347db9bfa4dba7a4aacc7_67)] [added: Equity](#i8120124135ef44039511818d0a4d3edd_85)] | | | [removed: [57](#i696761e9974347db9bfa4dba7a4aacc7_67)] | | | [added: | | | [58](#i8120124135ef44039511818d0a4d3edd_85) | | |]

| [Consolidated Statements of Cash [removed: Flows](#i696761e9974347db9bfa4dba7a4aacc7_70)] [added: Flows](#i8120124135ef44039511818d0a4d3edd_88)] | | | [removed: [58](#i696761e9974347db9bfa4dba7a4aacc7_70)] | | | [added: | | | [59](#i8120124135ef44039511818d0a4d3edd_88) | | |]

| [Notes to Consolidated Financial [removed: Statements](#i696761e9974347db9bfa4dba7a4aacc7_73)] [added: Statements](#i8120124135ef44039511818d0a4d3edd_91)] | | | [removed: [60](#i696761e9974347db9bfa4dba7a4aacc7_73)] | | | [added: | | | [61](#i8120124135ef44039511818d0a4d3edd_91) | | |]

We have audited the accompanying consolidated balance sheets of Workday, Inc. (the Company) as of January 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of operations, comprehensive [removed: loss,] [added: income (loss),] stockholders’ equity and cash flows for each of the three years in the period ended January 31, [removed: 2021,] [added: 2022,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended January 31, [removed: 2021,] [added: 2022,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of January 31, [removed: 2021,] [added: 2022,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated [removed: March 2, 2021] [added: February 28, 2022] expressed an unqualified opinion thereon.

San [removed: Jose,] [added: Francisco,] California

We have audited Workday, Inc.’s internal control over financial reporting as of January 31, [removed: 2021,] [added: 2022,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Workday, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, [removed: 2021,] [added: 2022,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of January 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the related consolidated statements of operations, comprehensive [removed: loss,] [added: income (loss),] stockholders’ equity and cash flows for each of the three years in the period ended January 31, [removed: 2021,] [added: 2022,] and the related notes and our report dated [removed: March 2, 2021] [added: February 28, 2022] expressed an unqualified opinion thereon.

| | | | [removed: January] [added: As of January] 31, | | | | | | | | |

| | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | |

| Cash and cash equivalents | | | $ | [added: 1,534,273 | | | | | $ |] 1,384,181 | | | | | $ | 731,141 | |

| Marketable securities | | | [removed: 2,151,472] [added: 2,109,888] | | | | | | [removed: 1,213,432] [added: 2,151,472] | | |

| Trade and other receivables, net of allowance for credit losses of [removed: $14,267] [added: $10,790] and [removed: $6,762,] [added: $14,267,] respectively | | | [removed: 1,032,484] [added: 1,242,545] | | | | | | [removed: 877,578] [added: 1,032,484] | | |

| Deferred costs | | | [removed: 122,764] [added: 152,957] | | | | | | [removed: 100,459] [added: 122,764] | | |

| Prepaid expenses and other current assets | | | [removed: 111,160] [added: 174,402] | | | | | | [removed: 172,012] [added: 111,160] | | |

| Total current assets | | | [removed: 4,802,061] [added: 5,214,065] | | | | | | [removed: 3,094,622] [added: 4,802,061] | | |

| Property and equipment, net | | | [removed: 972,403] [added: 1,123,075] | | | | | | [removed: 936,179] [added: 972,403] | | |

| Operating lease right-of-use assets | | | [removed: 414,143] [added: 247,808] | | | | | | [removed: 290,902] [added: 414,143] | | |

| Deferred costs, noncurrent | | | [removed: 271,796] [added: 341,259] | | | | | | [removed: 222,395] [added: 271,796] | | |

| Acquisition-related intangible assets, net | | | [removed: 248,626] [added: 391,002] | | | | | | [removed: 308,401] [added: 248,626] | | |

| Goodwill | | | [removed: 1,819,625] [added: 2,840,044] | | | | | | [removed: 1,819,261] [added: 1,819,625] | | |

| Other assets | | | [removed: 189,757] [added: 341,252] | | | | | | [removed: 144,605] [added: 189,757] | | |

| Total assets | | | $ | [removed: 8,718,411] [added: 10,498,505] | | | | | $ | [removed: 6,816,365] [added: 8,718,411] | |

| Accounts payable | | | $ | [removed: 75,596] [added: 55,487] | | | | | $ | [removed: 57,556] [added: 75,596] | |

