Investor Presentation Q4 FY25 Safe Harbor Statement This presentation may contain forward-looking statements for which there are risks, uncertainties, and assumptions. Forward-looking statements may include any statements regarding strategies or plans for future operations; any statements concerning new features, enhancements or upgrades to our existing applications or plans for future applications; any projections of revenues, gross margins, earnings, or other financial items; and any statements of expecta ...

Financial Data and Key Metrics Changes - Workday reported Q4 subscription revenue of $2.040 billion, reflecting a 16% increase year-over-year, and full-year FY '25 subscription revenue of $7.718 billion, up 17% [36][37] - Non-GAAP operating income for Q4 was $584 million, with a non-GAAP operating margin of 26.4%, while full-year non-GAAP operating income was $2.19 billion, representing a margin of 25.9% [39] - Total revenue for Q4 was $2.21 billion, a 15% increase, and for the full year, total revenue was $8.45 billion, up 16% [37][39] Business Line Data and Key Metrics Changes - Workday's core HCM and Financials customers exceeded 6,100, with over 2,000 leveraging the full suite [15] - More than 30% of new business in Q4 was full suite, and this number increased to 50% in focus industries like SLED and healthcare [15][135] - AI solutions saw significant growth, with new ACV from AI SKUs doubling quarter-over-quarter [18][66] Market Data and Key Metrics Changes - U.S. revenue in Q4 totaled $1.66 billion, up 15%, while international revenue was $556 million, growing 16% [37] - The DACH region showed strong performance with new relationships formed with major companies like Bayer and Henkel [29][90] - In APAC, significant wins included Binance and JINGDONG, with ongoing efforts to expand in Japan [30] Company Strategy and Development Direction - Workday is focusing on AI integration across its platform, with the launch of the Agent System of Record to manage AI agents [9][25] - The company aims to leverage its strong customer base and expand its offerings in federal government and higher education sectors [14][115] - Continued investment in international markets and partnerships is a priority, with a focus on enhancing go-to-market strategies [27][150] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the renewal opportunities and the health of the customer base, emphasizing proactive selling into existing accounts [62][66] - The company anticipates FY '26 subscription revenue of approximately $8.8 billion, reflecting a growth of 14% [42] - Management acknowledged macroeconomic challenges but highlighted strong underlying business momentum and customer demand [29][92] Other Important Information - Workday's headcount as of January 31 was approximately 20,400, with a planned reduction of about 8% due to restructuring [42] - The company ended the year with $8 billion in cash and marketable securities, indicating strong financial health [41] - Leadership changes include the retirement of Sayan Chakraborty and the appointment of Gerrit Kazmaier as the new President of Product and Technology [32][33] Q&A Session Summary Question: Can you walk us through the vision and investment scale for the agent system of record? - Management confirmed that restructuring savings will be reinvested into the Agent System of Record due to high customer interest [50][53] Question: What is the health of the renewal base as contracts come up for renewal? - Management indicated strong visibility on renewals and ongoing sales into the customer base, with significant uptake in AI products [62][66] Question: Are you expecting contributions from agent revenue in the back half of the year? - Management noted that while agents are not expected to contribute significantly in FY '26, there is strong momentum in AI solutions [78][82] Question: How is the international market performing, particularly in Europe? - Management highlighted strong results in the U.K. and Germany, with plans to continue investing in international markets [90][92] Question: What changes are expected in the go-to-market strategy with new leadership? - Management stated that while there will be no major changes, the new leadership will refine the go-to-market approach to enhance performance [98][99] Question: How are you balancing investments and margin potential? - Management emphasized a balanced approach to investing in AI while maintaining margin growth, aiming for a non-GAAP operating margin of approximately 28% in FY '26 [104][106]

Workday (WDAY) Q4 2025 Earnings Call February 26, 2025 12:50 AM ET Company Participants Justin Furby - Vice President of IRCarl Eschenbach - CEOZane Rowe - Chief Financial OfficerMark Murphy - Executive DirectorDavid Somers - Chief Product OfficerKash Rangan - Managing DirectorRaimo Lenschow - Managing DirectorBrent Thill - Tech Sector Leader, Software/Internet ResearchJohn DiFucci - Senior Managing DirectorKarl Keirstead - Managing Director - Software Equity Research Conference Call Participants Kirk Mater ...

