Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS

Workday, Inc.

Condensed Consolidated Balance Sheets

(in millions)

(unaudited)


	October 31, 2025		January 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	2,609	$	1,543
Marketable securities	4,234		6,474
Trade and other receivables, net	1,750		1,950
Deferred costs	286		267
Prepaid expenses and other current assets	296		311
Total current assets	9,175		10,545
Property and equipment, net	1,132		1,239
Operating lease right-of-use assets	721		336
Deferred costs, noncurrent	573		561
Acquisition-related intangible assets, net	549		361
Deferred tax assets	905		1,039
Goodwill	4,263		3,478
Other assets	433		418
Total assets	$	17,751	$	17,977
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	103	$	108
Accrued expenses and other current liabilities	352		296
Accrued compensation	574		578
Unearned revenue	3,871		4,467
Operating lease liabilities	117		99

Total current liabilities	5,017		5,548
Debt, noncurrent	2,986		2,984
Unearned revenue, noncurrent	70		80
Operating lease liabilities, noncurrent	690		279
Other liabilities	109		52
Total liabilities	8,872		8,943
Stockholders’ equity:
Common stock	0		0
Additional paid-in capital	12,311		11,463
Treasury stock	(2,706)		(1,308)
Accumulated other comprehensive income (loss)	(69)		84
Accumulated deficit	(657)		(1,205)
Total stockholders’ equity	8,879		9,034
Total liabilities and stockholders’ equity	$	17,751	$	17,977

See Notes to Condensed Consolidated Financial Statements

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Workday, Inc.

Condensed Consolidated Statements of Operations

(in millions, except number of shares which are reflected in thousands and per share data)

(unaudited)


	Three Months Ended October 31,				Nine Months Ended October 31,
	2025		2024		2025		2024
Revenues:
Subscription services	$	2,244	$	1,959	$	6,473	$	5,678
Professional services	188		201		547		557
Total revenues	2,432		2,160		7,020		6,235
Costs and expenses (1):
Costs of subscription services	395		329		1,115		924
Costs of professional services	196		201		595		606
Product development	666		647		1,988		1,952
Sales and marketing	677		620		1,941		1,804
General and administrative	234		198		662		600
Restructuring	5		0		172		9
Total costs and expenses	2,173		1,995		6,473		5,895
Operating income	259		165		547		340
Other income, net	79		62		198		178
Income before provision for income taxes	338		227		745		518
Provision for income taxes	86		34		197		86
Net income	$	252	$	193	$	548	$	432
Net income per share, basic	$	0.95	$	0.73	$	2.06	$	1.63
Net income per share, diluted	$	0.94	$	0.72	$	2.03	$	1.61
Weighted-average shares used to compute net income per share, basic	265,870		265,411		266,387		265,062
Weighted-average shares used to compute net income per share, diluted	268,629		268,549		269,700		268,936


(1) Costs and expenses include share-based compensation expense as follows:
	Three Months Ended October 31,				Nine Months Ended October 31,
	2025		2024		2025		2024
Costs of subscription services	$	39	$	35	$	120	$	108
Costs of professional services	27		28		84		86
Product development	162		162		515		498
Sales and marketing	83		78		261		226
General and administrative	65		65		205		204
Restructuring	0		0		42		0
Total share-based compensation expense	$	376	$	368	$	1,227	$	1,122

See Notes to Condensed Consolidated Financial Statements

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Workday, Inc.

Condensed Consolidated Statements of Comprehensive Income

(in millions)

(unaudited)


	Three Months Ended October 31,				Nine Months Ended October 31,
	2025		2024		2025		2024
Net income	$	252	$	193	$	548	$	432
Other comprehensive income (loss), net of tax:
Net change in foreign currency translation adjustment	0		1		3		(2)
Net change in unrealized gains on available-for-sale debt securities, net of tax provision of $2, $2, $7, and $2, respectively	6		5		20		7
Net change in unrealized losses on cash flow hedges, net of tax benefit of $(1), $(1), $(6), and $0, respectively	(1)		(9)		(176)		(10)
Other comprehensive income (loss), net of tax	5		(3)		(153)		(5)
Comprehensive income	$	257	$	190	$	395	$	427

See Notes to Condensed Consolidated Financial Statements

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Workday, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in millions, except number of shares which are reflected in thousands)

(unaudited)


	Three Months Ended October 31,				Nine Months Ended October 31,
	2025		2024		2025		2024
Common stock:
Balance, beginning of period	$	0	$	0	$	0	$	0
Issuance of common stock under employee equity plans	0		0		0		0
Shares withheld related to net share settlement of equity awards	0		0		0		0

Balance, end of period	0		0		0		0
Additional paid-in capital:
Balance, beginning of period	12,055		10,869		11,463		10,400
Issuance of common stock under employee equity plans	0		0		111		106
Shares withheld related to net share settlement of equity awards	(122)		(123)		(496)		(518)
Share-based compensation	378		369		1,233		1,127





Balance, end of period	12,311		11,115		12,311		11,115
Treasury stock:
Balance, beginning of period	(1,900)		(1,051)		(1,308)		(608)




Common stock repurchases under share repurchase programs	(806)		(157)		(1,398)		(600)
Balance, end of period	(2,706)		(1,208)		(2,706)		(1,208)
Accumulated other comprehensive income (loss):
Balance, beginning of period	(74)		19		84		21
Other comprehensive income (loss)	5		(3)		(153)		(5)
Balance, end of period	(69)		16		(69)		16
Accumulated deficit:
Balance, beginning of period	(909)		(1,492)		(1,205)		(1,731)
Net income	252		193		548		432


Balance, end of period	(657)		(1,299)		(657)		(1,299)
Total stockholders’ equity	$	8,879	$	8,624	$	8,879	$	8,624


	Three Months Ended October 31,		Nine Months Ended October 31,
	2025	2024	2025	2024
Common stock shares:
Balance, beginning of period	266,904	265,260	266,352	263,862
Issuance of common stock under employee equity plans	1,348	1,340	6,027	6,179




Shares withheld related to net share settlement of equity awards	(519)	(506)	(2,140)	(2,058)
Common stock repurchased	(3,367)	(649)	(5,873)	(2,538)
Other share issuances	45	24	45	24
Balance, end of period	264,411	265,469	264,411	265,469

See Notes to Condensed Consolidated Financial Statements

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Workday, Inc.

