WDAY - Earnings call 3 2024

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Operator

Welcome to Workday's fiscal 2024 Third Quarter Earnings Call. [Operator Instructions] I will now hand it over to Justin Furby, Vice President of Investor Relations.

Justin, you may begin.

Justin Furby

Thank you, operator. Welcome to Workday's Third Quarter Fiscal 2024 Earnings Conference Call.

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

Following will we prepared take remarks, questions.

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

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

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

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

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

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

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

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

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

Carl Eschenbach

operating achieving joining for XX-month earnings thank to growth, you, Workday I'm Thank pleased notably driven across of base that regions, Justin, and non-GAAP and our subscription net everyone, enterprise U.S. share call. across customer EMEA. and large quarter, 'XX and XX% margin teams, QX you, These and growth broad-based the XX% strong revenue by medium results new strength FY XX%. another and backlog delivered were

the with momentum I was help of our partnering XX,XXX drive to on is want impressive There in the at for thank Rising and business. results. more globe our customers it Workday around to full September. than clear these a Workmates sense across display

AI record innovation, announcements delivered in and product drew and There, new and we a person partnership unleashed online. XX,XXX attendees

event over people in Rising In San by active over ago EMEA our just with in a Barcelona our touched of up in largest event pipeline rising ever fact, a attendance. couple was weeks followed and Francisco half we X,XXX of with

In speaking to prospects out partners me. these customers, few at stood with and things events, a

help them ultimately talent drives simply First, top C-suite attrition upskill can't to Leaders while delivering Workday In outcomes all a reskill hiring They a scale workforce, are and drive more. are reduce businesses employee to both them achieve productivity. environment, experience. to priority. looking this macro That continues productivity. by and turning and helps to great their be

money. positioned true accelerating businesses digital their Second, technology also platform consolidate intelligent Workday the backbone and benefit leaders their on cost on while operations. rely their manage precious to assets, benefits, their footprint to their of are continuing a can perfectly realize to ownership people as to most total is

are that we million customers. efficiencies will doing generative and in I our users and AI will more, is as uniquely share Aneel trusted resonating becoming imperative AI, particular, it's it under drive employee not improve say but over market experience. a just a with saying can is contract the with leader what we business finally, partner and that a XX And and

our put, and our At team about the business clear powerful. and times grow in our That's delivered relevant quarter. and theme and our Analyst results so in FY half Day, how This diversity had of we was recent in in during durability never talked it we has the financial of proposition Simply us 'XX. evident first wins been of the value the tailwinds. QX times headwinds helps of this and

welcome X perspective, us Health, customers Life Span surpass net Group Systems, Workday. Automotive, Advent such King Minor HCM X,XXX we as and Department Houston strength Green Bently in new Methodist new HCM platform full of once Financials We Group U.S. customer customers as core and Hotel full HCM again Brewing, the a customers, From saw new helped customers in Energy deals. and like on platform

and and Alongside quarter Company activity, Magna that we strategic Southwest a customer meaningful sales helping in including Mondelez had Sonoco of Products and customer-based driver in several Close new another had And Global, business is Create quarter, growth. renewals expansions great our International, I'm pleased share the our becoming to team's Airlines.

strong areas the the over you to addressable opportunity. results. us in that our consistent say and I which mark I'm Spain in key some half here eclipse our Now highlight at we ARR with additions Financial pleased the billion represents particularly with team U.K., $X want improved to The once France international, ACV, Analyst discussed leadership the delivered growth of Day. In region. are new driving and Germany, Starting helped EMEA, and more again

expansions Carl their others. along Ramsay Healthcare were Global important in region, Services, robust Asia Queensland. well the wins with Thales at in as among such Mission our International Wesley own Relus had and AXA even rates wins And backyards. Win new Pacific We like competitors, performed Zeiss Schools, or and and BBVA, U.K. Australia against with Group

I'm of region. us We largest making the but focused the has delighted X within still run have economies. work investments and to to also Simon do Japan in expand Tate help our world's we're opportunity joined in on to We're it, important APAC

directly President of our Blair, this, now to Global Japan of Patrick As Sales. part our leader will report in

seeing new core and ACV. financials. pay to growth Moving investments go-to-market We're are our customers healthy in to financial with continuing that proof off both

on the New in rise, XX% is this healthcare example, full we over momentum. were quarter QX of ACV landed wins to Healthcare, platform deals our industry and for platform. the contributing approach in roughly grew and new the are half full

State and local outperform wins strategic full government platform of of with at County Assembly. Pennsylvania also General and continues Kern, to the County Chesterfield

EMEA. Clinic financials in Foundation Our core core HR Wins footprint Help, a also back-to-base delivered motion it Web Concentrix, in when with expanded include included and their Workday Analytics, combined which Financials Clearwater in Oxener to Workday QX. financials customer

strong pipeline and NPR AWS welcomed planning a Group. ERP win QX, we Stores we And Kogan strong, our Our to our customer with as remain opportunities along replace see planning a rates of growing legacy business competitors. also a and and had finally,

