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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 -- EDUC -- MSFT -- WDAY --

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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