Workday Strong Q2 Spurred by AI: 10 Factors

In today's Cloud Wars Minute, I break down Workday’s strong Q2
results, highlighting how AI solutions, mid-market growth,
government expansion, partner-driven value, and global
initiatives are fueling momentum.
 


Highlights


00:14 — Workday recently posted a very nice
fiscal Q2, ended July 31. I pulled out growth factors from the
earnings call. Just a quick recap here: for Q2, its subscription
revenue was up 14% to $2.17 billion, while their current RPO was
up 16.4% to almost $8 billion. So, strong demand for the recent
quarter and the pipeline going forward.


01:37 — First of all, suites. Workday CEO Carl
Eschenbach said 30% of Q2 deals were for full suites, which, in
Workday parlance, is both Financials and HCM. These consolidated
data sets, he said, are more and more vital to companies. Now
they can use all of that data together for some of their AI
solutions, and certainly on the AI side, there was strength
there.


02:05 — Among existing Workday customers, 30% of
all deals included one or more AI solutions. For new customers,
that number jumped to 70%. In the mid-market, a lot of strength
there with a new go-to-market program tailored for the needs of
mid-market companies, Workday Go. In the federal government,
Workday has created a new subsidiary called Workday Government.


03:04 — Partners are now generating, among new
annual contract value, 20%. The sharing of data for AI,
Eschenbach, over the last few quarters, has been touting the
value and how clean that dataset is. There's a new president in
India. Workday is building a data center in India to handle local
and regional data requirements there—and in Germany and the UK.


04:19 — One of the high-growth areas was a
recent acquisition of a company called Eversort, in the contract
intelligence business. Eschenbach said that for Eversort, revenue
grew 100% quarter to quarter. So that's not year over year, but
sequentially—it is doubling its revenue from one quarter to the
next. Overall, very nice quarter for Workday and CEO Carl
Eschenbach.


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