Earnings call transcript Q1 2024

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

Operator

Welcome to Workday's First Quarter Fiscal 2024 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 first 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

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

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

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

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

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

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

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

Aneel Bhusri

to you, Thank Justin, quarter earnings first call. Workday's and fiscal welcome 'XX

reported revenue I'm and XX% which subscription of outperformed strong quarter. for QX that metrics, against pleased include the to key our again growth a operating share once Workday results

While be the macro environment prospects we continues growth of positive our a future reasons. unpredictable, remain couple to about for

momentum full artificial First, and have a continue value with and unique healthy trust to we second, Workday to put more their a the gives start of of us better And the seeing 'XX. industries learning, got pipeline rest opportunities, platform the combined to off year into machine and visibility work. intelligence we're organizations strong to approach us the drive geographies the future which fiscal in of them of our gain as across proposition help more built and

augment comes to while ML, scrambling the When to ML risk. capabilities AI to them human-centric, informed productive, in to more approach and been think software AI we've decade, enterprise people better with a of are it decisions, on about a emphasis help differently using at company in and being We heavy to we up. world. business reduce for nearly to implementing and it competitors organizations other catch than our them many any these make make And

more that the new billion last data But our competitors into million to Two, further meaning the us be quality data three, and the on and and ML simply than firmly and have that replicate. cannot offers train way amount Workday year. to must critical believe AI core users AI sustain way. very more assets, XX ML unethical possibilities data transactions of a only we deliver And help XXX private. when of been that we always enormous us things our into capabilities we infused products a that model to Several to more models drive quantity also trustworthy, their a ML. value unified and representing have for ML differentiates embedded access to to in secure trusted and the build to most have This not becomes the allows us, an keep due partner even has companies than a over deliver their apart. safe, our we set One, AI rapidly money, us in are our leveraging allowing of it business more approach and essential customers. platform, leveraged and people

the language value models, driving to ML from AI now. identify cycle need delivering ways extract hype years. is has AI been right LLMs. Despite discussion know customers several can including the look you for recent As we LLMs hype Workday and the business AI and past We ML real our large the generative believe around and

AI skills generative using of we're cases exploring customers. help Workday cloud, behind and Today our generative variety scenes AI like a tools search the power for use while products to

For HCM and our example, financial many use within core applications. management, management, at we're content generation recruiting, talent looking cases Workday

the have and that globally. policy a about I approaches AI discussions to from believe to more updates European local state should and AI. provide federal drive with in in hear years, partnering an and is world to be concrete we role the for level Union sharing leading future policy taken U.S., the the AI continue forward in This how look at Additionally, policy thoughtful area other us Workday is responsible to will to governments AI helping while focused quarters, put, you technology Simply regulated. around we and

in core search investment the analyze comments present semantic leverages which our millions of employee Peakon insights. unveiling meaningful set and capabilities, recently continued by AI our Employee we Voice to to most Workday of Moving applications,

in for need with to searches and on turn emerging address CEOs semantic can they provide seconds buttons hot take them insights While employee help we're top to manual trends. comments is continuing keyword more Peakon address to stay and hours engagement see days, of quickly sentiment. one the today, organizations search biggest leaders Employee of analyze the to employee workplace or to

than surpassed written one million datasets comments, standardized largest more the Peakon QX fact, employee responses, significant In of world's with million survey it XXX sentiment. a hit us providing on XX as total in and milestone

For a adaptive navigate add predictive and predictive business regressors to recently availability supports is capability within produce the of enhance today's ML-based unveiled plans we additional to effectively more our adaptive help to office planning that and The forecaster, which with feature Workday today, of ability organizations increasingly next the insights creates Workday landscape. planning, in limited CFO, forecasts the evolution datasets.

Whether more and extensible open focus or providing to connected. open innovation our area an customers. us by that's for important by deliver to Another is closely to with platform value working our added be and partners

tools that For Workday simplify and our and Extend. development with continuing platform, application deliver enhance Workday we're capabilities to

For customers our example, introduced to of APIs we first extensions our Extend that ML. leverage QX to set ML build enable in

low surpassed with customers GA office the And leverage The CIO. simple integration released native to to create our AWS code drag developers easily the with code AWS. which applications. XXX a QX user to services with major of in built we decade in year. to Extend also and developers With their enabling Extend is drop We continues access no Extend plus App to Extend early follow integration, via for interface. a and integration later Builder. us be this create partnership this in functionality AWS development from can securely on differentiator a apps with with

which customers and Planning, last we developers nearly year, held with event to year's annual DevCon, Adaptive Integrations. build to XXX% excitement Journeys the attendance by over only platform, Workday In partners Additionally, with third and person this month. our our on the we're testament is of Workday from grew but earlier top conference this seeing Extend, not Prism, for a

for the Germany, on our of Nordics, and the us integrated across to recently expansion six experience customers we Alight key partner front, And in payroll Benelux, Europe, Spain with to partnership Italy, deliver Switzerland. an an announced regions

