Workday has announced its Q3 financial results for fiscal 2024, demonstrating a 16.7 percent leap in total revenues from the third quarter of fiscal 2023, reaching $1.87bn.
As businesses are looking to scale and drive productivity in the tough macro environment, Workday’s co-CEO, Carl Eschenbach, explained during the earnings call that they can’t achieve both outcomes by simply hiring more, so the company is reaping the benefits of “leaders turning to Workday to help them reskill and upskill their workforce, all while delivering a great employee experience that helps them reduce attrition and ultimately drives productivity.”
As a result, the company saw its operating income for the quarter ended October 31, 2023, reach $87.9m, or 4.7 percent of revenues, compared to an operating loss of $26.3m, or negative 1.6 percent of revenues in the same period last year.
Non-GAAP operating income for the third quarter was $462.1m, or 24.8 percent of revenues, compared to a non-GAAP operating income of $314.2m, or 19.7 percent of revenues, in the same period last year.
Eschenbach also explained that momentum across the business is palpable, “powered by AI innovation, strength in full platform deals, expanding partner ecosystem and international growth – with EMEA surpassing $1bn annual recurring revenue in the quarter.
“Now with over 5,000 core Workday HCM customers, more companies around the world are turning to Workday to manage their most precious assets: their people and money.”
Influenced by these wins, and the ongoing market adoption for cloud financials and HCM, Workday’s chief financial officer, Zane Rowe, announced that the company is raising its fiscal 2024 subscription revenue guidance to $6.59bn, representing 19 percent year-on-year (YoY) growth.
Workday is also raising its fiscal 2024 non-GAAP operating margin guidance to 23.8 percent. “Our focus is centered on investing to drive durable long-term growth while expanding margins,” Rowe explained.
When it comes to the company’s AI offering, Workday’s co-founder and co-CEO, Aneel Bhusri said that its strategy to build AI directly into the core of products “continues to resonate with customers and is fueled by platform strategy, unrivaled dataset and emphasis on being human-centric.”
Rowe also spoke about another innovative way the company is infusing general AI into its platform, through investment in conversational AI. “While we’re still in exploratory phase with this technology, we believe conversational AI will fundamentally change how users interact with Workday by enabling them to easily surface the information they need and interact with data through simple conversation,” Rowe said.
Workday is also leveraging GenAI to create a conversational experience for Workday Adaptive Planning customers.