Playing both the short and long games, Workday continued to deliver 18% subscription-revenue growth for Q4 while also reporting that its total subscription-revenue backlog for the year jumped 27% to $20.9 billion.
CEO Carl Eschenbach cited four key trends in the quarter ended Jan. 31 for Workday, which is #7 on my Cloud Wars Top 10 rankings:
- more customers are choosing to go “full platform” with Workday for both HCM and Financials
- existing customers are adding more Workday applications and solutions
- strong revenue contributions from outside the U.S., which has been a key objective for Eschenbach since he joined the company as co-CEO about a year ago; and
- growth in and from the company’s partner ecosystem
This is clearly a very strong quarter for Workday, whose subscription revenue for fiscal 2024 reached $6.6 billion, up 19%.
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And while I in my recent Q4 preview forecasted that Workday was going to hit 19% growth for Q4 as well, the company has been remarkably consistent throughout the year and, with Eschenbach having instituted several strategic growth drivers, Workday’s in a terrific position to maintain that heady growth rate throughout its fiscal 2025 as well.
At the same time, Workday is in parallel ratcheting up its powerful innovation machine behind the leadership of cofounder and former CEO Aneel Bhusri, who’s now executive chairman. That was a long sought-after goal for Bhusri, and Eschenbach’s ascendancy to the CEO role gives Bhusri the opportunity to ensure Workday’s product and engineering teams are able to fully exploit the power and potential of the GenAI Revolution.
“Our relentless focus on innovation continues to fuel Workday’s success while helping to enable our customers to transform how they manage their two most important assets — their people and money,” Bhusri said in the Q4-earnings press release.
Having moved past the co-CEO model that Workday employed for the past year since Eschenbach joined with the expectation of becoming sole CEO earlier this month, Workday was the last of the Cloud Wars Top 10 companies to use the co-CEO model. And Bhusri expects the new structure will deliver as expected.
“As I step into my new role as executive chair, I look forward to working closely with Carl, the rest of our leadership team, and our product and technology organization to push the Workday platform to even greater heights and capitalize on the growth opportunity in front of us,” Bhusri said.
I’ll have more analysis on the Workday results and outlook later this week.
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