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)


	Nine Months Ended October 31,
		2025		2024
Cash flows from operating activities:
Net income		$	548	$	432
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		250		235
Share-based compensation expense		1,227		1,122
Amortization of deferred costs		215		185
Non-cash lease expense		84		77
Net (gains) losses on investments		(24)		6
Accretion of discounts on marketable debt securities, net		(52)		(90)
Deferred income taxes		145		38
Other		52		4
Changes in operating assets and liabilities, net of business combinations:
Trade and other receivables, net		211		238
Deferred costs		(247)		(178)
Prepaid expenses and other assets		42		57
Accounts payable		(7)		(3)
Accrued expenses and other liabilities		(124)		(136)
Unearned revenue		(659)		(638)
Net cash provided by operating activities		1,661		1,349
Cash flows from investing activities:
Purchases of marketable securities		(2,450)		(3,134)
Maturities of marketable securities		2,062		2,980
Sales of marketable securities		2,653		115
Capital expenditures		(102)		(183)
Business combinations, net of cash acquired		(974)		(824)
Purchases of other intangible assets		0		(3)
Purchases of non-marketable equity and other investments		(17)		(10)
Sales of non-marketable equity and other investments		5		5

Net cash provided by (used in) investing activities		1,177		(1,054)
Cash flows from financing activities:



Repurchases of common stock		(1,391)		(597)
Proceeds from issuance of common stock from employee equity plans		111		106
Taxes paid related to net share settlement of equity awards		(495)		(505)

Net cash used in financing activities		(1,775)		(996)
Effect of exchange rate changes		1		0
Net increase (decrease) in cash, cash equivalents, and restricted cash		1,064		(701)
Cash, cash equivalents, and restricted cash at the beginning of period		1,554		2,024
Cash, cash equivalents, and restricted cash at the end of period		$	2,618	$	1,323

See Notes to Condensed Consolidated Financial Statements

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	Nine Months Ended October 31,
		2025		2024
Supplemental cash flow data:
Cash paid for interest		$	110	$	110
Cash paid for income taxes, net of refunds		72		48
Non-cash investing and financing activities:
Purchases of property and equipment, accrued but not paid		35		66
Taxes related to net share settlement of equity awards, accrued but not paid		14		13


	As of October 31,
	2025		2024
Reconciliation of cash, cash equivalents, and restricted cash as shown in the Condensed Consolidated Statements of Cash Flows:
Cash and cash equivalents	$	2,609	$	1,311
Restricted cash included in Prepaid expenses and other current assets	9		12

Total cash, cash equivalents, and restricted cash	$	2,618	$	1,323

See Notes to Condensed Consolidated Financial Statements

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Workday, Inc.

Notes to Condensed Consolidated Financial Statements

As used in this report, the terms “Workday,” “registrant,” “we,” “us,” and “our” mean Workday, Inc. and its subsidiaries unless the context indicates otherwise.

Amounts in this report may not recalculate due to rounding. Year-over-year comparisons, operating margin, and net income per share are calculated using unrounded data.

Note 1. Overview and Basis of Presentation

Description of the Business

Workday is a leading enterprise platform that provides organizations with solutions for financial management, human capital management (“HCM”), planning, spend management, and analytics. With Workday, our customers have an artificial intelligence (“AI”)-powered cloud platform to help manage their people, money, and agents.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements include the results of Workday, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of our management, the information contained herein reflects all adjustments necessary for a fair presentation of Workday’s financial position, results of operations, stockholders’ equity, and cash flows. All such adjustments are of a normal, recurring nature. The results of operations for the three and nine months ended October 31, 2025, shown in this report are not necessarily indicative of the results to be expected for the full fiscal year ending January 31, 2026. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025, filed with the SEC on March 11, 2025.

Certain prior period amounts reported in our unaudited condensed consolidated financial statements and notes thereto have been reclassified to conform to current period presentation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates, judgments, and assumptions include, but are not limited to, the identification of distinct performance obligations for revenue recognition, the determination of the period of benefit for deferred commissions, the realizability of deferred tax assets, the measurement of uncertain tax positions, the fair value and useful lives of assets acquired and liabilities assumed through business combinations, and the valuation of non-marketable equity investments. Actual results could differ from those estimates, judgments, and assumptions, and such differences could be material to our condensed consolidated financial statements.

Segment Information

We operate as a single operating and reportable segment: cloud applications. Although we offer a variety of enterprise cloud solutions to a diverse global customer base, we operate in one operating segment because our business activities are managed on a consolidated basis, our service offerings all operate on the Workday platform and are deployed in a similar manner, and our Chief Operating Decision Maker (“CODM”), who is our Chief Executive Officer, allocates resources and assesses performance based upon discrete financial information at the consolidated level.

Our CODM assesses performance and decides how to allocate resources based on Net income, as reported on the Condensed Consolidated Statements of Operations. Net income is used to evaluate the overall profitability of the business and to guide decisions on how to invest in and grow the business. Our CODM also reviews Total assets, as reported on the Condensed Consolidated Balance Sheets, and Capital expenditures, as reported on the Condensed Consolidated Statements of Cash Flows. Significant segment expenses include the costs and expenses presented on the Condensed Consolidated Statements of Operations. Other segment items include Other income, net and Provision for income taxes.

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Note 2. Significant Accounting Policies and Accounting Standards

Significant Accounting Policies

There have been no material changes in our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025.

Concentrations of Risk and Significant Customers

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, debt securities, derivative instruments, and trade and other receivables. Our deposits exceed federally insured limits.

No customer individually accounted for more than 10% of trade and other receivables, net as of October 31, 2025, or January 31, 2025. No customer individually accounted for more than 10% of total revenues during the three and nine months ended October 31, 2025, or 2024.

Other than the United States, no country individually accounted for more than 10% of total revenues during the three and nine months ended October 31, 2025, or 2024.

In order to reduce the risk of disruption of our cloud applications, we host our applications in data centers operated by third parties located in the United States, Europe, Canada, and the Asia-Pacific region. These data centers include third-party hosted infrastructure, including Amazon Web Services and Google Cloud, and co-location data centers. Procedures are in place to restore services in the event of disruption at one of these data center facilities. Even with these procedures for disaster recovery in place, our cloud applications could be significantly interrupted during the implementation of the procedures to restore services.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. This ASU is effective for annual periods beginning in our fiscal 2026. The updated standard allows for adoption on a prospective basis, with a retrospective option. We are currently evaluating the effect the updated standard will have on our financial statement disclosures.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets. This ASU is effective for interim and annual reporting periods beginning in the first quarter of our fiscal 2027, with early adoption permitted. The updated standard provides for adoption on a prospective basis. We are currently evaluating the effect the updated standard will have on our financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires the disclosure of additional information about specific expense categories in the notes to the financial statements. This ASU is effective for annual periods beginning in our fiscal 2028, and interim periods beginning in the first quarter of our fiscal 2029, with early adoption permitted. The updated standard allows for adoption on a prospective or retrospective basis. We are currently evaluating the effect the updated standard will have on our financial statement disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the internal-use software costs capitalization model by eliminating stage-based rules and replacing them with a principles-based framework to be more aligned with modern software development practices. This ASU is effective for interim and annual reporting periods beginning in the first quarter of our fiscal 2029, with early adoption permitted as of the beginning of an annual reporting period. Entities may adopt the guidance using prospective application, retrospective application, or a modified transition approach. We are currently evaluating the effect the updated standard will have on our financial statements and related disclosures.

