WDAY - Earnings call transcript Q3 2025

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Operator

Hello. Welcome to Workday's fiscal 2025 Third Quarter Earnings Call. [Operator Instructions] I will now hand it over to Justin Furby, Vice President of Investor Relations. Mr. Furby, you may begin.

Justin Furby

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

our we On our our Somers, have CEO; call, Co-President; Product Zane David Robinson, Eschenbach, Doug Carl the Officer. CFO; Rowe, and Chief our

remarks, prepared we questions. Following take will

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

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Carl Eschenbach

Justin, of across growth of and geographies, the Assembly, education full industries strong modernize the for their the user I'm the the strong ultimate to non-GAAP in are power AI higher growing and and were and margins our report all all to the Workday industries. Georgia, expansions along suite. provide of joining XX% Several The wins, new financial and had XX%. industries. and was XX% a gives full growth wins Defense suite. In thank expanded total rising and net solid you, around in And our Lake we revenue ownership, New to customer a an quarter of reduce of have of want government in expectations and our we Technology organizations these were Thank in the Workday business them the its Institute Agency systems University QX and in with by of you today. our QX, solutions, relationships and across Illinois, of HR for experience. are meet Jersey to pleased two across consolidating of AI These County, us the more Workday and constituents. standouts. another of System for performance power of testament results in world. More subscription with customer few demand finance quarter, ecosystem best-in-class industries and operations QX, the evident General segments with reasons. with Roughly amazing the harness cost the their innovation Intelligence their advantage. That on Maryland chose in Workday employees key simplify platform operating They

transformation. planning Association to the Cloud suite. QX, to Lifestyle we full future our with Advantage in full our Flight the continuing third and ] the the professional Pro [ with name exceed also Valley $X in setting became a of IOI Fitness that [ in a Limited CEO retail billion partner we relationships Brookshire leader right and named live of service-centric More community hospitality. Solutions, organizations business, than a services Centre or mind had have for ] in we new Magic And annual had software. And quarter, care. From Workday financial to Common formed had invest suite. great comes some win Team one Connells Suites employee it recurring right business in and we quarter, thrilled Quadrant every Grocery This the healthcare guide Workday. Healthcare, AWS enterprises, and were a that's for planning, solutions XXXX business wins nonprofit again industry to now, services revenue really health and financial this Group through as speaking QX. AI of the for We cloud well work. systems demand QX. HCM the just with And for in. were to fantastic on Tenet selected Group, system ] planning huge new our all core and in were ERP go Healthcare, suite and Group, [ QX Gartner Picture X,XXX-plus HCM in as top Travel they're alongside [ U.S., largest of and like all Health is Health, are looking That's Health, XX% in Children's expanded comes and full financials a pace the to our Company, of We're In few. Mac Royal where them enterprises driving Mail, and ], Deloitte product when customers for perspective, in the Motion either Spirit for

Agent powered Talent or we're of excitement Workday driving involved know investment talent Johnson AI, investment our Agent, more customers XX% and Recruiter our that by value. have solutions, including and one particular, turnover. Recruiter Cox it's Enterprises Extend a a tangible up huge our of ton for [indiscernible] demand Controls, AI remains than more alone, and reduction in score. solutions. In Our QX Customers an in had Optimization fastest-growing with to Pro customer in at AI in seeing one and SKUs is an Health. optimization, expansions experienced of wins quarter and hired XX%

specific logos its ton is selling delivers support. shows invest boosting growing XX-year are are real needs price in whats results. clear of of And customers part of that opportunity average easy compared the solutions grow recruiter implement, our in In more closed This provide ACV to than is almost that core fact, quickly need the this that for our solution agent that's by more to QX. want QX team demand very of the quadrupled They in new IT new and to our recruiting AI than ready history, the built a value XXX%. It's to have monetize we and their business. huge without and awesome

our cleanest world's quantity XXX business million innovation. we're and data complex, ], in of unlocking our this and we're going AI contract, level of entire and the talk can more no productivity largest the is platform, our With our in billion about by competitor unlock [ than stakes task, of accelerating a transactions a transforming to set. under than and with Workday combination every a of AI. with data employee our leverages manual high next opportunity users it, year industry, whole our that capture a value context human data this how let's quality Illuminate In behind way unveiled more understand critical potential the finance in XX where we generating on and With the are do. At to differentiator, HR new the decisions to ability Illuminate, enables assisting ultimately processes. Workday generation Rising, So