On customer the our partner success we've go-lives. plays front, in it the starts always with recognized role our and vital ecosystem

quarter Increasingly, System this ways. financials our Electric Solution & included Wise leaning we're partner go-lives Health along Iberdrola and HCM American ecosystem Buster's with NorthShore University Markets. and in Dave strategic Power into Health go-lives at other

is which great Our we skills accelerator with example. partnership announced a that EMEA Accenture, Rising

services solution, be Workday our will Cloud. Skills skill of top the Accenture providing expertise their own on reselling

extend which ecosystem Smart of and allows solutions We with solutions trusted the compelling most also announced announced and of key to to our Compliance capability in markets, responsible with our ADP's use at us innovate with global to cases. we partners AI payroll partnership ADP Rising, Workday customers' deliver HCM AI and a Marketplace for

are of the our Finally, full number to our we starting partner launched year see we while strong for positive we our pipeline. from already exceeded this a target signed program And have impact earlier partners momentum referral on. year. early see We've it's to that

investment area a into building been key platform is we've for which Another nearly around AI, decade. our

with announcements had just of AI performance we will steal minute He'll fuel share The joining in demos at our nature strong more. our the demonstrated thunder. another consistent mentioned, I we shape a of how In continues success. dynamic that work. business new be mission-critical Aneel's in and diversity our I leadership As to environment. Rising future won't of quarter closing, a and amidst to illustrated

near a XX% subscription pipeline clear while while over are expanding long growth have set solid term on margins. solutions. for our XX% we sights the delivering QX, and revenue focused we our through clearly move in the term, momentum durable we we delivering to on As And have

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

Aneel Bhusri

everyone Thank joining to call. you, Carl, and today's

place As trust their across environment. innovation and thrive need delivering which our number to is remain you focused in heard of increasing are on Carl mention, Workday, today's in why all continuing geographies we the to organizations an customers industries

data in generative way driven commitment Rising responsible and set, our trustworthy redefine AI Workday of couple approach space AI For big human-centric was unveiled differentiated by capabilities being platform is strategy, customers on our unrivaled highlighted series including of that as to quarters, September, the to we new work. our we've long-standing our this the last a leadership showcased emphasis delivering help and that solutions. will way and in AI, in At a

driving several we streamlining and be cases processes On on previewed, retaining next we increasing better growing to users faster, to the of benefit available revenue and the correct ability create announced new recognition talent, productivity, capabilities and in generative productivity increase accurate use Examples hours Extend. we AI job growth app generate Workday analyze will all with business and which front, emphasis talent that decision-making. to of plans expect year, -- include Texaco provide and development foster and generation retain descriptions the employee to versus for minutes contracts more an capabilities

AI into conversational AI. Another through our our investment way is platform generative infusing we're in

While in believe for the We're conversational change customers. AI data simple interact generative leveraging easily enabling this fundamentally interact with with they to conversational and users need AI an a surface to Planning them technology, experience create by through conversation. with Workday we exploratory we also are Adaptive Workday information will how still phase

to will process key simplify planning use about enabling servicing of of users conversational the make their The text more quicker, businesses. fatigue decisions insights,

continues for to platform to Additionally, bring the to help Workday our and life customers Workday critical which announced enhancements we partners. a solution be Extend, to

increase we've in which fact, Workday customers AI of last unveiled more of the with At than Rising, we by Workday available Extend. in number extending Gateway an partners is the year XX% apps built and seen In alone.

on ability and Our the apps AI with Workday's provides build to to Workday our to intelligent responsible platform. developers Gateway enhance AI access services

their CHRO. elevating providing Turning tools opportunities interest the managers teams. employees based their to skills and is mobility Manager identify and recommendations improve for on AI example which easier best personalized One it career employee make talent engagement. office Insights surface that leverage growth by We the Workday leverages of with to for Hub, they them AI, insights and the several a focus to need HCM effectively the manager features new lead many introduced and the the foster of within to experience with on to

And of on customers, and as the will promise continue are on to while for the of we other AI our well. enterprise promise AI partners deliver of delivering our many companies

announced our native ecosystem. As delivered increase AI-powered will Carl adopters, innovation AI to marketplace apps. by over and mentioned, To Workday-related ecosystem, XX solutions Workday as expand harness to our number we capabilities have date, include we time partner across we and tailored third-party the help and that early happening Extend our AI products

course, of safeguards without truly be right AI Of in advancements none place. regulations and these can the effective

how the potential steps and workers at Building Landon, AI on Congress and invited in in to of was taking AI these Josh President spoke collaborate our to technologies Vice the to enhance deploy policy and the future Technology AI is advocate smart before potential Josh Productivity Workday's the on responsible amplify to federal efforts testify trustworthy a level, to manner. work. of Workday continued for human of

to level, customers. recognized innovation continue At Workday be for that deliver the application we products to the

