Workday (WDAY) risk factors, 2025 10-K

Risks Related to Our Business and Industry

1. 01Any slowdown or failure in our technical operations infrastructure or applications may subject us to liabilities and adversely affect our reputation and operating results
2. 02We depend on data centers and other infrastructure operated by third parties, as well as internet availability, and any disruption in these operations could adversely affect our business and operating results
3. 03The extent to which the continuing global economic and geopolitical volatility, and any resulting effect on customer spending, will continue to impact our business, financial condition, and operating results will depend on future developments, which are highly uncertain and difficult to predict
4. 04We may lose key employees or be unable to attract, enable, and retain highly skilled employees
5. 05The markets in which we participate are intensely competitive, and if we do not compete effectively, our operating results could be adversely affected
6. 06We rely on our network of partners to drive additional growth of our revenues, and if these partners fail to perform, our ability to sell and distribute our products may be impacted, and our operating results and growth rate may be harmed
7. 07Sales to customers outside the United States or with international operations expose us to risks inherent in global operations
8. 08Our business could be adversely affected if our users are not satisfied with the deployment, training, and support services provided by us and our partners
9. 09Our future success depends on the rate of customer subscription renewals, and our revenues or operating results could be adversely impacted if we do not achieve renewals at expected rates or on anticipated terms
10. 10The use of new and evolving technologies in our offerings at Workday, including AI, may result in reputational harm and increased litigation, and adversely affect our operating results
11. 11Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business
12. 12If we are not able to realize a return on our current development efforts or offer new features, enhancements, and modifications to our services that are desired by current or potential customers, our business and operating results could be adversely affected
13. 13If we fail to develop and maintain widespread positive awareness of our brand, our business may suffer
14. 14If we are unable to successfully integrate our applications with a variety of third-party technologies, our business and operating results could be adversely affected
15. 15We have acquired, and may in the future acquire, other companies, employee teams, or technologies, which could divert our management’s attention, result in additional indebtedness or dilution to our stockholders, and otherwise disrupt our operations and adversely affect our operating results
16. 16If we are not able to realize a return on the investments we have made toward entering new markets and new lines of business, our business and operating results could be adversely affected
17. 17Catastrophic or climate-related events may disrupt our business
18. 18Our aspirations and disclosures related to ESG matters expose us to risks that could adversely affect our reputation and performance

Risks Related to Cybersecurity, Data Privacy, and Intellectual Property

1. 19Privacy concerns, evolving regulation of cloud computing, cross-border data transfer, and other domestic or foreign laws and regulations may reduce the adoption of our applications, result in significant costs and compliance challenges, and adversely affect our business and operating results
2. 20Any failure to protect our intellectual property rights domestically and internationally could impair our ability to protect our proprietary technology and our brand
3. 21We may be sued by third parties for alleged infringement of their proprietary rights
4. 22Our applications utilize open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business

Risks Related to Legal and Regulatory Matters

1. 23Unfavorable laws, regulations, interpretive positions, or standards governing new and evolving technologies that we incorporate into our products and services, including those involving AI uses, could result in significant cost and compliance challenges and adversely affect our business and operating results
2. 24Adverse litigation results could have a material adverse impact on our business
3. 25We are subject to risks related to government contracts and related procurement regulations, which may adversely impact our business and operating results
4. 26Unanticipated tax laws or any change in the application of existing tax laws to us or our customers and unanticipated changes in our effective tax rate may adversely impact our profitability and financial results

Risks Related to Financial Matters

1. 27Because we encounter long sales cycles when selling to large customers and we recognize subscription services revenues over the term of the contract, downturns or upturns in new sales will not be immediately reflected in our operating results and may be difficult to discern
2. 28We have a history of cumulative losses, and we may not sustain profitability on a GAAP basis in the future
3. 29Our current and future indebtedness may adversely affect our financial condition and operating results
4. 30We may incur substantial additional debt in the future, some of which may be secured debt. It is possible that we will not be able to repay this indebtedness when due or refinance this indebtedness on acceptable terms or at all
5. 31We are subject to risks associated with our equity investments, including partial or complete loss of invested capital, and significant changes in the fair value of this portfolio could adversely impact our financial results
6. 32We may discover weaknesses in our internal controls over financial reporting, which may adversely affect investor confidence in the accuracy and completeness of our financial reports and consequently the market price of our securities

Risks Related to Ownership of Our Class A Common Stock

1. 33Our Co-Founders have control over key decision making as a result of their control of a majority of our voting stock
2. 34The dual class structure of our common stock has the effect of concentrating voting control with our Co-Founders, as well as with other executive officers, directors, and affiliates, which limits or precludes the ability of non-affiliates to influence corporate matters
3. 35Our stock price has been volatile in the past and may be subject to volatility in the future
4. 36We may not realize the anticipated long-term stockholder value of our share repurchase programs
5. 37Delaware law and provisions in our restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the market price of our Class A common stock
6. 38Furthermore, the change in control repurchase event provisions of our Senior Notes may delay or prevent a change in control of our company, because those provisions allow note holders to require us to repurchase such notes upon the occurrence of a fundamental change or change in control repurchase event
7. 39The exclusive forum provision in our organizational documents may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which may discourage lawsuits with respect to such claims
8. 40We do not intend to pay dividends for the foreseeable future