Earnings call transcript Q4 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to Workday's Fourth Quarter and Fiscal Year 2023 Earnings Call. At this time, all participants are in a listen-only mode.

We will conduct a question-and-answer session towards the end of the call.

During the Q&A, please limit your questions to one.

With that, I will now hand it over to Justin Furby, Vice President of Investor Relations.

Justin Furby

operator. you, Thank fourth Workday's XXXX conference earnings Welcome quarter call. to fiscal

Co-President. we On CFO; and our have Carl call, and Eschenbach, Robinson, our Bhusri Larson, Aneel the Barbara our Doug Co-CEOs;

Following prepared will remarks, take we questions.

after issued website, our call was release this press close market posted where webcast. and simultaneously being of is on is Our

with fiscal and call, additional regarding want information results on we are from guidance, based uncertainties refer and financial that the information Before those cause set the to for we risk release that XXXX could Form materially. customer and in actual Exchange of XX-K our statements. to we uncertainties risks, materially press demand, to may get Please to Commission, actual statements our assumptions including and statements other Securities particularly cause some as Annual the include of results results, and applications, such matters. we today have Report that emphasize our factors risks, assumptions and our differ are file started, statements on forward-looking on this the and operations to forth subject documents on These differ

will are In should of or isolation call, financial today's as substitute we we not in a addition believe considered from results. non-GAAP for be in addition, performance. which These useful during measures, measures supplemental measures GAAP as discuss Workday's non-GAAP to and

presentation measures, on these website. reconciliations press results regarding can comparable page non-GAAP in our including release, Relations of the find and disclosures additional investor You earnings in with Investor our our GAAP

the on XX for available be our will next call this of link. replay company under website Relations webcast days Investor The the

call. website customers' is updated posted Investor Relations will Also, website list of monthly. of quarterly on our and our following investor presentation customers a includes be the selected Additionally, page our this

period stated, of results Unless call Our begins comparable fiscal April XXXX. for to will our be our first comparisons otherwise XX, XXXX. quiet this XXXX financial the all on quarter We period fiscal in

I'll that, hand to the Aneel. over call With

Aneel Bhusri

full once to Thank that growth our again results you, welcome full year a and Justin, include year revenue call. for earnings of and we which for and pleased share QX the XX% Workday's XXXX I'm quarter metrics, XXXX. delivered results subscription solid outperformed against fiscal fourth year operating key financial quarter and fiscal to

unpredictable, While the to us turn macro and to more and proposition important only people their help adapt environment most as them continues getting value be stronger their is Workday's their finances. to two resources, manage organizations

feel path a in thriving our As our result, continues billion to revenue and $XX customer beyond. grow and to community

address milestone to in core In X,XXX ability fact, the our offices needs the those with achieved we a customers, and platform and being HCM true testament to than mark finance XX,XXX the the the a of surpassed of CHRO power significant and of our for Workday QX, we more as customer the CFO.

billion of with processed the were an fiscal Additionally, and that reached. Workday in approximately XXX transactions of proof XX% XXXX, year-over-year scale had further we year increase

we on made, to some phase our of will up for moves organizational that all recent leadership one highlights, share we Before and us want touch growth. which announcement set QX help I of several next

since is With perfect one to a which his December. and been a lead our sales experience culture, us forward. finest is has fit and Co-CEO, for scale leaders values Carl commitment in as in and Carl first years, and to Workday of help XXXX, The XX the of operational has Board technology. announced enterprise Carl past appointment we Workday the been the member Eschenbach and

and the involved while technology employees full-time and Chair our At of sole of as product with I will all the our XXXX, and end a assume fiscal expected of Chair is teams year our Executive responsibilities, to stay Carl Board. CEO

I'm while alongside our and on Carl's cloud to and HR him we transition in as to forward position into as going strengthen leader work excited the building continue Workday the has momentum seamless our Co-CEO been grow finance. role in

his work also to years with nine Co-CEO. for years last I Fernandez during into the want the the company and significant we He are two in his thank Workday who did to want and for acknowledge as great role played I Chano a shape today, him contributions. helping to

has Workday and joining elevated our been Doug platform Workday Chakraborty, led Since Technology, more Sayan strategy, ago, Additionally, driving EVP enable than behind Robinson. support and expanding years innovation our force to our Co-President of to some evolving scale of Sayan alongside the has been intelligence to and Sayan a seven and foremost Product world offerings. will now technology of organizations, largest it continue and as learning world's product is and the organization his relates the as one to our Co-President. and lead of we to leadership recognize pleased enterprise efforts artificial the machine the experts role are in organization, across to

who assume Chair. to that previously of leader now and and CFO in further work was will office With will as before our role team with this Co-President Robynne sales a Sisco, Robynne us global the our finance. build of on the the Sayan Co-President with CFO, role, stepping closely cement into cloud help Vice Workday a In role, momentum

to technology member leadership to the and invaluable than to announced XX and more our related been has recently newest Salesforce, of perspective leadership software we of that Mark at Board of our companies, last bring experience Hawkins that most With will Board. Directors. experience today pleased at global The Workday. share update Mark years as elected is I'm finance

roles restructuring global workforce. that of of to January, X% Final announcement a the across led elimination which our of we impacting to I highlight, Workday the of about want realignment some teams at made and end was

