Workday (WDAY)

Risks

• The extent to which the ongoing COVID-19 pandemic, the continuing global economic and geopolitical volatility, and measures taken in response to such events will continue to impact our business, financial condition, and operating results will depend on future developments, which are highly uncertain and difficult to predict.
• If we fail to properly manage our technical operations infrastructure, experience service outages, undergo delays in the deployment of our applications, or our applications fail to perform properly, we may be subject to liabilities and our reputation and operating results may be adversely affected.
• We depend on data centers and computing infrastructure operated by third parties, and any disruption in these operations could adversely affect our business and operating results.
• We may lose key employees or be unable to attract, train, and retain highly skilled employees.
• If we cannot maintain our corporate culture, we could lose the innovation, teamwork, and passion that we believe contribute to our success, and our business may be harmed.
• Our business could be adversely affected if our users are not satisfied with the deployment, training, and support services provided by us and our partners.
• Our future success depends on the rate of customer subscription renewals or adoptions, and our revenues or operating results could be adversely impacted if we do not achieve renewals and adoptions at expected rates or on anticipated terms.
• Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.
• We have experienced rapid growth, and if we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service and operational controls, or adequately address competitive challenges.
• If we fail to develop widespread brand awareness cost-effectively, our business may suffer.
• We have acquired, and may in the future acquire, other companies, employee teams, or technologies, which could divert our management’s attention, result in additional dilution to our stockholders, and otherwise disrupt our operations and adversely affect our operating results.
• Sales to customers outside the United States or with international operations expose us to risks inherent in global operations.
• The markets in which we participate are intensely competitive, and if we do not compete effectively, our operating results could be adversely affected.
• If 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.
• Our growth depends on the success of our strategic relationships with third parties as well as our ability to successfully integrate our applications with a variety of third-party technologies.
• If 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.
• Social and ethical issues relating to the use of new and evolving technologies, such as machine learning and AI, in our offerings may result in reputational harm and liability.
• Our aspirations and disclosures related to environmental, social, and governance (“ESG”) matters expose us to risks that could adversely affect our reputation and performance.
• If our information technology systems are compromised or unauthorized access to customer or user data is otherwise obtained, our applications may be perceived as not being secure, our operations may be disrupted, our applications may become unavailable, customers and end users may reduce the use of or stop using our applications, and we may incur significant liabilities.
• Privacy 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.
• Any failure to protect our intellectual property rights domestically and internationally could impair our ability to protect our proprietary technology and our brand.
• We may be sued by third parties for alleged infringement of their proprietary rights.
• Some of our 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.
• Unfavorable laws, regulations, interpretive positions or standards governing new and evolving technologies that we incorporate into our products and services could result in significant cost and compliance challenges and adversely affect our business and operating results.
• We are subject to risks related to government contracts and related procurement regulations, which may adversely impact our business and operating results.
• Adverse litigation results could have a material adverse impact on our business.
• We may not be able to utilize a portion of our net operating loss or research tax credit carryforwards, which could adversely affect our profitability.
• Unanticipated tax laws or any change in the application of existing tax laws to us or our customers, especially those limiting our ability to utilize our net operating loss and research tax credit carryforwards, may increase the costs of our services and adversely impact our profitability and business.
• Our historic revenue growth rates should not be viewed as indicative of our future performance.
• Because 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.
• We have a history of cumulative losses, and we may not achieve or sustain profitability on a GAAP basis in the future.
• We have substantial indebtedness which may adversely affect our financial condition and operating results.
• Our convertible note hedge and warrant transactions may affect the value of our Class A common stock.
• We 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.
• Our Co-Founders have control over key decision making as a result of their control of a majority of our voting stock.
• The 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.
• Our stock price has been volatile in the past and may be subject to volatility in the future.
• Delaware 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.
• The 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.
• We do not intend to pay dividends for the foreseeable future.
• Adverse economic conditions may negatively impact our business.
• Catastrophic or climate-related events may disrupt our business.
• We 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.