| Accrued expenses and other current liabilities | | | [removed: 169,266] [added: 195,590] | | | | | | [removed: 130,050] [added: 169,266] | | |

| Accrued compensation | | | [removed: 285,061] [added: 402,885] | | | | | | [removed: 248,154] [added: 285,061] | | |

| Unearned revenue | | | [removed: 2,556,624] [added: 3,110,947] | | | | | | [removed: 2,223,178] [added: 2,556,624] | | |

| Operating lease liabilities | | | [removed: 93,000] [added: 80,503] | | | | | | [removed: 66,147] [added: 93,000] | | |

| Debt, current | | | [removed: 1,103,101] [added: 1,222,443] | | | | | | [removed: 244,319] [added: 1,103,101] | | |

| Total current liabilities | | | [removed: 4,282,648] [added: 5,067,855] | | | | | | [removed: 2,969,404] [added: 4,282,648] | | |

| Debt, noncurrent | | | [removed: 691,913] [added: 617,354] | | | | | | [removed: 1,017,967] [added: 691,913] | | |

| Unearned revenue, noncurrent | | | [removed: 80,111] [added: 71,533] | | | | | | [removed: 86,025] [added: 80,111] | | |

| Operating lease liabilities, noncurrent | | | [removed: 350,051] [added: 182,456] | | | | | | [removed: 241,425] [added: 350,051] | | |

| Other liabilities | | | [removed: 35,854] [added: 24,225] | | | | | | [removed: 14,993] [added: 35,854] | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

February 28, 2022

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

San Francisco, California

February 28, 2022

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| | | | 2022 | | | | | | 2021 | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| Net income (loss) per share, diluted | | | $ | 0.12 | | | | | $ | (1.19) | | | | | $ | (2.12) | |

| Weighted-average shares used to compute net income (loss) per share, diluted | | | 254,032 | | | | | | 237,019 | | | | | | 227,185 | | |

| Total share-based compensation expenses | | | $ | 1,112,405 | | | | | $ | 1,004,854 | | | | | $ | 859,880 | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| Net change in unrealized gains (losses) on cash flow hedges, net of tax provision of $0, $0, and $3,216, respectively | | | 72,253 | | | | | | (79,951) | | | | | | 22,484 | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| Other | | | 125 | | | | | | — | | | | | | — | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

(in thousands)

| Net income (loss) | | | $ | 29,373 | | | | | $ | (282,431) | | | | | $ | (480,674) | |

| (Gains) losses on investments | | | (145,845) | | | | | | (16,558) | | | | | | (4,016) | | |

| Other | | | (14,213) | | | | | | 4,247 | | | | | | (31,047) | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

With Workday, our customers have a unified system that can help them plan, execute, analyze, and extend to other applications and environments, thereby helping them continuously adapt how they manage their business and operations.

For revenue recognition, examples of significant estimates, judgements, and assumptions include the identification of distinct performance obligations and the assessment of the standalone selling price for each performance obligation identified.

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

We allocate the purchase consideration of acquired companies to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date, with the excess recorded to goodwill.

In the event that we acquire a company in which we previously held an equity interest, the difference between the fair value of the shares as of the date of the acquisition and the carrying value of the equity investment is recorded as a non-cash gain or loss and recorded within Other income (expense), net on the Consolidated Statements of Operations.

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[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-06, *Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)*.

We adopted this standard effective February 1, 2021, using a modified retrospective method, under which financial results reported in prior periods were not adjusted.

We applied the provisions of this guidance to our 2022 Notes.

Upon adoption, we recorded a decrease to Accumulated deficit of $136 million, a decrease to Additional paid-in capital of $220 million, an increase to Debt, current of $79 million, and a decrease to Property and equipment, net of $5 million, which represented non-cash interest previously capitalized.

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In October 2021, the FASB issued ASU No. 2021-08, *Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,* which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured in accordance with Topic 606, *Revenue from Contracts with Customers,* as if the acquirer had originated the contracts.

Under current GAAP, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date.

We are currently evaluating the accounting, transition, and disclosure requirements of this standard.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

March 2, 2021

| Net change in market value of effective foreign currency forward exchange contracts, net of tax provision of $0, $3,216, and $6,386, respectively | | | (79,951) | | | | | | 22,484 | | | | | | 44,705 | | |

(in thousands, except share data)

| Equity awards assumed in business combination | | | — | | | | | | — | | | | | | 4,350 | | |

| Issuance of common stock under employee equity plans | | | 9,371,466 | | | | | | 9,656,111 | | | | | | 9,011,223 | | |

| Settlement of warrants | | | 1,587,375 | | | | | | — | | | | | | 1,063,380 | | |

| Settlement of convertible senior notes | | | 1,654,472 | | | | | | 217 | | | | | | 1,457,513 | | |

| Other | | | (12,311) | | | | | | (35,063) | | | | | | (53,195) | | |

We offer innovative and adaptable technology focused on the consumer internet experience and cloud delivery model.