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Note 3. Investments

Debt Securities

As of October 31, 2025, debt securities consisted of the following (in millions):


	Amortized Cost		Unrealized Gains		Unrealized Losses		Aggregate Fair Value
U.S. treasury securities	$	1,559	$	12	$	0	$	1,571
U.S. agency obligations	352		1		0		353
Corporate bonds	2,095		25		0		2,120
Commercial paper	26		0		0		26
Asset-backed securities	156		2		0		158
Supranational securities	27		0		0		27
Total debt securities	$	4,215	$	40	$	0	$	4,255
Included in Cash and cash equivalents	$	21	$	0	$	0	$	21
Included in Marketable securities	$	4,194	$	40	$	0	$	4,234

As of January 31, 2025, debt securities consisted of the following (in millions):


	Amortized Cost		Unrealized Gains		Unrealized Losses		Aggregate Fair Value
U.S. treasury securities	$	2,069	$	4	$	(1)	$	2,072
U.S. agency obligations	634		2		0		636
Corporate bonds	3,532		11		(3)		3,540
Commercial paper	294		0		0		294
Asset-backed securities	104		0		0		104
Supranational securities	5		0		0		5
Total debt securities	$	6,638	$	17	$	(4)	$	6,651
Included in Cash and cash equivalents	$	177	$	0	$	0	$	177
Included in Marketable securities	$	6,461	$	17	$	(4)	$	6,474

The following table presents the fair values of debt securities as of October 31, 2025, by remaining contractual maturity (in millions). Actual maturities may differ from contractual maturities because borrowers may have certain prepayment conditions.


Due within 1 year	$	1,049
Due 1 year through 5 years	3,129
Due 5 years through 10 years	47
Due after 10 years	30
Total debt securities	$	4,255

We classify our debt securities as available-for-sale at the time of purchase and reevaluate such classification as of each balance sheet date. We consider all debt securities as funds available for use in current operations, including those with maturity dates beyond one year, and therefore classify these securities as current assets on the Condensed Consolidated Balance Sheets. Debt securities included in Marketable securities on the Condensed Consolidated Balance Sheets consist of securities with original maturities at the time of purchase greater than three months, and the remaining securities are included in Cash and cash equivalents.

Interest receivable of $39 million and $53 million was included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets as of October 31, 2025, and January 31, 2025, respectively.

As of October 31, 2025, and January 31, 2025, unrealized losses on our debt securities were not material. We did not recognize any credit losses related to our debt securities during the periods presented.

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We sold $2.7 billion of debt securities during the nine months ended October 31, 2025, with a corresponding realized gain of $24 million. We sold $115 million of debt securities during the nine months ended October 31, 2024, with an immaterial corresponding realized gain.

Equity Investments

Equity investments consisted of the following (in millions):


	Condensed Consolidated Balance Sheets Location	October 31, 2025		January 31, 2025
Money market funds	Cash and cash equivalents	$	2,301	$	988

Non-marketable equity investments measured using the measurement alternative	Other assets	236		244

Total equity investments		$	2,537	$	1,232

Non-Marketable Equity Investments Measured Using the Measurement Alternative

Non-marketable equity investments measured using the measurement alternative include investments in privately held companies without readily determinable fair values in which we do not own a controlling interest or exercise significant influence. These investments are recorded at cost and are adjusted for observable transactions for same or similar securities of the same issuer or impairment events. The carrying values for our non-marketable equity investments are summarized below (in millions):


	October 31, 2025		January 31, 2025
Total initial cost	$	205	$	217
Cumulative net unrealized gains	31		27
Carrying value	$	236	$	244

During the three and nine months ended October 31, 2025, and 2024, there were no material gains or losses recorded on our non-marketable equity investments.

Note 4. Fair Value Measurements

We use a fair value hierarchy that requires that we maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — Other inputs that are directly or indirectly observable in the marketplace.

Level 3 — Unobservable inputs that are supported by little or no market activity.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of October 31, 2025 (in millions):


	Level 1		Level 2		Level 3		Total
U.S. treasury securities	$	1,571	$	0	$	0	$	1,571
U.S. agency obligations	0		353		0		353
Corporate bonds	0		2,120		0		2,120
Commercial paper	0		26		0		26
Asset-backed securities	0		158		0		158
Supranational securities	0		27		0		27
Money market funds	2,301		0		0		2,301
Foreign currency derivative assets	0		33		0		33
Total assets	$	3,872	$	2,717	$	0	$	6,589
Foreign currency derivative liabilities	$	0	$	111	$	0	$	111
Total liabilities	$	0	$	111	$	0	$	111


	Level 1		Level 2		Level 3		Total
U.S. treasury securities	$	2,072	$	0	$	0	$	2,072
U.S. agency obligations	0		636		0		636
Corporate bonds	0		3,540		0		3,540
Commercial paper	0		294		0		294
Asset-backed securities	0		104		0		104
Supranational securities	0		5		0		5
Money market funds	988		0		0		988
Foreign currency derivative assets	0		112		0		112
Total assets	$	3,060	$	4,691	$	0	$	7,751
Foreign currency derivative liabilities	$	0	$	26	$	0	$	26
Total liabilities	$	0	$	26	$	0	$	26

Non-Marketable Equity Investments Measured at Fair Value on a Non-Recurring Basis

Non-marketable equity investments that have been remeasured due to an observable event or impairment are classified within Level 3 in the fair value hierarchy because we estimate the value based on valuation methods which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the investments we hold. For further information, see Note 3, Investments.

Fair Value Measurements of Other Financial Instruments

We carry our debt at face value less unamortized debt discount and issuance costs on our Condensed Consolidated Balance Sheets and present the fair value for disclosure purposes only. The fair values of all of our debt obligations are categorized as Level 2 financial instruments. For further information on the fair values of our debt and the inputs used in the calculations, see Note 11, Debt.

