We have the opportunity to sit on 75 million desktops. I think we are uniquely positioned as well as anyone in the industry to take advantage of this tectonic shift in transition we're going through. That's what I believe. Let me give you a picture that kind of represents what's happened in the past and what we think will happen in the future. Go back to on-premises software, the old ERP days where everyone talked about everything's on-premises, and then the world was moving to cloud. As that happened, the software world was going to be in trouble. Actually, what happened? There's still on-premises software, and there's a new software model called SaaS. It expanded. Oh, by the way, something else happened. Look at the growth in headcount. The headcount in our economy only grew faster. If you think into the future, the SaaS world, it's not going away.
What's going to happen? It's going to expand. All of this AI opportunity is going to exist. There are going to be some people that are pure AI, and then there are going to be others who are SaaS. SaaS companies have an incredible incumbency. They get to expand on top of what they're doing. Oh, by the way, yes, headcount is still going to grow. At the end of the day, I think we all agree, if you have the data and you have the customers and they trust you, you will be a winner on the other side of that. That's how we think about the future of software and where it's going.
That's great. I think we have a slide on here about the data to your point on where we are and where we're going.
Let me talk about that. If we all agree AI is only as good as the data we're training off of, let me just show you this slide. Over the last five years, we've gone from 46 million contracted users on our platform to 75 million today. Over the last five years, the number of annual transactions happening on the Workday platform has gone from under 200 billion to a trillion in the last year. This is why we are in a unique and privileged position to drive AI outcomes for our customers better than anyone. You all tell me, are the largest, most sophisticated, most successful companies in the world going to go out to a venture-backed, vibe-coded AI company and implement it as their ERP platform, their HCM platform, their planning platform? They're not.
Those people are coming to us because we're already there and saying, how can you, Workday, help us leverage the platform and take us and help us on the journey in AI? That's what I think is going to happen.
Yeah, no, that's great. I want to keep going. I know there's an area that when you're on a lot of calls with me, Carl, and we get a lot of feedback. We've shared some anecdotes around AI momentum. I know we'll share a little bit of that here today. One of the questions we get is, what does that really mean to the broader Workday business in terms of driving growth?
Yeah, you've all been asking us for additional disclosures around how AI is growing, and we've decided to do that. I'm going to start with what we've already been talking to you about. Most recently, we've announced that 75% of our existing customers today are already using a Workday Illuminate feature or function. On the earnings call just a few weeks ago, we said 75% of our net new customers include AI as their first purchase, and 30% of our sales back to our customer base are buying AI. Our AI new ACV has been doubling year over year. What we decided to do is go further and show you what this actually looks like. Let's take a look at this. In the last year, our growing AI momentum has gone from over $250 million to greater than $450 million, growing 50% year over year.
This is across all of our products that now are being powered by AI. There's a disclaimer down below that you'll see that will be provided to you. Let's take it a step further. Let's look in the last year at what's happened very specifically to what I call our agentic AI SKUs. These are our agents. These are things like our talent mobility agent, our recruiting agent, our contract intelligence agent, our contract negotiation agent. Just in the last year, it's gone from less than $50 million to more than $150 million in ARR exiting Q2. When you pull this together, this is growing right now and driving about a point and a half percentage points of ARR growth in the overall business. This is on the $150 million number. I'm not even counting the $450 million in aggregate where we're selling other products that are AI as well.
This is on the agentic SKU side. What we're going to do on an annual basis is continue to update this and provide more clarity and color so you can see the path we're on and how well we're executing on our AI strategy. We'll give you more anecdotal evidence and talk about its growth and other things like we've been doing in the last couple of quarters. Our AI momentum is super, super energized right now. It was all evident today on stage at the Innovation Keynote.
Yeah, that's great. OK, I want to close, and I'm sure we'll get a lot of questions about that later. I want to close now on something that I know is super important to you, which is leadership and bringing talent in. We brought a lot of folks in over the last year. I know Robynne, who will be here spending time with us, Gerrit on the product and technology side, Peter from my hometown of Omaha, and a number of other folks that have come on. Maybe just talk about what that means and what are you solving for when you're bringing on this talent and what it means for the future.
Yeah. First, I hope you all saw, if you were there this morning, you saw Leighanne on stage. It's always a pleasure to have Leighanne come and talk about his vision of where enterprise software is going. It's not common 20 years into a business that you have a founder that's still around, and we get to leverage his incredible mind. As my friend and the Co-Founder and the Executive Chair of the company, it's just so good to have him part of the team. We have brought in a lot of new people. You'll see them today. Peter, who runs Product and Technology for Gerrit, will be here. We'll also bring up some other folks like Robynne, who's been here almost a year running go-to-market. It doesn't stop there.
We've added other people you might not see today, but you'll get to know to run and drive our medium enterprise. We hired a GM of the medium enterprise business. We hired a person to come in and run our platform business. He was running the platform business at Google. We have recruited some incredible talent over the last many years. If you look at this slide, it's new talent with existing talent that has been here for a while. How they've come together and worked is something I'm super proud of. In fact, the interworking between Gerrit and Robynne in the field and the product team at Workday has never been stronger. They run QBRs every quarter with the leadership across each of their respective functions. They dive deep into the market needs and customer needs.