Our applications are designed for global enterprises to manage complex and dynamic operating environments.

We provide our customers highly adaptable, accessible, and reliable applications to manage critical business functions that help enable them to optimize their financial and human resources.

Non-marketable equity investments are valued using significant unobservable inputs or data in an inactive market.

Valuations of non-marketable equity investments are inherently complex due to the lack of readily available market data, and require our judgment due to the absence of market prices and inherent lack of liquidity.

In addition, the determination of whether an orderly transaction is for an identical or similar investment requires significant management judgment, including understanding the differences in the rights and obligations of the investments and the extent to which those differences would affect the fair values of those investments.

Our impairment analysis encompasses a qualitative and quantitative analysis of key factors including the investee’s financial metrics, market acceptance of the investee’s product or technology, other competitive products or technology in the market, general market conditions, and the rate at which the investee is using its cash.

We also consider the impacts of the COVID-19 pandemic.

These factors require significant judgment.

If impairment is identified, we will assess the severity and duration of the impairment.

Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period.

We use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed as of the acquisition date.

In addition, uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date.

*Convertible Senior Notes*

In June 2013, we issued 0.75% convertible senior notes due July 15, 2018, with a principal amount of $350 million, which were subsequently converted by note holders during the second quarter of fiscal 2019.

Concurrently.

in June 2013, we issued 1.50% convertible senior notes due July 15, 2020 with a principal amount of $250 million, which were subsequently converted by note holders during the second quarter of fiscal 2021.

The equity components are not remeasured as long as they continue to meet the conditions for equity classification.

In accounting for the issuance costs related to the Notes, we allocated the total amount of issuance costs incurred to the liability and equity components based on their relative values.

The remaining lease term of our leases generally ranges from less than one year to nine years.

Compensation expense, net of estimated forfeitures, is recognized on a straight-line basis over the requisite service period.

For stock options assumed, fair value is estimated using the Black-Scholes option-pricing model.

We determine the assumptions for the option-pricing model as follows:

- *Risk-Free Interest Rate.* The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date closest to the grant date for zero-coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock option grants.

- *Expected Term.* The expected term represents the period that our share-based award is expected to be outstanding.

The expected term for stock options was determined based on the vesting terms, exercise terms, and contractual lives.

- *Volatility.* The volatility is based on a blend of historical volatility and implied volatility of our common stock.

Implied volatility is based on market traded options of our common stock.

- *Dividend Yield.* The dividend yield is assumed to be zero as we have not paid and do not expect to pay dividends.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, *Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments*, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, including trade receivables.

Based on the assessment, management has concluded that its internal control over financial reporting was effective as of January 31, [removed: 2021,] [added: 2022,] to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.

Our independent registered public accounting firm, Ernst & Young LLP, has issued an audit report with respect to our internal control over financial reporting, which appears in Part II, Item [removed: 8 of this Annual Report on Form 10-K,] [added: 8,] and is incorporated herein by reference.

Under the supervision and with the participation of our management, including our principal executive officers and principal financial officer, we conducted an evaluation of any changes in our internal control over financial reporting (as such term is defined in Rules [removed: 13a-15(d)] [added: 13a-15(f)] and [removed: 15d-15(d)] [added: 15d-15(f)] under the Exchange Act) that occurred during our most recently completed fiscal quarter.

Based on that evaluation, our principal executive officers and principal financial officer concluded that there has not been any material change in our internal control over financial reporting during the fourth quarter of fiscal [removed: 2021] [added: 2022] that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, despite the fact that the majority of our employees are continuing to work remotely due to the COVID-19 pandemic.

We are continually monitoring and assessing the [removed: COVID-19 situation on our internal controls to understand the] potential impact [added: of the COVID-19 pandemic] on [removed: their] [added: the] design and operating [removed: effectiveness.][added: effectiveness of our internal controls.]

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

PART III

None.

