Slides
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WELCOME TO
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Strategy and GrowthCarl Eschenbach Go-to-MarketRob Enslin Financial FrameworkZane Rowe Q&A Product and InnovationGerrit Kazmaier Aashna Kircher Peter Bailis Agenda
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This presentation may contain forward-looking statements for which there are risks, uncertainties, and assumptions. Forward-looking statements may include any statements regarding our strategies or plans for future operations; growth and opportunities; new features, enhancements, or upgrades to our existing applications or plans for future applications; projections of revenues, gross margins, earnings, or other financial items; and any statements of expectation or belief. Forward-looking statements are based only on currently available information and our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements, and therefore you should not rely on any forward-looking statements that we may make. Further information on risks that could affect Workday’s results is included in our filings with the Securities and Exchange Commission which are available on the Workday investor relations webpage: www.workday.com/en-us/company/about-workday/investor-relations/overview.html. Workday assumes no obligation for, and does not intend to update, any forward-looking statements, except as required by law. Any unreleased services, features, functionality, or enhancements referenced in any Workday document, roadmap, blog, our website, press release, or public statement that are not currently available are subject to change at Workday’s discretion and may not be delivered as planned or at all. Customers who purchase Workday services should make their purchase decisions based upon services, features, and functions that are currently available. Use of Non-GAAP Financial Measures In addition to financial results presented in accordance with generally accepted accounting principles (GAAP), this presentation includes certain non-GAAP financial measures of performance. A reconciliation of the non-GAAP operating margin to GAAP operating margin is contained in the Appendix to this presentation. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Refer to the Appendix for an explanation of non- GAAP financial measures, and why management believes these measures provide useful information.
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Chief Executive Officer
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DrivingInnovation Best AI Agents for HR, Finance, and Planning Accelerating Investments in Our Core Products Open Platform Designed for Work
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Opening Up Sizeable Core TAM Through T argeted Investments Core WorkforceMgmt. Talent Planning HCM FINS Payroll Spend TAM estimates based on Workday and third-party data as of 9.16.25.
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Platform and AI Expand Our Opportunity Core Workday Economy Marketplace Wellness
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Platform and AI Expand Our Opportunity Core Workday Economy Marketplace Wellness AI
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The Future of Software Global Workforce1 On-Premise1990–2010 2.3B SaaS2015–2025 3.7B Agentic2025+ ERP Software $2 On-Premise SaaS On-Premise AI SaaS On-Premise >3.7B 1 Global Workforce from World Bank Group for the periods 1990, 2024, and Workday Estimates.2 ERP estimates via IDC and include: Asset life-cycle management, Enterprise Performance management, Financials, HCM, Order management, Payroll management, Procurement, Project and Portfolio management.
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Pole Position in AI Through Proprietary Data Workday Users Under ContractAnnual Transactions on Platform >75M1 FY’20FY’21FY’22FY’23FY’24FY’25FY’26E >1T FY’20FY’21FY’22FY’23FY’24FY’25FY’26E 1 Represents Workday users under contract as of 7.31.25. >46M >195B
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~75% Core Customers Using Workday Illuminate™ >75% % of Net-New Customer Wins with One or More AI Products1 >30% % of Customer Expansions with One or More AI Products1 >2x Net-New ACV from AI Products1 YoY 1 Includes Recruiting Agent, Talent Mobility Agent, Contract Intelligence Agent, Contract Negotiation Agent, Extend Pro, Talent Optimization, and Labor Optimization and Scheduling for the quarter ended 7.31.25. Growing AI Momentum
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Growing AI Momentum >50%YoY >$450M >$250M ARR Q2’26Q2’25 Q3’25 Q4’25 Q1’26 Includes Recruiting Agent, Talent Mobility Agent, Contract Intelligence Agent, Contract Negotiation Agent, Extend Pro, Talent Optimization, and Labor Optimization and Scheduling.
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Emerging Agentic AI SKUs >$150M <$50M ARR Q2’26Q2’25 Q3’25 Q4’25 Q1’26 >200%YoY Emerging AI SKUs include Recruiting Agent, Talent Mobility Agent, Contract Intelligence Agent, Contract Negotiation Agent, and Extend Pro.