For for Gartner highest the was it Suites was a office Workday execute eighth ability in for of leader named Cloud for a we recognized X,XXX-plus and the to were Magic leader. Quadrant marked employee the Workday enterprises. HCM as the year consecutive positioned

end-to-end life to with Additionally, Workday ability a Resource organizations ability of was integrate to named external set Family's the The into with Workday a full and more. XXXX Executive. visibility HCM cycle Human provide its and headcount capabilities management award support of workers of spend recognized Year full by Top HR to for Product

Workday the was Magic And in for of service-centric based XXXX on and the for for enterprises in a year completeness ERP efforts I recognized was Cloud their Gartner vision execute. This leader. to QX. ability that second of the CFO, leader thank as In in to the the team a Workday a named for closing, is Quadrant Workday row want office entire incredible

in in to Workmates. our relentlessly on of innovation it, They and customers' on actively across address remain confident an our large than entire We have us, the XX,XXX thanks ability opportunity amazing part Workday to needs. and platform finance to in driving more focused are capitalize HR I front our

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

Zane Rowe

everyone Thanks, Aneel, today's and thank for call. you to joining

As cloud financials was quarter, strong Carl QX Aneel durability and for market mentioned, of highlighting adoption business and a our and the ongoing HCM.

in revenue of same revenue to $XXX was growth growing of Turning XX% services billion, $XXX totaled revenue total growing revenue revenue QX international year-over-year. results. billion, U.S. at subscription up was and to XX% XX%. totaled million, leading billion Professional $X.X $X.XX the $X.XX rate. million,

significant long-term expect driver opportunities, over our growth. become international As of we we have a time highlighted, more which we see will meaningful

end subscription growth our of at backlog As our we which Day, XX%. $X.XX the providing representing QX, billion was XX-month or are revenue at Analyst CRPO, discussed of recent financial we

point end up gross by XX% to of bookings renewals XX-month renewals QX, backlog at ACV respectively. backlog $XX.XX strong exceeded subscription X revenue and than driven revenue and XX%. over early new the quarter in with more net billion of XXX%, was result was in prior growth and continued Early our growth benefit quarters and from expectations, retention adding renewals QX. backlog XX-month rates healthy to The the of over also

platform. of benefits to the in billion, growth duration, speaks renewals continued from subscription our the Total revenue points at nearly to Early increased the result. up quarter end which X added Backlog backlog XX%. $XX.XX to customers' was quarter of contract our commitment the

the non-GAAP a of Margin we expect margin XX.X%. $XXX Our guidance certain quarter in of to and non-GAAP was outperformance was in revenue the third investments, resulting by strength driven relative the operating operating fourth and our timing million, income for expenses to quarter. which build

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

as buyback remaining During authorization million $XXX.XX of $XXX average of per an quarter had QX, to we share, execute under $XXX intend authorization repurchased program of QX. end. our remaining our and our million the We of we price shares in at buyback on during

quarter the marketable cash ended in with and $X.X billion We securities.

October We the ended continue growth Workmates in areas with in to over we globe. the XX,XXX invest and business, around

to Now turning guidance.

Following our in billion, to subscription guidance raising QX, representing momentum full growth. XX% FY our are 'XX $X.XXX year-over-year revenue continued year we

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

expect expect for quarter. outlook for provide approximately continue revenue now QX, in our We XX-month backlog professional guidance million million disclosing to our grow and months full but $XXX going in QX the This and to We In XX%. XX-month services renewals on we XX-month, the of current total includes $XXX plan backlog, XX year. forward. to early intend

key percentage to 'XX are We margin year our a expected areas. XX expect respectively. margins, margins operating up non-GAAP margin operating as our the approximately And we raising guidance non-GAAP for XX.X% the operating full quarter lower to XX.X%. than fourth and are we FY of investment and be GAAP ramp approximately XX QX, non-GAAP for points

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

billion, growth outlook 'XX are $X.XXX to raising of flow operating XX% FY cash our We year-over-year.

expect capital approximately 'XX expenditures we now $XXX In million. of addition, FY

at Day, financial see we over drive growth Analyst our to durable, term. considerable we the recent opportunity profitable longer As discussed

$X.XXX our performance of currently XX% key to the framework, billion 'XX and financial continued revenue is which momentum shared in growth The we subscription areas further by we outlook, see of $X.XXX growth approximately our QX In September across QX macro expect business. representing building billion, and light we our incorporating of uncertain the FY XX%. of bolstered to

to 'XX expand 'XX operating FY from expect also levels. We non-GAAP FY margins our

the we Workmates support the margin who our customers, are investments in expansion scale advocacy to supported contemplates our outlook by partners of The our business. is contributors and key our outlook and key continued success. while Our and across all initiatives delivering optimize growth incremental as confidence

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

Operator

question first Our Instructions] Mark [Operator is JPMorgan. from Murphy with

Mark Murphy

rising? and a back generation that, off on -- did back Congrats energy on Rising Thinking the of when great coming on was feel remarkable you pipeline the result. the conference, how look you pretty enthusiasm about

through side wave frame? of they in hiring noticed quarters? the drive early And see couple next the can the an ramp planning AWS sales win bookings to in validate had mentioned And that some traction that business, you've the of November of might fins reps on dedicated that as up I these signs time do you you fin any begin

Carl Eschenbach

Yes.