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

PART III

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| 3.2 | | | | | | [Amended and Restated Bylaws of the [removed: Registrant](https://www.sec.gov/Archives/edgar/data/1327811/000119312521054693/d109279dex31.htm)] [added: Registrant](http://www.sec.gov/Archives/edgar/data/1327811/000132781122000023/wday-02242022xex31.htm)] | | | | | | 8-K | | | | | | 001-35680 | | | | | | February [removed: 24, 2021] [added: 28, 2022] | | | | | | 3.1 | | | | | | | | |

| [removed: 4.4] [added: 4.6] | | | | | | [removed: [2020] [added: [Supplemental] Indenture [added: to the 2022 Indenture] dated [removed: June 17, 2013] [added: January 2, 2018] between Workday, Inc. and Wells Fargo Bank, National [removed: Association](http://www.sec.gov/Archives/edgar/data/1327811/000119312513261455/d554865dex42.htm)] [added: Association](http://www.sec.gov/Archives/edgar/data/1327811/000119312518000629/d489025dex44.htm)] | | | | | | 8-K | | | | | | 001-35680 | | | | | | [removed: June 17, 2013] [added: January 2, 2018] | | | | | | [removed: 4.2] [added: 4.4] | | | | | | | | |

| [removed: 4.8] [added: 10.21] | | | | | | [removed: [Second Supplemental Indenture to the 2020 Indenture] [added: [Credit Agreement,] dated [added: as of] April [removed: 27, 2018 between] [added: 2, 2020, among] Workday, [removed: Inc. and] [added: certain subsidiaries of Workday, Bank of America, N.A.,] Wells Fargo Bank, National [removed: Association](http://www.sec.gov/Archives/edgar/data/1327811/000132781118000022/wday-04302018xex41.htm)] [added: Association, Truist Bank, U.S. Bank National Association and the other L/C Issuers and Lenders party thereto](http://www.sec.gov/Archives/edgar/data/1327811/000132781120000043/wday-422020xex101.htm)] | | | | | | [removed: 10-Q] [added: 8-K] | | | | | | 001-35680 | | | | | | [removed: June 1, 2018] [added: April 6, 2020] | | | | | | [removed: 4.1] [added: 10.1] | | | | | | | | |

| 10.8† | | | | | | [Workday, Inc. Change in Control Policy](http://www.sec.gov/Archives/edgar/data/1327811/000132781120000167/wday-10312020xex101.htm) | | | | | | 10-Q | | | | | | 001-35680 | | | | | | [removed: November 20, 2020] [added: May 26, 2021] | | | | | | 10.1 | | | | | | | | |

| [removed: 10.13] [added: 10.15] | | | | | | [Restated and Amended Pleasanton Ground Lease by and between San Francisco Bay Area Rapid Transit District and CREA/Windstar Pleasanton, LLC and related assignment agreement dated January 30, 2014](http://www.sec.gov/Archives/edgar/data/1327811/000119312514124249/d667142dex1011.htm) | | | | | | 10-K | | | | | | 001-35680 | | | | | | March 31, 2014 | | | | | | 10.11 | | | | | | | | |

| [removed: 10.14] [added: 10.16] | | | | | | [Stock Restriction Agreement, by and among the Registrant, David A. Duffield and Aneel Bhusri](http://www.sec.gov/Archives/edgar/data/1327811/000119312512409980/d385110dex1011.htm) | | | | | | S-1/A | | | | | | 333-183640 | | | | | | October 1, 2012 | | | | | | 10.11 | | | | | | | | |

| [removed: 10.15] [added: 10.19] | | | | | | [Form of [added: Additional] Convertible Bond Hedge Confirmation [removed: (2020)](http://www.sec.gov/Archives/edgar/data/1327811/000119312513261455/d554865dex993.htm)] [added: (2022)](http://www.sec.gov/Archives/edgar/data/1327811/000119312517286324/d458726dex993.htm)] | | | | | | 8-K | | | | | | 001-35680 | | | | | | [removed: June 17, 2013] [added: September 15, 2017] | | | | | | 99.3 | | | | | | | | |

| [removed: 10.16] [added: 10.20] | | | | | | [Form of [added: Additional] Warrant Confirmation [removed: (2020)](http://www.sec.gov/Archives/edgar/data/1327811/000119312513261455/d554865dex994.htm)] [added: (2022)](http://www.sec.gov/Archives/edgar/data/1327811/000119312517286324/d458726dex994.htm)] | | | | | | 8-K | | | | | | 001-35680 | | | | | | [removed: June 17, 2013] [added: September 15, 2017] | | | | | | 99.4 | | | | | | | | |