next Illuminate, the is management which pinpoints processes with part to aren't agents inefficiencies available finance, Agent the be. transform I'm that out by believe complex The It of running launched business expense game of is processes as of year expected and bottlenecks, where the Expense endless, be As a AI some a they as smoothly to true recruiting, possibilities HR become soon Agent this end and changer. is several of uniquely succession in coming Optimize and more now. areas such most follow. going available in it. and will could about We is are planning. Recruiter up year as Agent fired we set new

to the collaborating employee great we're Workday a agents with agent needs. agent is support is Beyond Salesforce example our for delivering, communication here. self-service partners to

employee self-service So Microsoft on is its our with partnership agent. MXXX Copilot recent

information custom excited Workday to to personalized are it Assistant now ] Employees to Evisort's critical road We get closed this one company organizations document is systems. talk contracts, new decisions. The our down insights our will work. Consider answers. the our within Workday, This strength on difficult few. to empowering and this, with draw information get AI Workday payroll data, out unlock of can wants their a big been policy locked who policies, [ of Assistant. With platform. That drive customers our documents, sensitive continues stays move platform HR partners natural using currently in productivity, from our fastest-growing We've analyze them X,XXX our has HR assistant untapped more core a to to about name the from ask now more accelerate Workday a one data when able More customers one make to in unstructured, outside over AI, from than improve it includes about focus to departments to help business critical efficiencies, Copilot. it. using secure faster, search, case ], is increase of volumes Workday our or there just by strategic including cut we products ever. use take use to Copilot business of informed to anything building no powerful require everything their and own Other over platform language acquisition map, solutions like intelligence effectively. Gen and data With [ pay customers quick and super Extend, HCM got trusted alike. take to away customers can our of X,XXX platform. Continuing applications almost customers on risk our XX%. We questions of believe further making invoices in interest CIOs allowing it making leading AI and their the benefits and Workday XX% also Evisor even and updated we available employees

Copilot more you apps, greater is having Extend Pro, AI year. for last compared In Extend allows selling with doubled fact, double developer new first Gateway than our average which AI price its to build the even that quarter with an ACV Essentials. of in impact, within to Extend

more partner nearly and has ever. ecosystem Xx grown just in months diverse Our than is XX

are from within with on partners XX% revenue aged bill a Center, our months partnership pipeline. travel Rising, companies new on employee energy similar Flight leading compelling insights is system DATA, increasingly program, generating right critical [ are the sourcing to QX board, most ago. on growth percentage care using of leisure the how relationships our France Ireland, Unum their NTT partners benefits growth, partners. over continues workmates influential over and got which than real-time [ quarter, gives to Wellness, We've X design brand. announced the one and This We're adoption more Guardian, a as programs and seen like Australian strategic experience. we past of benefits. of in with becoming net in Mutual In in new launched XX we I U.K., excited integrators rapid a and in HCM and into be APAC, our improve major [ their the our to provider helps have most Germany, we we Workday already of ACV partners our spent new less of formed Workday overall incredible. excitement The and opportunities. This QX, and which And International Workday's new Our one time of them ] customers with We've signed to Japan. Omaha ] employees Hartford, already in are Australian Kainos Workday tailored ] formed a Japan. it. At SCA, amazing strategic

with agencies. and banks few largest We public a EMEA, also Bank, Overseas had with deal in we've the our footprint the U.K. expanded we of That's United our innovation we scrutiny win from technology other of the same U.K. science, for in quarters, out ever but sector generating Singapore. Over Department one interest in largest the called public lot faced last the

We also for Decathlon to in and in few world are ] our just Amsterdam around building like the Germany. And gearing business. significant [ EMEA The major international France a of big enterprises in we wins potential relationship and the had up Goldbeck rising with we're weeks. point long-term

While U.S. the only the outside today, XX% of we're our something revenue much groundwork comes for bigger. laying

wrap He quick recently that update Robinson, you Commercial to Rob great be XX ] Before We is space. Doug magnet world-class phase over the announced a I'm can't fantastic continue great efforts talent, Doug be have impact move in enterprise welcome next He advisory to a I I as the a growth. tremendous an enough to perfect more Workday a Workday. up, a retiring an he's Enslin the new our Doug's of Officer. to thank Chief and of partner team. the brings proven example. the been at as had who track lead in give experience we of the customer another success. to on him executive years, thrilled to the fiscal go-to-market than [ and for We're wanted continues year. the person years past is Rob President, record and company. With of XX to retirement, Workday will has incredible into end for leader on with He's our relationships I excited

quarter. been it's see, can you busy As a

at core ahead of we through revenue subscription expanding operating while our transform of innovation contributions and I'll what non-GAAP 'XX revolution fantastic as AI our in opportunity is this trust joining continuous over a across plan is their position growth and take of XX%. profitable to share streamlining to to their for have to continuing But markets FY the and Workday the incredibly mid-teen scale. while quarter. by in lead operations the company. a also between now driving this margins achieve Thanks Thanksgiving. With happy in our to innovate the excites U.S., amazing sustainable, us that, you organizations help growth, hand us and grateful to We We and future the With have Zane. them for really the workmates to drive of those Work. I'm we my target clear customers, it me our of again, culture, customers

