v3.26.1
Derivative Instruments
 3 Months Ended
Apr. 30, 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.
Our foreign currency contracts are classified within Level 2 of the fair value hierarchy because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates.
Cash Flow Hedges
We enter into foreign currency forward contracts to hedge a portion of our forecasted revenue and expense transactions (“cash flow hedges”). We designate these forward contracts as cash flow hedging instruments since the accounting criteria for such designation has been met.
Cash flow hedges are recorded on the Condensed Consolidated Balance Sheets at fair value. Cash flows from the settlement of these forward contracts are classified as operating activities on the Condensed Consolidated Statements of Cash Flows. Gains and losses resulting from changes in the fair value of these hedges are recorded in Accumulated other comprehensive income (loss) (“AOCI”) on the Condensed Consolidated Balance Sheets and are subsequently reclassified to the same line item as the hedged transaction on the Condensed Consolidated Statements of Operations in the same period that the hedged transaction affects earnings. As of April 30, 2026, we estimate that $48 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 April 30, 2026, and January 31, 2026, the notional values of the cash flow hedges that we held to buy U.S. dollars in exchange for other currencies were $3.3 billion and $3.0 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 $867 million and $874 million, respectively. All contracts had maturities of less than 45 months.
Non-Designated Hedges
We also enter into foreign currency forward contracts to hedge a portion of our net outstanding monetary assets and liabilities (“non-designated hedges”). 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 Condensed Consolidated Balance Sheets at fair value. These forward contracts are not designated as hedging instruments under applicable accounting guidance, and therefore all changes in the fair value of these forward contracts are recorded in Other income, net on the Condensed Consolidated Statements of Operations in the period incurred. Cash flows from the settlement of these forward contracts are classified as operating activities on the Condensed Consolidated Statements of Cash Flows.
As of April 30, 2026, and January 31, 2026, the notional values of the non-designated hedges that we held to buy U.S. dollars in exchange for other currencies were $311 million and $442 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 $619 million and $565 million, respectively.
The fair values of outstanding derivative instruments were as follows (in millions):
Condensed Consolidated Balance Sheets LocationApril 30, 2026January 31, 2026
Derivative assets:
Cash flow hedgesPrepaid expenses and other current assets$13 $15 
Cash flow hedgesOther assets9 2 
Non-designated hedgesPrepaid expenses and other current assets5 4 
Total derivative assets$27 $21 
Derivative liabilities:
Cash flow hedgesAccrued expenses and other current liabilities$65 $71 
Cash flow hedgesOther liabilities49 65 
Non-designated hedgesAccrued expenses and other current liabilities14 12 
Total derivative liabilities$128 $148 
The effect of cash flow hedges on the Condensed Consolidated Statements of Operations was as follows (in millions):
Three Months Ended April 30,
Condensed Consolidated Statements of Operations Location20262025
TotalGains (losses) related to cash flow hedgesTotalGains (losses) related to cash flow hedges
Revenues$2,542 $(9)$2,240 $8 
Costs and expenses2,204 2 2,201 (6)
Pre-tax gains (losses) associated with cash flow hedges were as follows (in millions):
Condensed Consolidated Statements of Operations and Statements of Comprehensive Income (Loss) LocationsThree Months Ended April 30,
20262025
Gains (losses) recognized in OCINet change in unrealized gains (losses) on cash flow hedges$21 $(162)
Gains (losses) reclassified from AOCI into income (effective portion)Revenues(9)8 
Gains (losses) reclassified from AOCI into income (effective portion)Costs and expenses2 (6)
Gains (losses) associated with non-designated hedges were as follows (in millions):
Condensed Consolidated Statements of Operations LocationThree Months Ended April 30,
20262025
Gains (losses) related to non-designated hedges
Other income, net
$(4)$0 
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 $4 million and a liability position of $105 million as of April 30, 2026, and an asset position of $1 million and a liability position of $128 million as of January 31, 2026.
Although legally enforceable master netting arrangements exist between Workday and each counterparty, it is our policy to present the derivatives gross on the Condensed Consolidated Balance Sheets. Our foreign currency forward contracts are not subject to any credit contingent features or collateral requirements.