those we areas growth help people While up to see business difficult that of this align decision strategic our employees Workday under set for to leave to to ensure circumstances, always the against it's made for and years is the most resources many come. continued

restructuring to a strategic not and affected initiatives. in fiscal cost-cutting for roles best hire the severance them treat our employees move with absolute packages. was offer and effort, continue did we to we that our process, this XXXX support compassion Throughout will year This generous

some product I'd drive like and quarter. world. and and there is innovation more focus XX us perspective, AI future of into our around embedding than that, and to employees an to our With enabling from continued the highlights for the platform From the customers ML finance core on technology uniquely the share of work HR are million

powered combination front, mindset. by customers HR of Skills in which Workday On and a their the Optimization AI Cloud, is skills-first is Talent to Workday and ML transition our the supporting

while is Workday's all attach customers Optimization on fastest-growing HCM XX% fiscal than of Workday Skills with new an are in SKU date, nearly XXXX. To live Cloud, of rate year more leveraging deals Workday Talent XX%

the ML Planning, to capabilities external to retailers For demand Retail be we based enable leverage momentum industries on XX% than AI organizations foot help that forecasting us Fortune such of on are as new to target build and forecast business the one history. our more XXX in And this of space. as continues our this customers. retail sales data, Workday introduced demand in like traffic will and innovations

of larger ML our emerging an in customers double announced of our fund Ventures AI work. focus expansion as to growth embracing world with We're on today's areas $XXX eye Fund. changing all further a and on Workday AI, down the such generative million to also technologies enable We to continuing help to through us

I to our in you the advertisement which all brand. to million fun on estimated XXX star-themed reached we're Finally, invest Super continuing rock how our during want Bowl, Hopefully, touch an saw viewers.

firmly stage as are audience. brand While saw the us, We Bowl services. the investments marketing known we strategic more well drive broader Super awareness products leaders and finance demand our our with to to that and believe familiar us is become for and HR help and in a

our very the capitalize long-term on confident front in us, around have to our ability in in feel we more talents XX,XXX our nature the to of growth the mission-critical thanks solutions globe. and place, we amazing forward, than opportunity the Workmates the strategy of of Going

have kickoff In today's of in our teams hosting we sales excitement all is from in incredible and opportunity of from front about fact, Las the go-to-market Vegas our we here palpable. meeting the us are annual call

that, With our buddy, over over to Co-CEO, Eschenbach. you. to I'll my Carl, it hand Carl

Carl Eschenbach

joining kind everyone Aneel, for you today. you, Thank thank for those words, to and us

incredible by of saying work alongside as and be This the company. unique world. and across to most opportunity to Aneel our companies the one this and co-CEO and by be their Workmates by software and honored more the partner call not am execution. amazing in start profitable our quarterly for opportunity largest my I teams me Let humbled Workday's could I'm first that proud truly energized of I was

built for immune a Despite one remains from, and the a uncertain environment macro QX rates we no in that pipeline healthy and ahead. is year drove strong close that

can excitement strength. Las us I position that, tell And a conference new the to the around we in respond come into from year is sales in we are as to are Our Vegas. our live to coming our heading would of environment. team annual was you we of deals all in this year prepared for scrutiny knew extra with you because kickoff fiscal the

the differentiated years, Co-CEO, than Workday's prospects of and and in even hundreds journey. value we involved Today, of an spending world. in months me compelling growth greater a around Those appreciation how partners two are. As given Board is more Workday's with have have last member really Workmates, I time had as five have for I privilege the the how actively meetings been customers, of proposition

relationship we have team It's the three our and better. co-CEO very Aneel, as I equals even a one And have is one equation. a Aneel complementary to plus while leadership gotten I really skill true working well partner sets. also considered a and know friend, already

with upon long values stood as months, the Aneel true driver and This, see the taking me frankly, and things built the and most important differentiator. my admired first culture of out, that this starting few have a role. in I was Dave particular I reflect a have for Workday. culture couple of As

at integrity. and to that values We core have six coming each But is are keep to of important. the back one Workday, I me, them

everything falls the talent by have do. everything company that away do we this and right sits the you thing, blown are If ingrained place. in I else our how into by across values been

it's With will tell Another observation wide open. is new around our customers, land opportunity. net you I

room XXXX, with great grow. new than was still a see plenty and XXX the and of validation new seven XX% We QX over of a XX% customers. have with XXXX XXX of Fortune Global Global to we footprint of Fortune the but this, XX more

Materials World, New Mercedes-Benz Mitsui HCM included the Heidelberg quarter Cracker And Whataburger. added in North Companies, go-live included Camping Chemicals. and Barrel, Delaware key we and Allstate, customers Group

National Restaurant had we And New Group, several several In addition, York Fidelity we The full and Title, once financial go of again FINS and and platform including Georgia. customers, State HCM Sanford added Panda including Times the Health. live,

our about things opportunity is that outdated on-premises systems. exciting not the of it's land One replacing to limited

has of upmarket ACV performance well In fact, the Fortune drove And competitors. our opportunity the legacy in beyond an net important ERP wins cloud XXX as quarter. new of medium the enterprise three the become our replaced new solutions extends team from increasingly driver that and record land

customer money. of adapt our who installed base strength their the them. the and to expand is This digital as us backbone our opportunity do incredible Workday important we strategic also of of an customers What's to on for what our relationships with with intelligent rely and nature people their manage and provides business

