Earnings call transcript Q2 2024

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Operator

Welcome to Workday's Fiscal 2024 Second Quarter 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 yourself to one question only.

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

Justin Furby

Quarter Earnings Second Call. Workday's Difficulty] Fiscal Conference XXXX [Technical

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

take will we remarks prepared Following questions.

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

regarding we want include emphasize particularly to based are uncertainties, differ our materially. some get financial cause have of could our and of our information today as we actual statements customer assumptions and statements Before and to statements applications, started, forward-looking guidance matters. on we results that other risks, that are demand, on call, results, the this to subject operations, These

we fiscal information the those including uncertainties, quarterly filed Exchange in that Commission, Please most Annual and XX-Q XXXX from and for with additional forth on to differ the refer to the documents release Securities our statements. press on on such materially Form set recent and may our results risks, Form Report report cause XX-K actual assumptions and risk and factors

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

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

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

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

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

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

Carl Eschenbach

am XX-month growth I of Second that delivered Quarter pleased non-GAAP subscription XX%, margin to and another we Call. XX%, Fiscal achieving Thank solid 'XX backlog Earnings and Workday's of welcome of quarter, to you, XX%. Justin, operating report growth revenue

see driving us around the job, in of result our While world this in we customers staying scrutiny, beyond. did strength remarkable quarter's the to close in our the positioning continue to a and for year second-half workmates deal

Workday continues to the a for stand-out from key few crowd reasons.

the mission-critical our of platform. First, nature

to their our at important now more most representing Our XX always Workday, customer contract users of on under in earn their customers us are and the million people core manage relationships to we is Trust two assets, than because they money. will all and their trust it. work

and value experience solutions strategies, Second, to technology as great platform, talent strengthening platform. productivity they Workday can gains, their same a drive all agility, best-of-breed businesses from skills-based our footprint at the is consolidate trusted to true a proposition turn employee time. is a

is Third more will Aneel ML. our and share unique here progress on AI shortly. approach to our

not stronger Salesforce finally, and best And our only companies culture Emma as is across a attract Officer. Marketing only which continue to all has Chief extensive is recently talent, at culture winning she marketing Chalwin welcomed as getting global industry's talent. and we facets but Adobe. great fit, of like experience Emma We our

us Government in our We of another team incredible organization efforts. our also U.S. Executive and services operations, Head our scale in recently hired Federal help a an sales go-to-market and Senior to

of leaders welcome growth. CFO, today achieve our you is first know who all more excited our existing joining team who could help for our next to call. Rowe, these I course, Zane will with along not be his us of earnings And us phase

the platform this expand, on technologies, University key build five Fresenius, position land, HCM and continue have market of financials Wins rise, wins partners. quarter. Health Rio Tinto. the And in to in leadership Florida. we include full Starting I Stellantis, global, focus illustrating to land, with Carillion ADVOCATE and we on see KinderCare industries, Turning Workday. including customer customers Partners, will of the trust on in our highlights digital wins, the areas, Tria, Assured for HCM, Services quarter and with new

Rite Once our include customers, HCM financial and Wintrust, Airlines, University efforts we we of Austria, lives QX go to In Nike, go-lives immediately include health successful land systems, multi-care international, fitness Washington. turn deployments. notable Korean Telekom AX Strategic the and Aid.

first FedRAMP agency. our rollout platform our a We growth full also strategy. to a existing our at Expanding well-known was is with key go-live civilian celebrated business which customers

we Lloyds Bank, quarter renewals at X-Eleven. Airbus, In companies in expansions companies of this such addition as to those had a number Technologies, strong Dell

optimization faster it's starting to time-to-value bear many talent continue Our with go-to-market the to and quarter. closed year includes increased financials and we deals health Picon, gain focus QX. with put and in traction planning, created customer This Extend, on growth solutions, healthy within which fruit

mentioned I the number a of College in Rakuten. we financial including Medical earlier, wins expansion Beyond Consulting, the Wisconsin, of Nordic quarter, the platform had deals and full

foundation continues our lay Given largest strength From our be momentum, for coming base particular sellers to financials in we industry continue in a our to in results QX with market, XX% team representing geographic solid The growth. teams. the our durable perspective, from targeted revenue. drove of customer invest to U.S. the U.S.

