WDAY - Earnings call transcript Q4 2025

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Operator

Welcome to Workday's Fourth Quarter and Full Year '25 Earnings Call. [Operator Instructions]

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

Justin Furby

Thank you, operator. Welcome to Workday's Fourth Quarter Fiscal 2025 Earnings Conference Call.

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

prepared take will remarks, Following questions. we

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

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

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

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

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

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

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

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

Carl Eschenbach

Justin, non-GAAP us another thank a businesses to you, These XX% QX, solid revenue and operating and Thank all Workday industries geographies for are with Workday as margin. trusted today. increasingly solid how how turning XX% teams quarter growth testament results delivered incredibly you subscription are executed of And sizes, in joining deliver year. in proud to all and I'm QX to our their partner. of a

ways with of power productivity been and their and customers solutions. what platform, can their AI ownership, reduce efficiently, their run ultimate for total money. look has faster, advantage, the organizations of boost unlock best-in-class and And never helping cost finance across value them stronger. our Workday and harness them our gives to our unified people more As HR value manage proposition the our most, matters

the On the will innovation, of of talk I'll now the entire workforce, digital, to quarter. call. exciting and and to on platform. about system manage Workday centralized and from parties customers trusted later more this AI front, in But we A momentum the be in an just our manage our their industry organization's record. humans agent turn this agents to our launched With able customers announcement third AI alike. all let's system

Carolina During Company. ], and Iberostar including we Trust State Citizens ], customers, the QX, incredible [ & welcomed Henkel [ Bank Bayer, new First North of

XXXX, nature geographies, industries the lot and a ] XX% XX% [ also now Cisco, Workday says industry leaders, customers of of of expanded the Toyota. including that XXX more than platform. the across Health [ and XX,XXX including Mondelez strategic about Fortune than more with Sutter and We serves ], our and Global

Minneapolis, of County In exception. huge focus University suite a of and the growth is QX. [ contributor QX no this city full chose was and all in New York Louis our industry St. SLED City to Our ],

with colleges deal our XXX,XXX We improve Student Minnesota students, Student the signed faculty. to State Workday experience Workday and and universities. a largest XX,XXX the also for ever massive This project choice traction is than and have be higher education of half gaining expect more as for quickly the institutions. now them spring. top the we customers, We will by live roughly XXX is

expand we're After the adoption Canada U.S., this year. Zealand in and the into rapid here markets to excited Workday New Australia, Student

strong efficiencies growing with IT a the modernization. opportunity and to focus have Federal administration's also driving thanks U.S. government, We the on

Fed a and recent at helped have Our foundation sector, of set exciting opportunities. wins DOE solid number up DIA the this opening a in

net continues our Fortune industries. Aon wins health [ them ] large in services FINS number Saudi suite. We wins we both that had of fiscal leveraging of QX full North XX% in a We a Hackensack and focused May closed climbs UnityPoint core the we Health [ with delivered, organization. across ] and now care notable full have financials Health our deal and one full again HCM with including largest quarter significant and also to over number More full XXX XX%. than to a than of Center, X,XXX suite, had once our core Health. the year. Bank, more ] wins were [ Medical ] of customers, SLED are and in of [ X,XXX core and Meridian Mississippi suite and with ] industries [ our QX, FINS care, new In [ record Financial be expansions ]

and financials, in pay new continued with in in investments QX. Our both go-to-market, in growth strong to innovation off ACV

demand And financials core to a accounting strong increasing see solutions. AI our student planning, solutions. record to momentum for we In saw addition and center, of continue for financial procurement wins, we number

in conversation them center is back for partners. move ROI They're and that fact, gains. have also with their In want productivity business. growth helps front every AI prospects incremental beyond and customers, I drive to into They looking

more Xtend fastest-growing one new QX, QX, customers recently AI our we SKUs, and which out build involve ACV including XX% on to one doubled continues rolled saw top Recruiting talent more of to than mobility our Pro, of or ] expansions Similar enables In [ our platform AI applications once SKUs. Xtend our agent. Agent over of [indiscernible] again QX. to be Pro, our customer

which hearing customers is Xtend faster. much is of Copilot, over We're that seeing is part results. from build gains productivity of they're them apps Developer real Pro delivering This helping XX%.

