Workday, Inc. · NASDAQ:WDAY
Workday — Investor Day (September 2022)
162 slides from Workday's investor day presentation, Sep 13, 2022
Slide 1: Financial Analyst Day
Financial Analyst Day September 13, 2022
Slide 2: Agenda
Agenda Our Momentum Aneel Bhusri – Co-Founder, Co-CEO, and Chairman Chano Fernandez – Co-CEO Our Expanding Opportunity Pete Schlampp – Chief Strategy Officer Our Innovation Story Sayan Chakraborty – EVP, Product and Technology Terrance Wampler – Group GM, oCFO David Somers – Group GM, oCHRO Break Ou
Slide 3: Safe Harbor Statement
Safe Harbor Statement This presentation may contain forward-looking statements for which there are risks, uncertainties, and assumptions. Forward-looking statements may include any statements regarding strategies or plans for future operations; any statements concerning new features, enhancements or
Slide 4: Our Momentum
Our Momentum Driving the Next Phase of Growth Aneel Bhusri Co-Founder, Co-CEO, and Chairman
Slide 5: Driving Enduring Growth at Scale
Driving Enduring Growth at Scale Workday Rising 2022 80%+ Workday Rising 2019 Subscription Revenue Growth $2.8B $5.0B (1) (2) (1) Subscription Revenue for the trailing 12-month period ended 7.31.19 (2) Subscription Revenue for the trailing 12-month period ended 7.31.22
Slide 6: Customer Momentum
Customer Momentum 4,300+ 1,400+ 2,800+ >50% 725+ >40% Workday Rising Workday Rising Workday Rising Workday Rising Workday Rising Workday Rising 2019 (1) 2022 (2) 2019 2022 2019 2022 Core HCM Core FINS Fortune 500 (1) As of 7.31.19 (2) As of 7.31.22
Slide 7: We're mission critical.
We’re mission critical.
Slide 8: Our Momentum
Our Momentum Driving the Next Phase of Growth Chano Fernandez Co-CEO
Slide 9: Digital acceleration is at the top of the agenda
Market Landscape Digital acceleration is at the top of the agenda.
Slide 10: Our Customers
Our Customers
Slide 11: Customer satisfaction for 13 years
95%+ Current year results based on a survey conducted by Workday of Named Support Customer satisfaction for 13 years Contacts in May 2022
Slide 12: Driving the Next Phase of Growth
Driving the Next Phase of Growth $10B 20%+ Total revenue Subscription revenue growth
Slide 13: Driving the Next Phase of Growth
Driving the Next Phase of Growth oCHRO oCFO International Medium Enterprise
Slide 14: Our Expanding Opportunity
Our Expanding Opportunity Uniquely Positioned for Market Share Gains Pete Schlampp Chief Strategy Officer
Slide 15: Our Expanding Opportunity
Our Expanding Opportunity ~20% $125B+ TAM(2) Growth $105B+ TAM(1) (1) IDC and Workday estimates as of 9.21.2021 (2) IDC and Workday estimates as of 9.13.2022
Slide 16: Addressing a Large and Expanding Opportunity
HCM $52B Human Capital Management/ Workforce Planning $125B+ Workforce Management and People Analytics Talent Management Employee Experience Payroll Addressing a Large and Expanding FINS+ $73B Opportunity Financial Management Financial Planning Spend Management Platform Analytics Student IDC and Wor
Slide 17: Cloud Market Leader
Workday Cloud 19.1% Market Leader Other Oracle According to Gartner’s market share 53.6% 12.3% research, Workday had the largest market share in 2021 for ERP Worldwide SaaS revenue at 19.1%. SAP 15.0% SaaS ERP Total Worldwide Revenue Market Share, 2021 (Millions of U.S. Dollars) Charts/graphics crea
Slide 18: A Recognized Leader in Two Magic Quadrant Reports
A Recognized ERP Leader in Two Recognized as a Leader(1) in the 2022 Gartner® Magic QuadrantTM for Magic Quadrant Cloud ERP for Service-Centric Enterprises Reports HCM Recognized as a Leader(2) in the 2021 Gartner® Magic QuadrantTM for 1: Gartner Magic Quadrant for Cloud ERP for Service-Centric Ente
Slide 19: Massive Scale
Massive Scale Stand up and be counted: most popular apps by unique users. Okta (2022)
Slide 20: Building Points of Leverage
Building Points of Leverage Expand with our customers Use our broad and deep data set Build on a single platform Delight our customers Win systems of record Digitize and automate business processes
Slide 21: How Workday is Unique in the Office of the CHRO
How Workday is Unique in the Office of the CHRO Trusted The world’s most HR brand in scalable people enterprise software data cloud Broad portfolio of native ML foundation applications that work to elevate human better together performance
Slide 22: Core HCM, Recruiting, Learning, Talent Optimization
Core HCM Talent Recruiting Learning Optimization
Slide 23: Core HCM Recruiting
Core HCM Recruiting
Slide 24: Core HCM Learning
Core HCM Learning
Slide 25: Core HCM Talent Optimization
Core HCM Talent Optimization
Slide 26: Extended Workforce Core HCM
Extended Workforce Core HCM
Slide 27: Core HCM Workforce Management
