Street Calls of the Week
On Wednesday, 10 September 2025, Workday Inc. (NASDAQ:WDAY) took center stage at the Goldman Sachs Communicopia + Technology Conference. CEO Carl Eschenbach outlined the company’s strategic initiatives, emphasizing its growth in AI and global markets. Despite skepticism in the SaaS industry, Workday remains confident in its position, leveraging its large customer base and clean data.
Key Takeaways
- Workday is expanding its international and U.S. federal market presence.
- AI is central to Workday’s strategy, with 13 new enterprise-focused agents.
- The acquisition of Flowize enhances Workday’s low-code platform capabilities.
- The company disagrees with the negative narrative on seat-based SaaS models.
- Workday’s AI solutions are seeing rapid adoption, with no immediate price hikes planned.
Growth Initiatives and Strategy
Workday is actively expanding its international footprint, with 25% of its business now originating outside the U.S., generating nearly $10 billion in revenue. The company is also making significant inroads into the U.S. federal market through its Workday Government subsidiary. Furthermore, Workday is transitioning from an applications company to a platform company, focusing on both human capital management (HCM) and financial solutions.
AI Strategy and Monetization
AI is a cornerstone of Workday’s growth strategy. The company has announced 13 AI agents tailored for HR and finance. The Workday Agent System of Record ensures secure onboarding of these agents, with partners like Microsoft and Google showing interest. The acquisition of Flowize, a low-code platform, allows customers to build custom agents. Workday is monetizing AI through various pricing models, with 75% of customers already using AI features.
SaaS Market and Seat Compression
Eschenbach challenged the prevailing narrative that seat-based SaaS companies face challenges. He attributed headcount moderation to post-pandemic right-sizing rather than AI impacts. He emphasized that AI will expand the total addressable market, outweighing any headcount adjustments. Workday views AI as a positive force, enhancing its market position.
Future Outlook
Looking ahead, Workday is poised to leverage its incumbency and innovation to become a leader in enterprise AI platforms. With a robust partner ecosystem and strategic acquisitions, the company aims to maintain its competitive edge. Eschenbach expressed confidence in Workday’s ability to manage its customers’ HR and financial needs effectively.
Q&A Highlights
During the Q&A session, Eschenbach addressed Workday’s acquisition of Flowize, highlighting plans for governance and community engagement. He reiterated the company’s focus on innovation and quality outcomes for customers, reinforcing Workday’s commitment to growth and leadership in the SaaS market.
Readers are encouraged to refer to the full transcript for a detailed account of the conference discussions.
Full transcript - Goldman Sachs Communicopia + Technology Conference 2025:
Cash, Host, Goldman Sachs: Good morning, everybody. It’s day three of the Goldman Sachs Communication and Technology Conference. Thanks for your support of the conference. Since the rebranding and the relaunch of the conference in 2022, this is the fourth year in a row. I think we’ve had you for a fourth year in a row, and attendance is up, not by software industry standards, but by our industry standards. It’s up very nicely. We crossed 3,000 plus. It feels so busy, and the room is full here. On that note, welcome to the Goldman Sachs Communication and Technology Conference.
Carl Eschenbach, CEO, Workday: Thank you, Cash. It’s great to be back. Good to see a lot of friends in the audience here. Also, I’d like to congratulate you, Cash. Thirty-one years in the industry, the last five here at Goldman Sachs. You’ve been a friend to many of us for decades at this point. You’ve had an incredible career. You’ve made all of us better. You’ve been tough at times, but you’re always fair. I just think you’ve done an incredible job helping the software industry as a whole be highlighted as a tech sector that people should really pay attention to in the past and going forward. How about a round of applause for Cash?
Cash, Host, Goldman Sachs: Thank you. That’s very kind of you. It’s very kind of you. Very, very kind. It’s all possible only when you cover great companies. I’ve had the pleasure of knowing you for a very, very long time, since the VMware IPO. Carl’s one of these, probably the only CEO that I know who has worn the following hats: COO, CFO, CEO, venture capitalist, board member to half a dozen public companies at some point in time or the other. I cannot think of somebody who has worn all these hats and has multiple roles of experience. Someone that I look up to, he’s a great leader and very inspirational, and someone who’s fun to spend quality time with, which is exactly what we’re going to do over the next 30 minutes.