Workday's companies Workday I'm you do, for strive consecutive make. the and the recognition we values of right. to year, our do ethical by was Ethisphere. world's third As we decisions are named what's to one most pleased know guide to efforts the to In of always share that core foundational everything

commitment Frontier, removal. market sustainability our joining accelerate Additionally, advanced by we commitment carbon continued to and to

to time with more want After change our nearly organizational years we Larson, that to be family. Workday, away an making. with will I spend Barbara stepping her nine note current Finally, CFO is

in we endeavor. her but served role with contributions company. Barbara I time in her and and across an I'm Workday During her the wish friendship for grateful today. played nothing finance our countless extremely are made into the has Workday, And to the several has her has leadership the she product next company best in shaping roles senior for integral organizations,

United Zane EMC will he from CFO let and be will roles Rowe comes With Airlines. leadership and I for what I'm our at was Barbara VMware, XXXX. that CFO. to team us before as Zane And Carl Workday. more mean Zane's pleased where on new a CFO in at addition minute share to held that so Zane announce worked to Carl our since Workday together leaving, joining VMware,

year be economic a closing, throughout our of In continue growth and again rest what about to fiscal the we once prospects challenging and 'XX, quarter delivered strong feel a despite environment. good will macro

serve that changing across Innovation fuels will focus and portfolio. us today's in on product infusing who continue world our work. our backbone thrive to differentiative and continuing who organizations as of the is for want digital ML to we are Doing AI to enable core entire to

Co-CEO Carl to share turn over highlights over it that, With I'll to go-to-market friend, our good Eschenbach quarter. my to from Carl, the you? and our

Carl Eschenbach

you And today. thank for Thanks, Aneel. everyone joining

done in nine my start to Barbara she Workday her for want all I here. has thanks years nearly sincere by offering to for

opportunity roles. of grow a forward as many better Co-CEO, question, company across her to her. her drive Workday Without had Board because As I've and Member leadership a the watch and Workday help now is

her her and miss will We we well. wish

than VMware, him enterprise he of [indiscernible] I of As take a alongside privilege to over is person and of and one software. Zane believe in I of all the Rowe. cannot I we leader a think searched working CFOs better as the at CFO executives and had finest for

margin upon of our guide As next person Zane growth to perfect our and we on growth is us phase expansion. journey, of embark durable the path long-term driving the

to and months. We seamless team over the to welcome Zane a the couple next are of transition expect thrilled

teams our FY across sales for geographies, QX. well lightning we Ninety sales challenged a to some macro which global cycles. scrutiny, increased in I'm despite environment, are growth solutions, in of cases, our that continues deliver and uncertainty, and we goal ACB we QX, new kickoff, driving days key at leading their say to customer head met strong 'XX. that to cause start into challenging efforts, strong Because positioned ago proud industries workmates a to growth our as

about Aneel excited Co-CEO was I possibilities am Aneel the joined I now. any the workday the as And six couldn't Sharing months ago. is to excited role I've XX unmatched the witness had alongside power more industry. then, of better. Co-CEO Working of with chance experience, years product which our going I while even him, in be

tremendous Our partnership. complementary skills make a

I've few They last time. with partners of a of one the months around has the world. firsthand. software our the customers innovation also These employees, that to of businesses enduring potential the visits the over belief and most and shown time be meeting energy the community spent reinforced me my Workday lot across our Workday have

There are apart. keep sets I hearing us that two themes key

and to mission move that are The applications looking intelligent cost of the for Workday first looking benefit is reduced are pace is enterprises Workday to innovation footprint who that total ownership best-in-platform. and the digital is Enterprises clearly delivers. rapid to backbone from or their consolidate of from best-in-suite best-of-breed critical. technology a Workday

us. as for is XX mentioned, a Second, all AI clear a Workday's differentiator ML million and With data Aneel model. on users approach unified to over

with to positioned as be this our same uniquely tectonic through steady secure to did technology hand Cloud. are We customers shift, support the we

to highlights X like and I to quarter, the industries focus expand, would key for on partners. land, global, areas; Turning

QX and new We a buying motion our and land with primary significant geographies customers had strong key performance driver of continue growth. landing industries to our customers runway. see net Our centers, across new remains in the

are with market In power to of financial are Dollar International. go-lives, leader, where notable Crew Goods, by we purchasing sustained saw Lexmark customers HCM HCM Interpublic and and Tree, the Sporting several HCM, Johor clear customer J. Increasingly, along full wins, Corporation DICK'S Workday Group, with new Company, leverage management. the both including and we including looking momentum McLean

in Stephens wins QX Solutions, Pima platform Transport. and Global County, New full include Rio IBEX The