Recruiting more. wins and Agent had with to pac Gen an the year BP, ] exceptional close at many [

continues in QX to and from this price New the recruiting ACV our boost solution. doubled core product of selling average nearly QX,

QX, for reported it was in of solutions. A we great the uplift QX. X.Xx ROI fact, in In customers example higher even to pay high than willing

AI customer-centric. always Our has been approach to

to features, our integrated for AI gen charge rush them others early While into we core offering.

fuel AI ROI, delivering more our are evolved, our has opportunities that further long-term ourselves from distancing tangible monetization growth. importantly, have new the perhaps And Now we that and competition. will we

world's our financial the transactions position. leverages And Workday in on ability data, our to with behind puts the of it, HR With more and trillion 'XX, than FY and data context set. understand our platform X AI unique largest cleanest processed in the combination this a

X today. role-based agents agents Following contracts, agents the announcement like These auditing our not for policy. financial of the most payroll, task-based at more market Rising, we of are and new launched

a people customers greater role-based ability ROI support where willing contain them that large of of Our is has see agents and Each that configurable true pay. a That's multiple their number give roles. in we can where to set skills tasks. skills are perform and to

the thousands, have market introduced the a agents vendors. and been year, hundreds, Over number past maybe into of of across

manage value solve. the risk, security true there's of That's more risks As to of their and agents difficulty a and operations, [indiscernible] agents fragmented place record measuring Workday is are Agent of to this real point, what central At the there deployed, increased system AI investments. organization's aims risk no

launch, customer we've of it all business' bill on fleet risk from and will their partner agents. customers trusted entire AI the partners, a technology Workday Workday in enterprise. a And workforce, also our the manage strong alongside and to it agents agent access record of will manage agents, won't Since bill mitigate who'd agents It platform. interest just like system to human had manage the

we role Workday's partners, more with net them them are than last just collaborating we're we're of drive to getting Wellness, XX% create partners and to play growth, where into Not strategic well. they And as the started. to leaning pipeline innovating only the QX, from increased ACV a strong lines XX% was than power with business also through we're products, extend continue but for Partners more through and quarter X we of of partners new core in like Workday new our Workday in In QX. signed up programs platform. sourced also our partner

the June, at Workday we continues to gain program Since Workday selling end applications and on on partners Bill the XX building of have its Our platform. launch traction.

[ in brings Finally, candidate of signed largest customers of in drive partnership our the the together data quarter, talent global hiring talent better our Randstad the strategic which increase the outcomes. we help the talent Recruiting efficiencies company ], Workday first power to pool also world Agent and with with

solid QX. We international. to key performance number a delivered across Turning our in of geographies

choice. hosted macro of two spending had When are December, with EMEA, what I've EMEA momentum a to customers We many attendees, record-breaking quarter the shows headwinds X,XXX is year. in make a also rising in Germany, the which Workday said in their largest Despite and the our U.K. continued markets, quarter. This the decision, the helped drive strongest times. ready

]. DOC selecting Bayer of German Binance, In this formed like to we the with the including HCM. the wins, important market in QX, region, we're Osaka competitors' had And office. our grow continuing several Nine companies our [ great ] we Henkel Japan, Entertainment build relationships Workday Jingdong opening and and core [ In new fantastic ] important in APAC, In [ some with backyard. [ to ] in foundation

thank us to high your Doug 'XX the like Robinson company. dedication partners also close my customers quarter a to our helping on recognize for Thank to you, want for workmates, strong. Doug, helping and end this us note. our I'd for building I FY

Kasmyer and President Technology. Cheyenne's enterprise enough impact can't of to he other a end start is transition. Product stay With Google, adviser we new the Google a to retirement Garrick SAP, thank through our to has an on and years Garrick March where us data, will [ leadership innovation ERP with and on excited we're and the has analytics in as years, May Workday. and Before our of force Cheyenne lead to After the XX, for incredible strategy. nearly driving spent the ] ] data to product and help our expertise Cloud. ideal AI, technology Garrick I'd strategy, of as share he [ his Cheyenne been from he [ updates. for Prior joins [indiscernible] retire ] had. decided we from welcome Garrick Workday, XX close, like He couple them from has for person BI today, processes, XX will business with led with

to at year to Workday, continue of It's the been years us. a in evolve coming after the change go massive we'll opportunity of ahead and

a our how we AI. customers' Our in in was will an fulfill can recent help our in founder's this us needs. tough, with XXth enterprise vision 'XX, We're necessary, the meet renewed restructuring revolutionize to a business, with our time clear decision year invest to energy, amazing FY but of business team, software, that entering view

Thank over to I'll with it And you us. again for hand joining that, Zane.