Note 5. Deferred Costs

Deferred costs, which consist of deferred sales commissions, were $859 million and $828 million as of October 31, 2025, and January 31, 2025, respectively. Amortization expense for the deferred costs was $75 million and $64 million for the three months ended October 31, 2025, and 2024, respectively, and $215 million and $185 million for the nine months ended October 31, 2025, and 2024, respectively. There was no impairment loss in relation to the costs capitalized for the periods presented.

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Note 6. Property and Equipment, Net

Property and equipment, net consisted of the following (in millions):


	October 31, 2025		January 31, 2025
Computers, equipment, and software	$	1,317	$	1,370
Buildings	702		752
Leasehold improvements	282		252
Furniture, fixtures, and transportation equipment	110		108
Land and land improvements	77		81
Property and equipment, gross	2,488		2,563
Less accumulated depreciation and amortization	(1,356)		(1,324)
Property and equipment, net	$	1,132	$	1,239

Depreciation expense totaled $59 million and $60 million for the three months ended October 31, 2025, and 2024, respectively, and $180 million and $174 million for the nine months ended October 31, 2025, and 2024, respectively.

Note 7. Business Combinations

Paradox Acquisition

In September 2025, we acquired all outstanding stock of Paradox, Inc. (“Paradox”), a candidate experience agent that uses conversational AI to simplify the job application journey. We have included the financial results of Paradox in our condensed consolidated financial statements from the date of acquisition.

The total acquisition-date fair value of the purchase consideration was $1.1 billion, attributable to cash consideration of $1.0 billion and the fair value of a previously held equity interest of $20 million. The purchase consideration was preliminarily allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill. The fair values of assets acquired and liabilities assumed may be subject to change over the measurement period as additional information is received and certain tax matters are finalized. The measurement period will end no later than one year from the acquisition date. The preliminary fair values of the assets acquired and liabilities assumed as of the date of acquisition were as follows (in millions):


Cash	$	75
Acquisition-related intangible assets	253
Goodwill	781
Other assets	49
Other liabilities	(95)
Total purchase consideration, inclusive of previously held equity interest	$	1,063

The fair values and weighted-average useful lives of the acquired intangible assets by category were as follows (in millions, except years):


	Estimated Fair Values		Weighted-Average Useful Lives (in Years)
Developed technology	$	133	5
Customer relationships	116		9
Backlog	2		3
Trade name	2		1
Total acquisition-related intangible assets	$	253	7

The goodwill recognized was primarily attributable to the assembled workforce and the expected synergies from integrating Paradox’s technology into our product portfolio. The goodwill is not deductible for income tax purposes.

Separate operating results and pro forma results of operations for Paradox have not been presented as the effect of this acquisition was not material to our financial results.

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Other Acquisitions

In August 2025, we completed an acquisition for total purchase consideration of $6 million, resulting in an increase of $1 million and $4 million in acquired developed technology and goodwill, respectively.

Note 8. Acquisition-Related Intangible Assets, Net

Acquisition-related intangible assets, net consisted of the following as of October 31, 2025 (in millions):


	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Developed technology	$	606	$	(342)	$	264
Customer relationships	478		(197)		281
Backlog	17		(15)		2
Trade name	16		(14)		2
Total	$	1,117	$	(568)	$	549

Acquisition-related intangible assets, net consisted of the following as of January 31, 2025 (in millions):


	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Developed technology	$	473	$	(303)	$	170
Customer relationships	362		(171)		191
Backlog	15		(15)		0
Trade name	14		(14)		0
Total	$	864	$	(503)	$	361

Amortization expense related to acquisition-related intangible assets was $25 million and $20 million for the three months ended October 31, 2025, and 2024, respectively, and $67 million and $58 million for the nine months ended October 31, 2025, and 2024, respectively.

As of October 31, 2025, our future estimated amortization expense related to acquisition-related intangible assets was as follows (in millions):


Fiscal Period:
Remainder of 2026	$	30
2027	99
2028	93
2029	83
2030	75
Thereafter	169
Total	$	549

Note 9. Other Assets

Other assets consisted of the following (in millions):


	October 31, 2025		January 31, 2025
Non-marketable equity and other investments	$	239	$	247
Contract assets	54		44
Prepayments for goods and services	31		16
Technology patents and other intangible assets, net	24		25
Deposits	13		10
Derivative assets	12		52

Other	60		24
Total other assets	$	433	$	418

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Technology patents and other intangible assets with estimable useful lives are amortized on a straight-line basis. As of October 31, 2025, our future estimated amortization expense was as follows (in millions):


Fiscal Period:
Remainder of 2026	$	3
2027	3
2028	3
2029	3
2030	2
Thereafter	10
Total	$	24

Note 10. Derivative Instruments

We conduct business on a global basis in multiple foreign currencies, subjecting Workday to foreign currency exchange risk. To mitigate this risk, we utilize derivative hedging contracts as described below. We do not enter into any derivatives for trading or speculative purposes.

Our foreign currency contracts are classified within Level 2 of the fair value hierarchy because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates.

Cash Flow Hedges

We enter into foreign currency forward contracts to hedge a portion of our forecasted revenue and expense transactions (“cash flow hedges”). We designate these forward contracts as cash flow hedging instruments since the accounting criteria for such designation has been met.

Cash flow hedges are recorded on the Condensed Consolidated Balance Sheets at fair value. Cash flows from the settlement of these forward contracts are classified as operating activities on the Condensed Consolidated Statements of Cash Flows. Gains or losses resulting from changes in the fair value of these hedges are recorded in Accumulated other comprehensive income (loss) (“AOCI”) on the Condensed Consolidated Balance Sheets and are subsequently reclassified to the same line item as the hedged transaction on the Condensed Consolidated Statements of Operations in the same period that the hedged transaction affects earnings. As of October 31, 2025, we estimate that $26 million of net losses recorded in AOCI related to our cash flow hedges will be reclassified into earnings within the next 12 months.

As of October 31, 2025, and January 31, 2025, the notional values of the cash flow hedges that we held to buy U.S. dollars in exchange for other currencies were $3.0 billion and $2.8 billion, respectively, and the notional values of the cash flow hedges that we held to sell U.S. dollars in exchange for other currencies were $433 million and $420 million, respectively. All contracts had maturities of less than 51 months.

Non-Designated Hedges

We also enter into foreign currency forward contracts to hedge a portion of our net outstanding monetary assets and liabilities (“non-designated hedges”). These forward contracts are intended to offset foreign currency gains or losses associated with the underlying monetary assets and liabilities and are recorded on the Condensed Consolidated Balance Sheets at fair value. These forward contracts are not designated as hedging instruments under applicable accounting guidance, and therefore all changes in the fair value of these forward contracts are recorded in Other income, net on the Condensed Consolidated Statements of Operations. Cash flows from the settlement of these forward contracts are classified as operating activities on the Condensed Consolidated Statements of Cash Flows.