University HCM. We core also live go-live, including had Extendicare, Foods, Financials and several which and Fins on Whole both Medical Vanderbilt went Center;

Hotels, our through significant bring important Leonardo quarter, region ExxonMobil. motion, agreement this growth of planning-first customers and our strategically community and a Workday wins we expansion the every that way including Another into new with which is in LeoVegas drove had major healthy

Planning they customers' QX, to our is Workday Several benefits the once them realize platform. Planning including an Nature a customer, on can full first our And important Holdings are and first partner The transformation digital step DJE to companies from full with journey. we platform Conservancy. in expanded of

along success, on office adding of we optimistic sales within the momentum, initial CFO, selling year are capacity about this are from seeing focused these Fins. while the Given significant we And this early, is are resources. with we pipeline momentum this the

few. Group, and base Customers Nissan Workday across platform as in strong into leaning are to across Wins Brown name was in and a expansion the our trusted QX. include increasingly reflected IU This & installed renewals their board. Racetrack, Brown, healthy activity

solutions momentum is customers our Peakon, sales amount value and in healthy Talent Optimization. deliver as Planning, same quarter. and are seeing to Health expand portfolio, our time faster momentum close This product such of teams the to We a including that all across pipeline for create helping

Co. Global we're across quarter, a large X% team that geographies less of penetrated. seeing execution Insignia continues of wins within wins, across APJ, of including number signs Clyde leadership Switzerland and highlight We TAM EMEA, and coming major to U.S., key Financial Marine. new Nordics; yet with the untapped was drove saw with our Equinor Australia the healthy and is In early a ASA opportunity arm our than the we be massive a growth and Australian traction, In including Germany, & including for markets, strong is enterprise. Tokio together growth strong particularly us. this In our

investment building in clearly our native the also in market. payroll is Momentum Australian within

While a continue in market to in do I time we to the still of potential, after see executive full and capture spending region have the opportunity. in QX, work APJ team lot the to

at example, HCM, approach, student winning momentum led Next, I the Maryland. University wins, saw financial notable We our a the is CFO for last want X and of over a to to industries. of wins in University cloud-native which have higher critical we part Northeastern Tambellini QX according and within systems continued at with and In of industry-first market offices CHRO highlight years Group. the expansion in of new Richmond the including services-based our University Fins core education, Loyola platform and the the

I In services had First DJE wins mentioned In and earlier Holdings, several industry, deals the Bank, professional Interpublic Absa include IBEX at expansions, wins key American. Mae the Group. and we Fannie financial including services, and

be In government, the solution ERP we significant healthy And quarter Health with wins, state pleased And a growth. to we including important and had QX health local of we care, Stanford Class another up strong at named cloud by were in QX Research. top-performing expansion Care. followed a

ecosystem. industries and partner engaged a in maintain Our and ability ability our to our depends these momentum across to business our vibrant on accelerate

has in ecosystem we are greater partners more strategic work Workday. deployments been return, our to success, And even and looking more shifting the increasingly our partner to drive co-innovation we always with generation our lead to partners. our While are ways in for critical to

of As we for rolled effort, clear to program in partner place our part generation. referral new lead May, incentives out drive in which our that ecosystem puts

share I'm that And we we announced QX. AWS recently addition, mentioned, AWS our payroll marketplace our Aneel In first transaction during private go-to-market expands payroll global Alight following our to last partnership quarter, announced the pleased with with partnership had coverage. as

new XX%-plus environment in foundation FY and a initiatives. to come. uncertain, to we're our with strategic off growth continued to macro expansion many to improves return growth healthy towards while growth subscription remains the closing, and strong driving bookings, the laying progress revenue business the business when great And pipelines 'XX we In are for and positioning margin durable the for start years

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

Barbara Larson

Carl. Thanks,

and on incredible than a pass take and you, work years. right the grow fit and next He's over for But look I culture Aneel after the remarkable and CFO to know reins its step Workday of next journey. last months of the the appreciate on person to kind person I organization a to to of the a couple to an I And such pleasure me a my transition. right this better been forward I to to can't thought, back Zane. X alongside entire incredible focus person leader, phase working him much this think with and words. family. these is It's growth time the seamless ensure

QX had organizations strong execution and As a across solid quarter as modernization U.S. was outside Aneel $X.XX $XXX our revenue revenue services and we year demand Professional billion, was of and HR in their QX, the $XXX of by was million in start durable driven revenue. to finance Subscription representing the journey. up Carl mentioned, in revenue year-over-year. XX% Total the million. XX% continue total solutions