Core HCM UK Retail Workforce France Hospitality Management Payroll Germany Healthcare Time Tracking Scheduling Australia Manufacturing Absence Management Medium Enterprise
Slide 28: How Workday is Unique in the Office of the CFO
How Workday is Unique in the Office of the CFO Leading oCFO cloud Unified, adaptable suite for service-based architecture built for industries speed and agility Composable platform Intelligent data core and broad network of to plan, execute, and solutions and analyze the business ecosystem partners
Slide 29: Connecting the Back, Middle, and Front Offices
Connecting the Back, Middle, and Front Offices Back Office Middle Office Front Office: Financial Services • Financials • Instrument Cash Flow • Claims and Policy • HR, Talent, Recruiting, Payroll • Cost and Profitability, • Loans, Deposits, Credit Cards • Spend and Supplier Business Planning Managem
Slide 30: Industry Accelerators from Workday
Industry Accelerators from Workday
Slide 31: Industry Accelerators from Workday
Industry Accelerators from Workday Accelerate to Cloud Scale with Open Ecosystems Adapt and Innovate Together Healthcare Insurance Banking and Technology Capital Markets
Slide 32: Financial Services
Financial Services $1B+ annual recurring revenue business As of 7.31.22
Slide 33: Healthcare, Financial Services, Government
Financial Healthcare Services Government $1B+ annual recurring revenue business Professional Education Services
Slide 34: Technology and Media, Healthcare, Financial Services
Technology Financial Healthcare Government and Media Services Retail and Professional Education Transportation Hospitality Services
Slide 35: Lead with Organic Innovation
Culture and Talent Product and Lead with Organic Technology Innovation Buying Center and Customer Fit Accelerate with Selective M&A Geographies Industry Verticals
Slide 36: Our Innovation Story
Our Innovation Story Designed to Adapt, Scaled to Win Sayan Chakraborty EVP, Product & Technology
Slide 37: Where we started
In-Memory Object Data Model Business Process, Where we ML, and Security started Intelligent Data Core One Version of the Software
Slide 38: Where we started
Reliable • 99.7% Best-in-Class Availability SLA Where we • 99.97% Delivered Service Availability started Scalable • 60M+ Users(1) In-Memory Object • 442B Transactions(2) Data Model Performant • 96% of All Transactions < 1 Second Business Process, ML, and Security Ambient • Responsive, Omni-Channel,
Slide 39: Where we are
Where we An evolving are architecture
Slide 40: Where we are
Where we Converted to are Microservices An evolving Scaled architecture Horizontally Integrated Acquisitions
Slide 41: Where we are going
Where we From Evolution are going to Revolution
Slide 42: Where we are going: Public Cloud
Where we are going Evolution: Public Cloud From Evolution • Global Expansion to Revolution • Hybrid Workload Management • Service Optimization Revolution: Public Cloud First
Slide 43: Where we are going: Workday Extend
Where we are going Evolution: Workday Extend From Evolution to Revolution • 750+ applications already built Public Cloud Public Cloud First • Workday Orchestrate • Workday App Builder Revolution: API-First Platform
Slide 44: Where we are going: ML in the Platform
Where we are going From Evolution to Revolution Evolution Evolution: ML in the Platform Public Cloud Public Cloud First Workday Extend API-First Platform Revolution ML in Everything We Do Revolution:
Slide 45: Where we are going
Where we are going From Evolution Evolution to Revolution Public Cloud Public Cloud First Revolution Workday Extend API-First Platform ML in the Platform ML in Everything We Do Leverage
Slide 46: Our Innovation Story
Our Innovation Story Designed to Adapt, Scaled to Win Terrance Wampler Group General Manager, oCFO
Slide 47: Empower the Office of the CFO
Empower the Office of the CFO Interoperate for Industry Depth Enable Organizational Agility Deliver Trusted Business Insights Create Intelligent Business Processes
Slide 48: Interoperate for Industry Depth
Interoperate for Industry Depth Connecting the Back, Middle, and Front Offices Back Office Middle Office Front Office: Financial Services • Financials • Instrument Cash Flow • Claims and Policy • HR, Talent, Recruiting, Payroll • Cost and Profitability, • Loans, Deposits, Credit Cards • Spend and Su
Slide 49: Services Industries
Financials HR ISV Services Industries Financial Services Professional Services Healthcare Media and Entertainment Technology Ingest loan, deposit, trade, CPQ [Services], Customer Ingesting clinical utilization data to Services CPQ, Product CPQ [ISV] CPQ [Services + Products], policy, and claims data
Slide 50: Services Industries