Zane Rowe

quarter continued QX, $X.XX you for thank the $XX.XX at $XXX XX%. was Gross a revenue revenue $XXX XX%. retention growth today's services growing the in up of Thanks, at was backlog, international QX profitable totaled In in make number the Karl, joining revenue end billion, billion, both Total million, areas subscription to key quarter increasing XX%. and XX-month remained we progress in strong XX%. of of up foundation revenue across call. Professional of scale. Subscription million, billion, backlog U.S. for to XX%. lay $X.XX totaled CRPO, the QX, growth everyone revenue revenue or was XX%. growth total third at our durable, revenue and was end resulting $X.XXX as $X.XXX rates revenue at of subscription the billion billion, we

stronger-than-expected the operating collections in our quarter QX cash out impacted was million, [indiscernible] margin non-GAAP year-over-year, QX. income in expectations, activity Our $XXX by was a the flow non-GAAP resulting with called million, of for third though XX.X%. we $XXX line in operating operating

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

we wins future October Workmates results revenue around year. growth stood deliverables areas. A impacts continue XX,XXX This benefit of slightly hire fully 'XX. targeted FY globe to don't have the our as across QX wins near-term at subscription nearly of few head in talent strategic until these as count XX, As in our product next

and billion, billion, of of full increase expect growth XX%. We be $X.XXX to 'XX of QX subscription XX%, subscription revenue year revenue an FY $X.XXX

between CRPO XX.X%. QX and to expect growth be We XX.X%

$XXX QX year professional in revenue full $XXX million. of professional expect million, revenue services approximately We services of resulting

targeted areas increased key in efficiencies. balance to continue We on focus growth investments with company-wide

non-GAAP a and XX.X%, at is and GAAP FY for quarter raising lower margin we expected non-GAAP 'XX of estimated QX. As operating remains guidance a the rate. The XX%. to both be operating margin approximately full 'XX margin non-GAAP are operating tax result, our anticipate approximately XX% to rate we fourth year XX points percentage in than non-GAAP FY

expectations of billion, now 'XX $XXX our operating and approximately we We flow cash expect FY million. expenditures are capital $X.XXX of maintaining

initiatives, mid-teens progress developing growth good our key and of medium-term making AI our our supporting ecosystem are opportunities, We partner in with particular, across growth. target

As 'XX billion, revenue subscription about XX% of FY view, anticipate approximately early we or an $X.X growth.

first year revenue over to 'XX. rate largely QX X than of This headwind just We subscription growth subscription due is point which to be expect quarter growth. slightly the growth FY overall our impact revenue for our lower to leap creates the

while expect across focused our across continued opportunities improving of in workforce, second by earlier. We're at same company on the which processes and half, wins referenced driven includes quarter, time, tied the and and the slightly We systems. third business. the strategic emerging driving higher AI deliverables expansion growth part for investing the efficiencies in growth a rate This AI the to I integrating global from the

margin operating expect We we expansion. approximately progress demonstrate FY margin towards XX.X% of non-GAAP 'XX as long-term

a compensation it addition, revenue. trend as percentage expense are of to we expect to actively In continue share-based and managing lower

operator and on As line that, durable to begin we build executing we turn and accretion. for margin long are for the the short back enter growth I'll With top focused over the both foundation we as QX, to it Q&A. term

Operator

question Evercore And ISI. from our Materne, comes Kirk Instructions] first [Operator

S. Kirk Materne

fourth the how I talk much more a on for little plays also is to bit wondering, a preliminary that of came weighing the quarter? the that about of issue realize perhaps that into onetime just guide relative fiscal guide it's than about about on in nature 'XX, 'XX? Can -- you little was And I that but much that more Zane, deliverable how concerned because fiscal mid-teens when of and guide nature? for you it's just as directional people sort can you in provide just have in bit I obviously more guys color a talked think are -- maybe

Zane Rowe

number that, comments afterwards. we little a some have Yes. Sure, I'm in on revenue or had then I mentioned, on. as the sure Kirk. quarter deals product Happy start deliverables a third and to were key that There strategic some Carl recognition saw of bit otherwise, later

it expect up of through ramp to course next the We year.