pipeline is among runway growth is significant globally a in in priority. untapped our largest top market a healthy our Expanding footprint opportunities for a looking-forward. have this We and

see leads certain X,XXX events and EMEA opportunities. new EMEA. execution APJ, During pipeline, attendees are attracting held building notably customer we only consistent across Elevate Not starting QX, hundreds and XX regions, of generating we in in net over to more we're

wins in Renus key West SA. France. Bank included Germany, Symrise, U.K. National Mr. Where as ALD in and Automotive such markets assets, strength saw We

is approach off. paying Our industry-first

$X performance strong of strong and Workday's Atrium with Workday in HCM financials retail Health chain management on cloud platform which ADVOCATE care outperformed in all and QX. delivered health their Services to A going is merger is services example in quarter, in Financial selected This a financial joining systems industry became our hospital competitor's to which solution. large in X we hospitality supply QX. recurring also great annual with continue replace revenue, have and second part Health, momentum to billion team The another exceed

supply continues than with in to reduce Workday contribute promote and more to resiliency. it health our health care costs, in boost XXX organizations standardization chain to investing care traction

a is our Metropolitan growth Finally, we followed and education strong an start to The and have College government team such QX, with wins Paul to to University, up year accelerate the West the huge. through community partner potential with Virginia a University impressive our name our view. Community as

and with the that multiple program partnership wins AWS referral signs payroll our early partner new led in to ELI to will pipeline. announced marketplace seeing are with We our is logos drive In strategic beginning partnership EMEA, positively QX. impact our recently

partnership it this month hope our conference than of We our building. our annual welcoming past expansion next enabling you applications the Altitude is development of Extend. is Workday annual We on with After Samsung see to at at overall of APJ, region-specific in our Rising only Korea. San us more not drive SDS look clear momentum many time Conference helping XX,XXX quarter, Workday business our in forward is in Francisco. of many Workday And with strategic built is spending also It to community our there. South partners members

continues quarter's fuel to our this diversity and show our As mission-critical success. the results nature business of

and relevant never leader We finance and are market for more been proposition powerful. HCM our cloud the value has or clear

believe We future made investing and portfolio, are partnerships durable our and a long-term time product truly incredible brighter. It across drive growth. has exciting industries geographies, I and work to through an our be is been never to

Aneel, friend, you. ML With quarter. it and will about strategy that, more AI over over to highlights I will my good our turn innovation from who the Co-CEO share and to and Aneel,

Aneel Bhusri

to today's and future call on to for agree a thing the the and that is workmates Thank you, deliver around is clear. recently extremely with our with nearly I've world solid helping current especially XX,XXX customers, prospective quarter. bright. sentiment to Carl, road more our abundantly one I the joining lot and another meet and been couldn't everyone

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we're set recent helps the to ahead, is and apart that than of a by most our models trustworthy which continue data our will continuing Looking in language has more accurate, billion for fueled Workday years, big to models XX meaningful Despite for further cycle, users a large been to be focus What importantly, way. provide annual Journal $XXX contract under major and set invest us. Workday transactions and AI using million results. data unrivaled is create quality, hype

forward tests. generative those Examples how leverage document can content understanding. redefine to Workday also the product help way augmentation and these new use latest previewing agents with of language content we're at looking at will a search, rest capabilities AI content capabilities copilots, cases look Rising September. they summarization, work, the building beyond variety leverage include currently conversational in We're of UI. And we natural developments AI for that and we customers along our and Each our generation,

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application Planning improvements, performance sacrificing Scaling or support and Adaptive automatically the Powered momentum our customers' customer the the Gartner can most Choice a are Adaptive seeing without Best now named the of XXXX Management voice in report. named Insights SIIA Financial Workday planning software by AI we continued requirements. complex proof Further planning wards. financial Planning also this Workday in Solution was XXXX Workday new with for to Customer's was Peer performance. speed CODI

proving Center the to Additionally, Workday at difference shown Accounting be the maker office in XX% a QX. for CFO, true is experienced of year-over-year as growth by the

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for $XX which back Area In closing, on excited that on trust driving platform more to continue entire only highest many levels us with I'm also XXXX. for month customers. revenue Workday us is I'm in integral next Rising our future to focus confident see build the but an billion continued will you the of the innovation in path XX,XXX helping in our not Bay of growth our than for to across Workday play position role

With our to CFO, Zane turn I'll it Rowe. over that,

Zane Carl fit out earlier, have and thrilled since perfect Over him board. joining last As a has pointed Zane. quarter, you, to been to I'm on Workday

Over to Zane. you,

Zane Rowe

Aneel. Thanks,

thought is all of call saying honored how the we alongside CFO, continued further as globe. because that partner fellow workmates it this earnings of start all one strength you I I first saw Carl reinforces by QX opportunities As I our am Aneel, belief. joined in in I around to want the software. enterprise of and to most my Workday's The compelling Workday was

was million, Subscription to services year-over-year. growth up total $X.XX of XX%. of revenue to leading XX% Professional revenue $XXX Turning the was billion QX revenue $X.XX quarter. in billion,

the From revenue U.S. representing of outside $XXX a revenue in perspective, total was geographic XX% XX% QX. growth total million, and

we net the of up revenue will ACV billion respectively. QX, XX% was revenue and become new we mix. bookings by As subscription renewals of XX%, over with over of Carl strong which opportunities, meaningful international mentioned, retention see at more time portion rates our backlog and significant a XXX%, expect long-term XX-month growth and end revenue driven $XX.XX gross over