Learning, our we solid once Dominion across Analytics, an along drive we the the market and bookings, lean Truist. of office core and at solutions And of Freight, deals CFO. into Prism Engagement. in as Accounting with Prudential momentum leadership portfolio, including strong ACV added financials renewals expansions saw Center Old our Belk, quarter, to expansion We increasing GE, increasing including drove momentum with HCM number our This very Planning, again new Candidate

Our market, opportunity has which is our forward. truly solid global. be continues QX a runway to healthy The a had going US, and largest

is a quarter have which revenue, about half a also We of our than opportunity, but only tremendous TAM. more of our international

priority DACH Services, help QX, and strategic Management we to Our and Mila drive talent our momentum building products NorgesGruppen. are number a is during is both investing including CCB of in in international and business like wins where Nordics, a and strategic Accelerating markets important that. we had

in Our a is a industry is a and the the and had of in Authority Georgia, of local continued core our including and the few. gaining ongoing New to of at key wins state part name government focus York verticals strategy. addition of had wins momentum, in number QX, it Boston, at Charlotte City State City where we the City of Housing to win We

continue new in expect fact, local our In and to doubled from QX, than teams FY ACV year-over-year state more traction XXXX. and our in we

our next to ecosystem be of Finally, will phase growth. our partner critical

Our partners we the from of deployments customer an today. where They the us our incredibly vast majority serve and the as get important global are system boutiques have of drive been integrators source to to co-innovation. important to

this which is community. our Workday of X,XXX One across they the production over Extend, through in do ways now applications customer has

We expect an our as for increased play more our them more XXXX even new of look number opportunities, important to we to ecosystem. strategically partners role while will we in drive deployments FY customer an shift

We win-win. see this as clear a

more also technology I broader work partners. on of focusing across SVP infrastructure our our appointed with our which and Partners, our efforts entire are example journey. of Global our newly alongside Officer, Brandt, Chief ecosystem recent relationship this formal excited Sheri to We A ecosystem motion. Rhodes, our great go-to-market extends partnership am ISVs to and a is Matt Customer AWS, our and

rooted we winning strategy industries. clear our have our XXXX, in FINS a is strengthening leadership across FY into in key in HCM which market place, Heading and

the in relentlessly of We as work of machine focusing evolving key customer down on strategic base, the our innovation, are and focusing shaping partner double such in industries, including to learning. our on optimizing to areas and AI business growth ecosystem application investing and future our in investing

right right engineering add to plan as strategy part wave we only is continue capacity key of talent equation, which position of next in why the you is need the the Workday Having also we the growth. for to sales people,

in Doug role We as go-to-market to responsibility functions. also some will execute continue and will changes recent all strategy. be our that us leadership our to now full his Robinson strengthen has Co-President critical on made for helping bench

external Chair, As Sayan year to a a us on Head North opportunity. around and across excited squarely to who Co-President, elevated Aneel now has global Patrick joined is helping America Robynne Workday been of run mix Sales. Sisco mentioned, Chakraborty and who elevated Vice focused His to FINS. talent, ago has Global the been to proven will talented added sell as rally also I'm team sales, also have veterans seasoned our of serve regions recently Blair, our

an It's Workday, inspired by be I'm journey amazing the and time and so incredible ahead. to at energized

thank to revenue we normal the cycles, opportunities factors taking longer continue see than to close, new primarily subscription And delivering I FY to are prudently road positioning margin business when sales net While growth of look environment quarter improves, plus and you XX% many the you to the support. while this guidance our revenue subscription return we certain in. the simultaneously in for forward expansion. meeting XXXX to your on ahead,

With over that, I'll over Barbara. Barbara, turn it to you. to

Barbara Larson

our I Thanks, I to incredibly Workday journey. Carl, speak phase and I for on of with the the welcome. excited you broader say that know partner growth next I'm organization when

and a organizations across As Aneel had with times. driven combined execution the finance and strong solid we mentioned, for close Carl durable to prioritize solutions company, the uncertain as all sizes, demand during year, HR these our by modernization of

XX% QX was billion, Subscription year-over-year. up in revenue $X.XX

subscription and year, the XX%. million $X.XX was million year. XX% QX, $XXX revenue $XXX Total outside growth $XXX total US QX services Professional of the million revenue full revenue of was full a for was For representing revenue. of the for billion, also in

over XX-month subscription XXX%, renewals, in at was by over result bookings retention the of new rates billion, net revenue respectively. and end XX% fourth and ACV XX%. up growth $X.XX strong was the backlog revenue driven quarter with solid The

was XX-month Total In backlog added percentage QX up revenue to roughly percentage end at upside backlog point growth billion, addition, backlog X the total X points of XX%. $XX.XX early renewals subscription roughly to and of growth.