Core Insights - Workday reported revenue of $2.21 billion for the quarter ended January 2025, reflecting a 15% increase year-over-year and a surprise of +1.44% over the Zacks Consensus Estimate of $2.18 billion [1] - Earnings per share (EPS) for the quarter was $1.92, compared to $1.57 in the same quarter last year, resulting in an EPS surprise of +9.71% against the consensus estimate of $1.75 [1] Financial Performance Metrics - Subscription Revenue Backlog reached $25.06 billion, exceeding the two-analyst average estimate of $24.87 billion [4] - Subscription services revenue was reported at $2.04 billion, slightly above the average estimate of $2.02 billion from eight analysts, marking a year-over-year increase of +15.9% [4] - Professional services revenue amounted to $171 million, surpassing the average estimate of $154.84 million from eight analysts, with a year-over-year change of +5.6% [4] Stock Performance - Workday's shares have returned -0.9% over the past month, compared to a -1.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Workday surpassed earnings expectations with a non-GAAP EPS of $1.92, exceeding the anticipated $1.78, and total revenue grew by 15.0% year-over-year to $2.211 billion, surpassing estimates of $2.183 billion [2][3] - The company emphasized its focus on AI integration across its cloud-based software solutions for human capital management and financial management, enhancing operational efficiency [4][11] Financial Performance - Non-GAAP EPS increased by 22.3% year-over-year from $1.57 in Q4 FY 2024 [3] - Total revenue reached $2.211 billion, up from $1.922 billion in Q4 FY 2024, reflecting a 15.0% increase [3] - Subscription revenue rose by 15.9% year-over-year to $2.040 billion [3] - Non-GAAP operating margin improved to 26.4%, up from 24.0% in the previous year [3][7] Business Strategy - Workday's strategy focuses on dynamic product development and strategic partnerships, enhancing efficiency across multiple business functions [5] - The company has integrated AI capabilities into its product lineup, which includes partnerships with Randstad and TechWolf [6][11] Challenges and Competition - Workday faces challenges from intense competition and economic uncertainties, particularly in regions like EMEA, which have affected deal scrutiny and profitability [8][9] - Restructuring expenses totaled $75 million, impacting GAAP earnings [7][8] Future Outlook - For fiscal 2026, Workday anticipates subscription revenue growth of 14%, targeting $8.8 billion, and aims for an improved non-GAAP operating margin of approximately 28.0% [10] - The company plans to continue investing in AI innovation and international expansion to sustain long-term growth [11]

Core Insights - Workday reported better-than-expected quarterly results, with shares rising over 7% in extended trading [1] - Revenue increased by 15% year over year, reaching $2.21 billion, while net income fell to $94 million, or 35 cents per share [1][5] - The previous year's results were positively impacted by a $1.1 billion release of valuation allowance related to deferred tax assets [2] Financial Performance - Workday's revenue for the quarter ending January 31 was $2.21 billion, exceeding the expected $2.18 billion [5] - Adjusted earnings per share were $1.92, surpassing the expected $1.78 [5] - The company anticipates a 28% adjusted operating margin on $2.05 billion in subscription revenue for the fiscal first quarter, higher than the analyst expectation of 26.7% [3] Future Outlook - For the fiscal year 2026, Workday projects an adjusted margin of 28% with $8.8 billion in subscription revenue, indicating a 14% growth [4] - The company is experiencing increased demand for artificial intelligence tools, which is expected to enhance its HR and finance solutions [2] - Workday's new president and chief commercial officer, Rob Enslin, was appointed during the quarter, indicating a strategic move to bolster leadership [3]

