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Workday (WDAY) Q3 Earnings call transcript Nov 26, 2025

Daily EarningsTuesday, Nov 26, 2024 9:11 pm ET

1min read

CRM -1.21% EDUC 0.00% MSFT -1.05% WDAY -11.20%

Workday, a leading provider of human capital management (HCM) and financial management solutions, recently held its fiscal 2025 third quarter earnings call, revealing a strong quarter marked by robust growth and a focus on artificial intelligence (AI) innovation. The call, led by CEO Carl Eschenbach, CFO Zane Rowe, and other executives, showcased the company's strategic direction, financial performance, and plans for the future.

Strong Financial Performance and Strategic Wins

Workday reported a 16% subscription revenue growth in Q3, with a non-GAAP operating margin of 26%, underscoring the company's financial health and operational efficiency. Notable strategic wins include the Defense Intelligence Agency, several educational institutions, and major players in professional and business services, healthcare, and financial services. These wins highlight the company's ability to cater to diverse industries and demonstrate its growing market presence.

AI-Driven Transformation and Innovation

The call emphasized the importance of AI in driving future growth and competitiveness. Workday's AI-powered solutions, such as Recruiter Agent, Talent Optimization, and Extend Pro, are gaining traction with customers, leading to increased sales and customer satisfaction. The company's new AI agents, including Recruiter Agent, Expense Agent, Successor Agent, and Optimized Agent, are expected to revolutionize business processes and unlock significant value for customers.

Strategic Partnerships and Future Outlook

Workday's strategic partnerships with leading tech companies, such as Salesforce and Microsoft, were highlighted as key growth drivers. The company's recent acquisition of document intelligence platform Evisort underscores its commitment to leveraging AI to unlock insights from unstructured data. Looking ahead, Workday aims to maintain a mid-teen subscription revenue growth rate while expanding operating margins to 30% by 2027.

Investor and Analyst Interactions

Key shareholders and investors showed keen interest in the company's AI strategy, particularly its ability to monetize AI solutions and address competition. Workday's executives provided reassuring responses, emphasizing the company's competitive edge and growth prospects. The call also touched upon the impact of the U.S. election and the global economic environment on the company's business.

Conclusion

Workday's fiscal 2025 third quarter earnings call painted a picture of a company on a strong growth trajectory, fueled by its AI-driven innovation and strategic partnerships. The company's focus on expanding its market presence and enhancing customer value positions it well for future success. As Workday continues to navigate the complexities of the software industry and the evolving business landscape, its ability to adapt and innovate will be key to its long-term growth and profitability.

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Assistantothe

11/27

Workday's CEO recently praised Q3 as a'solid performance.' According to Carl Eschenbach, this success is a testament to the trust our customers have in us across various industries, the growing global recognition of our AI-driven innovations, and the robustness of our partner ecosystem. He added that organizations are increasingly opting for the Workday platform to reduce their total cost of ownership, streamline their operations, and tap into the potential of our top-tier AI solutions, giving them a competitive edge and positioning our company for long-term success. Zane Rowe, CFO of Workday, highlighted that in Q3, we made significant strides in several key growth areas. For fiscal 2025, we anticipate subscription revenue to hit $7.703 billion, marking a 17% growth, and a non-GAAP operating margin of 25.5%. As we enter our seasonally strongest quarter, our focus is on executing effectively, laying a solid foundation for sustainable and profitable growth on a grand scale.

RamBamBooey

$WDAY Just upped its forecast for FY25 subscription revenue to $7.703B, from the previous estimate of $7.7B-$7.725B. They're also upping their FY25 non-GAAP operating margin to 25.5%, versus the earlier projection of 25.25%.

GoodCoffeee

$WDAY Just a few more days and it'll be trading above 270.

KALVIN HARRYSON

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sniperadjust

WDAY's focusing on mid-teen growth? Count me in. Holding strong for the long haul.

stanxv

Workday's partnerships with Salesforce and Microsoft are like having Avengers on their side. 💪

McLovin-06_03_81

AI's the magic sauce that's turning WDAY into a goldmine. 🚀🚀

raool309

Partnership with Salesforce is a game-changer, IMO

Ubarjarl

Evisort acquisition is genius, grabbing future 🚀

Historyissuper

AI agents are Workday's secret sauce 💡

rbrar33

Thinking of buying $WDAY for the AI play

Ok-Memory2809

Workday's AI moves are 🔥. Those agents are game-changers. But I wonder if they'll maintain the growth momentum. Anyone else thinking about $WDAY's competitive edge compared to the likes of SAP, Oracle?

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