Zane Rowe

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

for our Our financial the across business, industries. solid momentum continued performance across AI key solutions, growth areas driven and strong demand full of QX with including were SKUs, and growing execution key by suite our results

Subscription year billion, services Professional in QX XX%, FY was year quarter the $X.XXX the Full favorable in $XXX Total growth billion, linearity in was up revenue bookings for new QX benefiting XX%, revenue up million the XX%. from was within revenue was billion, billion, $X.XX to $XXX was year. 'XX ACV and growth XX%. Turning subscription of quarter. full million $X.XX revenue for results. $X.XX and the full of of

U.S. QX quarter and revenue XX%. international $XXX totaled in was the million, $X.XX growing revenue in XX%, billion, up

XX%. year, was $X.XX was billion, U.S. revenue full XX%, the $X.XX international billion, For up up revenue and

at the retention CRPO, quarter slightly the of or and activity growing remained the gross strong end contributed renewal was the end backlog, billion up at XX%. revenue was subscription Total in XX%. Early outperformance. to $X.XX QX subscription than expected XX-month of rates backlog at QX, $XX.XX XX%, revenue and revenue higher billion, was

a charge was and was fourth discipline year-over-year income non-GAAP a of operating the ongoing operating the of previously benefited primarily year improved operating quarter $XX related million, across was announced Full for non-GAAP reflecting from $X.XX operating a XX.X%. operating billion, a quarter Non-GAAP non-GAAP XX.X%. to in restructuring. million revenue margin by efficiencies representing impacted outperformance, income The income GAAP of $XXX the margin the improvement combination company. cost

in annual operating was billion, of million growth million cash billion, year, cash helping the of dilution our and flow quarter repurchase X% had We our timing $XX during full as constraints. repurchased for by in year-end. resulting flow impacted of was trading and operating $XXX below million of the amount full $X.XX $X.XX activity the QX drive quarter of for authorization year year. XX%. shares in The We remaining the $XXX

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

Our X%. count restructuring we by workforce early XX,XXX our that approximately in was place not of the as reduce head February, January XX took expect approximately which reflecting workmates will

expect of in XX%. U.S. performance to across provided is 'XX outlook dollar, fourth Now incorporates of pleased turning given to FY million billion, guidance. are subscription revenue our we of strengthening driving We're since quarter, several $XX strategic the And of continue approximately areas. solid of execution key This a the our which quarter. the we incremental the we guidance $X.X continued last impact growth headwind roughly the with

FY period last to or XX%, of anticipate when the of QX $X.XX leap billion, XX% 'XX growth for QX. subscription be effect the We approximately normalizing revenue

QX. expect between CRPO to in XX.X% We increase XX.X% and

subscription expect increase We X.X% QX. revenue sequentially to in roughly

FY second we pace in expect to year-over-year relative revenue discussed initiatives, the from building and across FY in continue call. the in last slightly closed momentum our This revenue by half continued certain deals investment first earnings on 'XX of is growth We half. to driven faster our a addition of 'XX, to subscription

of We our approximately we to revenue million anticipate services 'XX leverage $XXX FY continue ecosystem. professional as partner

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

incorporates This pace investment We of expect accelerated FY areas our platform key and XX%. outlook approximately business. investments AI 'XX non-GAAP operating the of across margins of targeted an across

scale. to drive improvements also look operating our will in at continue and We for efficiencies business

expect XX%. a operating margin non-GAAP QX, For of we

previously GAAP operating margin restructuring. announced is quarter the for first by impacted the

expense restructuring We million incur the results. to in our an from expect quarter non-GAAP be $XXX which will additional of approximately excluded

XX points respectively. We expect and and XX approximately lower the FY GAAP operating non-GAAP operating be year 'XX full margins QX margins to than our percentage

The is XX%. non-GAAP FY be expected rate to 'XX tax

of cash FY billion, half incurred which we FY of cash 'XX. roughly expect 'XX restructuring, $X.XX operating to We will related flow in be expect which of includes outflows $XXX the million first the

from of million, approximately down expect 'XX FY expenditures We capital $XXX slightly FY 'XX.

with strategically focused margin, objectives and year investing foundation margin medium-term growth to of and fiscal clear support expansion. new the revenue are mid-teens entered growth, our to non-GAAP We support momentum the subscription and on XX% operating enduring while building

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

Operator

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

Mark Murphy

agent the of highest building the that scale to is chunk ever. curious investment vision system nice into reached going the of system figure to think that us the to the for I it of be the if It's wanted a you required savings ask agent through the restructuring are record. CRPO from I redirected I'm if record? dollars -- see can and you Congrats. its level of added. believe walk I

to do that, to raising then using Lighthouse some in customers their entire of are any you that fleets we relating And -- have way, third-party product? including do some manage agents, you want hand agents saying that

Carl Eschenbach

this Mark, is Carl.

