v3.25.4
Derivative Instruments
 12 Months Ended
Jan. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
We conduct business on a global basis in multiple foreign currencies, subjecting Workday to foreign currency exchange risk. To mitigate this risk, we utilize derivative hedging contracts as described below. We do not enter into any derivatives for trading or speculative purposes.
Cash Flow Hedges
We enter into foreign currency forward contracts to hedge a portion of our forecasted revenue and expense transactions. We designate these forward contracts as cash flow hedging instruments since the accounting criteria for such designation has been met.
As of January 31, 2026, we estimate that $38 million of net losses recorded in AOCI related to our cash flow hedges will be reclassified into earnings within the next 12 months.
As of January 31, 2026, and 2025, the notional values of the cash flow hedges that we held to buy U.S. dollars in exchange for other currencies were $3.0 billion and $2.8 billion, respectively, and the notional values of the cash flow hedges that we held to sell U.S. dollars in exchange for other currencies were $874 million and $420 million as of January 31, 2026, and 2025, respectively. All contracts had maturities of less than 48 months.
Non-Designated Hedges
We also enter into foreign currency forward contracts to hedge a portion of our net outstanding monetary assets and liabilities. These forward contracts are intended to offset foreign currency gains or losses associated with the underlying monetary assets and liabilities and are recorded on the Consolidated Balance Sheets at fair value.
As of January 31, 2026, and 2025, the notional values of the non-designated hedges that we held to buy U.S. dollars in exchange for other currencies were $442 million and $242 million, respectively, and the notional values of the non-designated hedges that we held to sell U.S. dollars in exchange for other currencies were $565 million and $91 million, respectively.
The fair values of outstanding derivative instruments were as follows (in millions):
Consolidated Balance Sheets LocationAs of January 31,
20262025
Derivative assets:
Cash flow hedgesPrepaid expenses and other current assets$15 $59 
Cash flow hedgesOther assets2 52 
Non-designated hedgesPrepaid expenses and other current assets4 1 
Total derivative assets$21 $112 
Derivative liabilities:
Cash flow hedgesAccrued expenses and other current liabilities$71 $22 
Cash flow hedgesOther liabilities65 3 
Non-designated hedgesAccrued expenses and other current liabilities12 1 
Total derivative liabilities$148 $26 
The effect of cash flow hedges on the Consolidated Statements of Operations was as follows (in millions):
Consolidated Statements of Operations LocationYear Ended January 31,
202620252024
TotalGains (losses) related to cash flow hedgesTotalGains (losses) related to cash flow hedgesTotalGains (losses) related to cash flow hedges
Revenues$9,552 $18 $8,446 $30 $7,259 $62 
Costs and expenses8,831 7 8,031 (3)7,076 1 
Pre-tax gains (losses) associated with cash flow hedges were as follows (in millions):
Consolidated Statements of Operations and Statements of Comprehensive Income (Loss) LocationsYear Ended January 31,
202620252024
Gains (losses) recognized in OCINet change in unrealized gains (losses) on cash flow hedges$(228)$96 $16 
Gains (losses) reclassified from AOCI into income (effective portion)Revenues18 30 62 
Gains (losses) reclassified from AOCI into income (effective portion)Costs and expenses7 (3)1 
Gains (losses) associated with non-designated hedges were as follows (in millions):
Consolidated Statements of Operations LocationYear Ended January 31,
202620252024
Gains (losses) related to non-designated hedgesOther income, net$(8)$4 $5 
We manage our exposure to counterparty risk by entering into foreign currency forward contracts with a diversified group of nine major financial institutions and by actively monitoring outstanding positions. We are subject to netting agreements with all of these counterparties, under which we are permitted to net settle transactions of the same currency with a single net amount payable by one party to the other. After consideration of these netting arrangements, the total net settlement amount related to our foreign currency forward contracts is an asset position of $1 million and a liability position of $128 million as of January 31, 2026, and an asset position of $86 million as of January 31, 2025.
Although legally enforceable master netting arrangements exist between Workday and each counterparty, it is our policy to present the derivatives gross on the Consolidated Balance Sheets. Our foreign currency forward contracts are not subject to any credit contingent features or collateral requirements.