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>200%YoY Emerging Agentic AI SKUs ARR Percentage Points of ARR Growth to the Overall Business Driving >$150M <$50M Q2’26Q2’25Q3’25Q4’25Q1’26 Emerging AI SKUs include Recruiting Agent, Talent Mobility Agent, Contract Intelligence Agent, Contract Negotiation Agent, and Extend Pro.
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Leadership Team Chief Strategy and Business Operations Officer Chief Customer Officer Chief Financial Officer Chief Legal Officer President, APAC President, Japan Chief People Officer President, Product & Technology SVP, North American Sales President, Chief Commercial Officer Chief Technology Officer Chief Revenue Officer Chief Marketing Officer President, EMEA Co-Founder and Executive Chair
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Chief Financial Officer
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Growth Area KPIs FINS/Full Suite AI >$150M in emerging agentic AI ARR growing >200% International ~15% international subscription revenue growth1 Partners 1,300+ partners including over 725 sales partners and over 650 innovation partners2 Medium Enterprise>50% of new customer ACV1 M&A HiredScore ARR +250% since acquisition (5 quarters)3 Evisort ARR +45% since acquisition (3 quarters)3 Success attaching to customer base / opening TAM1 For the Trailing Twelve Month (TTM) period ended 7.31.25.2 As of 9.16.25.3 As of 7.31.25. ~20% FINS+ subscription revenue growth1
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Driving Growth at Scale . . . Net New Subscription Revenues Added Diverse Revenue Drivers Customer Base Product Adoption New Customer Growth Ramp of Growth Areas Monetization of AI Inorganic Contribution FY26E represents guidance provided on Q2 earnings call on 8.21.25. $5.6B FY23 FY26E $8.8B14%YoY FY24 $6.6B FY25 $7.7B $1.0B $1.0B $1.1B $1.1B Subscription Revenues
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. . . While Expanding Margins . . . Non-GAAP Operating Margin Driving Leverage Strong Gross Retention Efficiencies Through Scale People/Process/Systems Internal AI Adoption FY26E represents guidance provided on Q2 earnings call on 8.21.25.Refer to the Appendix for details about Non-GAAP Measures and Reconciliations to GAAP. 20.1% FY23 FY26E 29.0%3 pts FY24 24.0% FY25 25.9%
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. . . And Managing Stock-Based Compensation . . . Stock-Based Compensation Expense as a % of Revenue SBC Considerations Structural Plan Improvements Disciplined Approach to Allocation Moderated Headcount Growth 21% FY23 FY26E ~17%(1 pt) FY24 20% FY25 18%
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HighLow Mid Slowing Moderating Stable Continued Improving Faster Key Framework Assumptions Growth Investment Level(assumes continued investment in AI across all scenarios) Reduced Pace:Bias toward incremental margin Current Pace:Balanced margin progression Margin Impact Macro Ramp of Growth Areas Increased Pace: Bias toward growth
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Ta rg e t F i n a n c i a l Fra m e w o r kMidLow High Subscription Revenue CAGR Through FY28 Non-GAAP Operating Margin in FY28 SBC % Revenue in FY28 Non-GAAP “Rule of” Including SBC2 FCF/Share CAGR Through FY284 Share Repurchases3 12% 36% 13%-14% ~35% 15% 33% Non-GAAP “Rule of”1 $5B through FY27 >20% ~35% 13%-14% and managing lower 48% FCF/Share in FY284 ~$15 All Targets are FY28 unless otherwise noted; 3-year CAGR calculated for FY26-FY28. Refer to Appendix – About Non-GAAP Measures for further details.1 Defined as FY28 subscription revenue growth plus FY28 Non-GAAP operating margin.2 Defined as FY28 subscription revenue growth plus FY28 Non-GAAP operating margin minus FY28 SBC % of revenue.3 Share repurchases are inclusive of FY26 and FY27.4 Excludes any non-recurring items.