FY 'XX for to drive margins. answer our a durable good thank customers at the diversity don't finish. I question, and goal my and expanding platform scale business just really Workday workmates, Again, QX to delivering mind, like a help and demand continued everyone. of Before our solid to of towards the us you growth your has again and durability on you partners and I'd thank The if operating

answering start your investments. let So me question around by

something restructuring But in do. we it never weeks thought is organization said technology to agent easy us necessary reinvest we remarks, a product absolutely ago. was we their able to my around record ] that of [ system be into for announced to our back specifically As and prepared in X

from uptake a in who and interest partner understand there customers to risk entering in agents an have since We that uncontrolled build incredible enterprise both from our way. them announcement, of and an want the seen is community

seeing. of to enterprise. where to all of the with is role-based agent to investment to demand this on along take go-to-market system of record, deeper going because doubt required also invest no continue there's required able agents side, into the our So we're the we're It's be the

product David, to for Anything runs us. who And there? add

David Somers

record, response of one Yes. been No. also I response -- of there's I mean, in agent think I system we've think -- with within that only this, and extremely just with partners. the of that's in we've lot that this record. agents. questions customer third-party a the yes, And specific within gotten, pleased mentioned not customer from interest those Carl, but you terms product, system of you see partner agents agents was of not built we managed also even being in areas, managing or built agents Workday both of interested third-party agent And asked but whether there

significant a again, see opportunity customers to our value to once So there. deliver we

Operator

from Next question Rangan Kash Goldman Sachs. from is

Kasthuri Rangan

Carl, nice the one Congrats finish on year. for you. question a to

business. have in guys You tremendous visibility your

what There CRPO, Your a for like, side, that flip they're especially have world Xx for from But renewal, on in is backlog up that coming of contracts 'XX, up is with customers look X-year base a workforce contract as reductions in the the XXXX, signed renewal over, is you health AI, all happening. presumably XXXX without come AI? right? levels

are on that of itself you to as list me. upsell as to of its for goals? grow it company the that, for your And meet opportunities impressive That's renewal -- the to AI to ensure attach what products you're able the AI top overlay your upon and to

Carl Eschenbach

good years at the Workday. have said, do we for question. customer the opportunity not we for wait for being visibility Kash, many Thank renewal know, sell you, you That renewal our opportunity do we next to here Yes. as into back on and base. you thank have the Yes, the

quarter second back Recruiter them base to we our sell back quarter which an example, And Extend SKU Agent the seeing in into more customer customer us for we're our doubled second uptake is the to were base. a and on Pro For than highlighted into those allow quarter-over-quarter. we almost specifically, of of that again row. sell that Both transactions, consecutive AI the able XX%

not in products the waiting couple we've today. base, we So Kash, base, have great last existing have and customer we're of sell to customer importantly, we as our in for into renewals, back the more SKUs renewal years, the but been doing visibility the

We also into be that rolling SKUs have agent to And new X XX they over we of know great a back months. that base. customer next that opportunity number sell to we'll the AI us also a give out

excited we're the X,XXX how to new which market. looks to excited and now them all selling that than the future about bringing we're So is customer we're customers, and base, more today of like the what our with we're agents about

Zane Rowe

you that Kash, year. it's we similar just upcoming just the I'll year prior is to Carl that that in leverage growth off, very saw baseline Zane. is look the add, in opportunity, what opportunity the to if renewal at going

but there's feel good some the heading variability we well. 'XX obviously about So into quarter-to-quarter, as the FY growth and opportunity

it's that. the attributed back as was we're reason that well. the from Obviously, CRPO go-to-market to and motion into part that how of growing and And base strong the selling

Carl Eschenbach

back an quarter thing other the is pipeline seen was create see into customer probably not the base where that strongest did momentum we selling I highlight, and ended in opportunity in year. up the the our close The that fact should all we've Zane, we our

opportunities them how good proud quarter team a same on and closing executed of in the given creating and another was the was at motion, that I really So selling time.

