WDAY

Workday is a high-quality, durable enterprise-SaaS franchise that keeps compounding. Revenue rose to $9.55B (+13.1%) and has grown every year for five years ($5.14B→$6.22B→$7.26B→$8.45B→$9.55B), backed by an $11,500-customer base and a $28.1B total subscription backlog (+12%), with the near-term 12-month backlog up 16% to $8.83B — that backlog is the single best evidence the top line is contracted and visible, not speculative. The headline GAAP picture understates the economics: GAAP operating margin was just 7.5%, but non-GAAP operating margin was 29.6% (+368bps YoY) and free cash flow was $2,777M (+27%), the difference being ~$2.1B of stock-based comp plus $303M of restructuring. On the figures provided, market cap of $26.3B equals roughly 9–10x free cash flow and 2.8x sales for a business growing low-teens with high-20s cash margins — that is a cheap multiple for this quality, even if the GAAP P/E of 48 looks rich in isolation.

Management is explicitly running the margin-expansion playbook: GAAP operating income jumped 74% to $721M and net income rose 32% to $693M, and the MD&A states product-development, S&M and G&A as a percent of revenue should keep falling 'over the longer term.' The two FY2026/FY2027 restructurings (7.5% then ~2% of headcount) are evidence they are willing to take cost out to protect durable growth and free cash flow. Capital return is real — $2.9B of buybacks retired 12.8 million Class A shares — though it is partly why cash + marketable securities fell 32% to $5,443M and equity declined 13.6%; with $2.99B of long-term debt and 1.32x liabilities/equity the balance sheet is still sound but no longer cash-flush after the Paradox and Sana ($1.1B each) AI acquisitions.