Carl Eschenbach, CEO, Workday: Thank you, Cash. It’s been an amazing career. I feel blessed. Every day I wake up, I pinch myself and wonder how this kid from Pennsylvania got in this industry 37 years ago, and here we are. I’m grateful for sure.
Cash, Host, Goldman Sachs: Congratulations. Give us a bit of assessment since you took over as CEO. What are the milestones the company has been able to accomplish? We can talk about the go forward.
Carl Eschenbach, CEO, Workday: Okay, sure. It’s been an incredible journey, Cash. It’s hard to believe in three months it will be three years. It feels like just yesterday I joined Aneel in the Workday team to step in and serve in an operating role and step off the board. It’s been an incredible journey. It’s been exciting. It’s been everything I expected and then some. You know, when I joined almost three years ago, Workday was a company that just did an incredible job in a large enterprise, if you will, crushing the HCM market, specifically in North America. When I came in, I wanted to leverage that strength in that position as a company. I also knew there was a tremendous amount of opportunity outside of that. Very quickly, we embarked upon a number of growth initiatives and strategies. In no particular order, we really leaned into our partner ecosystem, Cash.
We had partners that deployed our software, but they weren’t really driving innovation. They weren’t looking at us as a platform and building solutions on top of us. We now call this the Workday economy. We don’t call it an ecosystem. Almost every six months, a number of partners working with us is doubling. We’ve leaned into partners. We’ve leaned into our international opportunity. We think we have a tremendous opportunity to grow our business internationally. We only get 25% of our business. We’re almost $10 billion in revenue outside the U.S., which is pretty amazing for someone of our scale. We’re not stopping what we’ve done the last three years. Most recently, we announced we’re entering the India market and putting a platform in a cloud there to offer that. We’re going to be going into many markets. International has been a big push for us.
We’ve entered the U.S. federal market in an aggressive way. Just about two years ago, we brought in a great leader. She’s built out that business. We think there’s a massive opportunity in the U.S. federal government to really upgrade and transform what I would describe as an antiquated infrastructure in the federal government that’s all on premises. We’ll move to the cloud. Most recently, we launched actually the Workday Government subsidiary, a subsidiary of Workday, so that we can really target that market. That’s been a really big push for us. I said we crushed the HCM market and we continue to do so, but also now we’ve leaned pretty heavily into our financials business.
The financials business, we can sell a financials platform, but really what it drives is what we describe as a full-suite sale into our customer base, where they buy both HCM and financials and our accounting center at one time. That has been a really big push for us. Quite frankly, it’s been very, very successful. In two other areas in the last three years, I think we’ve moved from being a company that is an applications company to an applications and a platform company. There are very few, I think, enterprise software companies that can say they’re both an applications company and a platform company at the same time. We can say that. We have one of the most robust platforms in the industry that runs two of the industry-leading applications, but people are now consolidating on top of us. Obviously, I’m sure we’ll talk about it.
I’m sure you have questions, but we’re leaning heavily, heavily into AI. We think we’re uniquely positioned compared to most out there to take advantage of our incredible moat that we have around our data and the incumbency of our customers. Last, Cash, I’d say, I think I said it here last year, and I’ll repeat it because I think it’s still the same. We’ve become an incredible magnet for talent. The talent that we can recruit to bring into Workday is really incredible. We’ve done it on the go-to-market side. We’ve done it on the product side. We’ve done it in different functions across the company. These people have come in and very quickly engaged with the existing set of executives and drove the company forward.
In the end, five years out, I think we will be by far the number one enterprise AI platform managing our customers, people, money, and agents. That’s what we’ll be five years from now.
Cash, Host, Goldman Sachs: Yeah. I want you to talk a little bit more about that five-year out 2030, your best prognostication. I know you had a high-level assessment of the money, people, etc. Talk a little bit more about how you see that playing out.
Carl Eschenbach, CEO, Workday: Yeah, I think, you know, Cash, right now we’re incredibly well positioned. I’m surprised you didn’t ask this as a first question. There’s this whole damn narrative out there, quite frankly.