| 10.17 | | | | | | [Form of [removed: Additional] Convertible Bond Hedge Confirmation [removed: (2020)](http://www.sec.gov/Archives/edgar/data/1327811/000119312513268934/d558595dex993.htm)] [added: (2022)](http://www.sec.gov/Archives/edgar/data/1327811/000119312517286324/d458726dex991.htm)] | | | | | | 8-K | | | | | | 001-35680 | | | | | | [removed: June 24, 2013] [added: September 15, 2017] | | | | | | [removed: 99.3] [added: 99.1] | | | | | | | | |

| 10.18 | | | | | | [Form of [removed: Additional] Warrant Confirmation [removed: (2020)](http://www.sec.gov/Archives/edgar/data/1327811/000119312513268934/d558595dex994.htm)] [added: (2022)](http://www.sec.gov/Archives/edgar/data/1327811/000119312517286324/d458726dex992.htm)] | | | | | | 8-K | | | | | | 001-35680 | | | | | | [removed: June 24, 2013] [added: September 15, 2017] | | | | | | [removed: 99.4] [added: 99.2] | | | | | | | | |

| 21.1 | | | | | | [List of Subsidiaries of the [removed: Registrant](https://www.sec.gov/Archives/edgar/data/1327811/000132781121000020/wday-01312021xex211.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/1327811/000132781122000030/wday-01312022xex211.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 23.1 | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/1327811/000132781121000020/wday-01312021xex231.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/1327811/000132781122000030/wday-01312022xex231.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 24.1 | | | | | | [Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form [removed: 10-K)](#i696761e9974347db9bfa4dba7a4aacc7_175)] [added: 10-K)](#i8120124135ef44039511818d0a4d3edd_196)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 31.1 | | | | | | [Certification of Periodic Report by Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781121000020/wday-01312021xex311.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781122000030/wday-01312022xex311.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 31.2 | | | | | | [Certification of Periodic Report by Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781121000020/wday-1312021xex312.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781122000030/wday-01312022xex312.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 31.3 | | | | | | [Certification of Periodic Report by Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781121000020/wday-01312021xex313.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781122000030/wday-01312022xex313.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 32.1* | | | | | | [Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781121000020/wday-01312021xex321.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781122000030/wday-01312022xex321.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 32.2* | | | | | | [Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781121000020/wday-1312021xex322.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781122000030/wday-01312022xex322.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 32.3* | | | | | | [Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781121000020/wday-01312021xex323.htm)] [added: 2002](https://www.sec.gov/Archives/edgar/data/1327811/000132781122000030/wday-01312022xex323.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| 10.13† | | | | | | [Offer Letter between Barbara Larson and the Registrant dated June 30, 2014](https://www.sec.gov/Archives/edgar/data/1327811/000132781122000030/wday-01312022xex1013.htm) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 10.14† | | | | | | [Offer Letter between Doug Robinson and the Registrant dated June 3, 2010](https://www.sec.gov/Archives/edgar/data/1327811/000132781122000030/wday-01312022ex1014.htm) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| 4.6 | | | | | | [Supplemental Indenture to the 2020 Indenture dated January 2, 2018 between Workday, Inc. and Wells Fargo Bank, National Association](http://www.sec.gov/Archives/edgar/data/1327811/000119312518000629/d489025dex43.htm) | | | | | | 8-K | | | | | | 001-35680 | | | | | | January 2, 2018 | | | | | | 4.3 | | | | | | | | |

| 4.7 | | | | | | [Supplemental Indenture to the 2022 Indenture dated January 2, 2018 between Workday, Inc. and Wells Fargo Bank, National Association](http://www.sec.gov/Archives/edgar/data/1327811/000119312518000629/d489025dex44.htm) | | | | | | 8-K | | | | | | 001-35680 | | | | | | January 2, 2018 | | | | | | 4.4 | | | | | | | | |

| 10.19 | | | | | | [Form of Convertible Bond Hedge Confirmation (2022)](http://www.sec.gov/Archives/edgar/data/1327811/000119312517286324/d458726dex991.htm) | | | | | | 8-K | | | | | | 001-35680 | | | | | | September 15, 2017 | | | | | | 99.1 | | | | | | | | |

| 10.20 | | | | | | [Form of Warrant Confirmation (2022)](http://www.sec.gov/Archives/edgar/data/1327811/000119312517286324/d458726dex992.htm) | | | | | | 8-K | | | | | | 001-35680 | | | | | | September 15, 2017 | | | | | | 99.2 | | | | | | | | |