Twenty-four-month revenue ACV $X.XX end XXX%, growth XX% strong net new over over renewals bookings resulting up of rates from in backlog XX% subscription and retention respectively. the QX, at billion, was and with revenue

and mentioned, and renewals quarter base strategic the that in contracts their early elected we significant their total These expansion ahead of to the customer X the added customers existing percentage saw schedule. Many activity expanded Carl point As in backlog roughly of co-term renew to footprint growth. both quarter. XX-month

subscription $XX.XX revenue was billion, backlog the Total QX up at end XX%. of

causing from significantly backlog to on both renewals, XX-month renewals, increased benefit total grow the backlog. an see continue duration contract to we deals new addition In to and early average than faster

ramp slower-than-anticipated in the million, the income of Margin operating non-GAAP upside, by resulting quarter expenses. was operating in non-GAAP margin hiring was XX.X%. certain overachievement of a a timing first $XXX for revenue Our driven and

flow $XXX was operating cash QX million.

of cash year-over-year the bonus quarter, payment associated $XX million our payout the workforce interest on performance-based realignment. driven our program, we payments full our first decline was last debt and a As year with January by discussed

workmates. first the ended more global XX,XXX quarter with We than

across of key FY strong execution go-to-market QX, momentum the areas as for business, we notably 'XX. are we fewer technology, very on enter head and growth continue compared but of maintaining as strategic We count focused and FY in company-wide product QX. Overall, to to additions 'XX in add proud continue the to we talent and plan we're our

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

FY the $X.XXX our an to billion raising QX, strong year-over-year 'XX new revenue a growth. end of billion, of a guidance, in are $X.XXX range we Following low resulting XX% subscription

view We prudent of continue in context the to this as the guidance environment.

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

Additionally, we continue to QX expect approximately growth in of subscription sequential X%. revenue

'XX services our We million guidance professional FY $XXX of are revenue $XXX million. maintaining to

mentioned, shifting of our strategy. Carl ecosystem channel As to partner deployments more we our strategically are as part

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

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

plan We non-GAAP to margin disciplined a growth maintaining continue on in expect healthy expansion. to margin while at opportunities, and of a 'XX long-term FY same delivering the XX% approach operating invest time

margin typical at effect reflects compensation a result cycle, For QX, approximately which annual beginning took our XX%, operating employee of the which we seasonality a of expect QX. non-GAAP as of

GAAP the are margins. points and operating percentage to margins lower quarter non-GAAP than year be full approximately for expected the second both the XX

in on basis 'XX full for as The the non-GAAP an to expect and fiscal percentage at operating stock-based reduce GAAP a rate quarter of drive compensation achieve remains as revenue. expansion continue margin beginning third XX%. to and tax FY the we We year profitability income

focus speed semiannual structure, bonus 'XX from with bonus modified with on of our a our plan. payout and we FY results, plan compensation beginning annual execution program to our our align To an cash recently

QX additional payment an our expect this the FY semiannual in year, first versus to bonus make initial payment expectations. in We in resulting 'XX of

growth operating XX% we 'XX $X.XX cash result, billion, expect flow a As year-over-year. FY now of of

our we approximately In are FY guidance to within supply for addition, are 'XX million seeing normalization lowering our driven $XXX capital we expenditures by chain.

authorization We window QX buying program have after in and trading the expect under shares opens. to $XXX remaining our buyback in back million resume our

their close and FY partners I'll by for and move our support finally, continued And as we amazing work beyond. customers employees, 'XX thanking hard and through

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

Operator

the from [Operator line Please Sachs. Kash of with Instructions] Our Rangan with first proceed your Goldman question. question comes

Kash Rangan

a Considering QX backlog. is this headwinds it's macro that are and persistent, in significant the a outperformance

net powering if initiative get business Aneel. AI, new on the quick back-to-the-base One can congratulations one would the through that's team what paid? Workday And much. useful. to So I slip on Carl, to generative a and for SKU in is update how can potentially for any one you With your Thank ARPU? new Is or be view Workday. it these how results so improvement

Aneel Bhusri

what part ChatGPT then then generative the and So to follow-on or that? touch was and I the think about AI,

Kash Rangan

monetize for you can can new in to of that you the it, an ability to How Aneel, more your improvement charge a terms or productivity SKU offer customers?

Aneel Bhusri

Yes.