It's an incredible relationship that's been established in a short amount of time, and it's driving growth overall for our company. Sometimes we put these slides up, and some of you investors say, Carl, how the hell do you manage all these people? These are not all direct reports. There are six or seven that are direct reports of mine. I think it's critically important that we showcase the incredible talent we have at this company because these are the people that are going to lead us into the future, Justin. I couldn't be prouder to be associated with all of them and get to serve alongside them.
Yeah, awesome. Great. Carl, thank you for the conversation. I'm going to exit stage left. I know you've got a few comments, and then we'll bring Zane up here in a second.
OK, great. Thank you, Justin. Thank you. Before I bring my dear friend and a great CFO up to stage, I'd just like to make a couple maybe closing comments on my opening section and some opening comments on the next section. I think you know me. You know how energetic I am, how optimistic I am. I couldn't be more energetic or optimistic about Workday and our future and what we're doing. We have 20,000 workmates here at Workday who are working hard to propel us for the long term. They're doing incredible work. They're bringing incredible innovation to market. Our customers are deep loyalties to us. Our partners are coming to us. They want to partner. We are in an incredible position to thrive for many years and decades to come. Folks, I want to be clear.
There's something special happening here at Workday. There are 30,000 people at this conference this week wanting to hear about what we're doing to help them navigate the future. It's been an amazing 20 years. I will tell you, the next 20 at Workday is going to even be stronger. Before I bring Zane up, one closing thought and one opening comment. We are absolutely continuing to be focused on driving durable growth at scale and at the same time expanding operating margins. I remember when I started, they said, you can't do that, and you're not going to drive margins. We have. I honestly believe, and I think a lot of my workmates believe, we are underappreciated and we're undervalued. We have many different ways we can invest in Workday. We're going to place that bet on ourselves. You're going to see what we're doing from an innovation.
You're going to see our financial framework. The best use of our capital to drive growth of the company and get the return on that capital is to invest in ourselves. I'd like to bring Zane up to talk more about that with me. Zane, please join me.
Thanks, Carl. Hi everybody. Good to see so many of you here. I know this is a great event, a big rising. I think what, many, many % more than what we had last year.
I think I didn't share a statistic, but I think we have more than 40% growth in new companies at rising for the first time. That's pretty impressive.
Yeah, no, it's great. I see this room's expanded too. I've actually met a number of people outside, and it's such a beautiful day in San Francisco. Many of you here know we've closed Howard Street. I actually think next time we just do it right out there in the open air with the big pavilion.
Let's do it. That's really cool. Lots of energy outside there.
That's for sure. I think Carl stole a lot of my thunder here on the financial framework we're about to present. What I thought we'd do, Carl, is just spend a few minutes on the KPIs. As Carl mentioned earlier, you've been here almost three years. Exciting times. I know since day one, we've been talking about some of these key initiatives. I think just spend a few minutes. You're going to hear a lot more later on this afternoon in a number of these categories. We're not going to spend a lot of time on it. First and foremost, AI. Carl mentioned $150 million with emerging agentic AI growing at over 200%. Of course, we've got a great crew back here. We've got Peter, we've got Ashna, and of course, Gerrit, who are going to talk a lot more about agents and the agentic opportunities that we have ahead.
When you just talk to everyone around here at this conference, you're going to see a lot more visible. I think versus last year, Carl, we actually see practitioners using it, and we're very excited about the path ahead. A lot more to come on AI. On international, Rob's going to talk about the continued growth opportunity in international. If you look back over the last 12 months, we've had 15% growth. Growing consistently with the company. We've talked about it publicly, where we've leaned in in some quarters and said, look, it's exceeded expectation in some quarters, a little bit shy of expectations in others. Again, a big international contingent here. We've got another rising coming up later this year.
Yeah, we'll probably have 5,000 in Barcelona in a couple of months.
Exactly.
will keep it going.
Of course, Fins and Full Suite. We talk a lot about Fins and Full Suite. 20% growth here. Of course, this is our core Fins product plus our planning product. Some of the adjacencies we've got are Extend, Extend Pro, and then Eversort that fill out that combination. Nice growth. This is over $2 billion on a run rate. We see nice growth there. Carl, you talked about partners. Can't be more pleased with the partners. This is like five times 1,300 plus, which is five times the number of partners that we had just a few years ago. It's so impressive from deployment all the way to go-to-market and then this ecosystem that you talked about. It's really exciting times.
Yeah, for sure.
Of course, medium enterprise, new to this list, but we've been focused on medium enterprise for some time now, whether it's the pricing, the packaging, the product, the go-to-market. Carl, maybe if you want to mention a little bit more, because we're actually putting even more behind that.
I mean, if you look at the opportunity we have in that aggregate of TAM, a significant portion of it is in the medium enterprise.
Yeah.