Operator

Materne from next ISI. is Evercore Kirk The from question

S. Kirk Materne

nice on to Congrats finish year. the the

for probably first some through bit is year second Zane for Zane. one the the why. you ] the sort a the from cadence [ this think of half to of obviously, acceleration infers your reasons half little I of went

I the from the agents guys X of back Just in last expecting of around over put you -- out contribution the agent the X are some of some sort that months? that. revenue or much of X-part half year, question you guess, the one,

strong sort the just of half is had -- guess, you of know you secondly, opportunity X I Do sort I the into months? about quarter I that And versus guess today or feel you. a for quarter. fourth back big year visibility, XQ bookings the a the better of

reiterated visibility just perhaps your was would if wondering So but little I think put that, [indiscernible] I I than that. was today so around that could guidance, bit you more infer a bit better is color then. a just little it

Zane Rowe

think I add Of Carl to to course, Kirk. I'll start want it. then probably

you that in point pleased are a areas, newer in notably mean of around particular we AI. strength variety have we most I QX as out, opportunities very in

to of course relates as them it haven't question of a agents, agents just dollars your I'd out say, expect As through first amount to to meaningful year. we on in, tied the the built we roll

to amount there's $XX little that to forecast. and I that called prepared we updated got million So about the Obviously, we've called had more not remarks. also we think meaningful into my that And quarter, the fact incorporated out bit that additional, a out we've a I now FX. in related into attributed last agents. that taken into headwind account I visibility you

strong at a we are outlook a number FY that pressure out, little got we've but as you of the of 'XX key visibility as the better So underlying well really have. look in we the there, in we supporting business quarter. see areas fourth And growth was bit point

focus to that addition always we it's very about that, level we good CRPO In the on. aggregate while We that tightly feel correlated. [indiscernible] not that

Carl Eschenbach

optimization. it as contribution things like something already indicated But Agent early relates have now and Extend And seeing also AI grown our evidence its Pro, XXX% contribution, Recruiter like Evisort, from we're seeing we're quarter-over-quarter. Yes. earlier, in which talent I to the and

have agent then be ago the guidance and to were did a attributing announce half the And see system our because at not agents access for out FY at be Mobility X will They year. policy year. they'll event agent early this the X that we whole a current of rising don't contract to we and called later agent, agent agent, agent in Talent available we the lot 'XX, have record second weeks new Agent. financial new We them payroll of auto

Operator

Next Bank Sills question America. from is of from Brad

Bradley Sills

question international. a ask about to wanted I

haven't you. a been it's Europe companies lot of and source strength We heard a from area focus quarter, a I this know of was that for

seeing would in feel do I expect countries you to working the love get street as the and How So nicely forward? Europe? color strength you on about And have you're progress? to Which of in from which would where we feet going ones some are there? to the go-to-market that some the over see more progress

Carl Eschenbach

Brad. Yes. Thanks,

As couple you years, know, we've significant called a out for internationally. have of we the last opportunity

know the You is of market XX% and our revenue more U.S. that XX% yet, the of only from XX% comes guys our the of changed. addressable outside math, than hasn't the and U.S., U.S. of outside

in Specifically, think more of the said, being of was the a finish had no And a we've in biggest the out tailwind year entire delivered a Europe, and the year, compared as I markets, two That U.K. about strong really Germany really it called that was specifically for results. solid honestly, to EMEA, the different headwind we QX. the than quite years teams in us think that to past. for both

we strength is of a quarter say Now X trend. wouldn't

large a after. Workday. of go, the time of with of customers internationally the expect of have in I most but continue more expect forward decision because to business market when or expect move transformation we same they size in the make go to we always we do project, we to go And say, 'XX, FY So ultimately should with invest a to do the the

one two [ Bayer, we closed move and And forward prepared many and large of quarters, selected examples for finally Germany, and to were my HCM out there they backyard. we're in two our remarks. they in ] with biggest our I of -- opportunities that out called competitors Henkel us. In decided them and

our momentum example bringing does our we the around that someone and customers prospects. an we're value make decision a just solution to of that's So the and have when

Zane Rowe

'XX, look we're to any in considering tie at we change forecast as not macro just Europe. at environment, and perspective meaningful Brad, the FY least to our from the in that

the we're So team environment. continuing not still product least at any with deliverables. material from pleased have side we're -- But go-to-market build the the expecting having we're the on our we not very there, change, we're to and that

Operator

Lenschow The from from next question Raimo is Barclays.

