WDAYWorkday, Inc.
Is the business good?
A genuinely good business: earnings fully cash-backed (2.9×) and margins widening.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
A balanced mix of margins, efficiency, and leverage. ROE 12% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is WDAY?
Workday, Inc. earns 14% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 5.2 points above what the capital costs: growth creates value
- Operating margin
- 11%
Operating margin · Software - Application median 6.4% · 12 months to Q2 2027
- Cash conversion
- 2.92×
Cash conversion · 6.36× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −8.8%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2021 | −5.8% |
| FY2022 | −2.3% |
| FY2023 | −3.6% |
| FY2024 | 2.5% |
| FY2025 | 4.9% |
| FY2026 | 7.5% |
Details›
- Operating margin12 months to Q2 2027
- 11%
- Net margin12 months to Q2 2027
- 12%
- Free cash flow margin
- 28%
- R&D as % of revenue
- 28%
- Revenue, trailing twelve months
- $10.2B
- Free cash flow, trailing twelve months
- $2.84B
- Net income, trailing twelve months
- $1.25B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 14%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Software, Application
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