Early roughly renewals Total to growth. Early quarter renewals XX-month of X roughly and quarter of added end in up was $XX.XX subscription in the billion, expectations the growth the the points quarter at our exceeded added points X.X revenue backlog the XX%. backlog. to

In to addition, significantly backlog. outpace causing which continue see the continued growth net our platform renewals, duration to and is to we contract new XX-month total on customers' deals our both in commitment speaks backlog to longer and our growth

our quarter non-GAAP and operating operating of out-performance which in flow benefited quarter. $XXX $XXX was operating revenue second was Our for XX.X%. a driven Margin resulting of income non-GAAP million, million, was the the the of collections in the from QX certain margin guidance strength timing relative timing expenses. by to cash

quarter of remaining had an repurchased our the and at securities. share. we QX, in ended in $XXX.XX billion program with $X.X During average price shares marketable we and $XXX of cash per $XXX million authorization million under in end. as We buyback quarter

we growth areas across key add XX,XXX talent nearly of ended strategic the global with workmates. continue to QX We business, and

in financial on focused growth. pleased support second-half drive the QX with longer-term to results to We and while our continuing in investing performance are

Now turning to guidance.

our the momentum are our 'XX we range of billion revenue XX% to growth. in to FY year, Following $X.XX the a full-year billion of guidance year-over-year first-half representing $X.XX subscription raising new

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

million $XXX deployments to our our guidance as to FY we $XXX revenue 'XX continue of professional of ecosystem channel strategically We're part shift to strategy. more as maintaining partner services million our

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

our early We quarter. QX. XX-month backlog in year-over-year renewals current This to in for XX% outlook grow includes expect approximately the

long-term maintaining XX.X% growth our margins. and on approach non-GAAP guidance disciplined we investing raising while plan are expand of to FY a margin 'XX operating in We

of we GAAP points For the the approximately year expect percentage margin for operating XX margins be third the to approximately expected quarter non-GAAP and XX.X%. operating lower QX, full margins, respectively. non-GAAP are than XX and

rate FY non-GAAP tax The XX%. 'XX at remains

We expect of flow XX% year-over-year. FY 'XX operating billion, of growth cash $X.XX

semiannual 'XX. payment annual impacts making our in FY quarterly anticipate we our bonus our quarter, and cash last seasonality cash which flow employee QX, mentioned we first As plan of for

I'll addition, the Francisco. thanking approximately forward on terrific you seeing I customers FY In by for capital and in of And Day their expect partners continued 'XX Financial investment Analyst upcoming community at to look community million. we our XX to $XXX support. our close September of in expenditures continue of many San

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

Operator

Ladies you. with Please Rangan line of will Thank and Instructions] question-and-answer be question from your question. comes Sachs. Our Goldman session. with proceed gentlemen, this we time first the conducting at a Kash [Operator

Kash Rangan

Thank you have lot on data world great ahead, had a how XX there possibly two the for team changes. and like could value the Zane thing The its years leadership or in I you the At of monetize new therefore joining with palpable. maybe in looks call you things. workers. professional so a one very is power AI, energy much, here. AI, Workday? data Congrats level, of data of the just is It and of pricing the a high on on million implications this the importance of

And you there better have If could do spending the do portfolio segments you the caution because maybe within if so that in are year congratulations. goes could, taken might product that any the in much that or bit even away, geographies of of the see a where a and environment? caution areas pent-up you Thank ahead? seat-back

Aneel Bhusri

those voice. part. the see language So And expensive. the is you'll first competitive we or I'll can our to basis And models. the like are large to Skills we valuable and turn The domain-specific Cloud. the hear models, around is train large do Kash, only SKUs We data what new can they're train it language the then us sets, the more make use of because less either with large and your language models do large data really smaller us Good take on those lets models. have products and

mode results think actually data. it Cloud SKUs to that in specific them use the the new us an language But allow then create anonymized do rather data see charging and than allows you They give of think Skills for train the like models it large in SKUs. is back. -- we ones way I us new insight to that domain it's and from customer's these I the us more any will what

Carl Eschenbach

of great Aneel some Dave that know Kash, and one talk And from platform add-on questions deep I into hear other the quick important they ML and just think And your they AI Yes. it's to built beginning about we'll then this the did built voice. is platform. to the and

Workday So strong to built set, it's rates remain customer and been and a AI and ML seen beginning. industry-leading because we've already our and from the it's in economic win impact through built rates of in, our still positive renewal competitive

that So I million a users the for think get those we that's a against XX and on $XXX transactions differentiator billion, platform year. us

As more start, of financials platforms. product for their If of around who in. into question, best-of-breed their to planning we're on it only Workday called and and second are any onto cash multiple adaptive suite then both. best the -- anything, is I'll they're and consolidate resonating pullback our products both consolidating seen things to Doug, proposition look wrapping macro HCM you any selling maybe relates people the we as headwinds sometimes the top due to I the of market. our your and jump haven't in can value any think

board. across strong momentum see the So we continue to

to continue focus and mentioned geographies and They're deliver to We've our our continues -- we'll and European then team color? about strong on add the predictable to you well. it out. to more of grow want continue quarters Doug, additional still do EMEA us. you they And couple driving to work quite international, for on last talked in do that any business much pipeline -- APJ and they're