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Capital Allocation Philosophy Organic Innovation Primary Investment Focus Innovating and Growing Our Platform Driving Value with Agentic AI Opportunities M&A Share Repurchases Cultural Alignment Te a m a n d Te c h n o l o g y Adjacent Markets TAM Expander Accelerating with $5B of Intended Repurchases Through FY27 Reducing Our Share Count Through FY27
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President, Product and T echnology
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Workday’s Unique Appeal Leadership and Trust Market Position and Potential Core ValuesInnovation Agenda & AI Inflection Point
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of companies are using the latest generation of AI; the same percentage have seen no significant gains in top- or bottom-line performance. Source: https://www.mckinsey.com/cn/our-insights/our-insights/beyond-the-hype-unlocking-value-from-the-ai-revolution.
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Accuracy with Enterprise Data and Context Enterprise data can’t be upstreamed into base LLMs Finding the right context for LLMs is very hard Most enterprise data is not close to being ready Our Data, Workflows and Governance Are the Foundation to Deliver On an Enterprise AI Promise Integration with Processes, Logic, and Systems Agent interop limited by enterprise APIs Workflows are stateful and fixed Automation gains are often cross-process/domain The AI Challenges Everyone Faces
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Accuracy with Enterprise Data and Context Enterprise data can’t be upstreamed into base LLMs Finding the right context for LLMs is very hard Most enterprise data is not close to being ready Integration with Processes, Logic, and Systems Agent interop limited by enterprise APIs Workflows are stateful and fixed Automation gains are often cross-process/domain The AI Challenges Everyone Faces Our Data, Workflows and Governance Are the Foundation to Deliver On an Enterprise AI Promise Leverage and Expand Data Moat Build context and models on clean data Expand and integrate our data foundation Evolve our data model for AI consumption Integration with Processes and Logic Radically embrace OSS standards (MCP) Reimagine business process with embedded AI Enable AI-based extensibility The AI Opportunity We Have
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Best AI Agents Expanding the Core Business Open Enterprise AI Platform The AI Enterprise Platform for Managing People, Money, and AgentsNext-Generation ERP
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Every Aspect of HR, Financials, and Platform Illuminate for Spend Contract Intelligence Agent Contract Negotiation Agent Supplier Contract Agent Illuminate for Accounting Financial Audit Agent Financial Test Cost & Profitability Agent Financial Close Agent Illuminate for Employee Experience Employee Sentiment AgentNEW NEW NEW NEW Illuminate forHigher Education Student Administration Agent Academic Requirements Illuminate for Platform Workday Flowise Agent Builder Illuminate for Revenue Revenue Contract Agent Illuminate for Planning Planning Agent NEW NEW NEW Illuminate for Talent Management Talent Mobility Agent Performance Agent Illuminate for Learning Learning and Development Agent1 Illuminate for Payroll Payroll Agent Illuminate for Talent Acquisition Recruiting Agent Workday Paradox Candidate Experience Agent2 NEW NEW Illuminate for HR Admin BP Optimize Agent Self-Service Agent Case Agent Job Architecture Agent Illuminate for Implementation Business Process Copilot Agent Illuminate for Workforce Management Frontline Agent Illuminate for Contingent WorkforceContingent Sourcing Agent Document Intelligence for Contingent Labor AgentNEW NEW NEW NEW NEW 1 Pending close of the Sana acquisition. 2 Pending close of the Paradox acquisition.