It has been an area of focus for ours. In fact, we have thousands of customers that are under 3,500 employees. I do not think we talk about it enough, but we launched something, Workday Go, earlier this year, which really transforms how we think about the medium enterprise, or sometimes we even call it the emerging enterprise, which is 500 employees or greater. We are leaning into it with new pricing, new packaging, new deployment services and capabilities, acceleration of value for our customers with how we are deploying both direct and indirectly with our partners, and then how we sell. We hired, as I mentioned earlier, Zane, someone to come in, a really seasoned executive, a former CEO, to be the GM of that market segment globally for us. I am super excited about the medium enterprise. We are going to push hard into that market.
The harder we have been pushing, the more success we have. It also drives, two points up, Zane, a lot of Full Suite sales.
Exactly.
On M&A, I think you guys have seen what we've done since last year, Zane, with Eversort, HireScore. We did FlowWise. We announced Paradox for frontline high-volume recruiting. Obviously, today, we're super excited about what Sana brings to us.
Yes. Some great growth opportunities there and great growth ahead with that. As we look at those KPIs, and obviously we talk about those emerging trends, that's what's helped drive this durable growth, which we're very proud of. Going back to 2023, we were just under $6 billion and expecting just over $8.8 billion this year. I'll point out the obvious, which is that this does not include Sana. Sana is smaller, but we have great aspirations and expectations for future years. None of the guidance you see here includes our most recent proposed acquisition. What I do want to highlight is the increase here on an annual basis. You can see it's a billion, then a billion one, and a billion one again.
We feel good about the growth here, the diversity of the growth, obviously leaning in a couple of the areas here, whether it's customer base, product adoption, new customer growth, the ramp of the growth areas that we've talked about, and then monetization of AI. You're going to hear Gerrit talk a little bit more about flex credits as we think forward and look forward. A great opportunity ahead on the flex credits.
Yeah, super excited about the new pricing model for our AI solutions. We'll dive deeper into that here today.
Right. We take a look at the opportunity that that has presented in expanding our margins. We've always talked about durable growth, but growth at the same time expanding margins. Here, if you go back to just FY2023 on a non-GAAP basis, just over 20% in operating margin and expected to climb three points on a year-over-year basis to 29% at the end of this year. A lot of work by the team here. Obviously, we've been investing. At the same time, we've got strong gross retention, which obviously helps. We look at efficiencies across the business. We talk a lot about the investments, but at the same time, we put just as much energy into thinking about people, process, and systems and some of the efficiencies we can get out of the business at the same time. It's been a great balance.
Obviously, we're quite proud of the growth that you see here and a lot more to come just in a few slides as we look to the future.
Yeah, no doubt. Zane, I want to give Workday and our workmates a really big pat on the back for helping us drive this efficiency in the business. It's not been easy. I will tell you on the other side of all the changes we've made inside the business, we're moving faster than ever. That's why I said initially one of my observations is the bigger we're getting, the faster we're moving because we're more efficient, we're more streamlined, and we're just operating at a scale and pace bigger and faster than I've seen in a long time. I'm really proud of the team. This is not easy, but the team's pulling it off. We're not going to stop here either, Zane.
Yeah, no, we'll keep going. You know, I highlighted AI here. As with a lot of companies, we focus on AI not in just our products that we produce, but also what we do across every function. We all have AI plans. We call it everyday AI. We're pushing AI literally across the enterprise as well. In addition, I know there's not a conversation we have where we don't talk about SBC and how we're managing stock-based compensation. We take it very seriously as you look on the progress we've made here from 21% in FY2023, expecting 17% off a point year over year into the end of this year, and still on track for the 15% that we mentioned this time last year when we talked about how focused we are and how we're managing SBC.
Yeah, Zane, thanks to all of you. This has been a hot topic of discussion the last three years. I don't know if we've ever had a call where this wasn't brought up. We said we were going to address it, and you can see we're doing that. We're trending to exactly what we said, exiting next year, FY2026, trending to 27% to 17%. We're doing that. At the same time, there's an incredible war for talent out there. When you see some of the people up here on stage, whether it's retaining people like Ashna or recruiting people like Gerrit and Peter, we have to be able to lean in and invest and make sure that they feel like they're an equity owner in the company. We're going to continue to trend this. We'll talk more about this in a couple of minutes.
I also, Zane, don't want to over-rotate because it is very powerful when you're going out and recruiting the type of talent we're getting into the business. We need to be able to leverage equity and stock to get them to join Workday. We're going to keep pushing this down, but we're also going to continue to use it as a way to attract the best talent in the industry.
Agreed. Now, as we look forward, this has been sort of the progress to date. We wanted to lay out a framework here that you can understand as we set up our financial framework. If you look at our key assumptions here, we've laid out three cases as we look ahead. There's a low, a mid, and a high case. Of course, there are a number of factors that could go into each of them. We've highlighted two key levers here that we talk about a lot with all of you. One is the macro. The second is the ramp of the growth areas. As I mentioned, there are a lot more that go into this. If you think about laying out these cases, in the case of macro, we'd say similar to today.
To ground you on the mid-case, the macro is what we're experiencing, where it's a stable macro similar to what we're experiencing today. As we think about the correlation with that and the growth there, I'd say it's continued progress that we are making and will make in our growth areas as we expect, given the current environment. That's how we're setting up the growth profile. At the same time, we're looking at margin. I could say the same under each of these cases. With the mid-case, for instance, the current pace is balancing both growth on the top line and growth in operating margin. At the same time, we're always investing in AI.