Financials HR ISV Services Industries Financial Services Professional Services Healthcare Media and Entertainment Technology Ingest loan, deposit, trade, CPQ [Services], Customer Ingesting clinical utilization data to Services CPQ, Product CPQ [ISV] CPQ [Services + Products], policy, and claims data
Slide 51: Industry Spotlight
Industry Spotlight Professional Services Healthcare Media Services CPQ Mobile Inventory User Experience Subscription Management Guide Selling & Automate Quoting and Order or check inventory levels for medicine and Construct innovative product offerings and easily Proposal Creation medical supplies f
Slide 52: Subscription Management
Ww Q search ® ‘Subscriptions | BB Overview Ye Subseription Management My Subseriptons Upcoming Renewals (1,208) EE Accounts ® My Accounts Wing Center Reports Planned vs Actuals ‘chum Anas ‘SubserberAnaytlos Retention Analytics ‘Suggested Links Overview New cuetomers 290 |Possee | soreeee —-_~ View M
Slide 53: Enable Organizational Agility
Empower the Office of the CFO Interoperate for Industry Depth Enable Organizational Agility Deliver Trusted Business Insights Create Intelligent Business Processes
Slide 54: Agility and Planning: By the Numbers
Agility and Planning: By the Numbers 100,000 160% (1) levels or planning entities more planning scenarios (1) Represents the median increase of planning scenarios for large enterprise customers as of March 2022 compared to March 2020
Slide 55: Deliver Trusted Business Insights
Empower the Office of the CFO Interoperate for Industry Depth Enable Organizational Agility Deliver Trusted Business Insights Create Intelligent Business Processes
Slide 56: Trucking Carrier Determines Driver Profitability
Trucking Carrier Determines Driver Profitability With Workday ● Leveraging Workday Prism Analytics to bring external data (from fleet management, billing, customer sat, ops systems) along with HCM and finance, created general manager dashboards for each location (e.g., business mix) ● Truck driver P
Slide 57: Workday Accounting Center
Use Cases: Simple Revenue Recognition Transform Digital and Physical Sales Transform business events into accounting to into Accounting recognize revenue, including deferred revenue Transform physical product sales and digital product sales into accounting to recognize revenue Cash Subledger Transfo
Slide 58: Workday Accounting Center
“ With Workday Accounting Center we have full transparency into detailed accounting creation from close to 75 files from policy, claims, and other systems, streamlining our accounting into one system and providing us with deeper insight into insurance product profitability.” Vice President of Accoun
Slide 59: Create Intelligent Business Processes
Empower the Office of the CFO Interoperate for Industry Depth Enable Organizational Agility Deliver Trusted Business Insights Create Intelligent Business Processes
Slide 60: Machine Learning
Available Future • Supplier Invoice Automation—Scanning • Contract Metadata Extraction Automation • Receipt Scanning for Expenses • Auto-Skip Approvals • Contract Scanning and Search • Self-Reconciling Accounts • Journal Insights • Duplicate Detection of • Expense Protect Expenses Anomaly Detection
Slide 61: Machine Learning
“ “ Using supplier invoice scanning has been a Workday proactively identifies accounting big win for us. We let Workday do the work errors and helps us understand the behavior for us and we simply review the scanned of journal data, learn from it, and solve from it information. And we’ve gained grea
Slide 62: Our Innovation Story
Our Innovation Story Designed to Adapt, Scaled to Win David Somers Group General Manager, oCHRO
Slide 63: Empower the Office of the CHRO
Empower the Office of the CHRO Innovate Around Skills Cloud and Surrounding Products Empower Frontline Workers and Managers Incorporate the Extended Workforce
Slide 64: Skills Momentum: From 25M to 5.7B
Skills Momentum 1,300 (1) Customers live From 25M to 5.7B (2) Skill usage in 4 years (1) As of September 2022 (2) As of August 2022
Slide 65: Workday Skills Cloud
Public & Point Market Data Solutions Workday Skills Cloud Assessment Custom Data Integrations
Slide 66: The Next Generation of Skills
The Next Generation of Skills Skills infrastructure Skills in applications Annotation technology Performant tooling
Slide 67: Talent and Performance
Talent and Performance
Slide 68: The Next Generation of Performance Management
The Next Generation of Performance Management
Slide 69: Leader in Recruiting Market
Leader in Recruiting Market 74% Using Workday Recruiting Represents attach rate based on core HCM and/or FINS customers as of 7.31.22
Slide 70: Expanding with Messaging and Candidate Engagement
Expanding with Messaging and Candidate Engagement You’re all set for your interview tomorrow at 10:00AM with Workday Click here for directions Thank you so much for your help!