Cash, Host, Goldman Sachs: Oh, that’s my next question.
Carl Eschenbach, CEO, Workday: Oh, okay. I won’t answer it.
Cash, Host, Goldman Sachs: Every CEO has gotten that question.
Carl Eschenbach, CEO, Workday: Okay, I’m going to wait.
Cash, Host, Goldman Sachs: I was here yesterday, so that question.
Carl Eschenbach, CEO, Workday: I’m going to wait because I’ll jump off the stage and start running around. It’s such a bunch of crap. That being said, I think why we’re uniquely positioned and why the next five-year journey is going to be incredible is, number one, we have a massive install base of customers. We have more than 11,000 customers with a gross retention rate of 97% to 98%. They’re not going away, number one. We have the cleanest and largest set of data around HR and finance in the industry, bar none. We are on the desktop of 73 million users. 73 million users, think about that. We have the opportunity to go back and continue to drive innovation into our customers. It’s an incredible position we are in. We don’t have just the data, though. We have the context of the data. We know why it exists.
We know how it interacts with other sets of data. No one else has that. The last thing is a lot of people come in and their workflows. They have workflows. We’re in the workflow, but we have the data and the context of the data. Those three things give us a unique advantage. Last, I’d say we’re a System of Record. We’re a system of engagement. We’re a system of action. Now, Cash, we’re a system of intelligence with AI built into the platform. No one else can claim those four things.
Cash, Host, Goldman Sachs: That’s a neat position. This kind of line of reasoning as to why a SaaS company is relevant in the AI world is just starting to form this context, data, the workflow, et cetera. What are the things that the company is doing under your leadership to take these advantages and mold them in a very tight cast to make it like solidly bulletproof for them?
Carl Eschenbach, CEO, Workday: I think there’s a few things. First, we’re making sure the core platform continues to be innovated on top of.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: Very quickly, we all jump and talk about AI, and we’re going to do it. There’s no one leaning more into it than us. We have, you know, 6,000 HCM customers and 11,000 customers in total that are using our platform, and they expect value from us. We’re innovating on the core. We can’t leave the core behind because what we have with our incumbency, with our customers, is 20 years of trust. They have trusted us with their most mission-critical data, their people, and their money. That’s a privileged position that we’re in. If we innovate on top of the core, continue to drive value into our customers, they will look to us as they are today for their AI partner. On the AI front, I think it’s a stack that gives us a differentiation.
Number one, we’re building first-party agents, our own agents that are very enterprise-focused, domain-specific around HR and finance. We’ve rolled out a whole bunch of them. We have 13 of them we’ve announced. We’ll showcase them next week at our big user conference here in San Francisco. We have incredible enterprise agents that drive real business value. When you drop down out of the agent strategy hat, we have something we announced earlier this year called an agent system of record. I will tell you, this is something that is resonating not just with our customers, but with the ecosystem, or as I described it, the Workday economy. We have people like Microsoft and Google who have agent builder platforms who say, we need to onboard these agents into the enterprise in a very secure, safe, compliant way. We need to make sure they have access rights, just like employees.
They’re coming to us and saying, hey, we want to partner with you because you own the majority of the enterprise, and we’re going to onboard agents in the same way we did humans. We’re going to align them to org charts. We’re going to align them to management. We’re actually going to have to manage a total workforce. The agent system of record, as the orchestration layer, is going to be super powerful. Our partners, Accenture and Deloitte and many others, are coming to us and saying, you’re the on-ramp. Today, everyone’s talking about agents, and I call it agent sprawl. At some point, the CIOs are waking up and saying, what’s going on? Where are these agents coming from? What data are they getting access to? What are the privilege rights? What are the access?
It’s changing rather quickly, and you’re going to need something to be able to onboard those agents. The last thing is, because we are a true platform, most recently, we acquired a company called Flowize, which is a low-code, open-source agent builder platform. Now what we’re starting to see is both customers and partners saying they want to build their own first-party agents on top of Workday because they want access to the data, and now we deliver that platform. It’s a stack from our own agents to the Workday Agent System of Record, and finally, the low-code, no-code development platform for people to build on top of us. That’s what differentiates us. What do they all get access to? Data.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: AI. One talks about AI, AI, AI, right? Yeah. It’s super powerful. I always like to say we don’t hallucinate. We’re not training off the internet.