income discipline. driven a workforce upside January The non-GAAP was Margin resulting the for our overachievement point operating X was of realignment announced the and which of fourth margin by non-GAAP cost end margin, million, $XX non-GAAP the quarter, revenue quarter operating non-GAAP or continued we at in Our QX XX.X%. to $XXX a million roughly was in expense was factored percentage guidance. headwind into of most operating

billion, operating representing non-GAAP year, margin was XX.X%. $X.XX of income the For a

operating $XXX growth XX%. cash QX of was flow million,

result a tax billion. impacted reminder, the QX one-time payment. cash was $XX a $X.XX million operating year flow by As IP Full roughly transfer was

shares than repurchased workmates. quarter roughly XX,XXX buyback we quarter, remaining million We authorization $XX our have the the global ended million $XXX During program. fourth under in more and in with

in and areas company-wide product the will of mentioned, and key technology, to we're enter Anil but we of a talent strategic go-to-market business, As Karl strength. very XXXX we QX, FY and fewer proud FY strong execution across add growth FY position continue compared notably planning we for in and of additions are Overall, XXXX in as headcount XXXX. the to

remains business, which also guidance, momentum reflects what an to turning while the environment. both uncertain our continued balancing in macro Now,

completed recently equipment. network and we addition, of In server our assessment an

beginning positive useful which increasing our will margin, reflecting FY in years XXXX This life assumption impact benefiting we're I years, in a the to change have cover XXXX, on And we non-GAAP five shortly. from. that three are technology from advances FY will operating

Following this to QX, subscription But view when revenue subscription of a we in environment billion, preliminary as XX% mentioned, of to $X.XXX Carl and as a our revenue improves. midpoint to representing narrowing the We maintaining solid range the context the environment. billion growth. plus XX% we're guidance XXXX return growth guidance the to XX% positioning FY the are year-over-year $X.XXX to prudent

growth. FY to We be revenue expect billion, XX% $X.XXX to $X.XXX XXXX QX year-over-year subscription billion representing

We increase in X% QX revenue approximately expect subscription by to X% QX. sequentially approximately in and

million. services expect in We $XXX revenue to $XXX the XXXX range of professional be FY to million

our ecosystem making channel. As ongoing strategically we part partner the as of shifting mentioned, deployments are are more in to Carl we investments

revenue expect $XXX For we services professional million. QX, of

to XX-month in year-over-year QX. approximately expect We XX% grow backlog

expansion the hiring, margin and discipline. primarily expected of model, operating a is expense expect by currently We ongoing of our driven The of scalability FY non-GAAP XXXX moderation margin XX%. being

result $XXX operating the useful roughly XXX and cost a server FY change In reduction a of subscription about creating addition, of will we the million non-GAAP life this basis in points estimate to in XXXX, GAAP and equipment network in margin benefit to revenue year.

change GAAP in forward, of Looking reduction to this approximately expected cost impact million subscription from is and to policy revenue FY an result $XX trend non-GAAP the and XXXX. down in

QX expect process. estimate decline approximately our our we QX We and as sequential non-GAAP of in through annual invest seasonal compensation margin in a normal people XX.X% operating

XXXX non-GAAP quarter than GAAP XX%. expected approximately lower, are be for XX and at The first margins. the FY to the operating the rate points tax full XX and remains margins percentage year respectively, non-GAAP

cash of recent XX%. $X.XX be last We full interest year-over-year a cash payment to year expect the severance occur our timing costs associated QX FY will impacted first first On due approximately billion, of offering. growth and an realignment of of did operating our our flow quarter XXXX flow that by basis, payout with performance-based the debt bonus cash plans, the not

expenditures million approximately expansion. We of continued expect in FY capital support to $XXX business XXXX our

customers finally, and and continued by And thanking their work. for I'll partners employees, amazing close support our hard

With operator that, over Q&A. the to turn to it I'll begin

Operator

conducting comes Kirk At question. the [Operator Evercore time, question-and-answer Please from first a this of we Instructions] your Materne with line question will be session. proceed ISI. with Our

Kirk Materne

that get the sort into environment. the once we on in a getting Thanks that was strong what bit finish back at in much. I talk to eyes the the you looking to of have And a little believe of fresh could very to just Thanks. wondering pipeline a XX% a normalized congrats operating pair more if seeing since relatively is leads XQ achievable growth year. you Carl, you about business, you're and close

on quick Just be have Barbara. some that helpful And a front. specifics you're what then for I seeing around follow-up or maybe that

Carl Eschenbach

all, thank of Kirk, for question. Well, the you, Sure. first

I by world thank the start the FY strong setting around strong a want a us saying of for to to for just up year delivering XX. and me Workmates all Let close our

to the announcing you strong, As CEO year middle your always of our at in is Kirk, time just finish we that. quarter, and QX, biggest was know, talked probably priorities we And the about not transition did a optimal. that

quota-carrying go-to-market see environment getting about technology. both what invest investment in think to on reps sales plenty far additional side and with opportunity in in capacity continue a continued business, we product of in seeing as well we're as the to XX% the growth, back as As the to to

international key in I yet international our business have role, guess, in XX% only continued A couple business, on, greater TAM. opportunity APJ. Today, is of and now, than see coming XX operation, insights of it early of EMEA our we our we into over represents in XX% from the days both our

EMEA have markets. big So Patrick respective we Doug strong a did what brought and leaders brought our in we is there. in really opportunity And see And in additional top in we under leadership those even strength actually APJ. both and

this job base we into think on we customer we're our further can to a did in down going of. do We into FINS base also rich into think our selling opportunity. well our FINS sell We We both new. see solution, our net to even more that's a double opportunity, a with HCM as QX back something and nice as back lot

the Kirk, there's going I'd is then plenty ecosystem. to thing, And highlight our leverage to more, we're last continue although

job, implementing they just Our them new as overall. also plans going world are partners we're drive as us build a with the business new business, implementations, new so well customers drive doing great technology not net base work around to us help and into business deployment. but driving can net do But our help to the

to then able the that they with to us, allows a sell announce be leverage for first Workday thing on their platform spend to And marketplace, were solutions. allowing last time, the today have their partnership AWS excited the technology on with customers our we to through AWS ecosystem,

an aggregate be over when time, favorable, to on able growth back side. the XX% subscription to turns get on that's So more think the macro we we'll of depending why