If you midpoint it the quarter, year. would for outlook us the think about of guidance in put our our original for roughly fourth the

say basis, 'XX then million on were at a actual that point second if it I'd to about on FY say, the to the year-over-year have think half would to, contribute recognize of sort you look we $XX of basis, as So in if historically. And on approximately sort impact I'd of you that, $X of deal, X.X million fourth quarter, revenue we a growth. approximately

year, 'XX. of recognize product continue QX, nice leap see to these mentioned, amount will and and But lapped momentum the those, 'XX. Carl, to that's part and deals, impact FY with about excited we're revenue into and area in we you I of the the which obviously, I'll beyond these that strategic FY of that. QX. But the still that and there others business. I'll we fair out, this key grow obviously course point add impacting this at we a that's definitely expect can in let to a revenue. of very of about believe recognition build are there's the As aligns the heading point through the X growth we And point be

Carl Eschenbach

Yes.

strategic Kirk, DIA really what's to importance the the like of is a Defense think Intelligence or I recognize important, deal Agency.

of out on to and really actually recognize We it that can we it's levels to and deliver as go revenue federal doing opportunities we're critical the the federal demand into in for are is security, recognize pushing for people we those the a and government. hard platform have for build until Workday us with But us these government and can't so, driving market. government wins different

is them one integrate as with critical Workday well. and another It's into other for building that our The and Workday partners for wellness, wellness. platform, to out wellness to platform we're engage us the

revenue of ready key we while So like not of It's next build partners the just ], which in be Guardian, able Hartford, ], on year. they're [ Omaha to delivered that our for a recognition signed number Mutual Unum to yet, the platform. [ changes

S. Kirk Materne

we can lot ask board. quick and just If assume made on since in you've same reshuffling the your start et Rob's kind terms are the in I necessarily not you you came there's on any of that sort on of way appointment, or of changes as that thinking board, next I cetera? so Rob's year, follow-up of Karl. partner strategy, deck a a I assume restart Rob of

Carl Eschenbach

No, question. for Rob we've but tremendous for for the have the been for of I've probably Thanks grew I'm industry respect around sorry, known in We long up I Yes. XX a age, our years. time. showing and a him. I'm XX the amount or industry

to and tremendous up, passing I that SAP sad we're nicely, pick baton X going for background, Doug he's He also in steps as in we'll of started aside. But we between Rob's fits over us we're overlap a when lived all be about the Japan. the Like international. months business especially China. doing what experience his have in He's be and his almost asset think to lived Rob. just think very Doug you us Europe.

strategy. we're at business So how go-to-market any the impact our of the thinking I future or don't about we're how running expect all to

that has that partner relationships many SAP, In fact, not have a with. spent Workday today because you doesn't already at if Rod about think Rob, he there's so years single

it's excited and outlook joining the future for us. to I bring us. a think great hire he's for team We're great super a the energized he'll So and

Operator

comes question next JPMorgan. Our Mark from Murphy,

Mark Murphy

the agency, a the might U.S. but $X spending curious out. getting next into but whether to those this be I'm And understand department of year? impacting Carl, inflection going of of there in if strip was a quick think be might how We're Federal that questions business that, you government a closed have you've heard budgeting I any Day defense agencies interpreting in on can spending of Analyst comment anything, you follow-up. to point. the stated I And efficiency at plans QX, that. And lot try their trillion that behavior a is

Carl Eschenbach

Sure, Mark.

So I'll start.

As coming focusing why people remarks, It And in we're think post now, and efficiency. the tell inflection we're scale federal heavily a think these is looking opportunity so more we're investing more to same platform. At and [indiscernible] I to a building my way We supporting can out going on-premises XX% I drive absolutely that. at time, election, not to antiquated more and catching you, moved systems is an really with economies said on prepared forward. probably are than in right we of there do secure HCM out, of a there's with government the huge point And on-premises. cloud. hasn't ERP the it which still

only this about think for be government going the a business we tailwind So we forward. think will federal us as

Mark Murphy

any seen your then, or where as there stabilization customer the in any look think, indicators any to quick of detected election, also ago different cuts you it That's it's did even uptick or employment U.S. of might and in interest I'm any couple great I any sluggish been follow-up, hear. And a quarters base? I a that moving sideways, to have of recent wasn't any know but that moving might past renewals you payroll different? possibility Okay. than of wondering, might data the generally, in rate is any subsequent sure feels without have runs Zane, kind I if

Zane Rowe

Yes. Sure, Mark.

it moderation pleased year, As and further expectations we year. downtick. we in saw in haven't mentioned of I'm the the what we any early seen a say more earlier was to