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Medium Enterprise International Frontline Expanding Our Core Business Federal
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Open AI Enterprise Platform - Workday BuildThe Developer Platform for People, Money, and Agents The entire user journeyFlowise AgentsWorkday Flowise Agent Builder Extend AppsWorkday Extend App Builder OrchestrationsOrchestration Builder Data CloudData & Analytics Workday Developer Copilot One Developer Experience APIs & ConnectorsOpen standards for max connectivity: MCP, A2A, REST, GraphQL, SOAP, JDBC, Iceberg
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Group General Manager, CHRO Products
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Best AI Agents Expanding the Core Business Open EnterpriseAI Platform The AI Enterprise Platform for Managing People, Money, and AgentsNext-Generation ERP
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Getting The Data Right HRORGANIZATIONS COMPENSATIION ABSENCE BENEFITS RECRUITING ONBOARDINGGOALS & PERFORMANCESUCCESSION CAREER & DEVELOPMENT PAYROLL TIME TRACKING SKILLS
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Getting the Data Right Post tothe GL Transform Transactions into Detailed Journals POS Hospitality Management Property Management External Data Sources Integrate and Enrich 1B+Detailed Entries Automated 400+Customers Achieving Mass Efficiencies 13Industries in Use FINS: Accounting Center
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Getting the Data Right Transforms the financial close processTransforms the order-to-cash process for B2C companies in tech and media Transforms the supply chain across industries such as high tech, life sciences, automotive, and healthcare FINS: Connecting Industry Operational Data
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Data Flywheel AIData
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Best AI Agents for HR, FINS, and Planning Recruiting Agent Talent Mobility Agent Contract Intelligence Agent Contract Negotiation AgentAgent System of Record Available 2024/2025Announced Feb. 2025 Expected Availability 2026Early Adopter 2025 Document Intelligence for Contingent Labor Agent Business Process Copilot Agent Case Agent Performance Agent Workday Paradox Candidate Experience Agent1 Learning & Development Agent2 Job Architecture Agent Employee Sentiment Agent Financial Test Agent Cost & Profitability Agent Financial Close Agent Student Administration Agent Academic Requirements Agent Workday Flowise Agent Builder Self-Service Agent Payroll Agent Financial Audit Agent Frontline Agent BP Optimize Agent Revenue Contract Agent Planning Agent Supplier Contract Agent Contingent Sourcing Agent 1 Pending close of the Paradox acquisition.2 Pending close of the Sana acquisition.
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Reduction in Screening Time Decrease in Hiring Time Recruiting Agent Ta l e n t M o b i l i t y Ag e n t Up to Up to
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Reduction in Contract Execution Time Contract Intelligence Agent Recruiting Agent Ta l e n t M o b i l i t y Ag e n t Up to
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Contract Intelligence Agent Recruiting Agent Ta l e n t M o b i l i t y Ag e n t Faster Compliance Enablement Payroll Agent Up to
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Contract Intelligence Agent Ta l e n t M o b i l i t y Ag e n t Payroll Agent Financial Audit Agent Hours Saved on Annual Audits Up to
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Contract Intelligence Agent Payroll Agent Financial Audit Agent Contingent Sourcing Agent Lower Sourcing Costs Up to
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Payroll Agent Financial Audit Agent Efficiency Gains Contingent Sourcing Agent Planning Agent Up to
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Financial Audit Agent Address employee sentiment and reduce costly employee turnover. Contingent Sourcing Agent Planning Agent Employee Sentiment Agent
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Contingent Sourcing Agent Planning Agent Employee Sentiment Agent Streamlines the entire review process so managers can focus on meaningful feedback. Performance Agent
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Planning Agent Employee Sentiment Agent Reduces case resolution times and lowers the number of support requests. Performance Agent Case Agent
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Employee Sentiment Agent Optimizes the financial close process to accelerate predictability, efficiency and lower risk. Performance Agent Case Agent Financial Close Agent
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CEO Level Business T ransformation HRContingent Labor FINSWorkforce Mgmt Spend Payroll TalentPlanning Industry Solutions • Analytics • Extend
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Best AI Agents Expanding the Core Business Open Enterprise AI Platform The AI Enterprise Platform for Managing People, Money, and AgentsNext-Generation ERP
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Improvement in Business Process Efficiency BP Optimize Agent Expanding the Core Business: Medium EnterpriseReducing Operational Costs Up to
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Revenue Contract Agent Expanding the Core Business: Medium EnterpriseSimplifying Integrations Automatically extracts key financial data from contracts with AI and automates downstream activity.
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Expanding the Core Business : International Sydney Singapore Japan 2H25 Portland Montreal Columbus Ashburn Dublin Frankfurt London Belgium Charleston India 2H25 Middle East 2H26 EU Sov 1H26 Cloud Platform Availability Zones & Regions
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Expanding the Core Business: International 175+ 55+ Compliance Preconfigured Tax and Reporting Templates2 Countries1 Integrating partners: 1 Represents the number of countries Workday is deployed in as of 7.31.25.2Country-specific local configurations available as of 2025 R1 release.