Kirk Materne

sort and maybe Barbara, correctly. see margins seasonally XQ? risings I just on because sequentially between rest the thanks XQ, for terms just XQ, or more and commentary XQ Barbara. super. assume flat thinking it -- in of we're one should XQ, we expansion That's real XQ in just a quick And flat for the in of the of about margin

Barbara Larson

right. about sounds that Yes,

Kirk Materne

Okay. all. it. Thanks, great. That’s Appreciate

Operator

Goldman Kash the comes Sachs. question question. of next Our line with proceed with Please Rangan your from

Kash Rangan

and are you is, get maybe customers, Carl, or Carl so much. Aneel, the with I you Congratulations, Thank speak one is from the worries, of conversations key is question themes everybody to et you rate targeted given are your prioritizing they're particular, worries, in of since software, only conscious recession. emerging as Barbara. Workday, cetera? risk how a what that for the also in investments respect X.X. One inflation with And

foolhardy models as through our building your But cycles might But much. all think Aneel a high are so from to that we hopes before increase in be could career, percent environment been what conviction very of at looking a are you things the I could are entertain you increasingly although the for mentioned, terms long recovery? that. XX-plus go it you've better? teens that your what of in gets since multiple that the when could Thank little recovery, to signs that you're looking a be

Carl Eschenbach

today. us our Thanks. who's call Doug, I'll joining and on Yes. to here I'll turn the it start over then Co-President, off,

in So first, people driving and their that. looking and I their companies Kash, the think get value in of we're out to more financial continue financials at say, a is core of their I'd both both prioritize to HCM Everyone and systems, transformation. digital

reprioritizing they're going is their where to it while true, make So investments. customers are

the the term early I of midst the now. which of we digital of being that true us we're five quarter, the including it's last the list legacy us, in our talked XXX seeing on-premise beneficiary do cloud replacing a probably think wins that signs seven about is happening wins the Fortune wins had for the we of top of or move a global those by solutions, transformation, competitors' a And XX in years, right had XX all transformation, with to drive XXX but we we've solutions. way, because And last legacy Global just three XXXX. Fortune replacing weren't came we of number

good So sign. really that's another

not When And HCM to the it's when at of they're forefront going the rates actually moving while the or we at quarter, look doing to get and win things people And just faster a opportunity be move FINS, are that. Kash, are opportunities. when true, we're cloud, cloud to two get look. additional whether it win other to any look, we have discount it's and then improving, is last than to people ever, a we we they're our seeing those the

positioned because sudden, both get of we're the and the interesting So drive opportunity digital here, clear we've their that's their with that focus help digital And we of all customers in think we're systems. it's transformation the financial transformation clarity. happening. their for people on well seen scarcity, to middle And unlike it's them a before to

Doug Robinson

of the Yeah. highlight Doug you. There's for things Thanks question. Hi here. Kash, I'd a couple for

The first hearing and -- customers what the question executives. went from and to are you

tight continue. markets first is The labor

so back the and And jobs I you see retain get how turn increasingly do for company CEOs to positioned the reskill, of tomorrow.

those XXX those shows familiar it so in XXXX. seven And think, wins, there, Global up, some and XX it's I themes up, showing Fortune

give of make the those really models, be your to you then entire about doesn't for level talk able to business enabling over business Workday you on really the CEO business FINS reinvent model. at it, technology the -- And, to of And the course, time. agile, driving we an side changes there's reinventing but

say as that, do I'd we signs And we duration net relates it's me, thing for last look as starting the question about it And the cycle what of your you track to new. on when to it. come we're sales out To over industry, And by we'll go guess, and solid size come we're we And down, that a see geography. pipeline position to up seeing when XX%. I build. think be by right what in might by is of start now to company,

dealing those elongated some cycles So in with but we're with of pipeline new we're build, the space. pleased still the net

Carl Eschenbach

is Doug, thing we best-of-breed And tailwind, both of to buy platform there, headwinds, buy we for and they the other core today, HCM. best best typically add times One customers When want to of suite. Yeah. see there's solutions. have FINS during

see consolidating we and infrastructure. your to on look to as own in before of more than more their efficiencies point, So platform customers, drive our ever they seen we've

Kash Rangan

Doug. you, Congratulations. Thank and Carl

Operator

JPMorgan. Mark your next Our with comes from question Please Murphy question. proceed with

Mark Murphy

much. very you Thank

is through or through so or And industry, really not we a compare where XX just that's less more software you? the help of flowing a forefront of ability points think a or there factor many growth do where the revenue of little Workday's a diversification labor is XX function or Carl, you around navigate companies growth complex by it's much. of driven rest by companies suffering it period to quick XX the for have to the type slowed look and tech the the verticals has some there's to follow-up. think So resilience I Workday's market, their industry, more Is this If very more. reliance other I across coming on or kind have you this of

Carl Eschenbach

the hand it some Yeah, make Aneel and sure. comments. question, start, then Thanks over additional to to I'll for Mark. I'll