| 10.21 | | | | | | [Form of Additional Convertible Bond Hedge Confirmation (2022)](http://www.sec.gov/Archives/edgar/data/1327811/000119312517286324/d458726dex993.htm) | | | | | | 8-K | | | | | | 001-35680 | | | | | | September 15, 2017 | | | | | | 99.3 | | | | | | | | |

| 10.22 | | | | | | [Form of Additional Warrant Confirmation (2022)](http://www.sec.gov/Archives/edgar/data/1327811/000119312517286324/d458726dex994.htm) | | | | | | 8-K | | | | | | 001-35680 | | | | | | September 15, 2017 | | | | | | 99.4 | | | | | | | | |

| 10.23 | | | | | | [Credit Agreement, dated as of April 2, 2020, among Workday, certain subsidiaries of Workday, Bank of America, N.A., Wells Fargo Bank, National Association, Truist Bank, U.S. Bank National Association and the other L/C Issuers and Lenders party thereto](http://www.sec.gov/Archives/edgar/data/1327811/000132781120000043/wday-422020xex101.htm) | | | | | | 8-K | | | | | | 001-35680 | | | | | | April 6, 2020 | | | | | | 10.1 | | | | | | | | |

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Pleasanton, State of California, on this [removed: 2nd] [added: 28th] day of [removed: March, 2021.][added: February, 2022.]

| | | | [removed: Robynne D. Sisco President and] [added: Barbara Larson] Chief Financial Officer (Principal Financial and Accounting Officer) | | |

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints [removed: Robynne D.][added: Barbara Larson or Richard H.]

| /s/ Aneel Bhusri | | | | | | Co-Chief Executive Officer | | | | | | [removed: March 2, 2021] [added: February 28, 2022] | | |

| /s/ Luciano Fernandez Gomez | | | | | | Co-Chief Executive Officer | | | | | | [removed: March 2, 2021] [added: February 28, 2022] | | |

| [removed: Robynne D. Sisco] [added: Barbara Larson] | | | | | | *(Principal Financial and Accounting Officer)* | | | | | | | | |

| /s/ Ann-Marie Campbell | | | | | | Director | | | | | | [removed: March 2, 2021] [added: February 28, 2022] | | |

| /s/ Christa Davies | | | | | | Director | | | | | | [removed: March 2, 2021] [added: February 28, 2022] | | |

| /s/ Carl M. Eschenbach | | | | | | Director | | | | | | [removed: March 2, 2021] [added: February 28, 2022] | | |

| /s/ Michael M. McNamara | | | | | | Director | | | | | | [removed: March 2, 2021] [added: February 28, 2022] | | |

| /s/ George J. Still, Jr. | | | | | | Director | | | | | | [removed: March 2, 2021] [added: February 28, 2022] | | |

| /s/ Lee J. Styslinger III | | | | | | Director | | | | | | [removed: March 2, 2021] [added: February 28, 2022] | | |

| /s/ Jerry Yang | | | | | | Director | | | | | | [removed: March 2, 2021] [added: February 28, 2022] | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| | | | /s/ Barbara Larson | | |

[Table of](#i8120124135ef44039511818d0a4d3edd_7) [Conten](#i8120124135ef44039511818d0a4d3edd_7)[t](#i8120124135ef44039511818d0a4d3edd_7)[s](#i8120124135ef44039511818d0a4d3edd_7)

| /s/ Barbara Larson | | | | | | Chief Financial Officer | | | | | | February 28, 2022 | | |

| /s/ Thomas F. Bogan | | | | | | Director | | | | | | February 28, 2022 | | |

| Thomas F. Bogan | | | | | | | | | | | | | | |

| /s/ Lynne M. Doughtie | | | | | | Director | | | | | | February 28, 2022 | | |

| | | | /s/ Robynne D. Sisco | | |

Sisco or Richard H.

| | | | | | | | | | | | | | | |

| /s/ Robynne D. Sisco | | | | | | President and Chief Financial Officer | | | | | | March 2, 2021 | | |

| | | | | | | Director | | | | | | | | |

| /s/ David A. Duffield | | | | | | Director | | | | | | March 2, 2021 | | |

| David A. Duffield | | | | | | | | | | | | | | |

| /s/ Michael C. Bush | | | | | | Director | | | | | | March 2, 2021 | | |

| Michael C. Bush | | | | | | | | | | | | | | |

| /s/ Michael A. Stankey | | | | | | Director | | | | | | March 2, 2021 | | |

| Michael A. Stankey | | | | | | | | | | | | | | |