That general; all that have are should in customers it Cloud. is of without The in we've about but existed AI/ML. as their have it thought Skills them couldn't enable AI way be to couldn't some new think SKUs, expect that I embedded our using products and been to far exist products. ML announced big technologies ones just so We before.

say Talent You Optimization. could same about the

relates Cloud well. it example language by generative model way, are AI based of generative And as is on large great to As not a ChatGPT, generative the a maybe those Skills but AI. AI,

content SKUs generation. road. There's There's down coming the other

tuned. reviews about would we to think monetize to performance sure that about, everybody want an a could that talks ways be it's without the just You There built as make say couldn't it, brand-new one stay And product are but I example. it.

things way. it follow us generative make and doing we're rolling the see on our start You'll but doing sure path right carefully we and things ethics around very out, to AI that security

Carl Eschenbach

both It in specific well. segments. was industries. EMEA U.S. across all market to all year in It in start new business. was strong our performance you to our we Yes. It industries. it a new includes across really net was business, and it wasn't the here the net as to business across and or that see, Kash, QX, as one. relates the And new had as can ACV And saw strong geographically, all we

new installed was net us QX, is in we of the gives So sell rest to the for the customer a QX lifeline our performance Workday. business saw base in guide of the and back into. reflected both It And strong year. our and that

Operator

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

Mark Murphy

for on Carl environment, in And marketplace. on incremental just I'm wondering that where you you you announced best see the great stronger navigating challenging why Aneel, prioritization Congrats with help and planning because thank everything. and this willingness off are and dollar the expansion the recruiting surprised to as consistency. significant very buy. or market, I clarify recall there? to And skills just then, deal and so Barbara, ExxonMobil. summer. talent better cloud that wishes, you rapid products did is financials and spending this next a expansion labor like mention a just little a Can large on last you I'm

Aneel Bhusri

side, R&D that long-term funded. very And the I they're investments. On comfortable feel they're fully all

that's you think resources. to go-to-market of And it's really I how Carl. in a up question this on more allocate environment,

think you that? would how Carl, So about

Carl Eschenbach

Sure. Yes.

hiring So quarter. a quota-carrying financials. as the performance talked to we we quarter, on down specifically about significant to do around build saw And this we were number financials that because pipeline and continue really we're financials doubling And we reps. of go-to-market that capacity solid of a going saw in last around

buy then see seeing but a they come a that around also and We workforce specifically land we land prepared of both. also back remarks continue in Financials, planning. people called business, we're of our HCM in because planning, on customers right our land to in and obviously, planning. planning buy with the of back momentum lot out We

value only from that entire they got because their they more In much use that to across platform the of their year we had portion a a expanded business it example Planning, business Exxon, and they the broadly started saw of ago. that they for

planning for So is today. the a the of continue in to of financials because again, and around both planning business land invest strength see us, financials go-to-market good we we'll lead-in and

Operator

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

Keith Weiss

question what the out to really about seeing wanted there. I a macro quarter. nice and Very environment ask you're

sort to customers time when referred still But this out. it little uneven. than You aggressive contracting the year like as we last what of like deals and forward and of idea it more a seems delaying pulling shifting bit were customers saw, co-terming

of one, as on should any take macro that So the kind indication environment? overall we

And contract that canceled. the on of I Iowa wanted there? RPO ask or any or Thank just that impact out you. that then terms in got the as to have quarter about Did that a follow-up, is was already in state bookings of of news that

Carl Eschenbach

for Yes. Thanks, Keith, the question.

cycles, or described They customer push out uncertainty, specific, We're net pushed I more we're if you from by in And away. X. lot in be think even a in if cases, to which, last out but just sales seeing caused will, And new increased the cases, lengthening it's of go what quarter opportunities. even quarter. some that's don't they environment an get out, they There's more uncertain deals. seeing there some scrutiny. consistent CFO we involved a

And financial assets: that's in That value environment we like ownership get. starting people is an as only platform, we're proposition play. executed specific to people we of that the a their reason on this, their being that more And And of consolidation to a platform they one of The consolidate this because support of there's cost companies our said, we that think the to proud for both couldn't transformations backdrop. total to benefit most their critical and in two our reasons see HCM think how more QX actually continue is be with much money. is prioritize a become stronger. case and we

productivity they do what we facing our specific things, highest the the and need side. to if the to customers experience headwinds employee need at are drive to also most two their need platform, And HCM they of exactly sure and think HCM gains the make you is about to that's they level, drive on

they On to this financial on financials and nimble. much the They our is also to And get environment, forecast, an environment change today. we playing have to that to be have another in make agile platform side, finance where value in we're example They as do resonating play to and the have see only Because proposition like just why? has this the be in continued quick [indiscernible]. role able stronger.