As of October 31, 2025, and January 31, 2025, the notional values of the non-designated hedges that we held to buy U.S. dollars in exchange for other currencies were $229 million and $242 million, respectively, and the notional values of the non-designated hedges that we held to sell U.S. dollars in exchange for other currencies were $535 million and $91 million, respectively.

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The fair values of outstanding derivative instruments were as follows (in millions):


	Condensed Consolidated Balance Sheets Location	October 31, 2025		January 31, 2025
Derivative assets:
Cash flow hedges	Prepaid expenses and other current assets	$	17	$	59
Cash flow hedges	Other assets	12		52
Non-designated hedges	Prepaid expenses and other current assets	4		1

Total derivative assets		$	33	$	112
Derivative liabilities:
Cash flow hedges	Accrued expenses and other current liabilities	$	49	$	22
Cash flow hedges	Other liabilities	49		3
Non-designated hedges	Accrued expenses and other current liabilities	12		1
Non-designated hedges	Other liabilities	1		0
Total derivative liabilities		$	111	$	26

The effect of cash flow hedges on the Condensed Consolidated Statements of Operations was as follows (in millions):


	Three Months Ended October 31,
Condensed Consolidated Statements of Operations Location	2025				2024
	Total		Gains (losses) related to cash flow hedges		Total		Gains (losses) related to cash flow hedges
Revenues	$	2,432	$	3	$	2,160	$	7
Costs and expenses	2,173		5		1,995		3


	Nine Months Ended October 31,
Condensed Consolidated Statements of Operations Location	2025				2024
	Total		Gains (losses) related to cash flow hedges		Total		Gains (losses) related to cash flow hedges
Revenues	$	7,020	$	19	$	6,235	$	23
Costs and expenses	6,473		5		5,895		(2)

Pre-tax gains (losses) associated with cash flow hedges were as follows (in millions):


	Condensed Consolidated Statements of Operations and Statements of Comprehensive Income Locations		Three Months Ended October 31,						Nine Months Ended October 31,
		2025			2024			2025			2024
Gains (losses) recognized in OCI	Net change in unrealized gains (losses) on cash flow hedges		$	6		$	0		$	(158)		$	11
Gains (losses) reclassified from AOCI into income (effective portion)	Revenues		3			7			19			23
Gains (losses) reclassified from AOCI into income (effective portion)	Costs and expenses		5			3			5			(2)

Gains (losses) associated with non-designated hedges were as follows (in millions):


	Condensed Consolidated Statements of Operations Location		Three Months Ended October 31,						Nine Months Ended October 31,
		2025			2024			2025			2024
Gains (losses) related to non-designated hedges	Other income, net		$	3		$	0		$	(10)		$	(2)

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We manage our exposure to counterparty risk by entering into foreign currency forward contracts with a diversified group of nine major financial institutions and by actively monitoring outstanding positions. We are subject to netting agreements with all of these counterparties, under which we are permitted to net settle transactions of the same currency with a single net amount payable by one party to the other. After consideration of these netting arrangements, the total net settlement amount related to our foreign currency forward contracts is an asset position of $4 million and a liability position of $82 million as of October 31, 2025, and an asset position of $86 million as of January 31, 2025.

Although legally enforceable master netting arrangements exist between Workday and each counterparty, it is our policy to present the derivatives gross on the Condensed Consolidated Balance Sheets. Our foreign currency forward contracts are not subject to any credit contingent features or collateral requirements.

Note 11. Debt

Outstanding debt consisted of the following (in millions):


	October 31, 2025		January 31, 2025
2027 Notes	$	1,000	$	1,000
2029 Notes	750		750
2032 Notes	1,250		1,250

Total principal amount	3,000		3,000
Less: unamortized debt discount and issuance costs	(14)		(16)


Debt, noncurrent	$	2,986	$	2,984

As of October 31, 2025, our future principal payments for the outstanding debt were as follows (in millions):


Fiscal Period:
Remainder of 2026	$	0
2027	0
2028	1,000
2029	0
2030	750
Thereafter	1,250
Total principal amount	$	3,000

Senior Notes

In fiscal 2023, we issued $3.0 billion aggregate principal amount of senior notes, consisting of $1.0 billion aggregate principal amount of 3.500% notes due April 1, 2027 (“2027 Notes”), $750 million aggregate principal amount of 3.700% notes due April 1, 2029 (“2029 Notes”), and $1.25 billion aggregate principal amount of 3.800% notes due April 1, 2032 (“2032 Notes,” and together with the 2027 Notes and the 2029 Notes, “Senior Notes”). Interest is payable semi-annually in arrears on April 1 and October 1 of each year.

The Senior Notes are unsecured obligations and rank equally with all existing and future unsecured and unsubordinated indebtedness of Workday. We may redeem the Senior Notes in whole or in part at any time or from time to time, at specified redemption dates and prices. In addition, upon the occurrence of certain change of control triggering events, we may be required to repurchase the Senior Notes under specified terms. The indenture governing the Senior Notes also includes covenants (including certain limited covenants restricting our ability to incur certain liens and enter into certain sale and leaseback transactions), events of default, and other customary provisions. As of October 31, 2025, and January 31, 2025, we were in compliance with all covenants associated with the Senior Notes.

We incurred debt discount and issuance costs of approximately $27 million in connection with the Senior Notes offering, which were allocated on a pro rata basis to the 2027 Notes, 2029 Notes, and 2032 Notes. The debt discount and issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the contractual term of each arrangement. The effective interest rates on the 2027 Notes, 2029 Notes, and 2032 Notes, which are calculated as the contractual interest rates adjusted for the debt discount and issuance costs, are 3.67%, 3.82%, and 3.90%, respectively.

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As of October 31, 2025, and January 31, 2025, the total estimated fair value of the Senior Notes was $2.9 billion and $2.8 billion, respectively. The estimated fair values of the Senior Notes, which we have classified as Level 2 financial instruments, were determined based on quoted bid prices in an over-the-counter market on the last trading day of the reporting period.

Credit Agreement

In fiscal 2023, we entered into a credit agreement (“2022 Credit Agreement”) which provides for a revolving credit facility in an aggregate principal amount of $1.0 billion. As of October 31, 2025, and January 31, 2025, we had no outstanding revolving loans under the 2022 Credit Agreement. The revolving loans under the 2022 Credit Agreement may be borrowed, repaid, and reborrowed until April 6, 2027, at which time all amounts borrowed must be repaid. The revolving loans under the 2022 Credit Agreement will bear interest, at our option, at a base rate plus a margin of 0.000% to 0.500% or a secured overnight financing rate (“SOFR”) plus 10 basis points, plus a margin of 0.750% to 1.500%, with such margin being determined based on our consolidated leverage ratio or debt rating. We are also obligated to pay an ongoing commitment fee on undrawn amounts.