Slide 71: Rapidly Growing our Learning Footprint
Rapidly Growing our Learning Footprint 2,000+ Learning Customers As of 7.31.22
Slide 72: Empower Frontline Workers and Managers
Empower the Office of the CHRO Innovate Around Skills Cloud and Surrounding Products Empower Frontline Workers and Managers Incorporate the Extended Workforce
Slide 73: Scheduling and Labor Optimization
Scheduling and Labor Optimization + + +
Slide 74: Frontline Worker
Frontline Worker Check in/check out Shift scheduling Access to earned pay
Slide 75: Workforce Management
Workforce Management Payroll
Slide 76: Incorporate the Extended Workforce
Empower the Office of the CHRO Innovate Around Skills Cloud and Surrounding Products Empower Frontline Workers and Managers Incorporate the Extended Workforce
Slide 77: Source and Manage the Total Workforce
Source and Manage the Total Workforce Holistic workforce strategy Extended WFM HCM Visibility into total workforce Planning and Analytics Statement of Work Worker Profile & Tracking Better plan for and manage labor needs Talent Optimization Workforce Management Control compliance and security risk S
Slide 78: Our Customer Experience
Our Customer Experience Accelerating the Value of Workday Sheri Rhodes Chief Customer Officer
Slide 79: Customer Experience: It Takes an Ecosystem
Customer Experience It Takes an Ecosystem . . . 16,500+ 95%+ 95%+ (1) Certified Customer On-Time Resources Satisfaction Deployments (1) As of 7.31.22
Slide 80: Evolving the Customer Experience
Evolving the Customer Experience Adapting the customer experience as we move out of the pandemic and into an uncertain macro-environment Hyperfocus on Rebuilding Flexibility to Meet Evolved Business Model Customer Intimacy Broad Customer Needs and Rapid Innovation
Slide 81: Optimizing Customer Deployment
Optimizing Customer Deployment Prescriptive deployment techniques, pre-configured setups & standardized tools Tailored approach when warranted Proven Methodologies Accelerated Time to Value Global Momentum
Slide 82: FY23 Go-Lives
FY23 Go-Lives Representative sample of Go-Lives for the 6-month period ended 8.31.22
Slide 83: Our Partner Journey
Our Partner Journey Accelerating the Value of Workday Sam Alkharrat Chief Partner Officer
Slide 84: My Observations
My Observations Partners Going “All In” on Workday Customers Seeking More Depth and Choice Unwavering Commitment to an Enhanced Partner Experience
Slide 85: Global Partners Strategy
Global Partners Strategy INNOVATE SELL SERVICE Expand Joint Grow Partner Leverage, Deliver Customer Solution Offerings Reach, and Coverage Quality, Value, and Choice Partner Experience Foundation (PXF) Partner Joint Partner Partner Success Management Go-to-Market Development SI Software AMS Channel
Slide 86: Our Go-to-Market Strategy
Our Go-to-Market Strategy Broadening our Strategic Footprint Chano Fernandez Co-President
Slide 87: Broadening Land Opportunity
Broadening Land Opportunity Accelerating Expand Opportunity Evolving Industry Opportunity
Slide 88: Land Is an Important Growth Contributor
Land Is an Important Growth Contributor . . . ~80% Land ~20% Expand Trailing 12 Months 7.31.19
Slide 89: Land Is an Important Growth Contributor
Land Is an Important Growth Contributor . . . ~80% Land ~60% ~20% Expand Land ~40%Expand Trailing 12 Months Trailing 12 Months 7.31.19 7.31.22
Slide 90: Core Customers
. . . With Significant Opportunity Ahead 4,450+ Core Customers
Slide 91: With Significant Opportunity Ahead
. . . With Significant Opportunity Ahead 36,000+ 4,450+ Core Customer Core Customers Opportunity 36,000+ opportunity shown is targeted companies for core HCM and FINS in our CRM and includes our existing 4,450+ core customers
Slide 92: Platform Expansion Driving Larger Lands
Platform Expansion Driving Larger Lands Average SKUs per Net New Customer 4 FY15
Slide 93: Platform Expansion Driving Larger Lands
