Workday, Inc. stock research
FY2025 Q4
Workday (WDAY) Gross Margin — Quarter Ended Jan 31, 2025
For the quarter ended January 31, 2025, revenue and gross profit both increased year over year, while cost of revenue rose at a slower pace, leading to a slightly improved gross margin compared to the same quarter last year. Sequentially, revenue was stable, but cost of revenue increased, causing gross profit to remain similar and gross margin to weaken slightly.
Gross margin takeaway
Quarter ended Jan 31, 2025 · FY2025 Q4
For the quarter ended January 31, 2025, revenue and gross profit both increased year over year, while cost of revenue rose at a slower pace, leading to a slightly improved gross margin compared to the same quarter last year. Sequentially, revenue was stable, but cost of revenue increased, causing gross profit to remain similar and gross margin to weaken slightly.
- The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue grew more than cost of revenue on a year-over-year basis, supporting gross margin expansion. Sequentially, however, revenue was flat while cost of revenue increased, which pressured the margin.
- Compared to the immediately preceding quarter, gross margin weakened as revenue held steady but cost of revenue rose. Compared to the same quarter one year earlier, gross margin improved as revenue grew faster than cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
75.6%
Gross profit
$1.7B
Revenue
$2.2B
Cost of revenue
$539.0M
Quarter-over-quarter change
-0.8 pts
Year-over-year change
-0.4 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Apr 30, 2024 | $2.0B | $1.5B | $472.0M | 76.3% |
| Jul 31, 2024 | $2.1B | $1.6B | $491.0M | 76.5% |
| Oct 31, 2024 | $2.2B | $1.6B | $510.0M | 76.4% |
| Jan 31, 2025 | $2.2B | $1.7B | $539.0M | 75.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Oct 31, 2024
-0.8 pts
Year-over-year change
Jan 31, 2024
-0.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue grew more than cost of revenue on a year-over-year basis, supporting gross margin expansion. Sequentially, however, revenue was flat while cost of revenue increased, which pressured the margin.
Compared to the immediately preceding quarter, gross margin weakened as revenue held steady but cost of revenue rose. Compared to the same quarter one year earlier, gross margin improved as revenue grew faster than cost of revenue.
Monitor the trend in cost of revenue relative to revenue, as its sequential increase despite stable revenue directly affected gross margin.