Welcome to the Cloud Wars Minute — your daily cloud news and commentary show. Each episode provides insights and perspectives around the “reimagination machine” that is the cloud.
In today’s Cloud Wars Minute, I break down Workday’s strong Q2 results, highlighting how AI solutions, mid-market growth, government expansion, partner-driven value, and global initiatives are fueling momentum.
Highlights
00:14 — Workday recently posted a very nice fiscal Q2, ended July 31. I pulled out growth factors from the earnings call. Just a quick recap here: for Q2, its subscription revenue was up 14% to $2.17 billion, while its current RPO was up 16.4% to almost $8 billion. So, strong demand for the recent quarter and the pipeline going forward.
01:37 — First of all, suites. Workday CEO Carl Eschenbach said 30% of Q2 deals were for full suites, which, in Workday parlance, is both Financials and HCM. These consolidated data sets, he said, are more and more vital to companies. Now it can use all of that data together for some of its AI solutions, and certainly on the AI side, there was strength there.
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02:05 — Among existing Workday customers, 30% of all deals included one or more AI solutions. For new customers, that number jumped to 70%. In the mid-market, a lot of strength there with a new go-to-market program tailored for the needs of mid-market companies, Workday Go. In the federal government, Workday has created a new subsidiary called Workday Government.
03:04 — Partners are now generating, among new annual contract value, 20%. Eschenbach, over the last few quarters, has been touting the value and how clean its AI dataset is. There’s a new president in India. Workday is building a data center in India to handle local and regional data requirements there—and in Germany and the UK.
04:19 — One of the high-growth areas was the recent acquisition of a company called Evisort, in the contract intelligence business. Eschenbach said that for Evisort, revenue grew 100% quarter to quarter. So that’s not year over year, but sequentially—it is doubling its revenue from one quarter to the next. Overall, very nice quarter for Workday and CEO Carl Eschenbach.