Platform Expansion Driving Larger Lands Average SKUs per Net New Customer 4 6 FY15 FY18
Slide 94: Platform Expansion Driving Larger Lands
Platform Expansion Driving Larger Lands Average SKUs per Net New Customer 4 FY15 6 FY18 7 FY20
Slide 95: Platform Expansion Driving Larger Lands
Platform Expansion Driving Larger Lands Average SKUs per Net New Customer 4 FY15 6 FY18 7 FY20 9 Trailing 12 Months 7.31.22
Slide 96: Platform Expansion Driving More Diverse Lands
Platform Expansion Driving More Diverse Lands Industry Medium Enterprise International Non-Core
Slide 97: Platform Expansion Driving More Diverse Lands
Platform Expansion Driving More Diverse Lands ~50% Industry Land Deal Sizes Are ~50% Larger Compares average ACV of large enterprise deals landed in financial services, healthcare, education and government, and professional services compared with large enterprise deals outside of our focus industrie
Slide 98: Platform Expansion Driving More Diverse Lands
Platform Expansion Driving More Diverse Lands Industry Medium Enterprise International Non-Core
Slide 99: Platform Expansion Driving More Diverse Lands
Platform Expansion Driving More Diverse Lands ~50% of Total Land ACV Comes from Medium Enterprise For the trailing 12 months ended 7.31.22
Slide 100: Platform Expansion Driving More Diverse Lands
Platform Expansion Driving More Diverse Lands Industry Medium Enterprise International Non-Core
Slide 101: Platform Expansion Driving More Diverse Lands
Platform Expansion Driving More Diverse Lands ~100% Growth in New ACV Bookings in Our Tier 1 EMEA Countries Tier 1 countries are UK, France, and Germany For the trailing 12 months ended 7.31.22 compared with the trailing 12 months ended 7.31.21
Slide 102: Platform Expansion Driving More Diverse Lands
Platform Expansion Driving More Diverse Lands 70%+ Growth in New ACV Bookings in APJ For the trailing 12 months ended 7.31.22 compared with the trailing 12 months ended 7.31.21
Slide 103: Platform Expansion Driving More Diverse Lands
Platform Expansion Driving More Diverse Lands Industry Medium Enterprise International Non-Core
Slide 104: Platform Expansion Driving More Diverse Lands
Platform Expansion Driving More Diverse Lands 40%+ Growth in Planning-First Lands Converting to Core HCM and/or FINS Represents year-over-year growth for the quarter ended 7.31.22
Slide 105: Accelerating Expand Opportunity
Broadening Land Opportunity Accelerating Expand Opportunity Evolving Industry Opportunity
Slide 106: Expand Is Becoming a Powerful Growth Driver
Expand Is Becoming a Powerful Growth Driver . . . ~20% Expand ~80% Land Trailing 12 Months 7.31.19
Slide 107: Expand Is Becoming a Powerful Growth Driver
Expand Is Becoming a Powerful Growth Driver . . . ~20% Expand ~40% Expand ~80% ~60%Land Land Trailing 12 Months Trailing 12 Months 7.31.19 7.31.22
Slide 108: Driven by a Strong Customer Base
. . . Driven by a Strong Customer Base . . . 4,450+ 6,000+ Core Customers Planning Customers 50%+ 95%+ 25%+ Fortune 500 Customer Global 2000 Satisfaction Fortune 500 and Global 2000 customer counts include core HCM and FINS as well as non-core land solutions
Slide 109: And Our Expanding Platform: Product Attach Rates
C an di da te En ga ge m en M t es sa gi ng Sc he du lin g Ac VN co D un LY tin St g Ce ra nt te er gi c So ur ci ng Ex te nd Attach rates based on core HCM and/or FINS customers as of 7.31.22 Jo Each Has <10% Attach Rate ur n ey s Pe ak on W or kf H el or ce p Pl an Pe ni op ng le 10% 11% An al Pr
Slide 110: Momentum Is Broad-Based Across Solutions
Momentum Is Broad-Based Across Solutions . . . <15% Largest product is less 2/3 Top 10 products represent than 15% of new ACV 2/3 of new ACV from from customer base customer base For the trailing 12 months ended 7.31.22
Slide 111: And Driving Increased Deal Sizes