I'll have and start, Doug, if to me anything add. you then ask Let you

So thanks for the question, Mark.

by start to thank for first and consecutive our in you outstanding me saying around workmates Let world. quarter the our here third 'XX. partners delivering FY

and about in it full was again on talk often We here our display business, durability diversity and of QX. the once

continues business. than durable very proposition resonate gives value Our to ever this customers, a and our more with resilient us and

answer it outstanding So you're your another just as question, Ryzen, quarter. to you achieve exactly yes, for everyone directly right. helping thank to to relates Mark,

was amount was and we're was from the it lot practice of solution the coming invest there around financials. There to market. our energy to on conference. from will it that our bringing enthusiasm And also building their you, a who of partners financials energy I And continue just tremendous but around customers, of out out a tell wasn't

XX we've our As you financial the investment know, months, for times business. the multiple last about in talked

we see are logos, one, platform sales, around three, we've dividends, all we business continue and us our base. to but to our those actually go-to-market And Number of forward, not the helping impacting seeing say also FINS sell I new off. fins investments customer of both two, on our are financials reps opportunity full early into to hiring pipeline and sales. Thins that grow. still a the paying our done just grow early because to net back Number are Number dividends sales lot continues drive we early we but going have

I And I And we strength already would a quarter. just this in conjunction think is again did significant is up talked being very quite We sales continues HCM to platform have financials well. our full lastly, say what strong of business. that us for about the quarter, with talked a as this is about large talked landing well. last quarter, land do announce about planning which we deal. Exxon financials we AWS, In a We

talked So opportunity quite against really to competition financials win overall, moving large. which FINS are We there. rates being see opportunity represents us, XX% with our pleased we the only of huge the for and we about our just cloud, a

Operator

from Sachs. Our next Goldman question Rangan with Kash is

Kasthuri Rangan

to Congratulations actually on in you've been under a a seat year. a finish quarter. third for close a Carl, wonderful little the the year

full through stay writing You've X pulse chance cycled you've the the customer. of partners, to check a with conference had

through year predicted one. macro, tough have a we went everybody You thankfully, of recession, don't

So that next where congrats the respect X here. years you with leave your assessment X of where does to team the to to we started. refreshed versus entire And

Carl Eschenbach

by still I'm to way. you here, answer question? the want Aneel, that

Aneel Bhusri

No.

Carl Eschenbach

Of course.

of your the first you thank for So and all, words, nice question. Kash, thank you for

start we let appreciate months. I almost it's talk a can't then about me you because Workday. and So no a talking I of December till it terms in about officially saying year, longer hits year, wait

a year this Aneel. almost with we're full So journey partner, into my

me I And values. X when Workday incredible talking whole. And as start it culture recognized what an that excite Let Board is strong on was thing for evident to I that's that about and that had before. about years me than continues to me One a the by ever Workday. more

a into refreshed throughout opportunity, already leaning and the As you I it relates to, a will, many this number -- year. outlook them and business were of the ahead see if of

in business spoke my significantly the year-over-year in around predictable opportunity. international our remarks driving results. of We team growing performance EMEA our prepared the First,

We see them. continue how getting ecosystem leverage from and partner through we're strong to we're building the potential that

opportunity a for that's huge So us.

answering early sales large to that continue year, the continue represent Mark's for that year. We've the and heavily. additional X hired quarters into see this Zane spoke is reps FINS of first throughout a third especially seeing we we're lot in question on I and a I this on of side. to the fund will if just results us growth go-to-market leaning The financials And opportunity financials, we're around about

when that that to data paying is competition come there. unrivaled about last, dividends have us to And really Aneel think that appreciate, our One out compared thing I've think terms language we through I our model recognize you and for and generative And today, set talks productive customers AI, and our generative no has has driving X enterprise AI. it AI especially large results like about for in the and an tangible Workday is

Operator

from is Evercore Kirk next Materne Our question with ISI.