Cash, Host, Goldman Sachs: Yeah, yeah, yeah.
Carl Eschenbach, CEO, Workday: We’re training off a highly curated set of data.
Cash, Host, Goldman Sachs: Yeah. Let’s talk about seats. It’s the easiest conclusion to make. Perhaps it’s prematurely wrong. The conclusion is seats are under pressure because of AI. Every SaaS company that has been through the post-pandemic correction has seen seat-based growth come under a lot of pressure. Mark talked about it yesterday, and I’m sure we’re going to hear about it from other SaaS companies as well. What is your thought? Is the seat compression just a function of overbuying during the bubble and we’re just kind of working through that? Is there something structural by way of employment? The employment numbers don’t seem to make it very easy. Jobs added was the slowest pace we’ve seen in quite some time. What is going on in your customer base from a seats perspective? What is your outlook for seat-based growth?
Carl Eschenbach, CEO, Workday: Thanks for the question. Cash, as I said, you’re always tough but fair. This was the very first question you asked me on our earnings call just three weeks ago. First, I fundamentally disagree with this narrative, and I don’t know where it started that, like, SaaS companies, and more specifically, seat-based companies are in trouble. They’re going away. I just fundamentally don’t believe in it. I think it’s completely overblown. If you go talk to our customers, that’s not what they’re saying. For people, Cash, who are right-sizing their organizations or doing a restructuring, right? When you talk to the leaders, and I talk to my peers, they’re not doing it because of AI. They’re doing it because from the pandemic in 2021 through 2024, we overhired. We were zealous. We wanted all these employees, and we’re right-sizing the business. That being said, we can’t be naive.
AI will drive further economies of scale and better productivity for all of the employees. We can’t be naive either, right, Cash? We’ve been very transparent. Before AI really started to emerge in the enterprise, we talked about now a year and a half ago where we saw a moderation of our headcount growth. Even last quarter, our headcount growth in our employee or in our customer base actually accelerated again.
Cash, Host, Goldman Sachs: There’s $74 million. That’s growth.
Carl Eschenbach, CEO, Workday: Yeah, it’s moderating. It’s not growing. The year-over-year growth isn’t as fast because now we got to lap all the hiring people did. The overall headcount in our 11,000 customers actually continues to grow. It’s not like we’re going away. By the way, the other thing I think we need to remember, and it goes back to the earlier conversation, Cash, we’re in such a unique position. I think we need to think about it from the context of how much total addressable market expansion are we seeing because of AI in the enterprise, right? I think that number so much outweighs the moderation in headcount growth that we’re thinking about it completely wrong. This is why I think some SaaS companies maybe will have bigger or more structural challenges than us. I think we’re uniquely positioned. I view it as a tailwind to us.
Will we see moderation in headcount growth? Yes. The opportunity outside of just pure seat-based licensing.
Cash, Host, Goldman Sachs: Tell us more about it. You sound fired up.
Carl Eschenbach, CEO, Workday: Yeah, because you know why? Take this right away and take this. I mean, I get asked this question all the time, every day, like, you’re going to, what’s happening to Workday? I’m like, nothing. We’re doing pretty well. We have an incredible franchise, Cash. I just think it’s completely overblown. People aren’t taking out their employees because of AI or solely because of AI. People are right-sizing their business from overhiring in the past. Now we have the opportunity to go back and leverage AI and actually sell back into our install base. Our install base is huge, Cash. I just don’t see it happening. Yeah, I am. It’s a bit irritating. We got to address it. It’s our cross to bear, and we’ll continue to push the message out there. We are selling, our AI solutions are doubling year over year.
Some of them are doubling quarter to quarter. When you have that incumbency and that install base, it’s an incredible opportunity to innovate and drive right back into your customer base to sell them more. I think that’s the opportunity for us. Again, I fundamentally believe AI will transform a lot of jobs. We know what happens in call centers, customer success, maybe marketing, maybe sales, and lead development. Obviously, we see the power of it when it comes to software development. Again, it’s happening. I’ll tell you a quick, interesting story. I was talking to a CIO, Cash.