. . . And Driving Increased Deal Sizes ~45% growth in average deal sizes to customer base For the trailing 12 months ended 7.31.22 compared with FY20
Slide 112: Customer Base Is Key Driver of FINS Expansion
Customer Base Is Key Driver of FINS Expansion
Slide 113: Digital AE Channel Driving High-Velocity Transactions
Digital AE Channel Driving High-Velocity Transactions Serve the Grow the Develop Customer Business Talent
Slide 114: The Power of Land and Expand
The Power of Land and Expand Expanded to include core fins, prism, accounting center, fin planning, ARR from this customer Purchased and procurement has increased workforce planning >25x Added payroll in U.S. and Canada Expanded to Recruiting Added time tracking Started as core HCM customer
Slide 115: Evolving Industry Opportunity
Broadening Land Opportunity Accelerating Expand Opportunity Evolving Industry Opportunity
Slide 116: Leading in Industry
Leading in Industry Financial Services Healthcare Education & Government Professional Services Retail and Hospitality Technology and Media
Slide 117: Financial Services
Financial Services 1st Industry to >$1B in ARR of the Fortune 500 financial >70% services companies are customers Workday Accounting Center driving increased core financials win rates
Slide 118: Healthcare
Healthcare Attach rate for Financial >60% Management and Supply Chain Management among acute care providers increase in customers ~10x since announced focus on healthcare industry in 2015 Ranked Best in KLAS ERP and Talent Management #1 for five years in a row— every year since first included(1) (1)
Slide 119: Education & Government
Education & Government Workday Financial Management attach >75% rate in Higher Education Student records 1.2M+ managed by Workday Student $2B Federal TAM
Slide 120: Professional Services
Professional Services of the top 10 accounting 70% organizations have selected Workday(1) Workday gained PSA 26% market share at 26% year-over-year compared to nearest competitor at 3%(2) (1) Rankings via Accounting Today (2) Source: IDC PSA Marketscape
Slide 121: Retail and Hospitality
Retail and Hospitality of the Fortune 500 retail >50% and hospitality companies are Workday customers 16M+ retail and hospitality workers using Workday increase in retail finance >100% customers since pandemic started
Slide 122: Technology and Media
Technology and Media of the Fortune 500 >70% enterprise tech companies are Workday customers in automated revenue #1 management for second time in a row #1 Largest industry of financial planning ARR(1) (1) As of 7.31.22
Slide 123: Our Powerful Model
Our Powerful Model Converting Opportunity to Profitable Growth Barbara Larson CFO
Slide 124: Enduring Growth
Enduring Growth Profitable Growth Responsible Growth
Slide 125: Driving Enduring Growth at Scale
Driving Enduring Growth at Scale Subscription Revenue $4.5B 26% CAGR $3.8B $3.1B $2.4B $1.8B FY18 FY19 FY20 FY21 FY22
Slide 126: $125B+ TAM penetration
HCM $52B Human Capital Management/ Workforce Planning Workforce Management and People Analytics $125B+ >10% share <5% share Talent Management Employee Experience >5% share <5% share Payroll TAM ~10% share <5% FINS+ $73B Financial Management Financial Planning <5% share <10% share penetration Spend M
Slide 127: Leveraging Our HCM Leadership to Sustain Growth
Leveraging Our HCM Leadership to Sustain Growth HCM Subscription Revenue(1) 21% $3.80B Growth $3.15B <10% penetration (2) TTM12 Trailing 7.31.20 Months TTM12 Trailing 7.31.21 Months Ended 7.31.21 Ended 7.31.22 (1) HCM includes Workday Human Capital Management, Recruiting, Time Tracking, Payroll, Lea
Slide 128: Share Gains Driving Scale in FINS+
Share Gains Driving Scale in FINS+ FINS+ Subscription Revenue(1) 28% Growth $1.24B <5% $0.97B penetration (2) TTM12 Trailing 7.31.20 Months TTM12 Trailing 7.31.21 Months Ended 7.31.21 Ended 7.31.22 (1) FINS+ includes Workday Financial Management, Financial Planning, Spend Management, Prism Analytics