In fact, has moderated. it

improvement haven't significant either. necessarily We seen

for think as always around is business but expectations the and in where within plan rates conviction growth business. ahead, good we the always I interest it's obviously, enthusiasm So our may around our go welcome

business seen that quarter from the continuing although significant would we that areas -- no that to we in take pleased we've year. So caution scrutiny. said, especially of But momentum a still in we've next very through the right into impact we're the believe look globe course that are experienced All in or through now, I we're around outlook still change with deal impacted the and what forward we year. global and increased the certain being

Operator

Our comes Sachs. Kash from next Rangan, Goldman question

Kasthuri Rangan

Carl, going with to be you're have you're Rob [indiscernible] guys, cricket. you with Rob to learn outnumbered going and joining and to

you a need if So me let primer, know. please

Carl Eschenbach

take Only That's really I right. they're but shorter I bit may little enjoy know on that about a and I cricket up Kash, though. when it. you the matches

Kasthuri Rangan

Great.

you So the moving growth on compounding the do rate. harder a -- curious to see bit as business. same margin It's to reiterate numbers make and maintain rate becomes bigger, growth XX% company the I'm the what 'XX 'XX. good to the fiscal little in get I guess,

next or building in numbers any a 'XX? confident and better recap these feel couple we inflection us 'XX AI with of perhaps [indiscernible] with are why you So in still years? point the of monetization getting Give over

Carl Eschenbach

we couple of the salient question. conviction and being points the reflect next so Kash, of Thanks you And give to able in for confidence a mid-teen think I that couple have over guide me Yes. expand years let while much, operating the margins. our

than which the that recruiter the add conference in quarter we you XX we I solid attended felt product, continued And our the a the we we throughout running business. more tell number delivering excitement ], the our that QX QX. number September, in we conference, is Workday launched AI Illuminate to We we momentum, logos a had they QX at including our with platform. which which tried highlight quarter. our had next-generation Rising of So which the [ can AI did prior back after the in a We solid one, in points were really years at around

our an in Recruiter included Talent is than Pro Extend our saw customer also solutions, to one base with We our back Optimization, of XX% base selling back AI AI sales Agent, the our to our along uptick which solutions. our platform. More of

it So in we the to AI. when seeing absolutely business momentum are comes

couple working you XX% building we've the federal out a with on suite as in enterprise, on Kash, our full combine down full the that move suite with included the few all growth on years. And platform my U.S. last lands gave more remarks, think we our that focus focus then in as let's along very doing on ecosystem, quarter, to continued the we our solutions. things been our confident a market If our next new prepared the feel QX, I building focused we guide quarter. nail. on we're our in quarter focus this we for you you into then in industries, nailing our a net remember, government, our which And continue partner think out focus than maintain mid-teens on FY what over the got got I here like 'XX, you We're this years, over just of sales, had big ability opportunity medium in pushing we of about

call. guide update our and on we'll to it FY strong And against as have really number QX. for our to relates deliver looks be as then during our we'll We earnings able QX it you quarter, further 'XX current a pipeline the -- I'm confident

Zane Rowe

next that we've deals where I revenue Kash, of there. come, again we of we would And have that's $X.X And work point next and add, see line to out, to on and momentum have expect been we'll done, more including you approximately said, billion. Carl obviously, as that closed lot just the the more already update details year. quarter a on into strategic into sight conviction we obviously,

Operator

Fargo. question Wells Michael comes Turrin, from next our And

Michael Turrin

pieces contemplating you're consider? that's more it some the not given just what anything there's just add into inform around progresses a if and could if as other software. that margin on or next seasonal you there's QX layers context bigger FX the can helpful. your and is any you impact year trade-off between all year to guide and that how the closed profile it's And growth Any views add Maybe few case commentary the could there. -- informs across moving Workday on not a for Given

Carl Eschenbach

Thanks, Yes. Michael.

you guide a We pipeline coming have that solid in QX. that we is the give reflected into the for did One quarter.

these customer of of these have we said, base what these ROI now, think the deals Recruiter solutions really doing our our and AI business they in technologies. when pay Extend now selling willing back into get Optimization rapid like from quarter, especially our with to of customers SKU And where XX% I interesting we're in of Talent a uptake is lot Pro. I as the mean, also, Agent, some a that tangible momentum We what's you an have about our the they for solutions include is AI products. that are because can pretty right

of in So the quarter quarter. us, pipeline. deals largest historically it's it have different well. the as don't And momentum, as is you it's this It's that we the the any the know, large the I quarter for think always year QX will and be

Zane Rowe

look one at expected Yes, the the of Michael, in add, number elements points. feel of believe, It's that we we basis saw obviously, we positions a I third would exceeding good the growth quarter, the us by range CRPO. well our just just about we

about of see good so this is feel being base, the fourth we the the still close significant that we as is it business setup. FX an don't quarter. majority into obviously, U.S. where So but impact, our

then about last scale opportunity line and we'll good and still We've that and So the the continue of balancing the the job number for systems, a top process years we continuing we're efficiencies in business. quarter. And focus on guide with think, I always people, thinking to feel done, margin. over good the about to and outlook

the for the year grow great feel years. margins XX% as next beyond beyond and that this we next but into X of outlook over year, margin the only we remainder not So about

Operator

from Brad our next comes And Deutsche Zelnick, question Bank.