Cash, Host, Goldman Sachs: By the way, this is high energy, right? I mean, this is.
Carl Eschenbach, CEO, Workday: I’m fired up with this energy.
Cash, Host, Goldman Sachs: I’m in the middle of it.
Carl Eschenbach, CEO, Workday: I was talking to a CIO, Cash, and they have 10,000 software developers. I was just asking them, and I’ll say a Fortune 10 company to be safe, but it’s probably even higher than that. I said, how’s AI going? He said, it’s going incredible. We’re getting incredible productivity gains. I said, what are you getting? He said, we’re getting about, we can quantify 30% productivity gains. I said, okay, that’s great. What are you going to do with those 3,000 people that might be impacted? He said, absolutely nothing. They are moving on to more productive work, taking out the mundane of what they do every day, and they’re going to do work they love. They’re not getting rid of them, right? I don’t know. I think it’s completely overblown.
It’s our responsibility and my responsibility at Workday to prove the market wrong in this context and show how we’re monetizing. Next week at our Financial Analyst Day, hopefully you’re there.
Cash, Host, Goldman Sachs: I’ll be there.
Carl Eschenbach, CEO, Workday: We’re going to do some further disclosures on our AI growth and how we’re doing. It’s pretty damn impressive.
Cash, Host, Goldman Sachs: Carl, let’s talk about the AI agents that are doing so well, the doubling sequentially, doubling year over year. What are these agents exactly and how are customers getting value from these agents?
Carl Eschenbach, CEO, Workday: Yeah, we talk about a recruiting agent all the time. This is a company we acquired last year called HiredScore. There’s a recruiting agent. You plug this in and you can very easily drive business value in the tune of 50% productivity gain for your recruiters. Think about that. The onboarding of those new employees accelerates by 40% to 50% as well. It’s very quantifiable. We have a contract negotiation agent with a company of Eversort that we acquired. Have all these contracts. Now you’re going after a new customer and someone’s got to sit down and redline, which is a tedious task, we all know. Now you can automate all of that because you have all your contracts, what you want in the contracts, and you can do that. That’s another example.
We’re rolling out a business process agent which looks at your workflows of your business and will automate it and clean it up so that someone else doesn’t. You don’t need process mining. You can do it, for example, with an agent. We’re rolling out a payroll agent. Think about payroll administration. Payroll administration, there’s a bunch of people who look at payroll, answer calls, what’s going on today? You can automate that. That’s another example. We have 13 of these we’re rolling out. We’re a financial audit agent. If you look at financial audits, only a little bit of variation changes each and every year. You can automate that. What we are focused on is enterprise-grade agents, Cash, that drive true business value. The thing we’re focused on, which is different than a lot of our peers out there, we’re focused on quality of agents, not quantity.
These people come out and say, we’ve launched 20 or 40 or 100 new agents. Their thin veneer is just wrapped around something. It’s not true business value. People aren’t really getting that in return when they go to the enterprise to monetize it. They’re not getting it back. We’re focused on quality, not quantity, and business value outcomes for our customers.
Cash, Host, Goldman Sachs: That’s great. I can see that there’s a lot of innovation. It’s a very different discussion than a year back, just in the space of one year. I recall that there are points in time when there’s maximum skepticism. We’ve been through, you and I have been through these cycles many times before. I fondly recollect, maybe not so fondly, but 2016, February 7, Tableau and LinkedIn, these are public companies at one point. They had missed their quarters. Their stocks were down 50% that day. It led to a de-rating of the sector. We had the birth of Amazon Web Services, or at least the scaling of Amazon Web Services. People said Amazon Web Services is going to get into the application space. They’re going to commoditize. You were at VMware at the time.
Carl Eschenbach, CEO, Workday: Yeah.
Cash, Host, Goldman Sachs: Remember the fighting?
Carl Eschenbach, CEO, Workday: I was.
Cash, Host, Goldman Sachs: You led the deal with Amazon Web Services.