So of companies differentiated of think peer is our allows in us so the business out the be the there first, group. our diversity to what I from rest

across What landing a get We're I and with back by base customers. mean renewal all to verticals. large have rates. high selling is installed all We're we into new industries that that net we sell

there. our So is different business most the than radically of diversity people out

we're basis, of we predictable. renewal other I have what and you When is think Street hit to consistency. the in also, can on a have with quarterly our we think rate really the all deliver quite thing that a dial we -- business like in is And to you going

our in diverse are we business. So

any of solid good our good guidance. rest as our cash the margin We to And in think weather seeing we're is headwinds and can industry, growth model I compared going XXXX in we and which reflected business forward, good have the potential flows. just with operating FY durability

some maybe question this as Aneel, And color add like well. you'd around to

Aneel Bhusri

Yes.

are is, part just mission-critical. -- proven to out applications other be the think they're I our just

systems when during apps some downturn, And mission-critical. of did just doubling not well you efficient on and viewed that years last few I a the not based -- of and business. lot it's the becoming a a But record. they're more they're a beneficiary And are our companies have we're as on it supports downturn, sticky down those that, of all of during think very

Mark Murphy

the in sizable ago, here of some very think have you pipeline, or Barbara. just XXXX. And the deals as quarter FY to look follow-up Excellent. you a quick I continue a seeming into which might mentioned of for two trend Is these forward seeing planning

Barbara Larson

want Do you plans about pipeline. the that It's in one? to the take

Aneel Bhusri

Planning do coming. more Yes. we QX, had -- of planning in it. really we take it I'll a Yes, and was see performance strong

follow-on In is fact, the for other of there's fiscal in capacity a the Accounting Center, first dedicated areas to customers the making nice office one, planning Prism of ways: help are and convert some two financials, the year the this core with we're Analytics, changes -- of those customers sellers CFO. into to planning that or sales solutions increasing two

actually opportunity then increasing earlier. highlighted the second for the as we land Carl as business capacity that not planning is for dedicated that And phenomenon that's sellers see And a sales US there. well, Adaptive. just We're internationally

Mark Murphy

much. very you, Thank

Operator

comes Please question DJ question. with proceed next from Our Canaccord. Hynes with your

DJ Hynes

Hey, thanks any put large the question. if being very of for signs much additional hold. seeing taking projects Curious you're on

is if starting influencing kind that's the the I up curious of to something in show think kind of ecosystem or event services broadly a little last was bit a disruption, a handoff implementation with about one-off bit more some the cycles? numbers quarter, revenue that guide. But understand talked we

Aneel Bhusri

you don't why one? Doug, take that

Doug Robinson

projects. stoppages I margin seeing understood more think for Yes. leverage. for -- operating looking productivity not round of approvals. do CEOs companies of and are It's I question your trips -- are gains about wholesale correctly, They're looking And if

getting investment extra every so, And is scrutiny.

customers sales this I that, one really our a that frankly, great the job line. is quarter these But pure really, to anticipating close time cycles net large on think And new in of team to transformational the of happen, longer projects. no think our things solid those business and this I'm year quite a in question, take projects and over of proud the conjunction did in get cases I building bit of with

Aneel Bhusri

Yes. our and world, The around and prepared Doug the level rates would up thank The a deals only -- scrutiny, couple forward. I'd we these in thing we anticipate add of we that taken get to deal teams we extra notches in, if saw QX, is just, inspection close and of like Patrick and of QX that it. and for the were outcome the we throughout you knew will, was going had

DJ Hynes

maybe more And got for then, you. it, question Doug, a strategic Got it.

AI about into Is I evolving conversations? right? change their and the in become much with or to And bought organization, partners? leading to we right, strategies, playbook like talk you ML as like, adopting Just technology to guess a kind adoption, I'm accompany how of your has how customers curious, they're skills-based deep something management leading this this with go-to-market or

Doug Robinson

And strategy take to cloud, great done, the be is in the to an more that's lot. skills and work itself, around is a question, think really as upfront, advantage I enabling and there answer technology. of of a

us to who all our that so, that know important change XX profile-based talk anticipating really years you and out year that look bringing years to lens to opposed you've their your set, are with this now skills now, we some how beyond, how analysis of growth global well, as are the and IP of too needed about the through skill five skills GSIs heard large where teams. partnering from partners And management just and and skills job around build from or at of to are

hand-in-hand yes, give to solution Aneel? to goes customer. needed a it So to are add, guys you Anything both complete want and the

Aneel Bhusri

the the a But process. not enables coming looking other It's it's you just do doing it skills-based world. say forward in two-year simple journey. business I'd everybody business a end, to to to way out is one the

investment but done the learning going they -- that to partners, they're customers of But it's their and a Accenture, point to it and biggest have for our our so I think customers, help one big is own one the HCM and well. around organization, payoff payoff our I'd as And huge. it's biggest of using this do

DJ Hynes

the Yes, makes color. sense. you, Thank for guys

Operator

Please Turrin Michael with from question. comes with your question next Wells Our Fargo. proceed

Michael Turrin

target, of as kind billion opportunities we leverage you job year. helpful? the Appreciate the Barbara, Thank operating scale, mentioned add impact Hey life anything year. the thinking to great. XX% and closing in margin the longer up about Thanks. for and out coming you. around taking question you how views brings change is expectation margin just $XX XX% longer policy you you're that in nice accounting, in for can Does the the margin term useful versus the given or term trend line near-term those, towards

Barbara Larson

so your thanks question. for much Yes,

operating there's So, change no target at to margin billion. XX% that $XX

for We positive outlook, at that we haven't time. a in on When it updated provided our framework time. this in useful that we weren't change medium life impact impact factoring margins, near-term over this reduce the term will assumptions. our And while has

we opportunity driving remains Day. see operating drive the margin profitable described exactly long-term term. to that's definitely over at our non-GAAP we and growth, focus what XX% Analyst longer And So, the on beyond

Operator

That’s all the questions from Michael.