Doug Robinson

I I that was as think that's -- echo well. some of --

I lift as of think just the you cash. it coined caution, sort in

scrutiny. up as little mentioned in more but really the still in that in to large I enterprise caution, attribute still a much and me, I nice were -- and caution really first-half. think the Carl execution there, -- lift give would you additional as performance that I U.S. a pleased insight, But deal is that to the maybe say, Europe to been it's shows just across we out with execution of the

Kash Rangan

Doug. Thanks,

Operator

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

Mark Murphy

I'm to seeing on the Thank FINS currencies you're might capacity you. the the And I'm stellar Or up more an at much congrats at demand for board? there there? could of relative perhaps all interest, you're sensing the that the if type complicated dimensionalize then Zane, And curious signals need customers opportunities wondering can you bringing Carl localizations, you increase see for on on bring absolutely that that quota of legal or out if out you XXXX entities, Or performance. handle mid-market. an how level in to that inflection arrangement? Aneel, some Global minority country or just

Zane Rowe

I'm Mark. to to happy Sure, start hand and Carl. over then

and as As you domestic this it clearly will say, on. exceeded there growth some to side. unit point I'd time those it's sellers early say FINS a I will amount for them thin our us expectations. you it's bring days see I'd quarter and for all bringing of us. out, significant area was of on benefits, side international the both that the Obviously, the that on some tremendous we as in we're focus we still on opportunity, tell but take

there the with FINS can we're future that seeing on with in go-to-market additional So what pleased very capacity. do we're we the about growth the and optimistic

Carl Eschenbach

reps go-to-market Yes, as know, color. in put the and you to specifically big business. we we're it providing in FINS. up to to while And decided around seeing of it early indications leverage takes a get significant Yes, Zane, ago, side, six XX your ramped, thanks for that months Mark, months the investment six

than platform units turned sold up market. growth as just this sell into a a about, seeing field with full our selling just the more good have really now HCM basis Zane But impacting both here new FINS set quarter, we is at the saw the into accelerating platform year-over-year time. that One only of on the the We're it's talked actually financials is full our FINS. knowledge as across it's FINS in market of sales a we ways the we number are same sales. also and

in And medium enterprise, The FIN sales force think and a those specifically at sale go for helps attributed us see planning. platform opens question, product of be that very business. build-out good our We're drive we with with thing next to I enterprise we FINS saw medium for we up into us both platform continue and then this with the and that about And sell a kind sales the planning. the landed door I full us. into customers full talk to that's And your sales of last regularly FINS force. landing to point. is it land to continues back Planning it, the the

paying of there force sales time is at dividends. So build-out is that the no FINS this the doubt

described and medium had to As really highlight we And medium was segment. the full think enterprise we're that medium to globally. there internationally And the market in the as we're build what enterprise, into out and more the their we with platform specifically going performance, segment. replicate we seeing it very solid that more relates we're enterprise a here in quarter U.S., sales pleased specifically the I

Mark Murphy

Thank very much. you

Operator

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

Brad Sills

out initiative there that one you're know the so see I you're success many Thanks particular to HCM love acceleration I within success that get mentioned strength? scrutiny to where color be there. you. the go expand here here. the that deal and any versus where Thank here. where results seeing here. seeing just might office on differences some on FINS I to of great and color to would then office Carl you Is great CFO, HR has and would Is some could potential see outsized you're base wanted that to back modules you as there? Oh, of seeing question you in provide There's the been wonderful. the is ask of we as an the macro, to coming to still from macro And there. second any

Carl Eschenbach

sure. Yes,

of exciting of diversity -- the we and really about one significant new platform business is net base, we you yes, business. still you diversity durability our things on the we what perspective, a two as back landing what that our there. both we're deals, land describe portion and business see. And to model when So net we of really the is selling have to our new is From into sell like deals, provides different a a which customer your motions

net had sellers, separating we're into new them to we balanced that's the when and quarter FINS back really landing -- this FINS FINS selling In the base. by a And we're across new into. customer performance into the keep selling and a net way, that adding base we back and to customer leaning motion going about talked we're when

is motion us. for clearly this So working

quite relates what customers ask just in level he's macro, changed seeing and it and then Nothing I'll because is with well has get. I skilled very force And maybe few the perform going over to to we Doug see to As navigating last at quarters. think a sales our extra that, chime the he's they're continue of high to because do since scrutiny daily.