So I is our think dealing like today. with in resonating value market there, we're overall, out but than the we're not environment a to immune that's ever more proposition

Barbara Larson

Keith, disclosures single business. then, do don't customer that mind is provide Barbara revenue Iowa. backlog on to is customer-specific And no in material We or our keep this but

Doug Robinson

of the that Keith, say the Doug quarter the I'd just business. Robinson storyline for is me of diversity here. the

it's the so sort there industry are of lot in about lots And there's macro, that of business diverse where you weakness, of where of your we're a of seeing strength. we see pockets of the do talk question. And have diversity lines that we not enough core business

And a any specific that's to run, base comment, a but back a and the of our of focus just larger think a doubling we're number I or customer from down getting early being not suppliers. specific rationalizing think play it's I of function a like of existing our do renewal about sales function that's revenue percentage

Operator

of next question question. Evercore. Materne the Our line your Kirk Please with comes from proceed with

Kirk Materne

interest the talk Aneel, you and, the the a was I of Barbara, AI. then data wondering little if on about strong of unified could model forward. start bit and explosion going Congrats just luck best around

of You product you bring didn't the you that? suite have how you if is, AI model unified versus been talk guys, the a AI much little into investing as in as you more just a in bit advantage Can generative data about while. an mentioned, have for

about in recognize realize I this when a a start we this, so was model of long-term bet more And curious the as talking do your customers product they meaning Thanks. portfolio, on bigger they're way? AI benefits even just do making

Aneel Bhusri

I great a it's Well, question. think

Prism unified them I against job it's all bring you all to model can think explain huge it's in data, have to data a it's not the benefits of HR, and the and just advantage, finance. right? third-party bring HR run are can wanted our that to but a through We we that algorithms that if huge And we Analytics. of model, data of in

data is do acquisition, lose along data way, they about to to the If been thing of intelligence the where out into probably you the lose that's dump get figure have how first alongside. kind it model a through a of all think company to lot data mart a you the and need built

it's huge. So

of But multi-tenant in the the normalized us other fashion. we huge data part have a is that's amount for

over every have hundreds million of employees transactions of and in We billions system the XX year.

the We have sets get in the against, place run think data we everybody all in just algorithms so don't for have have. that hard else, to I makes just easy on that advantage a almost one a huge then to the being it way data and it's data they where

Carl Eschenbach

the the becoming it say, teams and would perhaps a the sales much it whereas see the sales part the wasn't part pushing of a on year ago, the from a and perspective, we now customer spotlight of decision-making, I to it. value trying there consulting criteria too, teams and as it buying of so shine demonstrate

and off customers AI base of interest go within customer now, in there's years. how deeper and mentioned recommendations using detail. before, now for ML, based that doing that and about as in have And we understanding an been predictions Even done, set we've always Aneel

Aneel Bhusri

ML architecturally, other to AI something a brand piece they're ML lot trying and of and companies one the attach technologies applications. are And AI approaching to new, so as

always technology Our as XXXX. technologies applications in We've and way apply the consumer foundation their back light tool And protects really goes to we a a Internet the that way, in them that that in privacy. for looked new guiding through or secure set set. then have first born, where are data to a the

of And of forget at traditional and haven't next now is step, ML we in. almost AI value do And elements. because think I iceberg the but for their an more I techniques what So companies honing to decade tip have foundational important AI we even the better. make touched conversational we've would all the ChatGPT, businesses the and not been about it about can a

Operator

comes your Our Thill from question. of next Brent Jefferies. question the with line proceed Please with

Brent Thill

of many largest your verticals. Carl, ultimately post Aneel your to in I'd Have curious one And saw I and vertical. you are get just thoughts love services, is appetite seen the what of change any financial overall believe, on there? terms March. you

Carl Eschenbach

verticals. one Yes. our Yes, is of Brent. Thanks, it Sure. larger

about this we In crossing ARR quarters in talked $X in few fact, vertical. a billion ago,

it's note Brent, really insurance, things, to continues be though, talk of also It's asset it important industries, many about managers. to when including us and So inclusive to important strategic. services financial we the

commercial whole, We a with our as pleased have quarter. banks But across and investment really performance banks there, banks. this were regional services segment we the financial

Specifically in the out the of I U.S., best in our large things articulated there. enterprise segment, quarter we saw all probably the

what I think here services. the And regional on medium going our bit crisis expected was that that regional At the overall, of saw enterprise see fall we the But softness did a banking same be But business the little in in a in into really solid those with banks financial the performance States. time, more we in banks. business. banks, considering was to regional

Operator

Our comes with next from Bank proceed America. question. with line Please Brad question Sills of of your the