I don't want you to ever think, regardless of the case or the way that we think about sort of the low, mid, and high, we'll continue to invest in AI and continue to grow this business, just thinking about it in these different cases. In addition, I would also highlight that when it comes to M&A, we always will remain inquisitive. As you know, we have a high bar with M&A. We believe that under each of these scenarios, M&A would play an important role, as well as obviously our organic innovation and growth.
Yeah, I guess two things here, Zane. First, I want to make sure we don't stop investing in AI, right? Even if you go to the low end of this, Zane, and let's say the macro slows and we have to moderate because our growth areas aren't growing as fast as we can or we want, we're going to continue to lean in to investing in AI because of what I just laid out earlier, our unique position. Even in down markets, the people who recover fastest on the other side when things turn are the ones who never stopped investing in innovation and in technology. That's exactly what we're going to do here. The second thing I really like about this framework, for the last three years, you've asked me directly and Zane directly when I'm not in the room, listen, Carl's a growth guy.
He wants to keep pushing. He wants to keep growing the business. Is that going to come at the expense of operating margins and driving efficiencies in the business? The answer was always no. I think we've proved that. We continue to lean in. We continue to invest. If things slow, we'll accelerate our margins faster, but we'll continue to invest in the business. I think this lays out a great framework of how we think about the business over the next few years. I'd also say, Zane, it's not all siloed here.
Exactly.
You could see a stable macro environment. We see an acceleration of our growth areas, and then we accelerate our investments. It's a good framework on how we're thinking about the next two or three years.
Agreed. With that, I know you guys are all waiting for the numbers. Here they are. Our targeted financial framework for FY2028. As you can see here, we've kept to the low, mid, and high scenario that we just laid out for all of you. On the top line, we have subscription revenue CAGR through FY2028. That ranges from 12% to 15% in each of these scenarios. We have a non-GAAP operating margin for FY2028, and that ranges from 33% to 36%. As we've committed to you, we will adjust accordingly. Our target here is a non-GAAP rule of 48%, which is five points higher than what you see our expectations are for this year. We've always talked about that balance. This would include growth within FY2028 on the top line for subscription revenue with a non-GAAP operating margin that would total 48%.
For many of you, you also ask about SBC. We continue to talk about our commitment to managing that lower. Over that same period, we expect to have SBC as a percent of revenue somewhere between 13% and 14%, depending on timing, and then committing a target rule of 35%, which would be the non-GAAP rule of less the SBC. That would be nine points higher than what you see today. A meaningful step in each of these categories under each of these scenarios to drive value in the business, both on the top line and on the bottom line.
Yeah. I think this is a really good framework. We really thought a lot about this. I do want to anchor you on the mid numbers there, 13% to 14%, because I know immediately you start to think about FY2027. I want to anchor you to the 13% number. We want to put a number out there that we feel very confident in that we can hit. I think you have continuously challenged us and questioned whether or not we're going to meet the numbers we put out there. We can hit 13%. If the tailwinds start to really pick up and our growth areas start to accelerate, we'll try to grow and expand from 13% all the way up to the high end. We'll update you when that happens. I want to anchor you where we're focused and what we're delivering for both this year and into next year.
Zane, I think it's really important that people understand that.
Agreed. We'll, of course, update you later this year in our fourth quarter call as to more details looking into FY2027. This is the framework through FY2028. I couldn't be more pleased, of course, with the board having approved an incremental $4 billion in buyback. As you see on the slide here, we mean it when we say we're investing in the business and want to continue to drive this business, but also recognize capital allocation is important. Many of you have talked about buybacks. We think this is a good time to put our money where our mouth is as it relates to that. We're going to be buying back $5 billion through FY2027.
Yeah, with a lot of that being accelerated in the earlier part of that journey, too.
Exactly.
We're leaning in. This is why I said we think the best investment we can make in the future of Workday is in ourselves. This is an additional $4 billion on top of the $1 billion we already have out there. It is $5 billion to FY2027. This isn't to drive down dilution. It's because I think it's a great investment for our company and our business.
Totally agree. With the strength of the balance sheet and the progress we're making in the business, we, of course, see free cash flow per share CAGR of over 20% over the next number of years as well, targeting free cash flow per share of $15 in FY2028. Great growth on the free cash flow. I know so many of you, both in the room and outside the room, think this is one of the most important variables out there. That's obviously what we're focusing on. Yeah, before we.
We're excited about it.
Before we have others join, I just want to obviously go over our capital allocation philosophy here. First and foremost, as Carl has stressed, our primary focus is organic investment, in particular in AI, growing our platform. You are going to meet some of the key talent that we have investing in the key talent around the globe for the company. We are going to be driving value through that. Along with that, whether we are partnering or otherwise thinking about M&A, we will consistently have the cultural alignment, the team and technology, adjacent markets, and just great opportunities as we think more broadly around M&A. Nothing has changed. If you look at this list, whether it is FlowWise, Paradox, Eversort, HireScore, they all fit this paradigm that we invest in and are very excited about. Sana is soon to join that list.