As really line. them finish and sales getting well at across understanding and the as closing deals process the well they're doing they're their

choosing to That's but people two tribute support we're they're continue we their customers platform sales the both it proposition also most comes to providing strong I finances, think our both their their a and as value back the to to be force assets. globally, precious

prospects. us sales continuing and good proposition to it's have cycle execution, and our for understanding customers strong So a the combination a of value

any I'll And call ask on color Doug to macro. add additional the or

Doug Robinson

area meant between other, Carl, to shows say HCM From question the nice or and whether and or a you, I asked up the really. you, you in you Thank I'd macro one to think perspective, FINS, talk Brad. Yes. it not

I think that is the any it's is America in on fair across to say spent globe or dollar that corporate the getting extra scrutiny. scrutiny

I base, the pronounced, is base new of board. your two sort the is first describe know perhaps motion customer right been to it part versus important was net in the more question an around our don't such customer expand. over is I Which the it why across company. So which say the if of at last way scrutiny would has years

in we of two see motion, things. sort So key that really

notion SKUs is call speed or we this create what speed close One of and or solutions.

there, customer close. of sort to strong highlight to Peakon and quarter Lowe's, as value customers optimization, doing or expansions just create across But be time what the So more We quarter. enterprise X-Eleven to this talent and we those Lloyds to type would at opportunities I Airbus, really strategic go the tend planning, larger, agreements. about tend same base quick the Bank, in our time, have talked describe

to and already customers but strategic are more with look as approach the big taken to an us even consolidate they standardize our platform vendors have Those on committed on platform.

Brad Sills

much. Thank so hear. to you Wonderful

Operator

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

Kirk Materne

international be from that if you're the fruition bit talk wondering investments I could perspective a I year? you're very Thank on kind color much. to from that those opportunity guess of international. to on about Carl, sort across double-click And of little of and seeing I'll just bookings just would I more welcome helpful. bit wondering you just you to if could some was in you making come And you little echo maybe for to And again. the products. was a also the today what hear the a Zane. Good region, next

Carl Eschenbach

Yes.

of leadership the is Doug So quarters, I In across an a the in EMEA, area we of we've about I both you that entire last EMEA -- mentioned aware, this in lot brought level. and already both in the are specifically at which -- think that the we new region, talk U.K. shared I'll over couple France. but dock

So leadership there, out clearly it we've more is and really built bringing their dividends. team more and them, underneath they're and starting to talent actually in pay

pipeline past. in are HCM seen We it. have the both they more And build signs We around are see selling they seeing that's of their much and FINS predictable early in the arms business, predictability than successfully. we've more solid because

And we're what EMEA bit a a whole seeing enterprise which much the here they're is in sale. it for where true at see customers medium seeing, little business. HCM planning we're full again, thing the you into EMEA as both from doing other a combining and U.S., selling replication really The that financials as is wrapping know, market of platforms of full the very the platform well value around market and

win are including in of holding we our of competitors our rates backyard definitely up, discounts backyard our holding So the rates seeing competitive across have big competitors, momentum are there. when we there, look at up. some some competitive do we in market, but are our the big our win the And

and taking strong they're a really So the well really executing approach to market.

we couldn't what's pleased So happening be with in more EMEA.

APJ. We we're work products okay go after going the had add if APJ we a go-to-market the there's still some resources and we We have an the our both to of markets quarter. have on in upside tremendous do think continue market, localize into and fit and in emerging APJ, some to Internationally, can internationalize so continue better in you we to there. will

Kirk Materne

Thank you.

Operator

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

Alex Zukin

taking question. Hey, for Zane. and a Carl, the quick you maybe the guys. first Thanks for for one then one

You different mentioned number of local. deals state of really a interesting couple and verticals, in a including

You scale guess hospitality, and you're we of for a when that follow-up to of and life financial can opticality? -- local, talked the Zane. with to quick a sciences, of the retail retail services then the FINS and of the do And think you rival federal, the education can verticals serve start maybe FedRAMP that type relative seeing some the verticals I health that dimensionalize and kind state growth about deal. these

Carl Eschenbach

Yes.

segment specifically break or question, which business don't we our in industries annual given on the another out whole and care and we in ed, any recurring the or share percentages financial in to industry. quite be $X this solid continues and -- did quarter called we as in retail know, And Alex. in health services. strong you higher revenue out specifically as for and growing. market highlight thanks or we had a And billion hospitality, So time, really case second But

days In local the state in still listen, of the business, government. government early and very we're

opportunity for a good for have platform at solution this who replacement, we're XX to leaves side, for point which really do think decided I states on going only listen, XX starting. have up forward. that there's XX full market. think the or a we we states And just us federal And

we to a also us FedRAMP leader a we Cloud. leader, right, we We moderate. our excited to bringing agency, do FedRAMP a seasoned were lead customer new have said were in really said We civilian see our forward. going federal first help platform And on full rollout

continue of us that high an having with is even lot to we'll we opportunity do existing market see agencies, have We do into. forward. in rich FedRAMP a as cloud, area see going a this without the lean on for we the and federal So opportunity

Alex Zukin

Around Like there's it incentive like guys giving? just future think in description QX. this? code right way it a this benefit an year. guide seeing the upsell? we the the and you're also customer this? for as it that Do this QX, do are some dynamic about like driving for for benefit backlog, as sounds Clearly, think what's about we headwind? the XX renewal perming to like And what's an a early solid dimensionalize Like months at Maybe about macro? this remind opportunity what's Is you us Is that it think the activity?