The 2022 Credit Agreement contains customary representations, warranties, and affirmative and negative covenants, including a financial covenant, events of default, and indemnification provisions in favor of the lenders. The negative covenants include restrictions on the incurrence of liens and indebtedness, certain merger transactions, and other matters, all subject to certain exceptions. The financial covenant, based on a quarterly financial test, requires that we do not exceed a maximum leverage ratio of 3.50:1.00, subject to a step-up to 4.50:1.00 at our election for a certain period following an acquisition. As of October 31, 2025, and January 31, 2025, we were in compliance with all covenants included in the 2022 Credit Agreement.

Interest Expense on Debt

The following table sets forth total interest expense recognized related to our debt (in millions):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2025		2024		2025		2024
Contractual interest expense	$	28	$	28	$	83	$	83
Interest cost related to amortization of debt discount and issuance costs	1		1		3		3
Total interest expense	$	29	$	29	$	86	$	86

Note 12. Leases

We have entered into operating lease agreements for our office space, data centers, and other property and equipment. Operating lease right-of-use assets were $721 million and $336 million as of October 31, 2025, and January 31, 2025, respectively, and operating lease liabilities were $807 million and $378 million as of October 31, 2025, and January 31, 2025, respectively.

In July 2025, the 20-year lease for our new European headquarters in Dublin, Ireland, commenced, following its execution in the first quarter of fiscal 2026. This resulted in the recognition of an operating lease right-of-use asset of $313 million, and a corresponding operating lease liability of $333 million.

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The components of operating lease expense were as follows (in millions):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2025		2024		2025		2024
Operating lease cost	$	40	$	30	$	105	$	88
Short-term lease cost	0		0		1		1
Variable lease cost	14		15		38		39
Total operating lease cost	$	54	$	45	$	144	$	128

Supplemental cash flow information related to our operating leases was as follows (in millions):


	Nine Months Ended October 31,
		2025		2024
Cash paid for operating lease liabilities		$	97	$	80
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities		467		123

Other information related to our operating leases was as follows:


	October 31, 2025		January 31, 2025
Weighted average remaining lease term (in years)	11		5
Weighted average discount rate	4.16	%	4.20	%

As of October 31, 2025, maturities of operating lease liabilities were as follows (in millions):


Fiscal Period:
Remainder of 2026	$	36
2027	137
2028	143
2029	114
2030	78
Thereafter	527
Total lease payments	1,035
Less imputed interest	(228)
Total operating lease liabilities	$	807

As of October 31, 2025, we had operating leases for office space that had not yet commenced with total undiscounted lease payments of $36 million. These operating leases will commence in fiscal 2026 and fiscal 2027, with lease terms ranging from approximately five to ten years.

Note 13. Commitments and Contingencies

Purchase Obligations

Our purchase obligations are primarily related to agreements for third-party hosted infrastructure platforms, data center equipment and software, business technology software and support, and sales and marketing activities. During the nine months ended October 31, 2025, there were no material changes outside the ordinary course of business to our non-cancelable purchase obligations disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025.

Legal Matters

We are a party to various legal proceedings and claims that arise in the ordinary course of business. We make a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter. In our opinion, as of October 31, 2025, there was not at least a reasonable possibility that we had incurred a material loss, or a material loss in excess of a recorded accrual, with respect to such loss contingencies.

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Note 14. Stockholders’ Equity

Common Stock

As of October 31, 2025, there were 214 million shares of Class A common stock, net of treasury stock, and 50 million shares of Class B common stock outstanding. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to 10 votes per share. Each share of Class B common stock can be converted into a share of Class A common stock at any time at the option of the holder.

Share Repurchase Programs

We repurchase shares of our Class A common stock under share repurchase programs authorized by our Board of Directors. Under these programs, in accordance with applicable securities laws and other restrictions, we may repurchase shares of our Class A common stock through open market purchases, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, in privately negotiated transactions, or by other means. The timing and total amount of share repurchases will depend upon business, economic, and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The share repurchase programs have no expiration date, may be suspended or discontinued at any time, and do not obligate us to acquire any amount of Class A common stock.

Share repurchase programs authorized by our Board of Directors that were in effect during the three and nine months ended October 31, 2025, and 2024, were as follows (in millions):


Authorization Date	Amount Authorized		Authorization Completion Date
November 2022	$	500	Q1 fiscal 2025
February 2024	500		Q3 fiscal 2025
August 2024	1,000		Q3 fiscal 2026
May 2025	1,000
September 2025	4,000

The table below sets forth information regarding repurchase of shares under our share repurchase programs (in millions, except number of shares which are reflected in thousands, and per share data):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2025		2024		2025		2024
Total number of shares repurchased	3,367		649		5,873		2,538
Average price paid per share (1)	$	238.40	$	242.42	$	237.42	$	236.73
Amount repurchased (1)	$	803	$	157	$	1,394	$	600

(1)Amounts exclude excise tax and commissions.

All repurchases were made in open market transactions. As of October 31, 2025, we were authorized to repurchase a remaining $4.4 billion of our outstanding shares of Class A common stock under our share repurchase programs.

Employee Equity Plans

In fiscal 2023, our stockholders approved the 2022 Equity Incentive Plan (“2022 Plan”), with a reserve of 30 million shares for issuance. The 2022 Plan serves as the successor to our 2012 Equity Incentive Plan (“2012 Plan” and, together with the 2022 Plan, “Stock Plans”). Awards that are granted on or after the effective date of the 2022 Plan will be granted pursuant to and subject to the terms and provisions of the 2022 Plan. Prior awards granted under the 2012 Plan continue to be subject to the terms and provisions of the 2012 Plan. Shares that are forfeited or withheld in connection with the net share settlement of restricted stock units (“RSUs”) are added to the reserves of the 2022 Plan. As of October 31, 2025, 13 million shares of Class A common stock were available for future grants under the 2022 Plan.

In fiscal 2023, our stockholders approved the Amended and Restated 2012 Employee Stock Purchase Plan (“2012 ESPP”). Under the 2012 ESPP, eligible employees are granted options to purchase shares at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. Options to purchase shares are granted twice yearly on or about June 1 and December 1, and are exercisable on or about the succeeding November 30 and May 31, respectively. As of October 31, 2025, 2 million shares of Class A common stock were available for issuance under the 2012 ESPP.

