Workday AI boosted Q3 revenue growth 1.5 points to 15% and the company’s future pipeline expanded significantly as total RPO jumped 17% to $26 billion.
On top of that, 12-month RPO grew even more rapidly as its growth rate came in at 17.6%, giving Workday a trifecta of results that fully support management’s contention that Workday is prospering here in the early days of the AI Revolution.
And, I want to be sure to share one other vital detail about Workday’s position in the fast-changing and fast-growing apps plus agents plus platform space: about 14 months from now at the end of January 2027, Workday is very likely to reach $10 billion in annual revenue (for its fiscal year ending Jan. 31). To hit that major milestone, Workday will need to grow at a clip of about 13.1% for that fiscal year on top of the $8.83 billion in subscription revenue it is projecting for FY26, which ends Jan. 31.
That projected growth rate is highly credible as it sits right around the midpoint of Workday’s growth plans for the next three years.
Workday CEO Carl Eschenbach was appropriately bullish on last week’s Q3 earnings call as he cited his company’s unique ability among its competitive set to supply 20 years of cloud-based data and context around finance and HR operations for companies across the globe, including many of the world’s largest.
“I’ve been on the road a lot lately, meeting with our customers and prospects, and they’re all saying the same thing,” Eschenbach said.
“They see the potential of AI, but they’re stuck with disconnected systems, bad data, and closed platforms. That’s where Workday gives them the ultimate advantage.
“By unifying HR and finance on one intelligent platform, we deliver business-ready AI that helps organizations adapt quickly, make better decisions, and deliver outcomes that truly matter.”
Eschenbach added that 75% of Workday core customers — those using core HR and/or core Finance — are using Workday Illuminate AI, with more than 75% of net-new deals and 35% of existing-customer deals including at least one AI offering.
Confident Explanation of Workday AI Positioning
In my opinion, Eschenbach and other Workday executives on the Q3 call were more convincing and confident in their discussion of their AI strategy than they’ve been in the past. The primary example is noted above, where Eschenbach talks about helping customers overcome the massive challenge of ” disconnected systems, bad data, and closed platforms.” He later expanded on that by describing Workday as the customers’ “front door to work”:
Our vision is very simple and straightforward. Make Workday the new front door to work by bringing together enterprise knowledge, AI agents, and all the HR and finance processes our customers run every day. This will make it easier than ever to find the answers, take action, and learn.
That’s precisely the kind of business-outcome-oriented narrative that tech-company CEOs need to share with customers and prospects, rather than attempting to show off the magic of their AI technologies in ways that make software engineers proud but that make most business executives lose interest.
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Some Q3 Customer Highlights
Here are a few interesting trends about what Workday’s seeing from customers:
“One of my favorites this quarter was a major win-back at a large US health insurer,” Eschenbach said. “They were a long-time Workday customer that moved to a competitor several years ago and quickly regretted it. Now they’re back with Workday and choosing our full suite with a 10-year commitment.”
“Our public sector momentum was also strong in Q3, and despite the weeks-long government shutdown, engagement across federal agencies remained high,” Eschenbach said. “The Department of Energy’s successful go-live in Q3 is a great example. They’re the first cabinet-level agency to bring their core HR systems into our FedRAMP authorized cloud. We’re also nearing completion of the first phase of our work with the DIA. This opens up an important long-term opportunity both with the agency and across the intelligence community and Department of War.”
“We now have more than 150 customers — including Target, Accenture, and Netflix — using our Agent System Of Record in early access.”
“With Workday Data Cloud, along with our partners including Databricks, Salesforce, Snowflake, and now Google Cloud, customers can unlock even more insight and value from their Workday data.”
Final Thought
Workday’s quiet but relentless confidence about its unique ability to help customers maneuver the tumultuous terrain of the AI Revolution is strongly supported by all the financial results it released for Q3, particularly in its current RPO and total RPO numbers that offer a clear line of sight into future customer demand.
As it battles against much-larger competitors SAP and Oracle, those are exactly the type of customer-powered proof-points that will continue to underscore the unique and aggressive position Workday has created for itself and its customers.
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