Our from Weiss your proceed question. the next with Please Keith line comes question with of Morgan Stanley.

Keith Weiss

question. guys A you, couple cleanup for Thank questions for taking kind Barbara. of the of Excellent.

percentage point the from unusual? you of missing benefit get guidance XX-month -- to backlog Can mentioned to talked renewals. their Because is X early about You that talk one they renewal. your because didn't early the peers

So, to what those they unusual? kind early your of were in what to or renewals extent were expectations, already extent

XXXX Like guidance the And other to saw to on Is forecast, we of that push there XXXX the then early the we to that was or range be some we about the or that how should side be is pulls a conservatism the other there XXXX QX? of XXXX conservative two, are like it guide about? and you more the considering? adding in on sort that, should of after from outperformance factors renewals thinking it more the should of to think tightening the the

Barbara Larson

So, take first that ahead early let question go on and renewals. me

healthy as customer Workday the footprint. base early. And as added to their QX new part had of in renewed SKUs customers we that, many customers activity So, of

we around move that strength time-to-time, wanted just the of and base, but And larger so customer see we we out. quarter do a this impact sure renewals called from with saw to make

question second of XXXX $XX QX, we after Really range for year. that into and a the next allowing revenue narrow that to our subscription $XXX we maintain our into subscription quarter. billion down going last midpoint what's solid revenue, visibility your around guidance million FY million to us more have On $X.XX shared

consistent the still what prudently early uncertain last the the So fact we've guidance the accounts that couple and for very environment described quarters. of the in with year, and over remains

Keith Weiss

answers, to big one Carl. my go-forward And ton we a for investors what question sense. it. on the of lot what from Got obviously. And a a maybe should question been or have big Co-CEO you. that opportunity can But years When improvements company I'd the is, Carl think the impacts basis? Workday makes take mouth, three on at make next horse's have picture from to love hear Carl I've That or role, changes A are this changes and whatnot? you expect getting you I of or big Workday I'd love from look the big sort the what but from hear over or to you can on to year

Carl Eschenbach

Yes, sure.

of So a couple things.

is a had would opportunity. is I front the Board being anticipated. the the what member, know, probably good say row the now Workday, and full to I a five seat I almost right, So as quarter, as opportunity And you and had a a last on even years Board business than of I model understanding bigger

a is right. company things doing the said, lot of being That

our year at full for last the results look for Just QX. year, results our

special. Workmates and done So with the have team is our pretty executive

growth forward. to That us back there a being said, I've mentioned earlier. them to of are that opportunities get going for couple XX%

years, foremost, sales, doing He partners, all under Robinson, and the perspective, first So consolidating operations we're is before around industries move. and up. responsible I a one from things been of Doug now including everything good who's for go-to-market here was XX-plus that our a was think revenue were go-to-market broken presales, for

out And efficiency am starting So driving the and I across to that play organizations. see across already. we're on focused operational company

tremendous earlier internationally. we grow mentioned to I a opportunity thing business second I is just the The think have

where Our is really should focus don't it on we're going performance to it. think internationally be, I but

also across leadership and in new have in place, we're different that's I level important. and APJ. We execution EMEA of drive both to think going a And

highlighted the QX doubling last workforce. our thing, doing Aneel ways our to here as looking myself, and and we're and for of optimize one in things technology. is both Barbara And we're The product down efforts on are we

who those technology belief So that when to and is quota-carrying will my and go-to-market, personal invest we're around challenging be we And we're innovation. And it our today belief emerge and side to and specifically can continue are fastest on in focus other go-to-market growth. on like the investing capacity. innovation in markets also potentially the faced reaccelerate heavily

areas we just about ecosystem couple number along what are So us, spoke and of including a I a mentioned the other earlier. focus things, of for think there Doug with of

So there back us near the things that long-term XX%. drive from of they'll can that to think gets in us some I the growth expect are and durable term you

Keith Weiss

Thank Outstanding. concept. you the for

Aneel Bhusri

Carl definitely things. can go-to-market I add If innovator side. other an couple of the is a just on

entire say, think some And we raise of sense giddyup. differently. us the approaches it's of He's can frankly I'd here. telling And new happier what learning he's just I do energy and the all couldn't team. have I urgency great, level myself, management so we're on to including And all and be more that

Keith Weiss

Outstanding.