Zane Rowe

Carl Alex. then Yes, chime and I'll start as well. let in

reasons that as XX.X% But the about we're interface As all quarter well. XX-month interact as renewals well was points and a for of X.X quarter, with for be side Karl our the Doug you opportunity with to coming we mentioned, RPO upsell the point growth. this saw customers, which early very us and on we them is as out, the pleased terrific out into pointed as growth

in we're So the QX. pleased with very outcome

done say now we included to that next out is we that which taken X quarter XX%. our the to in that increase we've of where approximately what look right QX, as at is part XX% as for of As expectations are look guide. a point our I'd look QX, is included in

be we the couldn't continue. So customers that. with platform, thrilled It our doubling with we are will activity. Again, more into on They're that believe down leaning pleased activity we're and that us. means

point out, some for time obviously, revenue RPO. you running on of ahead As subscription been we've

to the think So you we continue early terrific would expect a I'll renewals, revenue to opportunity customers add in Carl, some it's welcome let to to subscription future, for platform. and related we that. buy we variability the but into the

Carl Eschenbach

our drives more of our to Zane. We And renewals. of clear our lot renewals. good it's everyone, I early Yes, that is into we top teams on to additional that But platform. they earlier. the the we financials and Yes. We to a as HCM to back Alex, have work another selling base. add talked quarter did customer Thanks, early of to with about what want teams or consolidate to sure make incent the don't drive customers incent SKUs more look our really

So drives and the which co-term driven and talked some renewal about customers we them in they we the that actually work they And then demand XX-month their SKUs. being they they've go do with in when agreements, RPO. by Zane and add so, is early our cases, our uplift do new

And we market, going new expect innovate looking to more incenting to They're people would to forward. and to as and not to do we're continue more demand. add bring modules. customer continue it. SKUs we So this It's

Operator

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

Keith Weiss

quarter. success of a that time on taking upsell a successful terms guys there's kind there. Carl, into part motion. of packaging and question on guys' and Sills wanted selling think having customers, huge VMware, of Brad more a of I seems business? and Excellent. your was back the of mechanisms for to for Thank like strong in extend It VMware you lot machine question the when congratulations solution existing you I a of earlier are to at guys kind sort about really

sort of turbocharge upsell even what improvements you learnings far? board that can motion or sort effort mechanisms of could that cell from seeing you there that make that on thus in been Are or guys could we've hub this further bring

Carl Eschenbach

thanks the are I'll the that, already selling and really hope doing Yes, question, Listen, teams Keith. into take well. you're I base. back customer for the good

back that driving Doug SKUs one think do the to selling other that I motion with teams selling has customer have it and into driving are on and customers. two are net focus will, Patrick only sales, we with sales And our new. think the new the forces, base customer-based because if different, I you to these

sales at are easier make to we and for easier sell package we will, the customers now, do you -- our future to it in it products ways our have relates, consumable we're things don't looking reps running. price as Specifically different can we any, Potentially differently. new plays -- make more if to right and and for that our it but

I think the team is executing well.

the see ownership Our we of customers in clearly by the top that play cost additional total see of have market. clearly SKUs value the a of and our platform. on consolidating

type of any we're I to through pricing here, on always don't would of some think see innovate looking change and go-to-market future. be ways and Keith. you'll But in for them short-term one the So packaging

Doug Robinson

for recognize value for to opportunity fair amount best tremendous about we and do time of customer spend looking this a area. opportunity of to the and to turn just in in continue for Keith, add, one obviously invest It's the the thinking us. I next course, what's would of us it same. we and, at

progress to So it's an good area continue on. that see we

Keith Weiss

Excellent. you. It’s helpful. Thank very

Operator

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

Brent Thill

a the months but nine over to seeing if year, Maybe Carl, this new next too with fruits partner earlier in you see to you're this what partner six what program. new curious early ultimately the the program? referral of unveiled and program,

Carl Eschenbach

new facets referral really leveraging rolled a the program. partner opportunity And And did from hear And and customers the collaboration We this Thanks, because Yes, on innovating you. expand us to new we a launch to technology I arrangements program. out sure. front, their leaning signs seeing will many into also, Brent. including they're say resell. getting like we're program. of technology it. including things value market including There's Workday, Extend Good co-sell, of early top to with as well. also they're on

off, kicked uplift program our and Phase has co-sell but referrals referral the a resell program, So seeing partners and we're basis. from a in X, on that's global nice the

if QX in from burn of recall, Another they were have AWS to we the and seen did today. that is And Brent, to with number you credits down we're that selling looking thing partnership, we are people driven with AWS opportunities a as AWS, marketplace. have the we with launched partnership a

very with sharing joining sell people we're get articulating drive Overall, more So paid us to month. and and new program. them last excited innovative help just partner net spent how over new conference about monetize a time outcomes at partner our solutions and it. for our the where us both program. more platform Altitude had had X,XXX We We we conference big services and also they can the Workday

Brent Thill

you. Thank

Operator

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

Karl Keirstead

I'll Thank aboard this to Zane, you. one Welcome direct you.

there time to for maybe curious you X unpacking -- due XX-month just a us. to between you renewals frame I'm why been other that the mentioned, sub is alluded think gap what and but Maybe to, factors. recent gap growth Thanks just historically over for that? revs you do X partly out lot it's pretty early but backlog As that widened has are the it's close? to the quarters the And in narrow, will points.