We should have added Sana. It's been disclosed.
Yes, it has. Of course, returning capital to shareholders through share repurchases, we've made a big step forward in that regard. We'll actually have less share count through FY2027 and couldn't be more pleased with a $5 billion buyback that we'll be executing against over the next number of years.
Yeah, thanks for laying that capital allocation strategy and philosophy out. We're going to innovate three ways.
Exactly.
Organically, inorganically, and the go-to-market, we're going to continue to be inquisitive through acquisition. We're going to bet on ourselves as much as we're betting on anything else in the market going forward.
Agreed.
We're an innovative company at scale. Speaking of innovation, it gives me great pleasure for Zane and I to welcome to stage our President of Product and Technology, Gerrit Kazmaier. Gerrit, welcome.
Thank you, Zane. Thanks, Carl.
Hello, everyone. It's great to be here. This is my first Rising. I have just joined in March. It's been six months by now, and it's my first Financial Analyst Day. Please go gentle on me. I'm a first-timer here, OK? Is that a deal? Good. I take it. Good. There was no other allowed answer, by the way. I want to quickly introduce myself to you for a second, right? Because I am new and some of you may not know me. I joined in March, as I have said before. Way before that, I was working at SAP. I started my career at SAP, actually, and left SAP as the President of all Database Analytics, Business Intelligence, and Planning Portfolio for SAP. I joined Google Cloud, and I was the Vice President and General Manager of Google's Data Cloud, so all of the data services and analytic services.
I've seen both the world of global business processes and the world of planet-scale data and AI technology. There is one opportunity that uniquely attracted me to Workday. I'm going to go into that in a second and just talk about some of the other factors which were main decision pieces for me to join Workday. One, you just saw it, right? Working with Carl, working with Aneel, working with Rob, a world-class leadership team is a unique opportunity in itself. Rob and I actually worked together in our past. Rob was at Google beforehand, and we also crossed paths at SAP. I have immense trust in the leadership team here at Workday.
You're going to see also a few of the leaders in Product and Technology later today, like Ashna, who leads CHRO, an incredible leader at Workday for, I think, 12 years, and Peter, who joined me from Google as our new CTO. We have an amazing leadership team at Google here at Workday. Very importantly, you know what I think also Carl has said, the Workday values for me, they mean a lot. I'm not sure how you look at these things. I'm a very competitive person. I want to go out there. I want to kick ass and win. I want to do it the right way, and that is, I think, unique Workday. As I said, there is a unique moment right now in the market happening. I know business processes, and I know AI.
No matter how you criticize one study, you also see the MIT report, the Stanford AI Index, the McKinsey report that is being shown here on a slide. There was a JPMorgan study also not too long ago. They all come repeatedly back with the same finding, right? We can't ignore the pattern. The pattern is that enterprises, while they spend a lot of money on AI, they're getting very marginal returns, surprisingly marginal returns for the amount of effort and investment. With all my experience, I know there are actually very good reasons for that. The primary reason is that the recipe for AI for the public domain, for consumer technology, if you will, is very different than the recipe for enterprise, fundamentally different. It starts with one big difference from how you actually build AI from the get-go. Enterprise data is proprietary.
You cannot just upstream it into a model. That's what you're calling the process to make the model smarter. You upstream data into it. That just doesn't work with proprietary enterprise data. Also, models, when they complete tasks, need to be provided with a lot of context information, right? They're not going off on their own and doing work. When you use ChatGPT or Google Gemini and give it a prompt, basically, you give it context, and it starts operating. If you want it to accomplish a complex sequence of tasks, you have to constantly refresh and keep that context exactly what it needs to be. That is a major system engineering effort. This is not trivial, right? We're talking sophisticated search, sophisticated ranking, and so forth. Last but not least, on the data plane alone, most enterprise data is not even AI-ready. It's inconsistent. It's fragmented.
It has all of the issues which make it practically impossible to even use it in a real AI process. This is why this DIY AI, basically, some vendors just give customers a box of Legos and call it the agent builder or whatever. Basically, it means, well, we give you the infrastructure, but you actually have to figure out AI alone. It doesn't work. Not in enterprise. The second piece, business processes are complex. They run organizations. They have systems. Whether it's hire to retire on the HR side, whether it's quote to cash, you pick yours, right? Source to pay. All of these processes are long running and are an orchestration of a complex network of actions and systems. You cannot just superficially slap AI or cross off that on legacy APIs and hope that this would reconfigure or transform the process itself.
The key is that AI actually needs to be brought into that stateful workflow model itself to operate it. It can't sit on top. It can't sit like a copilot on the side. You have to actually re-engineer it with AI first in mind. That's the unique opportunity that I see in Workday. Workday has the benefit of being born in the cloud, which means it has a consistent, uniform data foundation across all our tenants. It was multi-tenant from day one. All of the things that you have heard earlier about, the trillion business transactions, the 75 million users on Workday, they're all contributing to this pristine, clean business data set that Workday basically has and truly understands best how people and money are moving through organizations. That is unique. What you heard about when we are expanding our core, right?
