Workday, Inc. stock research
FY2025 Q2
Workday (WDAY) Gross Margin — Quarter Ended Jul 31, 2025
Revenue increased compared to both the prior quarter and the same quarter last year. Gross profit also rose, but cost of revenue grew at a different pace, leading to a gross margin that improved year-over-year but weakened sequentially.
Gross margin takeaway
Quarter ended Jul 31, 2025 · FY2025 Q2
Revenue increased compared to both the prior quarter and the same quarter last year. Gross profit also rose, but cost of revenue grew at a different pace, leading to a gross margin that improved year-over-year but weakened sequentially.
- The year-over-year gross margin improvement was driven by revenue growing faster than cost of revenue. Revenue rose from the year-ago level while cost of revenue increased at a slower rate.
- Compared to the immediately preceding quarter, gross margin was lower as cost of revenue grew more quickly than revenue. Compared to the same quarter one year earlier, gross margin was higher as revenue growth outpaced cost growth.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
76.1%
Gross profit
$1.8B
Revenue
$2.3B
Cost of revenue
$561.0M
Quarter-over-quarter change
-0.9 pts
Year-over-year change
+1.2 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 |
|---|---|---|---|---|
| Oct 31, 2024 | $2.2B | $1.6B | $510.0M | 76.4% |
| Jan 31, 2025 | $2.2B | $1.7B | $539.0M | 75.6% |
| Apr 30, 2025 | $2.2B | $1.7B | $516.0M | 77.0% |
| Jul 31, 2025 | $2.3B | $1.8B | $561.0M | 76.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Apr 30, 2025
-0.9 pts
Year-over-year change
Jul 31, 2023
+1.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The year-over-year gross margin improvement was driven by revenue growing faster than cost of revenue. Revenue rose from the year-ago level while cost of revenue increased at a slower rate.
Compared to the immediately preceding quarter, gross margin was lower as cost of revenue grew more quickly than revenue. Compared to the same quarter one year earlier, gross margin was higher as revenue growth outpaced cost growth.
Monitor the trajectory of cost of revenue relative to revenue, as its growth rate influenced the sequential margin decline.