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Expanding the Core Business: International Certified Partners Prebuilt Integrations Data Changes Tax Documents Payroll Results Payroll Documents Payslips Notifications Global Payroll Connect
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Expanding the Core Business: InternationalEnabling the Ecosystem PwC builds apps on Workday to help navigate global regulations. UK: Right to Work App Netherlands: Sickness & Recovery Management
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Expanding the Core Business: Federal Next-Gen AI Capabilities and World Class Data Security All of Workday for All Agencies Built-in Federal Productization – NOT Customization
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Expanding Our Product Depth Big TAM Strong Foothold in the Core Billions of Frontline Workers Globally Retail and Hospitality Manufacturing Healthcare Frontline Agent Expanding the Core Business: Frontline
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Frontline Agent Expanding the Core Business: Frontline Time Saved on Timesheet Approvals Up to
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Expanding the Core Business: Frontline Best-in-class conversational AI Market leader in frontline hiring workflows Conversion rates of over 70% Workday partner since 2021 with over 200 customers Expanding Our AI-Powered Talent Acquisition Suite
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Chief T echnology Officer
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Best AI Agents Expanding the Core Business Open Enterprise AI Platform The AI Enterprise Platform for Managing People, Money, and AgentsNext-Generation ERP
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Power of our HR Data Data exchange Plan setup automation Workerenrollment Usage and cost insightsPlan communications Partner ecosystemEmployer Employees HR and IT Workday Wellness
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Power of our HR Data Data exchange Partner ecosystemEmployer Employees HR and IT 75M+ Workday Users Under Contract Strategic Partnerships
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The Developer Platform for Customer and Partner Innovation on Workday
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Workday BuildThe Developer Platform for People, Money, and Agents Flowise AgentsWorkday Flowise Agent Builder Extend AppsWorkday Extend App Builder OrchestrationsOrchestration Builder Data CloudData & Analytics
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Workday BuildThe Developer Platform for People, Money, and Agents Flowise AgentsWorkday Flowise Agent Builder Extend AppsWorkday Extend App Builder OrchestrationsOrchestration Builder Data CloudData & Analytics Workday Developer Copilot One Developer Experience
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Workday AgentsWorkday Flowise Agent Builder AppsExtend App Builder OrchestrationsOrchestration Builder Data & AnalyticsPrism Analytics Workday BuildThe Developer Platform for People, Money, and Agents Developer Copilot One Developer Experience APIs & ConnectorsOpen standards for max connectivity: MCP, REST, GraphQL, SOAP, JDBC, Iceberg Flowise AgentsWorkday Flowise Agent Builder Extend AppsWorkday Extend App Builder OrchestrationsOrchestration Builder Data CloudData & Analytics Workday Developer Copilot One Developer Experience APIs & ConnectorsOpen standards for max connectivity: MCP, A2A, REST, GraphQL, SOAP, JDBC, Iceberg
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Workday BuildThe Developer Platform for People, Money, and Agents The entire user journeyFlowise AgentsWorkday Flowise Agent Builder Extend AppsWorkday Extend App Builder OrchestrationsOrchestration Builder Data CloudData & Analytics Workday Developer Copilot One Developer Experience APIs & ConnectorsOpen standards for max connectivity: MCP, A2A, REST, GraphQL, SOAP, JDBC, Iceberg
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Workday Build To o l s Build thefuture of work.Build yourbusiness. PartnerEcosystem Build yourcareer. Community++ + The developer platform for people, money, and agents.
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Making Data Open, Accessible, and AI-Ready
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WorkdayData Cloud Workday Data Lake Prism Data Management Workday Live DataQuery
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Trusted Partner Systems Zero-Copy Access Workday Data Lake Workday Data Connect Prism Data Management Unified Data Catalog Data Lakes Data WarehousesApplicationsBI Tools Workday Live Data Query Workday Data Cloud
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President, Chief Commercial Officer
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Balanced Go-to-Market Model 70,000+ Addressable Core Customers New Customers11,000+ Global Customers 65%+ of the Fortune 500 Customer Base ~40%of growth contribution1 ~60%of growth contribution2 Platform AdvantageOpenness • Tr u st • Extensibility 1 Represents % of Workday’s subscription revenue growth attributable to customers added after the beginning of 7.31.24.2 Represents % of Workday’s subscription revenue growth attributable to expansion within our customers that existed as of the beginning of 7.31.24.