Zane Rowe

of Karl, you. Yes, great course, hear to from

additional exceeded our it's the number As number the we've and that backlog RPO the we program last has by mentioned, behind we're of quarters. even of a really pleased driven And seen expectations on the with performance we over and have variables.

Carl think I that Doug and opportunity well relationship customer, to the as the those our both customers. with relevance with SKUs our talked and expand as about

there. performance with we're So the pleased

longer Now see and to tend with talked education we some of contracts. the those we gov variability about duration

we that mix line extension. if top you significant many at growth RPO especially increases look And see in shift. So of that driven a the have natural cases, by and backlog will

another where customer to sell renewal it's And of then with as the other course, dynamic deeper platform, into about, engage as the the we more to SKUs. go is, well of opportunity early talked our that the

there and as at higher, we current would feel the least second it's at second pointed So was in third be quarter expectations the we see the we saw the quarter higher what I like -- quarter, in the quarter. our activity third out than

where just leading and of their obviously quarter. spend Doug's seasonally strong up we've to Part also energy, it team is fourth a they and

longer the So a may relationship your we durable lean reflected It's you'll that point, opportunity more and it for believe in And customer with We encourage and base. the the in to an continued of revenue motion. have that to at our create see we're numbers. revenue. motion. and line. if solely like us a looked little that subscription we subscription focused backlog Hopefully, that helps. But and the growth long-term you bit variability backlog driving subscription and focused on particularly -- the variance between in business But on

Karl Keirstead

does it Thank Yes, you. Zane.

Zane Rowe

Great.

Operator

Our of proceed with next Zelnick Please Brad your question comes the Deutsche from line with Bank. question.

Brad Zelnick

very and thanks Great, the message. my much results goodness the of in for taking There's lot a question.

years you've all. to expanding I'll comments, in while disciplined growth your there's you, I Thanks. think you the is can Zane Zane, sort of So or what My everyone's consider that ears. we rule to you long-term of my actually expand in And thumb music in approach that welcome means is and to Workday maintaining which even margins, for ahead? a to should any you? if plans question that on investing said of congrats on But framework echo

Zane Rowe

TAM lean to make a good at that, point see at we in do to unique partners, say, at that a investments really of Yes, and We're is generally, exactly across to where on can that number defense the lean our is here I'd those, a it's hear to international from Carl growth we're product. opportunity you. opportunity think company to whether smart highlighted platform. has whether I the it's which an and in this it's opportunity

product the side. I So from help grow the side, and benefit we both investments make thoughtful because finance we think business can the on

think go-to-market Obviously, there. international, when we XX% talk we at the just balance about with I look XX% opportunity domestic side, I AI ML that have ripe growth thoughtful Carl tremendous seen and and between there. side, also But international there, and in with it great side, then it's on we've the the on on opportunities do backdrop, EMEA but good grow seen alluded as to to, opportunity way, we've a the an uncertain

leverage when pleased at on and here the line finance to to and just these I'm continue we -- look the see to in we be lean So where side then I to opportunity growth. top make investments

that RPO around mentioned just that, revenue Carl, we well I the create along see RPO longer-term growth areas interesting with but as significant revenue on have and And growth, as few. we globe. side, subscription you the can add a that investments in growth

Carl Eschenbach

it Yes. well, Zane. No, I you think said

ML investing I invest invest at leading [Indiscernible] make fruit want well. as think and into continue will product front charge on opportunity. We heavily in continue And technology AI bear side, the to to but which the Workday, that Neil's the drive innovation leaning knows to here -- we're with sure to and we're go-to-market we we future. on everyone the

The do future. We is we the margin, which other internally. how from in reinvest thing us to think can get using allows drive and think about operating to these ML and leverage operating in by AI go-to-market technologies, we actually products better

and is we of of ML. flywheel effect kind there a AI can the So get benefit from

Brad Zelnick

Great, stuff. Thanks so much guys.