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Restricted Stock Units and Performance-Based Restricted Stock Units

The Stock Plans provide for the issuance of RSUs and performance-based restricted stock units (“PSUs”) to employees and non-employees. RSUs generally vest over four years. Activity during the nine months ended October 31, 2025, was as follows (in thousands, except per share data):


	Number of Shares	Weighted-Average Grant Date Fair Value
Outstanding balance as of January 31, 2025	14,361	$	226.52
Granted- restricted stock units	7,281	219.30
Granted- performance-based restricted stock units (1)	84	215.98
Vested	(3,322)	227.69
Forfeited and canceled (2)	(3,672)	224.06
Outstanding balance as of October 31, 2025	14,732	223.24

(1)Includes approximately 42 thousand PSUs granted to executives in April 2025. The PSUs are subject to vesting based on the achievement of annual performance-based conditions determined at the beginning of each fiscal year and a three-year service-based condition. The PSUs will vest at the end of the three-year service period, with the number of shares vesting ranging from 0% to 150% of the target, based on the average attainment of the annual performance conditions.

(2)Includes shares withheld in connection with the net share settlement of RSUs.

As of October 31, 2025, there was a total of $2.7 billion in unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs and PSUs, which is expected to be recognized over a weighted-average period of approximately three years.

Market-Based Restricted Stock Units

In fiscal 2023, 0.3 million shares of market-based RSUs were granted to Mr. Eschenbach in connection with his appointment as Co-CEO that vest based on appreciation of the price of our Class A common stock over a multi-year period and upon continued service (“PVU Award”). We estimated the fair value of the PVU Award on the grant date using the Monte Carlo simulation model with the following assumptions: (i) expected volatility of 40%, (ii) risk-free interest rate of 4%, and (iii) total performance period of six years. The weighted-average grant date fair value of the PVU Award was $124.80 per share. We recognize expense for the PVU Award over the requisite service period of five years using the accelerated attribution method. Provided that the requisite service is rendered, the total fair value of the PVU Award at the date of grant is recognized as compensation expense even if the market condition is not achieved. However, the number of shares that ultimately vest can vary significantly with the achievement of the specified market criteria.

As of October 31, 2025, there was a total of $4 million in unrecognized compensation cost related to the PVU Award, which is expected to be recognized over approximately two years.

Note 15. Contract Balances and Performance Obligations

Contract Balances

Contract assets and unearned revenue balances were as follows (in millions):


	Condensed Consolidated Balance Sheets Location	October 31, 2025		January 31, 2025
Contract assets:
Contract assets, current	Trade and other receivables, net	$	512	$	373
Contract assets, noncurrent	Other assets	54		44
Total contract assets		$	566	$	417
Unearned revenue (1):
Unearned revenue, current	Unearned revenue	$	3,871	$	4,467
Unearned revenue, noncurrent	Unearned revenue, noncurrent	70		80
Total unearned revenue		$	3,941	$	4,547

(1)Included in this balance are amounts related to professional services that are subject to cancellation and pro-rated refund rights of $79 million and $83 million as of October 31, 2025, and January 31, 2025, respectively.

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Revenues of $1.8 billion and $1.6 billion were recognized during the three months ended October 31, 2025, and 2024, respectively, that were included in the unearned revenue balances as of July 31, 2025, and 2024, respectively. Revenues of $3.9 billion and $3.6 billion were recognized during the nine months ended October 31, 2025, and 2024, respectively, that were included in the unearned revenue balances as of January 31, 2025, and 2024, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

As of October 31, 2025, approximately $26.0 billion of revenues are expected to be recognized from remaining performance obligations for subscription contracts. We expect to recognize revenues on approximately $8.2 billion and $14.6 billion of these remaining performance obligations over the next 12 and 24 months, respectively, with the balance recognized thereafter. Revenues from remaining performance obligations for professional services contracts as of October 31, 2025, were not material.

Note 16. Other Income, Net

Other income, net consisted of the following (in millions):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2025		2024		2025		2024
Interest income	$	84	$	86	$	263	$	267
Interest expense (1)	(29)		(29)		(86)		(86)
Other (2)	24		5		21		(3)
Total other income, net	$	79	$	62	$	198	$	178

(1)Interest expense primarily includes the contractual interest expense of our debt obligations, and the related non-cash interest expense attributable to amortization of the debt discount and issuance costs. For further information, see Note 11, Debt.

(2)Other primarily includes the realized gains (losses) from sales of debt securities and net gains (losses) from our equity investments. For further information, see Note 3, Investments.

Note 17. Income Taxes

We reported an income tax provision of $197 million and $86 million for the nine months ended October 31, 2025, and 2024, respectively. The income tax provision for the nine months ended October 31, 2025, was primarily attributable to earnings in the U.S. and profitable foreign jurisdictions. The income tax provision for the nine months ended October 31, 2024, was primarily attributable to earnings in the U.S. and profitable foreign jurisdictions, offset by the excess tax benefit from share-based compensation and increase in research and development credits.

We are subject to income tax audits in the U.S. and foreign jurisdictions. We record liabilities related to uncertain tax positions and believe that we have provided adequate reserves for income tax uncertainties in all open tax years. Due to our history of tax losses, all years remain open to tax audit.

We periodically evaluate the realizability of our deferred tax assets based on all available evidence, both positive and negative, such as historic results, future reversals of existing deferred tax liabilities, and projected future taxable income, as well as prudent and feasible tax-planning strategies. The assessment requires significant judgment and is performed in each of the applicable jurisdictions. As of October 31, 2025, we continue to maintain valuation allowances related to tax credits in certain state jurisdictions and net operating loss in certain foreign jurisdictions. We will continue to evaluate the need for valuation allowances for our deferred tax assets.

On July 4, 2025, the One Big Beautiful Bill Act (“The 2025 Tax Act”) was signed into law. The 2025 Tax Act makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and modifications to the international tax framework. The 2025 Tax Act did not have a material impact on our annual effective tax rate and is expected to reduce our domestic cash tax outflows for the remainder of fiscal 2026. Due to the complexity and various upcoming effective dates of the 2025 Tax Act, we are still in the process of assessing its impact on our condensed consolidated financial statements. The final impact may differ from our current estimates based on further analysis, regulatory guidance, and any legislative changes.

Note 18. Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period, net of treasury stock. Diluted net income per share is computed by giving effect to all potentially dilutive shares of common stock, including outstanding share-based awards consisting primarily of unvested RSUs and ESPP obligations. We determine the dilutive effect of outstanding share-based awards using the treasury stock method.