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AI International Partner Ecosystem Go-to-Market Growth Priorities with customers at the center. Medium Enterprise Industries
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Tr a n s p a re n t Simple Flexible Included in subscription AI always on, no bolt-ons Fungible across agents, APIs, storage Scales as customers grow Clear view of usage & ROI Add credits as value expands AI: New Pricing Model Delivering Value at Scale Workday Flex Credits
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Japan UKI Playbook Lighthouse Wins Market leader in HCM Verticalized GTM + emerging enterprise France International: Growth Framework New Markets India: scaling with direct sales build-out Middle East: launch in progress Germany APAC Ta l e n tJess O’Reilly- VP, Sales ASEAN Sunil Jose - GVP, India Volker Reinert- VP, Customer Success EMEA and APAC Arvind Sundaresan - VP, Services APAC
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Medium Enterprise: A Core Growth Engine of TAM1 ~40%of New ME Customers Land Full Suite2 ~50%of New ME Customers Purchase Core FINS2 <60Days to Go-Live Workday GOFaster Deployments Full Suite DifferentiationU.S. Leading the Way 1 TAM estimates based on Workday and third-party data as of 9.16.25.2 For the TTM ending 7.31.25.
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Federal Frontline Workforce $2B+TAM1 70%of Global Workforce Industries: Diversified, Durable Growth Retail and Hospitality Manufacturing Financial Services Te c h n o l o g y a n d M e d i a Professional and Business Services Emerging Industries> $1B ARR 1 TAM estimates based on Workday and third-party data as of 9.16.25.
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Partners: Scaling Growth Across the Ecosystem unique partners Innovation Deployment Strategic Partnerships Sales $100M+in ARR2 100+Built on Workday Apps >20%of New Customer ACV1 21,000+Certified Partner Consultants Sourcing ~10%of Customer Expansion ACV1 Sourcing 1 For Q2 FY26.2 Represents ARR from strategic partnerships that has been added since the beginning of FY24.
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AI International Partner Ecosystem with customers at the center. Medium Enterprise Industries
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About Non-GAAP Financial MeasuresTo provide investors and others with additional information regarding Workday’s results, we have disclosed the following non-GAAP financial measures: non-GAAP operating margin and free cash flow margin. Workday has provided a reconciliation of the non-GAAP operating margin to GAAP operating margin. Workday’s management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Workday’s financial performance. Management believes these non-GAAP financial measures reflect Workday’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in Workday’s business. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Workday’s operating results and prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. Non-GAAP Operating Margin Non-GAAP operating margin differ from GAAP in that it excludes share-based compensation expense, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, acquisition-related costs, and restructuring costs. Management believes excluding the following items from the GAAP Consolidated Statements of Operations is useful to investors and others in assessing Workday’s operating performance due to the following factors: • Share-based compensation expense. Share-based compensation primarily consists of non-cash expenses for employee restricted stock units and our employee stock purchase plan. Although share-based compensation is an important aspect of the compensation of our employees and executives, this expense is determined using a number of factors, including our stock price, volatility, and forfeiture rates, that are beyond our control and generally unrelated to operational decisions and performance in any particular period. Further, share-based compensation expense is not reflective of the value ultimately received by the grant recipients. • Employer payroll tax-related items on employee stock transactions. We exclude the employer payroll tax-related items on employee stock transactions in order to show the full effect that excluding share-based compensation expense has on our operating results. Similar to share-based compensation expense, this tax expense is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of our business. • Amortization of acquisition-related intangible assets. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of the related amortization can vary significantly and are unique to each acquisition and thus we do not believe this activity is reflective of our ongoing operations. Although we exclude the amortization of acquisition-related intangible assets from these non-GAAP financial measures, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. • Acquisition-related costs. Acquisition-related costs include direct transaction costs, such as due diligence and advisory fees, and certain compensation and integration-related expenses. We exclude the effects of acquisition-related costs as we believe these transaction-specific expenses are inconsistent in amount and frequency and do not correlate to the operation of our business. • Restructuring costs. Restructuring costs are associated with a formal restructuring plan and are primarily related to workforce reductions, the closure of facilities, and other exit and disposal activities. We exclude these expenses because they are not reflective of ongoing business and operating results. • Gains and losses on strategic investments. Our strategic investments include investments in early stage companies that are valuable to Workday customers and complementary to Workday products. Gains and losses on strategic investments may result from observable price adjustments and impairment charges on non-marketable equity securities, ongoing mark-to-market adjustments on marketable equity securities, and the sale of equity investments. We do not rely on these securities to fund our ongoing operations nor do we actively trade publicly held securities, and therefore we do not consider the gains and losses on these strategic investments to be reflective of our ongoing operations. Free Cash Flow Margin We define free cash flows as net cash provided by operating activities minus capital expenditures. Free cash flow margin is calculated as free cash flows as a percentage of total revenues. We use free cash flow margin as a measure of financial progress in our business, as it balances operating results, cash management and capital efficiency. Limitations on the Use of Non-GAAP Financial Measures These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review Workday’s financial information in its entirety and not rely on a single financial measure. The Company has not provided a reconciliation of its forward outlook for non-GAAP operating margin with its forward-looking GAAP operating margin in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company is unable to predict with reasonable certainty the amount and timing of adjustments that are used to calculate this non-GAAP financial measure, particularly related to stock-based compensation and its related tax effects, acquisition-related costs, and restructuring costs.