Brad Sills

is forecasting? been you're like, really those to to momentum just effort need Thank attribute this but record, the you from to? Just into underway is the becoming an less would with this deals, challenging development My a as momentum you're the sounds platform, on planning number know planning of your particular more of like it that I for of ad the question seeing base the given you. that run What segment? emphasis change selling curious seems back in hitting or you're now. forecasting macro expansion kind has that's fins. seeing years, of more need here just Is it momentum a here. been for on to is and the that and hoc for the an Or this why analytics system of

Aneel Bhusri

no and was better. And piece. question it plan the adjust do clear there that if of could just is that think during record. any I'll going product planning question and a became companies answer I were the pandemic, There's very better system faster to

is so system record. core of clearly a it now And

So from and it Carl will there. Doug take

Doug Robinson

and helped frankly, and answer, wake simple with then with workforce Workday. really with between the it's but on mean focused But have who product great that partnering is there's full starting that Planning financial that vision so a I effectiveness a setting up definitely day the team say a which every I'd with our with vision platform the setting investments a lands motion planning. closely them sales for adding more collaboration Fins-focused sellers planning

Carl Eschenbach

to I anything Yes. don't have add.

Doug. well, it said You

Operator

Wolfe comes next the Alex question proceed with Our of Please Research. from line Zukin with your question.

Alex Zukin

the the tough, macro So kind worse? And it's kind that the of not of feel kind still you the that -- like compare? of first of then maybe just any you commentary evolved around it's May, way getting did but month exiting quarter, it throughout was one would

on then product partnership a global And Alight. interesting with point, payroll really around a

where functionality? partner acquire? build of functionality one to As buy increasingly global versus you one look right or this versus versus make onto case at customers platform, why sense in the does -- to payroll, was partner consolidate versus that payroll, it partner are wanting And on to kind buy

Carl Eschenbach

Well, let's last I'll Aneel, then quarter we're seeing. up and don't payroll. follow start the your on what question, the you with and why take

Aneel Bhusri

Yes.

been good very with is field. more choices the a of every Europe a in it's building councils particular, And So country box. versus partnership can six trade-off investments. that out partnership good good huge payroll used own to our our since that we Workday. good to them, And almost are a of HR in there. country. payroll partner about get is out Alight the is every great the start functionality that And do really, what a and in the native always work we field the provide of of with be the solutions has have There integrations we works day different. do customers They're And can you very Frankly, a want and the the in partner. a ADP Fins payrolls. have to when we

for some together geographies, they up HR. to in does of companies HR expect it just Frankly, where what as payroll is to opposed these market it and us come opens

So that to we're marketplace. when payroll, not we don't able have access all

these partnerships are us. important really So to

Carl Eschenbach

Yes. change office. or the around up to we're and approval, the seeing hasn't pretty CFO earlier, very the the And deals it's anything changed for macro, QX. said clearly whether seeing as And it uncertain. two we're no, consistent. I go QX question It's including as was to level start that last all of And way year relates throughout And the months. four another the of throughout

levels going I approval. prepared fact, waters of it's said, end what navigated year. this even And we at quite is The it. we're prepared with well. pretty for for In the very choppy saw happen. They're extra think That of being these to last understand consistent teams we've these

maintained our QX that's will And guidance. year to QX, mentioned coming both as playing out also I on say, because we of with what built full it's exactly the were our guide saw be the healthy QX. the out choppy in and we see we're in year, prudent in the seeing. pipeline And the out you full of in going we for guide there, for it based we we waters

Operator

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

Karl Keirstead

But numbers be can on Thank was seat isn't renewals. you love you're seeing Maybe all. these I'd at seat an harder for the upon aggressively. Carl. base guys But for come renewals from expansions an hiring where the comment appear your as to doesn't that expansion environment But certainly dynamic it issue and/or HCM is customer you. just in this Doug to upon by

Doug Robinson

plan. Yes. It's and great question built that we a one purposefully the into

of as this there. play expect And We moderation for it year's plan did fact, part out. that some in

end customers it aggregate of as we Now the did did but than quarter the employees their that agreement, more just planned. the in at the renew the of at at moderate the time added end

deviation we it. predicted. us, playing So No from down up as had or out to it's

Carl Eschenbach

the the head Doug, you more at one acute there, The if look others, only thing add industry market, much count that's in versus is it's hi-tech. I think contraction I'd in in and

their count everyone did It's customers head renewals come doing reducing So more count we because they their is out much lot there risks hi-tech. our market. have not acute the where of other expand in in and in a did up, head

Operator

line the with with next question Our your Sandler. of from Bracelin Brent question. comes Please proceed Piper

Brent Bracelin

Clearly on bit Workday pivot DevCon. little momentum planning-first sales the Extend, particularly the heels with of a seeing good here I to to motion. want

language types of Extend? people building the Extend does And build models, Thanks. the are Workday? What now. on think applications to with customers about AI and accelerate Extend XXX are exposing app you with run opportunity as potentially over that crossing large You're