Raimo Lenschow

more from me it? a finally change success, since thinking And that international as do that change? one -- go-to-market is of you now of in Any Congrats Or as well. you on with for the expectations there have coming do kind are down doubling well board? I'm you any on [indiscernible] you way

Carl Eschenbach

Raimo, thanks the for question.

I again asset, an at at Workday. to XX thank Workday here Robinson of of success. years for service First, I to because want was see just Doug here incredible He we and think all get his

thank just again. I So want him to

but and as partner internationally, customers and has the well has traveling the around already and on we've I amount he'll experience, board a Rob over international in of he's of already, now X have, and take opportunity markets advantage more be obviously, And think Japan network seamless and he expand been time spent months, especially as also actually for months to deep between Rob, that help he's Doug, coming both had in across the a and us Europe tremendous communities. transition. next smooth we

So that changes. being said, of not a lot

And at As no saw refinements motion Revenue But well changes you think time. this only to our improve I Chief the from to QX under from who's just working really will here. think I Patrick Rob it the tweaks or leadership major go-to-market make Officer. of engine the is performance, our go-to-market

Operator

Fargo. Michael from from is Wells question next The Turrin

Michael Turrin

back have the so upcoming in, year. It's think the leverage clear I flow from Zane, are I potential reinvest the just guide the relative how to the potentially of want all don't there product thinking go expected about reduction count margin areas to to you that. the for you're guidance head into and we initial can would

you're just to you currently? the here? kind can about from overall of potential evaluating the But margin of we should And trade-offs think how in then the of speak Workday those context

Zane Rowe

out allows put earlier, plus a year, Yes, Candidly, up opportunity see get incrementally laid tremendous out XX% this to 'XX, to plan FY Carl to there. midterm XX% obviously to get we've we Michael, what as AI. us mentioned through it we've moving in and

and a So leaning AI doing David I here into job got as we're, strategy investments. team surrounding they We've investments his our think, balancing our and good AI. ever those as have heavily

concurrently, to at think focused every opportunities we're and think what investments part the grow the business, how to the scale seeing continuously we it to And looking literally in that of how And scale, inorganically. that, obviously, you we we're we efficiencies. opportunity continue mid-teens, while on, both with you and you organically continue And time, margin we as do about affords allows that's balancing appreciation. same and invest to how on at of the organization

we've this into. give opportunity we've We've back lot year, where We and to you with our the across company a got And good a good we'll ahead and some tremendous that provide achieve it a you think invest we here. we I But saw, got upside of got saw as there. ensuring So objectives. the focus margins. still opportunities we to balance got balance see a some think

Operator

Jefferies. Next question is from from Brent Thill

Brent Thill

momentum there. some good federal, feel wins, Carl, and mentioned on the you've you

out you new a could next I kind the you where exact there's you the been just if out that they're things go could plays direction until figure how they think some I'm for think over lay year? with the also of going out little concerns sideways administration. curious

Carl Eschenbach

Thanks, Yes. Brent.

if HCM months, reason financial while XX over we've you into specifically than on are technology, the And money for very started federal opportunity amount the federal know, government, is, lean systems tremendous ERP, business more antiquated. look have, or at the the aggressively spend systems we've last to done. they historically the you they an As of a that

they're majority In them on-premise, means the still fact, of which inefficient. are

the significant Energy momentum federal Dodge could as the to a to forward, the our of springboard of to and ] [ for that And we've And us in year, at allow groundwork the opportunity. market moving in the wins, with DIA, couple laid last forward. Department and want find example, systems. about do you really to upgrade if efficiency your And think government, we going we as the rich have that what you a potentially in drive

] on-premises a still want the drive the them So efficiencies across but to yes, applications speak customers, service of starting uncertainty, the And looking cloud. better to some and what leverage more them And best-of-breed platform government, point there's is we efficiently. to in Workday there [ getting our to tremendous we opportunity. all if there's are and you to solution, called have and as

Operator

The next Alex from Research. question is Wolfe Zukin from

Aleksandr Zukin

[ the me. ] into year. maybe Carl. solid a just a Maybe for on I guess first, X-parter Congrats

new systems trying existing terms grapple I'm [ means front, all your what you curious this from it add kind of to framing level for and expansion the ] record. to the the of point a are Agentic On tremendous TAM we're value guys in really of how a with to of customer ability monetize relationships?

of kind calculus guidance? it that was there that -- RIF seeing then up for what the margin -- something like to always terms was in -- a maybe felt of want Zane, that And to more? change the maybe, previous Or the move you in in accompanied cards free like free faster