S. Kirk Materne

wondering that quarter. AI and echo or the is could congrats the right I'll on you Meaning, having, continue your so actually, tree where if to the talk guys sort to for it rates that in of Carl about of was has build. an win you decision-making already? guess, it top I Aneel, category on now. Is sort just I gen customers sprung impact your something expect to the leadership is

now, putting curious, your to kind a your was is you into everybody rates as of AI stronger I but head in right kind of if of is get 'XX. piloting win just sort I'm we position actually for curious leadership

Aneel Bhusri

for yet I win do us AI. our decisions people rates to get think think it this point, are will making position At 'XX. don't just I purely stronger in on

make think them a is a Workday going be to deployment with every place. knowing or has covered at looks that they're it's to strong that that I in customer new something a customer sure

We're in what's if we're the -- HR it's you in want And on their But ready. add cloud. in then days the still actual checks sales But just category. happening hype, finance. don't Doug, running unmatched looking, would I applications at when legacy that that and AI into they're of add just that think say it And early AI don't the stuff, the the box. know anything all we and AI of I with and moving off cycles? Doug despite and this. We're we're business I crappy know of still waiting. first foremost, is to large-scale I deployments

Doug Robinson

the out in it different cycle, but way. think come a does sales I in

entire off of and optimization, So it AI sort is value talent of built and ML. optimization prop we talk the of talent

we've to I me economy? how saying, saying, to not they're And my reskill innovation it showcase I'm then that while So a to a am are going going chance move me your show gives How show workforce? us skills-based They got. the gen to AI.

Operator

Our next Brent question is Thill with from Jefferies.

Luv Sodha

robust Luv expectations Thill. the activity year for is X few you next early to for This has will those guess be backlog been is on you. your Brent -- for fairly could you look quarters, this continue supported it I Zane, this backlog growth. renewals over Sodha talk out to and just a Early renewal as about growth? tailwind

Zane Rowe

Thanks question. for Yes. the

we've growth last As the of but we've with our activities very backlog activity. early and nicely over renewal ACV not renewal activity, our as the quarters, been the new communicated grow as number growth, pleased only both the scheduled renewal well

And of which last remarks, have renewals contemplated I will as in and has obviously I the that into as growth seen months, point we into the mentioned scheduled well. with year my backlog. have rates elevated out prepared some quarter helped that we next XX our in candidly, over upcoming

backlog subscription FY very that revenue obviously, the heading we're indicator point I'll you growth as health of good and subscription business. I've renewals But we're Carl? into an And guide pleased. to, subscription revenue. given well overall the we 'XX about out focused of and just revenue, so on and feel

Carl Eschenbach

to to think Yes. platform, based I'd our The if going wait not that to sell add, to until are best-of-breed a Aneel, to is demand. I consolidate renewal our them And driving cycle they on buy renewals on always the customers we're additional SKUs only additional thing we products. early want want reiterate

renewals. back that talent will, our we Last you in more Prism on center, customer base ready. force more quarter, We're being based X do are. customer accounting the just and We are Extend optimization, demand. drive, from if driving sold SKUs and of early where our than customers early customer a to going these we don't uptick saw us, renewals, to are nice early into incent we're like examples all when renewals sales demanding do is It's it those

Operator

Bank next with from Brad America. is Our question of Sills

Bradley Sills

things out is stands to here me in the the of One financials. that strength

full wins here as a out platform contributor. called You

both the there. and So deals HCM. commit you're great execution types platform, organizations full these seeing FINS to wondering, with where big just of I'm

just just Are to leap with making. you say, comfort of past? focusing that this of that function versus, that of the in financials, investments finding been you level you've on for there's simply deals the with an more increased willing the is cloud they're such make some Or now those types a

get strength to curious in why for some Just full particularly platform deals, on color now that FINS.

Doug Robinson

answering. This Doug is

is first XX% and still that's the moved think foremost, cloud. the all I we financials market to think of

So it's But growing recent that that it's suggests pipeline the quarter innings. early performance. more and build it's still consistent

at you it's popping really And look up. verticals where

think out, called this platform. we and grew the XX% were alone deals over I even those full of over in health care quarter, XX% but

with there's XX at buying financials enterprises So capital into Workday human full Health platform. employees, chain like the management, Advent XX,XXX hospitals of different sort massive supply transformation, scale and on

Carl Eschenbach

approach when decision for between tendency and in financials is, really those they're a add medium full on in both full had transforming to in And their and the a us we customers a QX, at And are both a thing U.S. I'd quarter X absolutely into leaning other platform good really business. time and HCM into at looking have Europe. given as platform leaned have a the that mid-market or enterprise, business decide customers those

Operator

with Our Alex is Research. next Zukin question Wolfe from

Aleksandr Zukin

strong first CRPO on guess, the at, It same I were And like quarter. sales a more know -- supposed do you on is of growth subscription your metric congratulations as way actually, to not you all, looks time and but we're since incremental at accelerated a marketing, efficient. bookings, I we really look which

need about what I leaning priorities to you the hit of want for margins. what algorithm. into of on be like kind year, to anchoring that are perspective next of that see temporarily areas is, incremental and think matrix rank about what spending the as the maybe to ask on there? an prevents kind I get then some might about And of guess I you growth which those How you talked So do stack you