Carl Eschenbach, CEO, Workday: I dealt with Amazon Web Services, but more importantly, VMware. I remember six times we were going to be, you know, taken out. We were going out of business. Every open-source hypervisor that came out was going to crush us.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: Going all the way back to 2002.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: Whether it was Xen, you know, KVM, whether it was OpenStack, you don’t need this anymore. It doesn’t happen.
Cash, Host, Goldman Sachs: You’d be happy to know that all the good work you did at VMware is showing up in the Broadcom. We had Hock Tan yesterday. This is just thriving. It’s doing really well.
Carl Eschenbach, CEO, Workday: Yeah, I hear it’s doing well.
Cash, Host, Goldman Sachs: Yeah. The point is, when there’s maximum skepticism, those are times that create fertile ground for a debate. I think the AWS is going to commoditize software debate was one that we lived through. Not only that, but AWS is going to commoditize Microsoft and Azure and the whole stack. Actually, what ended up happening was AWS created a platform for a Workday to scale its business, a Salesforce. The SaaS universe found a way to scale to an order of magnitude that was just not possible given their infrastructure. How do you see this AI thing? How is Workday working with the cloud ecosystem to help scale your AI footprint?
Carl Eschenbach, CEO, Workday: Yeah, so, historically, we’ve run our own data centers. Even to this day, most of our clients are on our own data centers. We are migrating to the public cloud. We’re migrating to both Amazon Web Services and Google Cloud, depending on where the customers want to go for obvious competitive reasons. Some of them don’t want to go to one or the other. We are rapidly migrating to the public cloud, leveraging their infrastructure, leveraging their continuity, and all of the data centers they have around the world for disaster recovery and making sure you have the right amount of uptime. We are absolutely leveraging it. They are partners as well. Google has now, as I said earlier, they have an application development framework for building agents. Now they’re going to integrate that on top of our Workday Agent System of Record to onboard it, right? They’re a customer.
We are absolutely leaning heavily into partnering with all the hyperscalers. We’re on Amazon Web Services and Google Cloud. We don’t run on Microsoft Azure at this time, but we do partner with them. Sacha and his team are working closely with us to bring their agent platform on top of Workday going forward. The hyperscalers are going to play a critical role going forward. We’re going to leverage everything they can do for us.
Cash, Host, Goldman Sachs: Thomas Currin was here yesterday, talked about how they’re scaling their AI footprint and the tremendous work they’re doing with TPUs. The models have come a long way, certainly.
Carl Eschenbach, CEO, Workday: We use all the models. They’re interchangeable for us from an LLM perspective. We can go and use any of the different models out there.
Cash, Host, Goldman Sachs: Do you have a view, since you mentioned it, there are so many models, right? It was a one-horse race many years ago. That became a two-horse race. Then there were three.
Carl Eschenbach, CEO, Workday: Yeah.
Cash, Host, Goldman Sachs: There were four, five, six, seven.
Carl Eschenbach, CEO, Workday: Listen, I like all my partners. I’m not sure which one of them is going to win.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: I think they’re all going to do well. There’s enough opportunity out there for all of them. We use them all.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: I don’t know if I’m in a position to say who’s going to win or lose because someone will hear that Carl said this, and then I’ll get a phone call about 20 minutes after.
Cash, Host, Goldman Sachs: They’re all probably Workday customers. Many of them Workday.
Carl Eschenbach, CEO, Workday: Yes, exactly. That’s why I’m not answering.
Cash, Host, Goldman Sachs: It’s too early to have a view on these things, right? It’s just extremely nascent. I wanted to ask you about your AI monetization strategy. How does your pricing strategy evolve? You could argue that the SaaS industry has gone through a fairly simple pricing, added value, ARPU goes higher, sell more seats. All of a sudden, there’s this AI thing. How do you value an AI agent? How do you price an AI agent versus a seat? How are you thinking about the pricing model for AI and how that kind of factors into the growth algorithm?