Slide 129: Leader in the U.S. Market with Ample Runway
Leader in the U.S. Market with Ample Runway U.S. Subscription Revenue 21% $3.77B Growth $3.12B <10% penetration (1) TTM12 Trailing 7.31.20 Months TTM12 Trailing 7.31.21 Months Ended 7.31.21 Ended 7.31.22 (1) IDC and Workday estimates as of 9.13.2022
Slide 130: While Expanding Our International Presence
While Expanding Our International Presence International Subscription Revenue 26% Growth $1.27B <5% $1.00B penetration (1) TTM12 Trailing 7.31.20 Months TTM 12 Trailing 7.31.21 Months Ended 7.31.21 Ended 7.31.22 (1) IDC and Workday estimates as of 9.13.2022
Slide 131: Strategic Growth Vectors Have Clear Momentum
Strategic Growth Vectors Have Clear Momentum Medium Enterprise Customer Base Industry ~50% ~45% ~50% of Total Land ACV Increase in Average Larger Land Deal from Medium Deal Sizes Sizes Compared to Enterprise Non-Industry
Slide 132: With Significant Runway Ahead
With Significant Runway Ahead Medium Enterprise Customer Base Industry ~50% ~45% ~50% of Total Land ACV from Medium Increase in Average ~15% $10B+ ~80% Enterprise Larger Land Deal Sizes Deal Sizes Compared to Non-Industry Customer Unit Customer Base of U.S. Employees Penetration Opportunity(1) Are i
Slide 133: Targeting Sustained 20%+ Subscription Revenue Growth
Targeting Sustained 20%+ Subscription FY23 Revenue Growth
Slide 134: Targeting Sustained 20%+ Subscription Revenue Growth
$10B Total Targeting 20%+ Revenue Sustained 20%+ Subscription FY23 Revenue Growth
Slide 135: Profitable Growth
Enduring Growth Profitable Growth Responsible Growth
Slide 136: Our Model Is Anchored in Best-in-Class Retention
Our Model Is Anchored in Best-in- Class Retention 98% Average Gross Revenue Retention Rate(1) (1) Measures the annual recurring revenue of our customers as of 7.31.21 that we have maintained as of 7.31.22, without giving credit for additional upsells or price and/or seats related changes. The metric
Slide 137: The Compounding Effect of 98% Gross Retention
The Compounding Effect of 98% Gross Retention Annual Revenue (in millions) $10 ,000 $1.5B $9,000 6% difference in churn rate $8,000 results in a $1.5 billion revenue difference $7,0 00 in the fourth year $6,000 $5,000 Calculation assumes both companies start with $5 Year 0 Year 1 Year 2 Year 3 Year
Slide 138: Driving Growth in Strategic Relationships
Driving Growth in Strategic Relationships 29% CAGR 24% 326 CAGR 256 207 109 164 66 79 51 113 141 177 217 Q2’20 Q2’21 Q2’22 Q2’23 $3M–$5M ARR Customers $5M+ ARR Customers
Slide 139: And Increased Net Retention
And Increased Net Retention FY22 ~7 percentage point improvement in NRR FY18 Represents the improvement in net revenue retention rate from 1.31.18 – 1.31.22
Slide 140: Which Combined with Efficient CAC
2.3x 2.1x Which Combined 1.9x with Efficient CAC 1.4x 1.4x 1.4x 1.4x Customer Acquisition Cost WDAY NOW OKTA ADBE DOCU CRM Calculated as the trailing 12-month non-GAAP sales and marketing expense divided by (subscription revenue for the most recently reported quarter analyzed less the year-ago perio
Slide 141: Informs Our Investment in Sales and Marketing
Informs Our Investment in Sales and Marketing #1 Largest Area of Headcount Additions For the Quarter Ended 7.31.22
Slide 142: R&D Source of Leverage as Platform Scales
R&D Source of Leverage as Platform Scales Non-GAAP R&D / Revenue 600 31% BPS 25% FY18 FY19 FY20 FY21 FY22 Reconciliation of GAAP to non-GAAP product development expense included in the appendix
Slide 143: Gross Margin Source of Leverage as Platform Scales
Gross Margin Source of Leverage as Platform Scales Non-GAAP Gross Margin 300 BPS 77% 74% FY18 FY19 FY20 FY21 FY22 Reconciliation of GAAP to non-GAAP gross margin included in the appendix
Slide 144: Profitably Growing at Scale
