Investor Presentation Q3 FY26 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 expectation or belief. Forwar ...

Core Insights - Workday reported total revenues of $2.432 billion for the fiscal 2026 third quarter, representing a year-over-year increase of 12.6% [7] - Subscription revenues reached $2.244 billion, up 14.6% year-over-year [7] - The company anticipates fiscal 2026 subscription revenue of $8.828 billion, reflecting a growth of 14% [3] Financial Performance - Operating income for the third quarter was $259 million, or 10.7% of revenues, compared to $165 million, or 7.6% of revenues, in the same period last year [7] - Non-GAAP operating income was $692 million, or 28.5% of revenues, compared to $569 million, or 26.3% of revenues, in the same period last year [7] - Diluted net income per share was $0.94, up from $0.72 in the third quarter of fiscal 2025 [7] - Non-GAAP diluted net income per share was $2.32, compared to $1.89 in the same period last year [7] Subscription Backlog - The 12-month subscription revenue backlog was $8.21 billion, an increase of 17.6% year-over-year [7] - Total subscription revenue backlog reached $25.96 billion, increasing 17.0% year-over-year [7] Cash Flow and Share Repurchase - Operating cash flows were $588 million, compared to $406 million in the same period last year [7] - Free cash flows amounted to $550 million, up from $359 million in the same period last year [7] - Workday repurchased approximately 3.4 million shares of Class A common stock for $803 million as part of its share repurchase programs [7] Business Developments - Workday announced a new AI Centre of Excellence in Dublin, Ireland, with a three-year investment of €175 million and the creation of 200 specialized AI roles [5] - The company welcomed new customers and expanded existing relationships, including notable wins in the healthcare sector [8] - Workday unveiled several new innovations at its annual customer conference, including new AI agents and a new data layer [8] Market Position - Workday was named a Leader in the 2025 Gartner Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises, Cloud ERP for Service-Centric Enterprises, and Cloud ERP Finance [8]

Core Insights - Workday has introduced new Illuminate agents designed to enhance HR, Finance, and industry-specific functions, aiming to deliver measurable outcomes and streamline complex processes such as performance reviews and financial close [1][2][3] AI Integration and Value Delivery - Despite significant AI spending, many organizations struggle to realize value due to disconnected deployments; Workday's Illuminate agents aim to embed AI directly into workflows, transforming processes for tangible business results [2][3] - Workday's approach redefines ERP systems by transitioning from passive record-keeping to active systems that drive outcomes, addressing the challenges of legacy systems [3] Functionality of Illuminate Agents - Illuminate agents are designed to automate repetitive tasks, allowing employees to focus on higher-value work, and they continuously learn to become more effective partners within organizations [5] - Specific agents for HR include the Business Process Copilot, Case Agent, Document Intelligence for Contingent Labor, Employee Sentiment Agent, Job Architecture Agent, and Performance Agent, each targeting different aspects of workforce management [6] - Financial agents streamline reconciliation, testing, and planning, enabling finance teams to focus on analysis and decision-making rather than manual tasks [7] Industry-Specific Solutions - Illuminate agents are tailored to meet the unique demands of various industries, simplifying specialized workflows and enhancing organizational agility [8] Workday Flex Credits - Workday has introduced Flex Credits, a subscription-based model that allows customers to access AI innovations flexibly and scalably, ensuring continuous value delivery as needs evolve [10][13] - Flex Credits are included in subscriptions and can be applied universally across agents and platform innovations, promoting ease of use and adaptability [10][13] Availability and Future Plans - New Illuminate agents are set to be available in 2026, while Workday Flex Credits can be purchased immediately, providing organizations with tools to enhance their AI capabilities [11]