Carl Eschenbach, CEO, Workday: Yeah, you know, it’s a great question. I think two years ago we sat on this stage and we talked about AI monetization in our strategy. At that time, most people were just basically saying we have some copilots and we have some bots that you can take advantage of. For that, we’re going to raise your pricing or subscription pricing by 20% or 25% per seat. Very quickly, that became the model. We decided not to do that. We believe there are table stakes when it comes to AI that need to be built into the platform and your customers should get them as part of their subscription fee. We didn’t rush to market and raise prices at all. I think a lot of people questioned us. I will tell you, fast forward to today, that goodwill has come back in spades for us. People appreciated it.
We have so much AI built into the core of the platform that they get as part of the platform. 75% of our customers are using AI that’s in the platform today already. 75%. That being said, when we have to bring out a new agent that drives true business value, we’re going to monetize it. We’re going to monetize it in a multi-prong way. Sometimes it’s seat-based, sometimes it’s consumption-based, and sometimes it’s volume-based. We have multiple pricing models. Our pricing model is working. I said, you know, Cash, we’re growing our business, our AI business 100% year over year. Things like Eversort for contract intelligence and negotiation agents are growing 100% quarter over quarter. Extend Pro, which allows people to bring in AI agents and bring in other platforms on top of our platform, is growing 100% a year. I think our pricing strategy is working well.
We will provide a further, again, come next week, we’ll provide a further update on our AI pricing strategy and monetization strategy going forward. I’m really pleased we didn’t rush to market. Sometimes being first isn’t always the best. We got goodwill from our customers. Now our customers pay us for the value. We’re going to take it one step further that we’ll bring to market next week, our pricing strategy.
Cash, Host, Goldman Sachs: That’s great. I’m looking forward to it so much. I wonder if you’ll go a few steps forward to actually quantify the AI book of business, which is like the nice disclosure that.
Carl Eschenbach, CEO, Workday: Yeah.
Cash, Host, Goldman Sachs: Companies like the other companies in the SaaS space have put a disclosure and a target. Not that it’s helped tremendously because.
Carl Eschenbach, CEO, Workday: Come next week, Cash.
Cash, Host, Goldman Sachs: Okay. All right. Okay. Stay tuned for that. I think a key aspect of the confidence-building process, at least from the investor community, is understanding that your base business is stabilized, first of all. The good news is that Workday is a System of Record. The perception is that the space you play in is the least susceptible to AI disruption. That may be different in other application spaces. You’ve got a solid base of defense. You need to establish that your core business is steady, and then when the AI monetization kicks in.
Carl Eschenbach, CEO, Workday: Yeah.
Cash, Host, Goldman Sachs: You’ve got a massive install base. I don’t know if you know Byron Deeter at Bessemer.
Carl Eschenbach, CEO, Workday: I know Byron really well.
Cash, Host, Goldman Sachs: You know him really well. I figured. He’s the guy that came up with the rule of 40, 50, 60, whatever it is. He’s such an amazing partner to Goldman Sachs and someone that I’ve worked with for 10, 12 years. We had him on stage a couple of days back with Carl Eschenbach and a couple of other VCs, all the people that you know from your.
Carl Eschenbach, CEO, Workday: I’m looking forward to seeing him.
Cash, Host, Goldman Sachs: Pat Grady is going to be here, by the way.
Carl Eschenbach, CEO, Workday: Oh, good.
Cash, Host, Goldman Sachs: He said at best, he said, you know, people are so nervous about SaaS, trading at five times revenue. Some of them are going to go to three and some of them are going to go to 10. I thought that was the single most interesting, simple takeaway that companies that are going through this transition. Remember, Adobe, in November 2011, was written off. You know, they’re not going to make it. Artist was written off. Intuit was written off. The incumbency is such a powerful thing that when you look through the lens of an old man like me that has lived through these cycles, I would not write these.
Carl Eschenbach, CEO, Workday: Again, this is why you got me all fired up earlier, Cash. You know, we have things that other people don’t have. We have incumbency. It’s super powerful.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: I look out in this audience. I don’t think anyone’s taking a VC-backed, you know, AI startup and replacing their ERP, whether it’s HCM or financial. They’re replacing their GL. I have yet to find one anywhere in the world who’s saying that at scale. It’s just not happening.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: What we have to do is we need to focus, deeply focus on driving innovation and leverage that incumbency, that data set, the context, all the things I talked about. If we do that, we’re going to be just fine. We’re going to wake up years from now at this conference.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: We are going to see a plethora of venture-backed companies that dissipate. You are going to see some of the bigger get bigger, faster, stronger. I expect us to be one of them.