Workday strategically extended that data set again and again and again. When you think about what we talked about today about frontline, right? That's basically more signal, more information, a wider funnel feeding our data backbone at Workday to build differentiated AI with. It's the ability to build now these AI models, these AI systems directly into the business process model itself. This is where truly differentiated AI actually is being built on when you rethink the process of how it's being done. This is where you see the great examples that we shared earlier today, where you actually change how frontline is managed, changed how financial close is being done, when you actually take a massive amount of inefficiency or labor costs, if you will, and compress it down into software cost very efficiently. That's ultimately the AI opportunity.
Our three pillars, I'm going to quickly touch on those and hand it over to Ashna to take you through the first two. Building the best AI agents really means that we have a world-class AI engineering team building AI systems. This is not basically automating the legacy. That's truly rebuilding. Peter, our Chief Technology Officer, he and his team are working on the frontier of that business AI system building. It means that when you see the agents that we're going to talk about later here today, they are not just single-task trivial agents, right? It's pretty easy to automate a quick demo, give a model a quick prompt, and do something superficial.
It's actually pretty hard if you want the model to behave like a recruiter, like a manager, like an AP clerk, like a financial analyst, and you actually build a system that can accomplish all of these tasks and actually work collaboratively with other agents on accomplishing a bit of a big business goal. Secondly, expanding our core, expanding our business. It's good business for us because Workday is a household name in North America, but internationally, not so much yet. I'm from Europe, right? There is such a big opportunity for Workday to take our existing application footprint and bring it there. Secondly, there are also so many untapped areas that we are just going into, like frontline work. Lastly, something that Workday did not yet really pursue: a platform business.
Today, we announced flex credits, a consumption-based pricing model, which truly allows us to, A, deliver value to our customer in a usage-based way, but also to capture value on a usage basis. A very powerful model. We have added a number of services into it, which allows us and our customers now to build AI better, build apps faster, and take their Workday data and integrate it with the data ecosystem around them, all on a usage-based model. Very quickly, these agents, you may wonder, right? Oh, great. This is a slide, and it doesn't have 10,000 agents on it, right? There are other vendors who are saying we have 100,000 agents. That is exactly why AI goes wrong on the enterprise level, right? It's very easy to publish a slew of trivial, low-accuracy, unreliable agents at scale. It's very hard to make AI proficient at real business tasks.
We are taking on the most complex processes in HR, in finance, and in planning. All of the agents that you're seeing here, we put them to the test with our customers. They all deliver real results, reducing the time that managers spend on managing shift work, speeding up financial close, getting payroll faster compliant and done with fewer errors. All of them are proven on a hard ROI measure. They all achieve a very high degree of autonomy. When I talked about expanding the core of our platform, we built a new unit around Workday Go, our medium enterprise segment that builds the right packaging, the right pricing, the right service model to really take the great brand that Workday has and bring it to all medium enterprise customers. A tremendous opportunity. It requires that we build a business like a true business, soup to nuts.
That's exactly what we're doing with Workday Go. As Carl has said, we hired a terrific leader who is leading this unit now. I can tell you, only a few weeks in, the potential is gigantic for us. Same with international expansion. We're going to announce more points of presence, more regions. We're going to make Workday more available around the globe and build up a global sales presence around it. We are going into federal in the U.S. and in other public sector entities around the globe. Last but not least, taking Workday to the billions, billions of frontline workers out there. Today, maybe the most innovations that we have launched organically all around Workday built. Workday Data Cloud, together with Snowflake, Databricks, and Salesforce, a new way for our customers to activate their enterprise data by building the most open, the most connected data ecosystem in the industry.
We launched a number of new tools for application and integration building. Most importantly, we built integration with FlowWise. A small acquisition. The key for FlowWise is that you have the most beautiful, the most powerful AI agent designer just outside of the enterprise. We brought this model, and we deeply integrated it into the Workday platform so that every Workday customer can now build AI-driven workflows backed by Workday's data, backed by our process model, backed by our security, and automate tasks like never before. You can forget all of the legacy workflow building in the world. This is a much better way, much easier. We are 100% convinced that this is changing the way how customers think about Workday automation, not just for Workday, but across the entire enterprise landscape. Lastly, before I get over to Ashna, you heard the announcement around Sana.
I know some of you may have questions about it. I'm excited to take some of them later. It's going to be a game changer. It's the new front day to work. That's a statement of true conviction. AI predominantly is going to revolutionize how people interface with software. That's where a lot of value truly lies. We had the opportunity with Sana to bring a company to us who has completely rethought how people interface with information and with AI-based actions by bringing them together in one experience. We're going to bring this across the entire Workday platform for every customer, every worker out there. That's going to work for Workday and even beyond. A massive potential for us. With that, I would like to hand it over to Ashna Kirschner, our CHRO, Group General Manager, and Senior Vice President. Ashna, over to you.
Thank you, Gerrit. Appreciate it. Great to be with all of you again. Gerrit spoke to our vision and our strategic opportunity ahead. I'd love to bring this to life with some examples, starting with AI. AI starts with getting the data right. Gerrit talked about the challenges with enterprise data accuracy and context and Workday's unique advantage in our architecture, governance, integrated workflows, and most importantly, customer trust. We don't take those for granted. We're continuing to help customers achieve the highest levels of data integrity and strategically widening Workday's data moat. In HR, this means reinforcing our data foundation. Take, for example, jobs, skills, organizations, or many other data points that are part of our HR backbone for customers' organizations today. We're investing to make these data foundations even stronger.
