Workday’s growth rate fell for the seventh time in the past eight quarters, but CEO Carl Eschenbach expressed a bullish outlook about customer demand for Workday’s AI solutions and full-suite bundles as well as for the impact incoming president and chief commercial officer Rob Enslin will have.
For the quarter ended Oct. 31, Workday subscription revenue grew 15.8% to $1.96 billion, and CFO Zane Rowe said the company expects Q4 subscription revenue growth of 15% to $2.03 billion, which would give Workday fiscal-year 2025 subscription-revenue growth of 17%.
But for FY 2026, Rowe said Workday is projecting that full-year subscription-revenue growth will fall to 14% on a projected total of $8.8 billion.
If we go back to actuals, the Q3 results released last week mark a clear trend of declining growth for Workday in the intensely competitive enterprise-apps field. Here are Workday’s quarterly numbers for subscription revenue and growth for the past eight quarters, starting with last week’s Q3 results and going backward through FY24 Q4:
- FY25 Q3: $1.96 billion, 15.8%
- FY25 Q2: $1.90 billion, 17.2%
- FY25 Q1: $1.82 billion, 18.8%
- FY24 Q4: $1.8 billion, 18%
- FY24 Q3: $1.69 billion, 18.1%
- FY24 Q2: $1.62 billion, 18.8%
- FY24 Q1: $1.53 billion, 20.1%
- FY24 Q4: $1.50 billion, 21.7%
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Eschenbach cited Q3 softness in the EMEA market as a major contributor to Workday’s measured outlook, but also offered a few compelling details to go along with his bullish outlook for customer demand for AI and suites as well as for the Enslin Effect.
1. New customers like the full suite: “More than 35% of our new core customers in Q3 were full suite,” Eschenbach said, referring to the decision by those customers to go with both Workday HCM and Financials. That trend was particularly strong in the higher-education and public-sector verticals, in which 90% of new customers went “full suite.”
2. 30% of existing customers added Workday AI. ” In Q3 alone, more than 30% of our customer expansions involved one or more of our AI solutions, including Talent Optimization, Extend Pro, and Recruiter Agent powered by HiredScore,” Eschenbach said, citing particular strength in the recruiting space.
“Recruiter Agent had a huge quarter, with wins at Johnson Controls, Cox Enterprises, and UofL Health,” he said. “The [Recruiting] team closed more new logos in Q3 than in its 12-year history, and our new ACV more than quadrupled compared to Q2…. It’s clear that customers are ready to invest in AI that’s built for their specific needs and delivers real results. They want solutions that are easy to implement, quickly provide value quickly, without needing a ton of IT support.”
3. Growth catalyst Rob Enslin joins Workday. Enslin “brings fantastic customer and partner relationships and a proven track record of success” and is “the perfect person to lead our go-to-market efforts as we move into our next phase of growth.”
Enslin most recently was co-CEO at high-growth UiPath for a couple of years after leading Google Cloud to three years of industry-leading growth. Before that, he led global field operations for SAP during its move from into the cloud, a tenure that Eschenbach noted in his rationale for bringing Enslin aboard.
“His background and experience fit us nicely, especially when you think about what we’re doing in international. Rob’s lived in Japan, he’s lived all over Europe, and he started the SAP business in China,” Eschenbach said.
“Because Rob spent so many years at SAP, there’s not a single partner that Workday has today that Rob doesn’t already have relationships with. So it’s a great hire for us, and… I think he’ll bring a great outlook for the future to us.”
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