Financial Outlook - Workday expects its fiscal 2025 fourth quarter and full-year financial results to be in-line with or above its previous guidance, except for GAAP operating margin, which is projected to be 22 to 23 percentage points lower than non-GAAP for Q4 and 21 percentage points lower for the full year [5]. - Workday's financial outlook for the fourth quarter and fiscal year ending January 31, 2025, includes forward-looking statements that are subject to risks and uncertainties [13]. - Workday's actual results may differ materially from its forward-looking statements due to various risks, including potential higher costs associated with the restructuring plan [13]. Restructuring Plan - The company announced a restructuring plan that will eliminate approximately 1,750 positions, representing 8.5% of its current workforce, while continuing to hire in key strategic areas [7]. - Workday estimates it will incur charges of approximately $230 million to $270 million related to the restructuring plan, with $60 million to $70 million expected to be recognized in Q4 of fiscal 2025 [8]. - The restructuring plan includes approximately $145 million to $175 million in future cash expenditures for severance and employee benefits, and $50 million to $60 million in non-cash charges for stock-based compensation [8]. - The actions associated with the restructuring plan are expected to be substantially complete by the second quarter of fiscal 2026 [9]. - The company plans to exit certain owned office space as part of the restructuring efforts [7]. - Workday's restructuring plan aims to prioritize investments and focus on durable growth [7]. - The company will recognize impairment charges related to office space in the first quarter of fiscal 2026 [11].

Financial Performance - Total revenues for fiscal Q4 2025 reached $2.211 billion, marking a 15.0% increase year-over-year [1][6] - Subscription revenues for the same period were $2.040 billion, up 15.9% from the previous year [1][6] - For the full fiscal year 2025, total revenues amounted to $8.446 billion, reflecting a 16.4% year-over-year growth [1][6] - Subscription revenues for fiscal year 2025 were $7.718 billion, an increase of 16.9% compared to fiscal 2024 [1][6] Operating Metrics - Operating cash flows for fiscal year 2025 were $2.461 billion, a 14.5% increase from the prior year [1][6] - Non-GAAP operating income for Q4 2025 was $584 million, representing 26.4% of revenues, compared to 24.0% in the same period last year [6][21] - The company reported diluted net income per share of $0.35 for Q4 2025, down from $4.42 in Q4 2024, impacted by restructuring expenses [6][21] Future Guidance - The company anticipates subscription revenue of $8.800 billion for fiscal 2026, indicating a growth of 14% [5][15] - Non-GAAP operating margin for fiscal 2026 is expected to be approximately 28.0% [5][15] Strategic Developments - Workday announced a restructuring plan aimed at prioritizing investments and achieving durable growth, which is expected to reduce the workforce by approximately 8% [18][19] - The company repurchased approximately 2.9 million shares of Class A common stock for $700 million as part of its share repurchase program [6][19] Market Position - Workday is utilized by over 11,000 organizations globally, including more than 60% of the Fortune 500 [11][15] - The company welcomed new core customers and expanded existing relationships, indicating strong market demand [15]

Core Insights - Workday has appointed Gerrit Kazmaier as the new president of product and technology, succeeding Sayan Chakraborty, who is retiring after a decade of leadership [1][3] - Kazmaier has extensive experience in enterprise software, previously leading the data analytics and business intelligence division at Google Cloud and holding various leadership roles at SAP for nearly 11 years [2][3] - The transition in leadership is expected to enhance Workday's innovation strategy, particularly in AI and cloud transformation, as Kazmaier aims to redefine HR and finance through AI [3][4] Company Overview - Workday is an AI platform designed to help organizations manage their people and financial resources, utilized by over 11,000 organizations globally, including more than 60% of the Fortune 500 [4]

Core Insights - Workday, Inc. is set to release its fourth-quarter financial results on February 25, 2025, with expected earnings of $1.78 per share, an increase from $1.57 per share in the same quarter last year [1] - The company projects quarterly revenue of $2.18 billion, up from $1.92 billion a year earlier [1] - On February 5, 2025, Workday announced an 8.5% workforce reduction to focus more on AI initiatives [1] Stock Performance - Workday shares increased by 2.1%, closing at $261.81 on Monday [2] Analyst Ratings - Loop Capital analyst Yun Kim maintained a Hold rating and raised the price target from $242 to $260 [3] - Morgan Stanley analyst Keith Weiss downgraded the stock from Overweight to Equal-Weight, cutting the price target from $330 to $275 [3] - Needham analyst Scott Berg reiterated a Buy rating with a price target of $300 [3] - Goldman Sachs analyst Kash Rangan maintained a Buy rating and increased the price target from $300 to $310 [3] - Citigroup analyst Steven Enders maintained a Neutral rating and reduced the price target from $287 to $270 [3]