Cash, Host, Goldman Sachs: I expect you to be here in 2030. I’ll be sitting in the audience as a client and watching this unfold. The other thing I want to point out is that I think most people don’t, maybe they do, but you were a venture capitalist. You understand a thing or two about disruption and hot startups and how to vet ideas. You looked at probably thousands of business plans. You have an eye for catching the right talent. If anybody could pick the right talking acquisition that’s promising, I would bet that you know how to do that.
Carl Eschenbach, CEO, Workday: I think, you know, the team and I, we know how to do that. It’s not just me. I have an incredible team that is really, really good at finding these opportunities. In the last year and a half, we bought now four AI companies. Some of them, you know, really impactful. Most recently, we announced an acquisition of a company called Paradox, which delivers a conversational AI platform, which effectively means mobile for frontline workers. Frontline workers work on their mobile phone, right? We were partnered with Paradox. Every one of our customers said, wow, why aren’t you guys owning this? You guys have the best, if you will, back-office white-collar recruiting platform in the industry through the acquisition of HiredScore. Go get the frontline. We’ve done that.
Now we have the best, if you will, AI recruiting platform in the industry from frontline to back-office and across every type of worker, whether it’s full-time, contingent, or gig workers. We’re buying those. We’re buying Flowize, which is an agent-building platform. We bought Eversort. We bought HiredScore. We are absolutely inquisitive.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: We’ll continue to be inquisitive. We’ll continue to find these AI companies, integrate them, and then they get to take advantage of our massive distribution channel to really scale a business. We’re aggressively pursuing that.
Cash, Host, Goldman Sachs: You got to see such great goodwill with your customers. I mean, when we go to Rising, it’s like a cultish thing in a good way.
Carl Eschenbach, CEO, Workday: Yeah, no, which is, I think the numbers I was, we had a session yesterday.
Cash, Host, Goldman Sachs: How many people do you have signed up for Rising?
Carl Eschenbach, CEO, Workday: I think we’ll have, you know, for the opening day, what, 25,000 live, something like that.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: Right here at the Moscone Center. Once we get through today and a board meeting tomorrow, we have three days to focus on this little user conference we have. People are rabid. I go back and I talk a lot about trust. It’s one of the most trustworthy companies I’ve ever seen and ever been part of. Our customers love us. They trust us. They’re looking to lean into us, lean into the platform and consolidate on it. They’re not looking for all these point solutions that exist out there today.
Cash, Host, Goldman Sachs: Yeah. On that note, this has gone so quickly and I’ve enjoyed it that I forgot to check in with our clients to see if you have any questions in the minute and 26 seconds that we have. Yes, go ahead. Just.
Carl Eschenbach, CEO, Workday: Yeah, go ahead.
Cash, Host, Goldman Sachs: Yeah.
Carl Eschenbach, CEO, Workday: I will start with the open-source model because they may be our research labs. Integrating them as part of Workday, how do you expect to deal with that governance conflict, or is there a conflict?
Cash, Host, Goldman Sachs: Yeah, actually, there is no conflict. Flowize is the first, if you will, open-source company that we’ve acquired, which is the agent-building platform. We’ll keep it going. If you look at how many GitHub stars they have, it’s pretty viral out there already, which is what gets us excited. Now we’re going to integrate that on top of Workday and Workday Extend for everyone to build their agents on top of us. We’ll keep the open-source community alive and well. I think about it as lead generation for us. We’re going to make sure we have the security, compliance, and controls around it because, as you know, we have people’s money in their HR data. It’s super important that we stay highly regulated and focused on security too. We’ll do that with Flowize, but we are going to keep it an open-source platform.
Carl Eschenbach, CEO, Workday: Carl, on that note, it’s been a couple of decades since we got to know each other. I wish you well in the next decade and beyond. Thank you so much for your support of Goldman Sachs. We really appreciate it. Let’s give a round of applause for Carl Eschenbach. Thank you so much.
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