Profitably Growing at Scale Non-GAAP Operating Margin 22% 1,200 BPS 10% FY18 FY19 FY20 FY21 FY22 FY23 FY24 Reconciliation of GAAP to non-GAAP operating margin included in the appendix
Slide 145: While Investing for Long-Term Growth
While Investing for Long-Term Growth Non-GAAP Operating Margin 22% 19% 10% FY18 FY19 FY20 FY21 FY22 FY23E FY24E Reconciliation of GAAP to non-GAAP operating margin included in the appendix
Slide 146: Expect Margin Expansion in FY24
Expect Margin Expansion in FY24 Non-GAAP Operating Margin 22% 19% 10% FY18 FY19 FY20 FY21 FY22 FY23E FY24E Reconciliation of GAAP to non-GAAP operating margin included in the appendix. Arrow not scale
Slide 147: Powering Margin Expansion on Our Path to $10B
Powering Margin Expansion on Our Path to $10B Line Items Non-GAAP Targeted Margins Gross Margins ~80% R&D/Revenue ~22% S&M/Revenue ~27% G&A/Revenue ~6% Operating Margin ~25% Operating Cash Flow Margin ~35%
Slide 148: Opportunity for Longer Term Expansion
Opportunity for Longer Term Expansion 25% Non-GAAP 35% Operating Operating Cash Flow Margin Margin
Slide 149: Expect Pace of Stock Compensation to Moderate
Expect Pace of Stock Compensation to Moderate on Our Path to $10B and Beyond SBC as % Revenue
Slide 150: Responsible Growth
Enduring Growth Profitable Growth Responsible Growth
Slide 151: Committed to Creating a Sustainable Future, Together
We’re Committed to Creating a Sustainable Future, Together
Slide 152: ESG and Our Employees
ESG and Our Employees Cultivating a Culture of Belonging Workday Peakon Employee Voice VIBE™
Slide 153: ESG and Our Customers
ESG and Our Customers Building Inclusive Solutions Building Sustainable Solutions Empowering our Ecosystem
Slide 154: ESG and the World Around Us
ESG and the World Around Us Commitment to 1.5ºC Net-Zero Carbon Footprint Driving Policy Change
Slide 155: Key Takeaways
Key Relentless innovation drives expanding opportunity Takeaways Strategic growth vectors have clear momentum Powerful financial model
Slide 156: Thank You
~. “oN workday. Thank You
Slide 157: Appendix
~. “oN workday. Appendix
Slide 158: Reconciliation of GAAP to Non-GAAP Data: Sales and Marketing
Reconciliation of GAAP to Non-GAAP Data Sales and Marketing Expense TTM period ending July 31, Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 2022 Sales and marketing expense 366,323 410,947 429,301 458,701 1,665,272 Non-GAAP adjustments: Share-based compensation expenses (55,645) (57,571) (59,169) (59,878) (232,2
Slide 159: Reconciliation of GAAP to Non-GAAP Data: Product Development
Reconciliation of GAAP to Non-GAAP Data Product Development Expense FY18 FY19 FY20 FY21 FY22 Product development expense 910,584 1,211,832 1,549,906 1,721,222 1,879,220 Product development expense / revenue 42% 43% 43% 40% 37% Non-GAAP adjustments: Share-based compensation expenses (229,819) (320,87
Slide 160: Reconciliation of GAAP to Non-GAAP Data: Gross Margin
Reconciliation of GAAP to Non-GAAP Data Gross Margin FY18 FY19 FY20 FY21 FY22 Gross profit 1,513,637 1,987,230 2,561,948 3,119,864 3,710,703 Gross margin 71% 70% 71% 72% 72% Non-GAAP adjustments: Share-based compensation expenses 63,872 92,289 130,320 165,122 199,156 Other operating expenses (1) 9,0
Slide 161: Reconciliation of GAAP to Non-GAAP Data: Operating Margin
Reconciliation of GAAP to Non-GAAP Data Operating Margin FY18 FY19 FY20 FY21 FY22 Operating income (loss) (303,223) (463,284) (502,230) (248,599) (116,450) Operating margin -14% -16% -14% -6% -2% Non-GAAP adjustments: Share-based compensation expenses 478,425 673,418 859,880 1,004,854 1,112,405 Othe
Slide 162: About Non-GAAP Financial Measures
About Non-GAAP Financial Measures To provide investors and others with additional information regarding Workday’s results, we have disclosed the following non-GAAP financial measures: non-GAAP product development expense, non- GAAP sales and marketing expense, non-GAAP gross margin, and non-GAAP ope