Carl Eschenbach

Yes, I'll Maybe sure. start.

taking are need quite you do and human the role-based we excited same agents than onboard, we similar same Workday. one To We're workers and very today, about which bring specifically new at is enterprise. done human you digital with to to no workers agents, past. right, in to in that, the opportunity workforce the better framework into to your way securely that them bring agents, the bringing So in have

to that shift revenue we're record. a on digital ever our able as of system from human land agent going capture Workday there's be for workers workers, if to still So the to they

come into believe into we're somehow onboard uniquely we the gateway have the the to role-based all to through they're that our enterprise. to our customers a think be competitors, going to even with that partners, are or cases And and our they we monetization for either earlier, our said as well our have own new we in system enterprise, as both positioned some that. record, able will opportunity building, monetize and agents agents, David agents, of So we do

we're monetizing the out the important in have lot because AI. functionality the of note year, Pro. itself. platform platform Extend that AI monetizing the also in things monetize in we the it we we We're some Recruiter It's ways last through have to Today, rolled to a Agent, around multiple of

it's based. these to and it of new and bringing all And another us Evisort. like for agents things to we're have seat-based way monetize We both consumption now is market

So we're to future monetize specifically looks like, the performance of after and it, lots we what have of opportunity about excited quarters last X our around AI.

Zane Rowe

Alex, no the it in change profile, in to relates there's and I'll just thought as add process. margin and

talked we always we our operating opportunity about our in as about obviously, about and opportunity framework a to and line as work margin have by. see more Carl's And there, parameters. order variety this scale that well in AI. a obviously that company, growing talked have that think the as the get tremendous business And we've our efficient in areas. we of but top have also only we become a the not in ways different invest we We can to

balance no balance, years how for the no only So that in we not change but there there in I'd sorry, say think beyond. year the -- about next

Operator

from is from Guggenheim. John DiFucci question next The

John DiFucci

has question last that in everybody. always actually. struggled you we my all think years years, touched the neighborhood. that challenging, something good thought just I guys, a been sort as have not for of I but couple of last it's for But tough on, with couple of the we've house but And a Workday been know of

continued think, that, you that. selling offset done never and way going down but business did, to base. of we recent Your Doug have core things prioritized Like hasn't in a too, good years. like part and the been a job, big large partners anyway, you've of back deals into the meaning a just will of in market, in lot a transformational doing But

doable? than sort question, just don't my control out meaning have I where were now you guess but are of post-covid things the come numbers you general we period. question, you'll And [indiscernible] and but this a of think the over, it's are point a actually at during improve, I if stronger when things

Carl Eschenbach

for the question. thanks John,

the going what forward. in on we're seeing touched you think I market us and the opportunity for

drive motion you in that of second If just other but financial we to not And planning, our customer SKUs, our it's we've area whether last years, on it's accounting into like AI our sourcing, invested it's well. and of of focus for our center, some the the SKUs, customer focus is into whether back really SKUs, our solutions is look many business base. just FINS or driving back working. at a areas base whether That's our AI few working

in we more And full at government, industries full into solution are our and XX% it's local new of market. some motion a new about included full than was we if where on than XX% is it the greater whether focused of suite key of higher the And that's The in look other was working talked quarter selling you health state suite. business our care, ed we focus, wins suite.

is in investment that that paid in So motion financials working has off.

had this our then they And we quarter, new contributed XX% impact partners to in ACV than greater record from where quarter. our the

of all areas focused starting into, we're leaning see these been to So that and we've we're off. pay on

new we've the we're into keep momentum that we pretty but the results and go year. optimistic to seeing the Now as into made, FY going 'XX, carry about we got investments we've we're the

John DiFucci

of Global yet? what's is Payroll just benefit still part too that early? that are that seeing Is to, is from you happening Or Connect? Carl,

Carl Eschenbach

Yes, we are.