Carl Eschenbach

going start can then I'm color. to add you saying

of hit So talked -- that we've our dividends. productivity build-out our lot a X already over of paying is do next the financials don't year. these of is the ramped to biggest investments aren't early in number times that remember hires I important X investment this of fully go-to-market last and about a until here year that full quarters have happened it's think

come next partners we're of we're they as partner business growth to up continue head financials right, do speed, I our as a We're lean So into we of see to this doing this manage the year. on. year of hiring all bringing overall We build-out in think the number and we'll to people organization. into because continued

this a our signing be of our year who would us leads referral quarters, XXX new here hundreds And business. had have new already goal up opportunities, and example through international up An signed program. in we XXX we both X when brought referral have of partners and program, partners launched have our we in

we'll that the And continue think into into we'll a lean drive that. to leverage talked investing that Cheyenne, the then and SKUs to solutions market. in opportunity great we and see continue to lean as product I So Aneel to new and into model data set side we AI about

same, that to we bit a lean to results want. the think early we year into this made producing that as we see signs I as investments they're more of it's and continue we'll little continue the the So the long

Aneel Bhusri

at incremental that being is aligns and alluding obviously, that there's gave the Alex, the is think next other around and investment Oploca I'll in we We're we're very just framework globe. just to, we product incremental how key side. sales expense We're why the significant heading -- add, disciplined time, this ahead looking into marketing which about with nicely the year, of have. as also areas same Carl that the at about investing

spend. how as on where and very this that you've spend we're confident we seen year, we'll be we And thoughtful

you've as seen revenue we year, the benefit of but only not look next XX we to XX.X throughout have guide margins in So year our As from also to our next now our course the expanding year. the of earlier increase base

in come very are. know, business revenue. where business, obviously as So about bookings the we good that out feel I'll point this those well ahead the investments is, you where the of

beyond So expect build revenue FY to 'XX. to would we continue see

Unknown Analyst

those feel did Analyst storm was out you Coming of the coming on front, potential the indeed selling like of squeeze horizon? and season look Perfect. you labor the maybe optimism then another it the kind some or at of of whether for Did if And strike of the the macro seeing were that just kind least out the quarter it maybe that it clouds, shutdown at macro maybe there -- and for of on I concerns. gathering big you're X in ebbed there's as of government conservative more or has kind feel into Aneel. a Day,

Aneel Bhusri

course. the just see I we've optimism. I just conservative par for been kind this don't it's mean I'd in of dynamic. see

I is right the think word. dynamic

is COVID. -- complicated to Doug That's they've world Somewhat before and to And time. going very just I'm the executed but to what predictable. want since defer I and unpredictable, Carl to how this don't question this now proudest it's challenging of team, I'm really say through not

Carl Eschenbach

Yes.

Aneel just with their understanding world worse. of teams I says, long. the what think these in want echo think around I hat Patrick see Doug waters. of improvement we sales tip to well. it seen And or just we've and don't It's consistent it any for year how to said to getting pretty we give see any and some I'll macro navigate our all a what do I you the choppy

move X And on new, quarter forward. will out around navigate business are don't I transformation X going good the business, quarter, make opportunities but even think be heightening how a them. call just it's figured that our at because continue a not it, each both continue very couldn't do of deals, evident may close quarters people skilled very going teams And I in to was of as the have and first past, I year, And leave that to out do financials. if decision It's quarters said slip, our to HCM when. they a we or of think to they're and they We've of this the particularly very see it their year. scrutiny some the they proud say. pipeline, I first closing quarter. lot when that a or our should teams But more the net X once

Aleksandr Zukin

you Well, from have us Congratulations. here. definitely to guys it

Operator

Raimo with from Lenschow is question Barclays. next Our

Raimo Lenschow

like on cycle, only out build-out. to appetite touched the Can like the are because Carl, build the as going on. we the on you -- partner obviously, that just SIs partner late X so moment headcount they're double-click well, side around on economic the As well. what's you, what's already usually now times at realizing

potentially Like their could you a in that congrats kind side? from from like side where there. is for headwind of Or pause are very as they their But forward. a -- going is mode well that kind much of on be still there investment me like

Carl Eschenbach

the Thank question. you Raimo, for you, thank and

partners we to on Workday. very see time and practice but in the is spend already if As investing making, are have a do there, do at in ecosystem investing them their that to building partners in what they're and were out the I financials the just financials you they're lot heavily you well-established like HCM heard think and relates practices, Rising our talking of would around mature opportunity you it investments They have Workday.

both evident in few ago was that in Rising a weeks U.S. here at And just the at EMEA. in rising