Carl Eschenbach

you. Thank

Operator

have two for We questions. more time

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

Michael Turrin

the Hey, well great. me on Thanks, from results. congrats as

impress. of the continues on that number but it's consistency a those questions really getting backlog to You're metrics, of the metrics

again low-XXs for guiding You're growth quarter. next

growth environment? expand an sustain can helping just such profile on you what's inconsistent in consistent a maybe So

but bit. were there rate lagging encouraging the side, there international the to back some growth around going then And EMEA, commentary still a

seeing if take up the of pick growth the of the rate U.S. strength that off can seeing? just help there load are So wondering Thanks. back some you're and and maybe there signs you're

Zane Rowe

hand Carl. start Yes, then to Sure. and over I'll

customer interfacing As lengths relationship see And RPO you we point leaning on the of interacting, the diversity in And business the been with the and out that with Doug's that's in contract backlog it's team and numbers. with more those what helped reflected have customers. really it's support that. those the that platform. and

engage relationship clearly Our success customers that as them. we've as well with seen our more, on the the helped create of uplift renewals has duration more extend our

So I that think it's effect. compounding

only do the look but there, We're we remainder highlight the backlog. of year, of we I for out number again, last that year the not next we And over wouldn't in or pushing focused not on subscription would we're even into expect seen the always lean it's revenue you've that that as to RPO be and quarters. That in happens interface revenue happens that little the -- increase developed growth a we've just more subscription with them. long-term in continued of Carl, to give backlog just relationship bit those with have interaction the detail. that customers byproduct the maybe and be big a and you that we

Carl Eschenbach

of I we asking less. do think it's best it's continues total you're think to do the ownership And think driving both question platform just that And employee a I that I looking a suite. are play. by of have. on specifically I with looking this. they're for so, we for some cost productivity with the face, as our earlier, how best-of-breed on from the of drive headwinds financials to in the and about what continue everyone think more customers. people strength And consolidate we market gains HCM I provide of also doing the first And people to different do the side And experience. helping said We're level to

of of other build on SKU, top rescale upskill more all those, it solutions employee new people on And to our just if them the and our continue leveraging to by extend Workday is We're top We're of like folks. even they're helping things the platform. a put delivering experience. more doing and of And own platform. level

of consolidate us. as and continue of on motion this people into back the think more base selling I So is more going to top

of to we're our encouraged performance and we out and by both we're year. the again, strong building As saw pipeline international into the that EMEA, in the their as performance specifically head it really consistency there of relates second-half team we the growth, good and we're highlighting the predictability over of

large though, as flip if I continues me outperforming team areas Our across in today. and about number enterprise spoke to Michael, U.S. industries some that right? drive performance on well, Let they're really can, of like a those we of side, and key just say, solid the

education health and care business, Our financials.

teams. driving, So the at from and outperform time, to the business and in shown slight something the them international growth. remember, it's doesn't actually right, perform aiming look watching to as to the coming you'll get keep we our quarter, impact drive same drive shift see in and -- the always it to continue more and to continue And important try we're a XX-XX bookings see We'll out to same from over from growth. that that international get growth in performance the international we to U.S. quarters years right more

Operator

Our of RBC. Jaluria comes from question. Rishi with line question Please with next the your proceed

Rishi Jaluria

fidelity? you Wonderful. and strength much my opportunity on-premise to maybe big to for opportunity making opportunity to as Thank of use to from data maintain better. guys, migrate, go to I data talking it business. about But so migrations for easier and terms the it to talk about question. see to utilize Clearly, it your solutions continued to generative you data Nice the applications for transform transfer as legacy custom and in platform resilience the product generative easier and maintain and make taking AI, well to I making the want there. leverage -- and accelerate want AI to both back have in a that

down mix it time, little so of way services Thank the to me you very maybe reduce you rate end, at the services and the be on time. understand way utilize on a utilize that bring over And kind much. could bit attach AI that can would same you generative your Any helpful? even help

Doug Robinson

Yes.

and at from first think be AI will of it generative the And transfer are AI. a we data definitely over time, to automated looking job transformation part, do systems. with legacy I On increasingly better

So that's motion. in already

we On at in to focused exploring build implementations. organization one to products actually the on thing that bring this It's second we're We're AI something a up how point. the make implement. products great And into to services speed definitely we on Stay it's part. AI tuned progress we that's about customers. to question. that But is easier and our our deliver into work the very think how one, them a to

Operator

for we for Ladies final all is for you on over questions. it Eschenbach Mr. gentlemen, I'll participation have the now That and today's your conference. turn time thank to comments.

Carl Eschenbach

And critical of the business. by globe and and you diversity the to joining that you, Thank for operator, thanks Workday's was partners our another today's our everyone to thank continue nature fuel quarter, highlighted mission and customers workmates a around call. success. solid special QX

we we the and ahead, the about all opportunity well exciting beyond. think are positioned an year second-half have of We and as

of over everyone today's With hand I many the to I look great our call. Rising Francisco. Conference forward at a close And operator call to upcoming evening. Financial I seeing has to Day will that, you Analyst back San in hope the and

Operator

Ladies and gentlemen, teleconference. today's does this conclude

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

Workday (WDAY) 24 Aug 232024 Q2 Earnings call transcript