We Connect more Partner Global part XXX of today. partners now have already than

David Somers

since the XXX that now top XX launched there's looking Global has a -- over on We whole Payroll back slew in well. October. GPC Yes, Connect now We've launched have well, and on of when that October, -- deals already in partners this real the building build we as way. as to top quickly, leveraging pipe that of capability by and well since in is we David, are been

Carl Eschenbach

doing into We providers our of the the have momentum, Extend and Wellness we we're see top platform and Yes. the platform. Pro, benefits around, on Workday of And has now build partners obviously, can platform, side, Workday platform. on innovating is the and bill Extend where momentum other on thing, now Workday David, many building

paying on platform our So people look off as to approach Workday. clearly is consolidate

David Somers

actually a more build, we've things to we've are going the was as investment start that done we same going we and what got the still exact lots build look as days, but is I AI been well. say seeing I on of we to to itself of mean what of we're pay we've seeing few thing. past I platform the Yes. agents to dividends the there other we're about, think talking at you're over years lot and and that lot plans think a early including

Operator

questions. now is The more take UBS. We question two from Keirstead will from Karl next

Karl Keirstead

appears in decision the little to to to changing. of back spending count savings I the just be particular, your go around bit is mix And what head reinvest most wanted a point on how better get the understanding maybe to cuts. of your to from

the what downsizing? maybe areas or of you functional you're are So whether on areas as trimming focused a result it's that RIF, geos

spending in head cut, how result increased of is understand to? sounds as certain invest up count like to a getting the AI, So there you'll then other Maybe what's are are new funds what's sales direct but certainly freed rep And could us the new conversely, any getting what you help dollars mix describe that being capacity? areas where the in? to maybe changing investment an those It cut? uptick

Carl Eschenbach

start investment then anything I'll Karl. front margin and the or Sure, obviously on Yes. add there. Zane

head there's looking I did Workday invest of are role-based bring more our to and more would this into the we it's we record, we the expect you in probably to and invest. technology multiple system as areas that than at expand in count will next we're to year, agents Yes, and organization market. the which So AI, the product time business, agent shows we and we prior more have in restructuring, that continuing

like We out also more build and continue internationally, I India side. global just more not a locations best And as it's on when say footprint Rica we to to Costa in customers. And but service invest in go-to-market, of internationally. to it's the product capacities it's look

more to areas going go-to-market And Rob and out seen, And you've two build XX% Patrick, the as coming of continue uptick continue, partners. sales of We're in something under like momentum we to perspective. we to capacity then we're then our invest our is quarter partner already from a from because ACV around new continue great this our have seeing focus. to want ecosystem

are TAM the opportunity the we we're they areas front heavily lean that our investments and the in focusing on So going see us. key to in are that we into of

Zane Rowe

across as as I of sort shift binary number what were always that here into of it's you into is -- obviously, a across there people, those like the would same drive to scale, mix how company. and process next we Karl, growth we Yes, in continue to as leg not far we really it's and invest see areas and are the efficiencies, as And that growth. both elements. well just time, of AI of looking and systems in of a some add, at build more at investing all We're how

these margin are that investments of us to beyond a just So also and enable FY 'XX. our lot grow scale investments will

as out around we we'd balance. globe the feel expect good more and with So mates that, the We're see about to also becoming more work balance global to that well.

Operator

Morgan Weiss is The from Keith next question Stanley. from

Unknown Analyst

But year, call Chris out you last prepared the it back didn't for remarks. is Actually hear at is [indiscernible] you Agent super to the This I announced on in partnership Salesforce Keith interesting. which to here. go want

So just that integration better to hear how at all it gone and rates has at maybe has contributed to curious potentially win all?

Carl Eschenbach

with partnership take David, to do Salesforce? the want you

David Somers

Sure. Chris, good talking And I'll on jump you. that. to Yes.

mean partnership that I with to we on work Yes, continue Salesforce.

and an working terms agent the was we've side. record, think, through and to we you matter Workday them in recently from of in talk lot I'd the fact, of what on and that just -- our of a announced some an instrumental get like there, understanding how do Salesforce done has system actually days issues of As a been early I to cutting say we agent of teeth with actually, innovation agent

It's going once progressing again, -- is early still in I or with well. to on continues Workday with still, partnership. partnership Salesforce we're that. days the that would really So be say sorry,

Operator

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

Carl Eschenbach

good you again, year To QX was for all thank a really Workday. for quarter, call. solid Thank close, off you, today's operator. another joining And capping

AI for of system new outcomes And Workday's partners, Our our and the fuel we're and diversity continue across results, increasing especially most durability our customer customers relevance our momentum agent of our across unleashing platform. industries demonstrate geographies, and strategy, our with and agent new new innovation drive platform business the to and our importantly, Illuminate exceptional will continue record, our of our growth. that and to

turn I'll the back operator the to to call. call over that With today's said, close out

Operator

Thank you. This teleconference. concludes today's

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

Workday (WDAY) 25 Feb 252025 Q4 Earnings call transcript