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The net income per share is allocated based on the contractual participation rights of the Class A common shares and Class B common shares as if the income for the period had been distributed. As the liquidation and dividend rights are identical, the net income is allocated on a proportionate basis. The computation of the diluted net income per share of Class A common stock assumes the conversion of our Class B common stock to Class A common stock, while the diluted net income per share of Class B common stock does not assume the conversion of those shares.

The following table presents the calculation of basic and diluted net income per share (in millions, except number of shares, which are reflected in thousands, and per share data):


	Three Months Ended October 31,								Nine Months Ended October 31,
	2025				2024				2025				2024
	Class A		Class B		Class A		Class B		Class A		Class B		Class A		Class B
Net income per share, basic:
Numerator:
Net income	$	205	$	47	$	155	$	38	$	444	$	104	$	346	$	86
Denominator:
Weighted-average shares outstanding, basic	215,620		50,250		213,047		52,364		215,736		50,651		212,350		52,712
Net income per share, basic	$	0.95	$	0.95	$	0.73	$	0.73	$	2.06	$	2.06	$	1.63	$	1.63
Net income per share, diluted:
Numerator:
Net income	$	205	$	47	$	155	$	38	$	444	$	104	$	346	$	86
Reallocation of net income as a result of conversion of Class B to Class A common stock	47		0		38		0		104		0		86		0
Reallocation of net income to Class B common stock	0		0		0		0		0		(1)		0		(1)
Net income for diluted calculation	$	252	$	47	$	193	$	38	$	548	$	103	$	432	$	85
Denominator:
Weighted-average shares outstanding, basic	215,620		50,250		213,047		52,364		215,736		50,651		212,350		52,712
Conversion of Class B to Class A common stock	50,250		0		52,364		0		50,651		0		52,712		0
Dilutive effect of share-based awards	2,759		0		3,138		0		3,313		0		3,874		0
Weighted-average shares outstanding, diluted	268,629		50,250		268,549		52,364		269,700		50,651		268,936		52,712
Net income per share, diluted	$	0.94	$	0.94	$	0.72	$	0.72	$	2.03	$	2.03	$	1.61	$	1.61

The computation of diluted net income per share does not include the effect of the following potentially outstanding weighted-average shares of common stock because their effect would have been anti-dilutive (in thousands):


	Three Months Ended October 31,		Nine Months Ended October 31,
	2025	2024	2025	2024
Total weighted-average shares related to outstanding share-based awards	3,487	258	1,305	2,217

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Note 19. Geographic Information

Revenues

We sell our subscription contracts and related services in two primary geographical markets: to customers located in the United States and to customers located outside of the United States. Revenues by geography are generally based on the address of the customer as specified in our customer subscription agreement. The following table sets forth revenues by geographic area (in millions):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2025		2024		2025		2024
United States	$	1,825	$	1,623	$	5,270	$	4,676
Other countries	607		537		1,750		1,559
Total revenues	$	2,432	$	2,160	$	7,020	$	6,235

Long-Lived Assets

Our long-lived assets are attributed to a country based on the physical location of the assets. We define long-lived assets as property and equipment and operating lease right-of-use assets because many of these assets cannot be readily moved and are relatively illiquid, subjecting them to geographic risk. None of our other assets are subject to significant geographic risk. Aggregate Property and equipment, net and Operating lease right-of-use assets by geographic area was as follows (in millions):


	October 31, 2025		January 31, 2025
United States	$	1,161	$	1,197
Ireland	516		215
Other countries	176		163
Total long-lived assets	$	1,853	$	1,575

Note 20. Restructuring

In February 2025, we announced a restructuring plan (“Fiscal 2026 Restructuring Plan”) intended to prioritize our investments and continue advancing our ongoing focus on durable growth. This plan resulted in the elimination of approximately 7.5% of our workforce. In connection with this plan, we have exited certain owned office space. The activities associated with this plan were substantially completed in the second quarter of fiscal 2026.

We incurred $237 million in charges in connection with this plan, of which $65 million was recognized in the fourth quarter of fiscal 2025, $166 million was recognized in the first quarter of fiscal 2026, and the remainder was recognized thereafter. The total charges consisted of $198 million related to employee transition, severance payments, employee benefits, and share-based compensation, and $39 million related to an impairment of office space.

Fiscal 2026 Restructuring Plan activity was as follows (in millions):


	Three Months Ended October 31, 2025						Nine Months Ended October 31, 2025
	Workforce Reduction		Office Space Reduction		Total		Workforce Reduction		Office Space Reduction		Total
Restructuring liability, beginning of the period	$	6	$	0	$	6	$	57	$	0	$	57
Charges	0		5		5		133		39		172
Payments	(1)		0		(1)		(145)		0		(145)
Non-cash items	0		(5)		(5)		(40)		(39)		(79)
Restructuring liability, end of the period	$	5	$	0	$	5	$	5	$	0	$	5

We recorded $9 million in exit charges associated with office space reductions under a separate restructuring plan during the nine months ended October 31, 2024.

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Note 21. Subsequent Events

In November 2025, we completed our acquisition of Sana Labs AB (“Sana”), an AI company building the next generation of enterprise knowledge tools, for approximately $1.0 billion in cash. The acquisition will be accounted for as a business combination and, accordingly, the purchase consideration will be allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. We are in the process of finalizing the preliminary purchase price allocation for the transaction and will provide the preliminary purchase price allocation within our Annual Report on Form 10-K for the fiscal year ending January 31, 2026.

In November 2025, we entered into a definitive agreement to acquire Pipedream, Inc. (“Pipedream”), an integration platform for AI agents with pre-built connectors to common business applications. The acquisition is expected to close during the fourth quarter of fiscal 2026, subject to the satisfaction of closing conditions.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements, which are subject to safe harbor protection under the Private Securities Litigation Reform Act of 1995. All statements contained in this report other than statements of historical fact, including statements regarding our future financial condition and operating results, business strategy and plans, and objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “seek,” “plan,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations, beliefs, and projections about future 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, assumptions, and changes in circumstances that are difficult to predict and many of which are outside of our control, such as those arising from the impact of recent macroeconomic events, including geopolitical instability, increased tariffs, elevated inflation, and fluctuating interest rates and foreign currency exchange rates, as well as those described in the “Risk Factors” section, which we encourage you to read carefully. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.

In light of these risks, uncertainties, assumptions, and potential changes in circumstances, the future events, 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 any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activities, performance, or achievements. We are under no duty to update any of these forward-looking statements after the date of this report or to conform these statements to actual results or revised expectations, except as required by applicable law. If we do update any forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

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