So partners an the us as they're us. lots program. mentioned our earlier, are it oh, opportunities to no time doubt we're leaning for there as referral the us our because of way, into bringing of by them net giving this to incentive really new bring I part opportunities year, first is also And

the yes, So happening. is investment

Operator

from is Cowen. TD with question Wood next Derrick Our

James Wood

at a think you can the into I AI third-party unlock tiered Workday ask wanted that you data I for guys helping bottles introduce and But to Aneel, extend. lot that monetization you've how helps helps look AI for about talk for to new that you and AI private you'll or Carl just with the for the of talked to see drive into traction that plays pricing is guess this term? the about how models Extend medium I maybe integrate opportunity about in Extend platform you

Aneel Bhusri

before years. the has for best-kept last several Extend X secrets AI our gateway the so Well, been of

business. customers every we And feature and able that are wanted ability. time, longest wanted they build give to Extend's and into unique the the For features develop them instead, they're we own to the their had Extend product, to, frankly,

And where got embedding into for out AI a strategy great same I plays we've AI, our products. with that story basically, think

technologies. over You'll new see they SKUs time a of are series AI around built

AI customers unique into our do core the AI may and to never very Extend be around their to But business unleashes gateway things partners that that would build products. we

been will AI make build only using think with front offerings happier ecosystem and extend that and they it's the technology, even of I So you'll customers to our also And see ISVs continue gateway extend which our products leverage huge. that in them. have the

And monetize more AI is Extend and do. Doug kind of monetizing think it maybe weapon mean it we're think we how about it. I are secret to for monetizing with Gateway. I can now talk continue to and wants a us, we we'll especially I how -- the much

Doug Robinson

Skills I think the this best of the example Aneel. quarter, is that Accenture that we Accenture announced with Cloud

of they're taken customers. market they've it. and and top different Extend Workday Journeys, essentially, Workday IP on on into of So also behalf the Skills Learning Cloud, reselling build Workday And then to Workday taking it

on services So it driving they're a with then packaging of behalf. it revenue our around up set and

example. of opportunities X That's lots there's just So like exciting that.

Operator

is Keirstead with question next UBS. from Karl Our

Karl Keirstead

there this to investor X tonight, yet of the year. Great. degree margins angst I'll year full Okay. and Zane, margins you've to about Zane. next margin and out of Day, direct up Investor your raised here some outlook was Maybe the guiding you're

trajectory Day better outlook as and as I'd that's all to flowing commentary. to imply your into get several it in bit bit feel the perhaps to terms has over more love little maybe about process a revenue contrast through you were little year. Just front-end sort of the years, margin next thought a color better-than-expected outlook, loaded the this Investor perhaps quite thinking. Does at a you it's the curious, changed next of not OpEx

Zane Rowe

the to Sure, first Carl. ask say answer months the pleased obviously you through the margin increasing can But thought as I'd that. outlook our discussed. you ahead change revenue X margin but here, of no course obviously, the the framework with seen me my point year, go we've Yes, the I'll year. happy I with out, instead. about question from for been we've that

well. as next margin into then increasing And the year into leaning

of well the around that that. And revenue So all makes make it beyond -- little We as those to those growth our it's articulated bit we at capacity expect feel to going that and FY want sense. confident to investments that do we've always we investments into above. have where making we're thoughtful believe Analyst be Financial a we 'XX our Day to strategy the We're we with seen. with

and that I've we'll see to previously let as the that increase pointed operating also that well. to where opportunities out continue to drop do margin, line it we bottom

in bottom our in right opportunities, we'll we So to you're outlook. let change that pointing no out broadly it speaking, those have when the line. But drop

Operator

is Our Walravens with Pat next question JMP from Securities.

Patrick Walravens

Great.

from transition when takes in wondering the how in see So back any role Aneel January. and Chair I'm And Carl, to your lessons Aneel partnership you chair XXXX? Dave's Aneel evolving executive

Aneel Bhusri

the a me things lot cut the I'll for Everything first. second continuum, and when I'm say weekly, excited of ship. Carl. X still be at he captain CEO, I'd I'll bit. the said touchstone me the little ship. about guard to X a just that of happen Dave off Workday. captain is Second a -- almost he talk only of And X same what there and Carl I the thing answer being But I became about can the to still the

days last XX could the And that frankly, seen Carl's have. what X date. over business December the ways I in and -- from we're year he the amazing never was year, I've the is almost just away driving

I, got transitioning a role, and my strategy innovation And so in started to how with are and product happy really Workday roots. Dave and which really is and back those I'm

It I, company about So and same it's I, and Dave friendship. really I'm been working this confident I But a has powerful, is the I think our that's what relationship very and with think and -- that's importantly, excited is and more makes and great. would future. say Carl Workday first was I optimistic on the now Dave built me I, and very and and

Carl Eschenbach

going been amazing. do a this even capacity. use he X He is like the to -- to product driving want anywhere. truly it steps I also term know He as far Aneel's technology He's him our sticking only to diving and rock . And has continue a I last can't AI, tell wait in that the the to months my star the comes product boss is And anywhere, the me Chair, star new is just he's I or energy industry. Aneel Workday. strategy. know when here it's software And I thing is into into deep be strategy going is be not Executive watching Yes. X and we not around. but is, going as to rock period. to see product as sometimes He at to I want genius truly add and

Operator

will take We now X more questions.