Brad Zelnick

if distinguish you partners. talk granularity happening Guys, it's execution helpful. more and through. picked could But I where, between environment there Can about things wins, be hear up just talking the frankly, Europe, to about really about would great to to in theater? you And many what's of little leverage shining ask seeing wanted some the any and a in mixed we that partner bit strategic

Carl Eschenbach

Yes. Thanks for the question, Brad.

in start has U.S. while is That remains changed. Yes, economy, outside business the the That of is think still lot market me changed, I that addressable people that out, specifically, with called for a let you the XX% not if headwinds we have EMEA, the some not and thesis. Workday in seen have has and of intact. So will, our

winning And same those stronger team the than ultimately HCM whether or significant is do leadership at make a ever. Our opportunity, of portion both, transformational Financials time, deals. when or people a we a decision on are large it's

customers these when Europe strong. in forward decide is rate do win go to Our very

I'm to rates they we over confident that, customers So we make that a Europe prospects continuing doing What work transformational couple decision are headwinds, what and of project, innovate, in can to our with win that the control and the seen when continuing are the while do control very ahead. is can't to so we're we've in quarters. last continuing there opportunity we a some obviously. do

Operator

Our Brad next of Bank Sills, America. question from comes

Bradley Sills

of seeing ed. some to quite wanted in going going you're deals on platform are the this well. that some time, for I and a ask has some question Obviously, higher around there strengths government you been and cited

across And working curious, kind fins are if that coming really and glue, should that vertical? of we you what's driving next up that thinking become will? that there that of in certain that about Is plus verticals? source that found are you there HCM combined a is be the Just the others kind strength of application might

Carl Eschenbach

question, Brad. the Yes. for Thanks

suite In quarter and platforms. full we included ed. we've full historically, our out state both always quarter, this think that and local in damn and pretty wins strong I business a government XX% had government, higher this called of

with at ed, student The growth dealing you exact or to also that local suite we've the of decision the and that higher quite product had rate for in the gain a full out that higher you're the platform, it didn't to care. advantage have have then these government the because and performed even in people time. I health over is state couple an it gives we've it federal called we make momentum full when called well, do out one think a us competition. quarters tendency So ed, continues last a over also the government same of

We care. continue to win in health

the think and Spirit. to the in I on deal probably over that table but a We which not were was XX supply win Common as to the also largest the product months well. testament our our it market, fact, both chain financials, last -- HCM health platform, able is it's In care only our

in we continue are suite industries, student for products verticals for we'll they think X have have I certain and look at like because health So have these care. momentum ed full we and chain to then industry higher supply

Operator

our next And question Keirstead, comes Karl from UBS.

Karl Keirstead

next you on a for for outlook couple year. the Maybe Zane,

sub Just first you of that be likely on mentioned XX%. it will all, QX,

XXX-plus second So fall bps from year. doesn't that Typically, would be, call that a this it quickly. the decel it, half

you're if So half what of you it is second able issues some a you confidence the you it's wins there. the you order, -- seems just that Maybe could driver year? function to acceleration? give you AI, us expect? And on which seeing ramping, second Are the help get AI. that QX you rank to maybe into it but secondly, had the to monetize bigger then the I'm strategic can acceleration, visibility of half little me half some that second onetime there next emerging unpack must be performance a mentioned curious, And also maybe is finally

Zane Rowe

compare, have me that obviously, point. the start highlighted Sure. was Yes, I year which about we X QX. with let leap

wanted more that, strategic expect of and given obviously, as in mention point any to related the obviously, haven't Karl, of QX. it, strategic than relates recognize that it And we just X.X wins. course pressure FY it into as other half. improvement those is or will we for to there a linearity the just small we ]. X.X build obviously, through the to any the AI, detail 'XX. Yes, deals We second FY the to see This wins I part see of, to [ the highlight on 'XX,

higher the expect and seeing the of we Carl then talk on see So about do through the half. And growth what FY course AI let slightly we're in momentum back front to the some I'll of 'XX.