For example, investing in Workday's Intelligent Job Hub, which streamlines job structures to keep customer architecture agile and market-ready to make sure that the data doesn't get stale. Workday Skills Cloud, one of our beachhead data sets with over 3,000 customers today, helps organizations understand their people and helps organizations drive workforce planning, internal mobility, and faster hiring. Organizations as a data set are also important. We're investing in organizational modeling and mass changes. Think about a customer who's going through an acquisition. We are helping them create simple experiences and high-performance processing for structural changes, a key part of how businesses evolve in the HR world, considering impacts on organizational health and on cost. It's not just about HR. It's also about finance. We're investing in the same data foundation in our financial products.
Accounting Center is the foundational step to verify that core accounting data is correct and auditable. It automates billions of detailed entries, confirming that financial information has a high degree of confidence and integrity. Over 400 customers have achieved massive efficiencies using Accounting Center, up to a 70% reduction in manual journal entries. Accounting Center has been critical to some of our large customers like Fannie Mae, Salesforce, and U.S. Bank in their decision to move to Workday Financials. In finance, we're also investing in enabling operational data to flow through Workday with strategic industry partners. For example, Trintech for financial close and financial services industries, Xora for order-to-cash in tech and media, and Kinaxis for a unified supply chain view, which we just added last week.
These partners bring operational data like a customer's order history and contract lifecycle directly into Workday, which creates an even richer and stickier data set for us. This unified data foundation with complete business process context, that's our AI differentiator. That is what allows us to build the deep domain agents that you just heard Gerrit talk about and I'll touch on in a moment. These are purpose-built agents that orchestrate complex business processes and drive real outcomes for our customers. You can see the incredible progress and momentum that we've seen. We've accelerated our organic execution in the past year. We've also made investments in AI leadership across our teams. This morning, we announced our next wave of roadmap for these agents. Our roadmap is tied to Workday's goals, deepening our suite and expanding into growth segments.
We'll talk more in just a second about our monetization plan via flex credits. Bear with me. I'm going to go rapid fire and highlight a few of the agents, but not quite all of them. We started with recruiting and talent mobility agents. These were built on our HireScore acquisition. We're seeing real results. A large automaker cut candidate screening time by 70%. AdventHealth decreased hiring manager decision time by 40%. We've been able to monetize that value with the HireScore business more than tripling since the acquisition. I can't stress enough our strength in talent acquisition, a giant market in its own right, with a ton of opportunity ahead. We just added Paradox into that equation. Last year's Eversort acquisition gave us the power to connect structured and unstructured data at unprecedented scale.
This is what powers our contract intelligence agent, which reduces contract execution time by 65% and accelerates both sales cycles and supplier onboarding. We're only a few quarters into selling this product, and customers can't get enough. Think about how many documents tie into Workday, from sales to lease to procurement. On the HR side, statements of work, policy documents, employee agreements, the opportunities are endless. We recently delivered a new set of capabilities to our customers. Hopefully, some of you got to see our end-to-end agent demo in the keynote this morning. We strategically identified other areas for driving significant efficiency gains for our customers. For example, our payroll agent, which proactively flags issues before payday, reduces errors, and expedites compliance up to four times faster. Our financial audit agent automates the very painful process of gathering audit evidence.
It's designed to process auditor requests, retrieve relevant documentation, and package it up automatically. Our early adopter customers using our financial audit agent have seen the potential to save up to 900 hours on audits per year. For contingent labor, which sits right in between HR and procurement, our contingent sourcing agent rediscovers talent within a company's existing workforce. This is another example of getting tremendous value out of our acquisitions. It's powered by Vendly for contingent workforce management and HireScore. Our agent accelerates sourcing by proactively finding top contingent talent. By connecting our market-leading recruiting platform for traditional labor with the best platform for contingent labor, we're able to provide our customers with that end-to-end solution to drive talent acquisition. Finally, our last example currently with early adopters is our planning agent, which flags variances and proposes adjustments, dramatically reducing cycle times by as much as 30%.
Our early adopter customers cut that data exploration time by 30%, saving roughly 100 hours a month, all while simplifying administration and lowering the cost of ownership. We also announced our next wave of agents this morning, including our employee sentiment agent built on Pecan, which has the world's largest data set of its kind, with over a billion responses around employee sentiment. It proactively addresses workforce issues to reduce costly employee turnover. Our new performance agent draws on data across Workday and other systems like Salesforce, giving managers comprehensive data-driven assistance, building that performance culture that powers businesses. Our case agent automates HR service delivery to increase operational efficiency and reduce HR costs, which reviews similar HR cases and applies the right regional and business compliance context. That's something that only Workday can do. It drafts a tailored response, resolving cases faster and lowering the number of support requests.