Berg is Our from next Scott question Needham & with Company.

Scott Berg

guess AI I now interest what appetite the space X the around to of that in Congrats or some on an of functionality is for platform Gen here. know incremental has technologies for years. out the you the customer of kind But into Doug. advanced and of really interwoven for guess a question sense some seeing probably nice early, last know Workday pay I are my months, the couple I actually had the there. I it's for, quarter renewed with obviously,

X I from have to be would this maybe questions the your get any is hat, is, now -- months around pay we viewpoint under lot investors helpful. think will you customers of actually there a for X that

Carl Eschenbach

months. where yes. remember was . I optimization broader right those in the increased I'll XX Day, answer X. answer and think that I that perspective. highlighted value. the -- sold XX at top XX% it of see talent in And to just we within the Analyst Customers will months, the And X for is from AI at in pay talent you that they QX SKUs a from top optimization attached previous business XX% look if quarter in

energy. was with co-innovate we're it ways, energy some a come us. at think pay business seeing Workday with customers of they're days I to In lot great So Workday. of like our willing of to early -- I part and feels days And where value early for

a some the But we and they they're row. that leverage platform of There share share onto talked we've we some experimenting about desire And to consolidate in things vendors what and a and to do quarters platform. a things for with. consolidate with can of the and this together, is experimenting several we're

think So results. it the do to and a I I up in do shows pay, think there's willingness

Aneel Bhusri

and willing If the for and pay copilots. that add getting I that equivalent solutions value. I willing adding customers the AI-only they're are good a that -- to proving for would point say pay to done, I other our could they're value adding part that point think deals created substantial they're ecosystem, are customers it's AI-native X thing, are are it of being by just start-ups proof companies if are and These they of see

Operator

final Our question Brian is from Schwartz Oppenheimer with & Company.

Brian Schwartz

Question for or Doug. Carl

If spending prioritization of there large read you're think spend early optimization. any technologies year, C-suite are a was in the IT about cost how efficiency Do on IT about year. for have and year. Just drove for you in the wanted this thinking prioritizing clearly, hearing tap terms C-suite on into at business to next next what enterprises prioritizing that we

Carl Eschenbach

go, Brian, okay. you Thanks, want to you the me Yes. Doug, start question. for and then do

a we're better demands upskilling productivity. on #X really to X and around companies probably and Talent seeing right driving talent. therefore, now C-suite their workforces the also is and experience there's the focused a of drive think and longer out reskilling I focused employees So keep C-suite all better now right clearly are priority they're on employee

talent would C-suite is So priority. a say I

The they're approach. a of to have consolidating total do their and leaning to they're IT looking top -- ownership. I and on a have a think better platform of of you we people when And platform cost that, where you consolidate I doing say into looking they spend. in would consolidate are more so, mentioned driving other And is something thing is you are

trying solutions who trust imperative Workday do becoming AI overall and And employees I AI business all out on to gains come. for what like little to this I able know and we'll going a how so, leverage really And I to is we've to to we're those drive call, bit they're and seeing. it. as That's to years they and productivity to But think a their figure company. seeking continue about as they're many talked do their think be lean so AI impact to towards deliver they vendors are really a

even out play. is I'd you're to. with business hit, the around customers suite desire to And energy there best consolidation other I you I'd that to respond with best and covered say agree -- applications. you on a was renewed breed. of so Doug, is But going for efficiency like productivity Well, There's versus but X of more touched I that, you I touching which than mind, you, which

great So driving by has a the get employees way, in effect and that, out, experience. And of drive side the better employee efficiency.

skills interesting. and get efficiencies, And more corporate into get where focus, so business employee productivity? I CIOs while talent AI experience more and come center and there's how saying, and get there's all this that's do How do our I the Gen conversations really

Operator

gentlemen, you Eschenbach Mr. and I'll on comments. participation now Ladies for it thank final conference. turn to your today's for back

Carl Eschenbach

everyone in Sure. by for have QX too. opportunity works we fuel strong to ahead. you the it problem. No have globe our thanks today's customers a around joining Workmates, mission-critical to partners and Thank call. our and quarter, was to Or that platform of thank durable and highlighted the continue special that and you, QX operator, reinforces another both success. only we Workday the nature excitement

a and growth FY at the here positioned 'XX we're focused durable and in well all in executing foundation are beyond. laying Workday, We and on for QX

hand With that, to a call. I season. it operator the everyone has hope over back holiday happy today's a close And and great to I'll evening

Operator

This conference. concludes today's

participation. disconnect You you may your your time. lines this for Thank at

Workday (WDAY) 28 Nov 232024 Q3 Earnings call transcript