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Reconciliations of GAAP to Non-GAAP Data (in millions, except percentages and per share data) FY23 FY24 FY25 Non-GAAP operating margin1 Operating margin (3.6) % 2.5 % 4.9 % Share-based compensation expense2 20.8 % 19.5 % 17.9 % Employer payroll tax-related items on employee stock transactions0.8 % 0.9 % 0.9 % Amortization of acquisition-related intangible assets 1.5 % 1.1 % 0.9 % Acquisition-related costs 0.0 % 0.0 % 0.2 % Restructuring costs 0.6 % 0.0 % 1.1 % Non-GAAP operating margin 20.1 % 24.0 % 25.9 % Operating Margin 1 Operating margin is calculated based upon the respective underlying, non-rounded data.2 The reconciliation to non-GAAP operating margin excludes $8 million of Share-based compensation expense in fiscal 2025 related to restructuring initiatives. This amount has been included as a component of the Restructuring costs adjustment in this reconciliation.
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Updated Product Attach Rates Denominator on attach rates is inclusive of all Workday core customers as of 7.31.25.1 Excludes legacy Cloud Connect for Third-party Payroll SKU which has over 50% attach rate.2 Includes attach rates for Extend inclusive of Extend Pro. 11%11%16%16%18%22% Evisort VN DLYHired Sco reAccount ing Ce nte r Gl ob al P ay roll Co nnect SchedulingCan didate En gag eme nt St rategi c Sourcing People Analyt ics Workforce Planning Me ssag in gExt end / Ext end Pro 23%23%24%29%33%38%38%40% 57%62%63%71%78% Peakon He lp Jou rne ysProcurementPri sm Analyt ics Co re Fina ncials Fina nical Planning Exp ensesLearningTa le nt Op ti miz ation PayrollTim e TrackingRecruiti n g Each Has <10%Each Has <5% 21
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Core Markets Support Durable Growth $4.54B HCM Subscription Revenues1 (TTM) Q2’24 1 HCM includes Workday Human Capital Management, Recruiting, Time Tracking, Payroll, Learning, Talent Optimization, Workforce Planning, People Analytics, Peakon, Help/Journeys, VNDLY, Scheduling, HiredScore, and Other.2 FINS+ includes Workday Financial Management, Financial Planning, Spend Management, Prism Analytics, Industry Solutions, Extend, Evisort, and Other. $1.54B FINS+ Subscription Revenues2 (TTM) $5.31B $1.86B Q2’25 15%CAGR 20%CAGR 13%YoY $6.01B Q2’26 $2.22B Q2’24 Q2’25 Q2’26 20%YoY
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Core Markets Support Durable Growth $4.59B U.S. Subscription Revenues(TTM) Q2’24 $1.49B International Subscription Revenues(TTM) $5.39B $1.78B Q2’25 16%CAGR 17%CAGR 15%YoY $6.18B Q2’26 $2.05B Q2’24 Q2’25 Q2’26 15%YoY