Carl Eschenbach

Yes.

of this Hired couple That's a things Karl, Agent that QX, sold acquisition and base. recruiting AI. have closed back customers the of back strong. had platform. we who in year, the of the customer our our we earlier selling That X,XXX-plus typically highlighted Score Remember So some gets Recruiter into into we on just success

Recruiter or of attach So sell, digits customer to we're base only in our the our rate low example, Agent. to penetration single existing for

agents and are AI developers the AI top that Talent a workforce indications internal things build to is that will come year from seeing solutions you platform seeking applications on the next and on of of couple as Pro, we to out year. API we're of which mobility an Workday. think like are is Optimized and bring for customers gateway These that have AI and the The all the are most bookings market there into Workday. And solutions and different deep later write to a an into a core Extend has out. core X which revenue with go new Copilot the When an which us, agents built momentum into have all around then and year, these the this are Successor It Expense be going we'll we that data have within AI platform, Agent. have Agent. we extracted. nice We'll new impact have stays than Optimization, have they're Agent, that will an to and We'll doesn't

we're today. Customers there. which that, So way, for And documents, even by unstructured and an the it pay mention building. looking early oh, the I that's the scanning momentum in ], is our indications world the to platform to. sign and AI very We the we driving at in data Evesort powerful especially is That's for AI excited are and solutions. see with didn't [ willing live

Operator

comes question from Jefferies. next Our Brent Thill,

Brent Thill

methodology the color the on any a guidance be you methodology? conservatism you're walked before? given a us had guide more are Everyone's to taking -- on the same Zane, looking guide, now. are that had give few can you've you a same asking little as at? times You the you of pipe that Or new or kind injecting down

Zane Rowe

would say, this we our line I Yes, reminder. look, of the for look thanks is as current 'XX. sight Brent, FY Yes, at Sure.

leave in but is range we detail. that to it's highlight closed heading number confident early then mentioned. are already the early just For and color more FY providing of we'll approximately give we of broader sort as in roll also, what lay into it as of year impact And there overlap. this initial very we leap I And more next year. But we off, a opportunities up look an particular. number in transactions feel look. in the about first to we've days we I second next of second quarter want we the now, out billion, think we as didn't as guidance, year, that these good It's rate have look. obviously initial But an reason, in forward we half, half will AI 'XX a that's We're still the $X.X excited it look to but growth wanted the And that to a next is. just

Brent Thill

way at you to And proactive changes. how Okay. you tend know positive not do I be when caliber, about -- impact that you've quickly questions of there for another turbulence that? with go-to-market we someone have go-to-market. been another is usually But for new how changes comes should think -- you a of exec? kind through coming his Great. then made Rob of And give Carl. confidence or do lot lot in the already How a that bring about on, With investors to there there's

Carl Eschenbach

It's Yes. sticking Thanks months, we X I positive around experience his to of smooth and for joining. also enough we're next and to have Doug we overlap because for going a with very with that going that I of have am will his industry. the transition. knowledge any negative Rob believe question. the be impact it's be not ensuring the confident all

joining from I any about impact think and team in the -- all him at only positives nervous from not I'm net So here. know it's fact,

Operator

now Barclays. will from question our Lenschow, We Raimo And questions. next take two more comes

Raimo Lenschow

as is of you kind of kind for solution of about make seeing solutions? a get AI paid more go how coming in for a as in solution, industry? you in add-on that are If players thinking it next question -- in of bundled there, your a for how kind back of the do the to is Eurospace Carl, terms sure I the monetization those you think an acceleration Can half. changing as add-on lot

Carl Eschenbach

for Thanks the Yes. question.

stated customers It the one, in in a we with, with customers investment monetization. approach or solutions point, into number where built Agent, an as we've they are take to well that example gets that of customers starts same the bring As an times, that past, into it's our AI a of we Workday pay customer are platform. believe rates multipronged in as us to when with expansion our AI our we meet to and existing for bunch and it. like whole opportunities, AI customer willing us reflected our satisfaction. And as lot prospects, with great investment a is core new on rates in on. At strategies a their Recruiter leaning for us win customers our our renewal that new has rates a It's truly market, bolted platform not already

gain which being productivity of recruiting when significant recruiters, of XX% upwards HR. are with associated is think costs about seeing in you customers the Our one biggest your

monetize for it. we our So pay and are customers it willing to

the like we out and mobility the platform, buying said it and our and then Another values well. And be people going Optimized impact paying bring people significant example leaning earlier, as reduce based Talent It's well we're to as as Pro, gets. we Extend it Successor internal an bring example X,XXX Agent, current I how to new and it. an them actually lastly, where Agent our new to customer are And using into Essentials customers a is Agent, Extend Optimization, going a for we're on it pricing products are agents, out uplift of as us and from have over Expense drive our attrition.