Aneel Bhusri

called that basically, now custom Yes. it's applications either usually the or in I'd say they into apps Workday environment. are that that want wanted that They're the they customers finance HR had Extend. apps most are before to move that build to of are

in updated just them the where next it same also So those move by helps applications the and getting Workday. everything benefit they applications forward and of put legacy retire the environment get to version

a was the you is doing. And we announcements, very of probably AWS said you enabling at ML doing a we're about with we're the of DevCon, opportunity. what AI ML it's what think was made development. made of That and announcements AI if we And lot what it most exactly huge. exciting powerful one So around and at And was DevCon. course,

application suite. tie Now into the people and rest have of AWS of and through Extend can natively top build their on represent Workday it

of our footprint. presence And I customer have best-kept think in least Extend it's of see their for Workday one is at secrets. every how to some hard Extend to shouldn't want still me

Operator

two take questions. more will We

question of Fargo. Turrin line Michael from next the comes with Our Wells

Michael Turrin

You're above that a growth, to number. still XX% return but about talking

to around the the timing out on on congrats we on transition Thanks. Maybe mindful year? team full of you on expenses you the know far? seamless XXX through any there's drove of how be the margin, of And good in in So basis I transition holding ensure the mentioned some year just some comment thus one but for of just should modeling expenses, that. Barb, anything rest maybe, a given management items further points Barb still guide. outperformance quarter,

Barbara Larson

for the Thanks Yes. question.

QX outperformed We margins. right. You're

ramp slower-than-expected expenses. Some to certain was of a timing hiring also due and that of some

year. the in early really it's So

while We business this have healthy where to durable margin deliver planning also the of growth a expansion and help of invest year. we're long-term areas to strategic lot looking growth, sustain

over and transition, person person. the team. for And well in Zane him making as as I the a known reins the Zane couldn't on for possible And terms as as end of of think of better July incredible to I've as and the hand to. here I'm personally. smooth seamless through an focused this is

Workday hands. So good is in

Michael Turrin

be will Barbara. But missed I will you add,

Operator

from of Canaccord. DJ line your comes Please with question question. with last Our proceed Hynes the

David Hynes

that's on we've leadership Congrats don't now. you're that on place in one think Maybe hit with It happy yet. the the like I international. results. sounds

start you've filled the in in about international. most in you of and Maybe you about that think talk be past, product I where that gaps the internationally. see opportunity jump you to talked process could to are just a some kind need bit markets little what maybe

Aneel Bhusri

want You to go?

Carl Eschenbach

Yes, I'll start.

yes, look TAM. our So big that revenues question. and market. come from we come going And to international lot of about at only expansion. our X% this from us is outside a our And And you talk quarter thanks talk the for forward that's TAM our always the going is for total And TAM. XX% U.S., it We here. it if a of we're about focus globally, penetrated our of only half of

about leadership Europe, talked of changes traction see made, last specifically, Europe. quarter, new and really starting number we're In a to in good we we

continued. about In fact, quarter the leadership we talked last

of amount has two team in we time right super hit brought now. saw in new a both so Just leader they're quarter last in last the the number markets. U.K., APJ as ground we that and week, and in new the France A leadership well there those us in spent team tremendous And a leaders, in of doing well. opportunity

partnership data about in can at over We've example presence in forward our payroll get As expect to built in to talked Germany, the them it us more centers relates earlier And going the us last in product, look of additional expanding to out international Alight, markets. you with in partners Aneel our ecosystem, an to I think Australia. the also year expand our market. Singapore,

partners. our a rolled We referral out recently just for program

that APJ. of So if get paid. also going EMEA. new We do they and in that bring see launched opportunities, that we're to some we they'll And us across net

we're functions signs go-to-market, all it's early in ecosystem. to product So with our of the across both and going international the to pleased come transformation and going the some business, of market we're really of the

Aneel Bhusri

payroll chicken-and-egg -- is the that a it's it's there we But investments be the investments where Japan is of a Yes. should some a lot the where we And year. gaps doing very we better it add just that have once markets. required a Korea. jobs and without Japan to a And change international pipeline re-recruiting They make in, capabilities. we in capabilities for like as I a a for business those we're solution And the of better can unique thousands the almost will product the been building, process teams. have are pipeline, lot sales those country fill process. a for the and is would big it's thing, making haven't made people

Operator

for you Ladies does your this participation. today's and gentlemen, teleconference. conclude Thank

your this have disconnect and a may You day. time, wonderful at lines

Workday (WDAY) 25 May 232024 Q1 Earnings call transcript