Operator

more questions. And take two we will now

comes next Keirstead Please Our question from UBS. your with with proceed question. Karl

Karl Keirstead

most macro, good. is Okay. the CRPO CRPO is not but Despite or recent the XX%, actually to like a Great. XX% quarter, I've sub-rev there today growth like perfect, in guidance got revenue the from decel relationship at implies two a XX% between for second Barbara. champ half. Barbara, low pretty tomorrow down hanging subscription growth XXs. XXs and on your But all the it's your like in this

guidance that in for just the there go-lives getting you maybe something within that still are I'm flag? months. conservative, I'm extended that might are And would somewhat growth but relationship At curious, sub-revs it your makes anything maybe missing that be? XX why blush, explain would but looks the first Is

Barbara Larson

backlog mean you of the revenue isn't at including growth due renewals. for in perfect subscription No, to I beginning, I reiterate said that factors, timing many which just keep the mind a future would proxy what

is upside at the XXXX it and out, does to subscription of macro roughly it time, had environment, revenue growth. view X QX underlying impact guidance FY our the renewals point a though As uncertain. factors percentage we backlog, not remains we the our in best early subscription prudently called revenue And think XX-month which

Karl Keirstead

guide, growth. improvement more bigger in Barbara. -- there your cash -- operating operating on it percentage Thanks anything XX% to anyone's modest your think margin one-time on between if your think asked if and don't you're I that I about quick a guide? or might calculation the margin to helpful, but spread That's expansion? factors cash flow flow Okay. of guidance more operating like a I somewhat suggests And highlight of operating could, that sort XX% then guiding implies year-over-year a flow modest a cash Is create lot. Any increase going

Barbara Larson

you’re welcome. Yes,

looking occur associated an with the recent the margin, flows the change cash company-wide impact interest at flow. and that So we the bonus, on keep first equipment in in last expecting offering. useful the the then didn't flow payment FY and cash expansion performance-based then you're realignment XXXX a but full an FY life payout to year guidance XXXX. QX server are impacted our mind that impact it in And that both cash due does reflect by has costs does But timing also it strong QX the cash debt when margin not year-over-year from severance standpoint, and our network of of

Karl Keirstead

lot, makes All a Barbara. sense. Yes. that Thanks

Barbara Larson

you. Thank right. All

Operator

comes last Please from our Wolfe your Research. Zukin question. with And question proceed Alex with

Alex Zukin

for Carl maybe cash I flow one thanks on and Aneel, and Hey, just a the squeezing guess then for in. question. follow-up me

seem They stabilized, the getting If things least you the kind aren't of you worse. macro other demand where commentary on at think some now like are environment, stand companies. environment, from from we it and have back about right based does seem progressively to

do is new phase feel any in signals other As data or trough rebased or the get current what lot. is we a the sales you question that you a And give on this net or cycle, configuration, one a Do digestion net a -- points like of you we've a period? terms way basically view new at you have the look that?

Doug Robinson

going that down challenge. and inflation cliff like it's is signs the think as But a economy to cliff. control, a feel it falling and ever I a very did still it doesn't continue a I personally Fed conflicting like under It there's to the falling get think whether be economy feel really to is the environment. don't off slow continues was off anymore. uncertain to

the see been it's think getting maybe of soon, the still I it pretty definitely worse. much it don't quarters. see So last I getting for but -- I not don't it's anytime same couple better

in think, maybe you I we're Carl? know, don't what yeah, So a stable.

Carl Eschenbach

companies HCM agree ask we proposition our have you. I always I is reflected who a out navigate going do Actually, with say QX waters faced talk commentary around what Yeah, that strong But we should I depending I on with respond to question, with this you forward. we're consistently value to if FINS, invest think And choppy know technology. have there. guide. in XXXX and in it's we and was that FY inconsistent are be people continuing to able both the the -- there's you And like

of the of face So prudent staying a confidence in that our have in And course. regardless we're team our execute lot what We're guidance. we we will future. the

well. So for it's uncertain, prepared but we're as it

Alex Zukin

just years on that continue helping little extent a your could changes really And the them some It the of a coming reinvigorated of a then What it's growth does specifically growth we also like bit around a different business. key for dynamics the maybe are and year or a even community. this past? to tuning driver the driver be in driving to be the to ecosystem, them from of driver feel -- getting make one growth in GSI than the that making moves been should enabling of you're that bit be they're or to some

Carl Eschenbach

don't color. that, add and why any Doug, then you Yeah, I'll take

Doug Robinson

more expertise that technology. it going solutions industry give I Accelerators. see much loosely profound and that's think to our of show couple our A be to or openness I from under question. our great called deliver then specific IP and couple we with Industry partners, life something a umbrella we we mentioned our so to partners about with customer, it's it And should more is for. question, partnered what looking another their can this and mutual take comes really with you're put things to where Yeah, that -- in you the to when it with drive before think up Where

beyond and capabilities. drives Extend, talked things much Prism about earnings like And so which extending taking and it that but Workday on haven't call, this we core really

Carl Eschenbach

also I think distribution like really alternate made that's for for the we're AWS be well looking routes with is GSIs, to us just on new which it's to Doug, at Workday. to here marketplace, but market specific and said, announcement a we channel our the

and So partners done through driving we're on GSIs going forward, at looking in the is ecosystem both really operating we go-to-market, additional leverage that past. the which important, haven't

Alex Zukin

Perfect. Congrats guys. Thanks again.

Carl Eschenbach

you. Thank

Operator

conference. will This earnings gentlemen, and conclude your again participation year Thank fiscal XXXX on you you ladies joining for quarter us. thank and fourth And call. today's Workday's for

Workday (WDAY) 27 Feb 232023 Q4 Earnings call transcript