And think have going growth continue sustainable time. a AI we to a strategy over help I around it's monetization. So to I drive think good

Raimo Lenschow

And for you. sorry, Perfect. Okay. then, Carl, one one Zane, --

you about Can this takes decision? guidance and and the side, kind drove puts the bit didn't guidance. of flow quarter like the talk flow cash the cash little change On you a what

Zane Rowe

that Raimo, came strong. last we mentioned collections in quarter really

you the you if balance X rate. actually year, if And you So out which the fiscal an period, that mentioned that quarter. for more normalized pay gets also comes fourth this had a to additional back recall we quarters into

So is of expected. a lot this

We haven't for for changed 'XX. obviously, time, some guide our FY

which we we year fiscal impacted year, FY called sizable the had and early as recall well. in last that well, 'XX, may as out You collections

year really we expectations, But variability picking and understand feel we about in good about OCF on I through though that the generation OCF. So with net-net, up you're the off about we good XX%. QX, even course the line were feel I saw in our of

Operator

from Alex Zukin, Research. comes our And question Wolfe final

Aleksandr Zukin

want I one quarter first on just -- maybe itself. the the to

of quarter in comment Your wondering deal And a And during question the will, And if itself on the the any verticals you you as the [indiscernible]. election both that time slippage, incrementally I And customers feel quick coming we're I'm post. quarter kind positive pretty either any that about you other But ended vertical, more also would marketplace. have incremental asked late with anxious on interesting. in obviously, a out minute be maybe unwound, if maybe follow-up. got caused that. just in conversation the of federal or friction, it, the

Carl Eschenbach

the We momentum with good pleased of were we deals the in number had and bookings Yes. were saw that Listen, line We our results tremendous on we we Alex, closed execution had thanks QX AI. a our internally. expectations a for significant quarter. with and question. in

is quarter, election us. So both the way But any deal pretty it have the we created. in have we're to or the may was or see behind what It's change that consistent, and distractions scrutiny It other us to or in behind postelection. I preelection would anything happy that say good one for any impact any didn't else.

Aleksandr Zukin

thing, you bit to to was didn't of as of then you were you would little sign at about surprise terms sign but these least in -- Was -- and them, think pace the we these help know in to cover. or numbers. understand it's because I any And a of ask deals, for kind the were companies, a really for Perfect. you the larger that a us quarter knew this [indiscernible] taking the a the of time of first going that incremental you of things impacting of will, able that terms -- kind deliverables, for they change of if impact necessarily we're that and hearing you that

I'd of and So to love was bit just understand little a issue? the mechanics this logistics

Carl Eschenbach

and Yes, Alex, some in revenue later. They're sooner these some a as obviously recognize you in of strategic get case, into cases deliverables, you deals. number

two later. so happened these that were Just

whether the As the for through working some we've that not a you have was accounting it or -- time. period at been you everything these and traditionally negotiation. of produce of to And obviously, course it the surprise, look

very enough shortly transactions. your to about of feel into as where we have had encouraged may be but it line went very or elements of impact them So the 'XX. sight large different you elements incredibly into by the either good we -- it, on FY transactions. we are only at out structure these one our They They're as just together obviously, there if you and they had They to strategic. recognize an call we out wanted these, were perfect revenue. And QX I differently point, signing, strategic. revenue of as to after into looked of these may types are nature some but

to over number them expect of We significantly a grow years.

I of to that just one we quarter. decided business too out much part them. So we're again, this very about read wouldn't excited call into the it. It's just

Aleksandr Zukin

element the So timing little bit to maybe latter -- it ACV. a change just period? the doesn't it It's basically, moves doesn't a that

Carl Eschenbach

the exactly capture cases, element Correct. just That's necessarily a of yes, can't timing you the it's nature I mean, the some But CRPO because of in deal. element. right.

Operator

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

Carl Eschenbach

again joining Thank everyone today. you, call our you for operator, for and thank

the world go, partners I'd like to to our Workday success. our fuel around who we continue thank and customers Workmates, Before

that, focused amongst operating we believe most and close to happy software for durable I'll on the of again. profitable enduring at world's this best platform those be the the driving to Workday Thank Thanks deliver AI you, back while of once everyone. and all business you call. customers. our it executing our And to achieved and We're time. growth strategy out margins scale turn Thanksgiving. With expanding QX, in continue in We solutions U.S., to operator our to the the again can on

Operator

This does today's you. teleconference. Thank conclude

at lines your time. this disconnect may You

Workday (WDAY) 26 Nov 242025 Q3 Earnings call transcript