Finally, our new financial close agent helps streamline the entire close process. It coordinates close tasks across teams, flags issues in real time, and helps transform the process into a simplified and efficient workflow. You can see this isn't back office plumbing. It's CEO-level business transformation. We help organizations plan, hire, pay, and close end-to-end on one platform with AI at the core. This deep domain AI builds on the strength of the Workday suite to transform HR, finance, and the critical markets in between, like planning, Vendly, payroll, and more. These are strategic markets that unify operational data, increasing the value of our platform and widening our data moat, making our foundation stronger and growing value for customers and Workday. Hopefully, you can see we're not interested in a couple % efficiency. We're looking for dramatic gains.
This is what allows us to strategically expand our core business to win in key markets, like medium enterprise, international markets, and even specific industries like federal and frontline, where you already heard some teasers today. Rob's going to talk a little bit more about our go-to-market enablement in these areas. Let's go deep on some examples around product investment, starting with our medium enterprise investment. Our platform has historically been perceived as too complex for midsize companies. We are actively simplifying our product and delivery to increase ease of use and reduce total cost of ownership, transforming how midsize companies deploy, adopt, and optimize our platform. We are reducing operational costs with AI. We know deployment costs are a major driver of TCO. We've invested in a deployment assistant to drastically accelerate deployment and time to value for go-live and new feature adoption.
We've also invested in our BP Optimize agent, which helps customers get more value out of Workday. This takes a look at the processes that are in a particular tenant and helps recommend suggestions and make changes on behalf of customers for them to get the most value. It surfaces bottlenecks, shows peer benchmarks, and recommends real-time configuration change. One of our EA customers experienced a 90% improvement in business process efficiency with our BP Optimize agent. In finance and payroll for medium enterprise customers, we're actively invested in reducing integration complexity. We'll come back to payroll in just a moment. In finance, we announced our new revenue center for medium enterprise. We know ME customers don't want the added costs of a third core system to manage revenue. They want it tied directly to their ERP. Our revenue contract agent automatically extracts key financial data from contracts with AI.
Let's turn to international markets. We're expanding Workday's addressable market in key countries. This starts with regional cloud platform coverage for increased performance for users in proximity to their region and data regulatory compliance. We support multiple global regions and are adding Japan, India, and the Middle East over the next 15 months. We're also strengthening our sovereign cloud offering for EMEA. Our second pillar of internationalization is localization and compliance. In finance, we support over 175 countries with pre-configured tax and reporting templates for over 55 of those countries. Our new global tax hub, which comes early next year, will provide a central place to manage multi-entity compliance. It will integrate with our comprehensive partner ecosystem, including the likes of Vertex, Avalara, Thomson Reuters, and Kyriba for global tax, e-invoicing, and bank connectivity. In HR, I said we'd come back to payroll.
For international payroll, we offer native payroll for Commonwealth countries. Australia and Ireland are now live. We actually just announced the intent to build New Zealand today. Our global payroll connect hub links Workday with third-party providers across 187 countries with 27 partners. Our global payroll connect solution cuts deployment time from 200 hours to at least half of that. These investments are about accelerating market penetration, driving global revenue, and continuing, I'm going to say it again, to build our data moat. We're also investing in marketplace solutions that accelerate time to market in international for us. These take advantage of the build platform. They are rocket ship accelerators for these markets. For example, companies in Japan have a unique way of assessing employee performance. An app for multi-rater performance management offers this in a scalable, low-cost way.
PwC has built apps to help customers comply with global regulations, like Right to Work app in the UK and sickness and recovery management for the Netherlands. We actually just signed an opportunity with Kainos to support an EU pay transparency app for EMEA. Peter is going to talk a little bit more about the build platform as well. Let's switch to industries, a key focus. Our investment here is helping us drive higher win rates and increased TAM, starting with federal. We recently announced Workday Government Cloud, our dedicated infrastructure to meet the highest security standards, unlocking this massive and very, very complex market. We are focused also on meeting the unique needs of the federal sector. We're actively engaged with the Office of Personnel Management, or OPM, to align our offerings with their standards for HR.
This direct collaboration is crucial, and it validates our ability to serve a market with a very high barrier to entry. This work positions us to capture a substantial share of a historically very underserved market. Beyond federal, we're also continuing to make Workday a platform to serve our customers' total workforce, serving every type of worker for every kind of work. HCN gave us employees. Vendly gave us contingent workers. Now we're moving beyond our 75+ million users to the billions of users in the global economy, specifically frontline workers. We already have a significant footprint in industries like retail, hospitality, and manufacturing. The opportunity to continue to expand is massive. This market wants AI-driven, mobile-first solutions, and our platform is uniquely positioned to deliver them.
Our frontline agent, now with early adopters, cuts the shift replacement process from 15 minutes to 2, saving managers an estimated 90% of their time on timesheet approvals. Guess what? We just announced our intent to acquire a company about three weeks ago with a large customer foothold in this market. Our intent to acquire Paradox is a big step forward, actually, on a lot of the fronts that we've talked about today: deep domain AI, broad customer fit, and a wedge for us into the frontline market. Workday and Paradox will provide an end-to-end talent acquisition suite, giving customers the AI advantage to find, hire, and onboard every worker. Paradox's leading conversational AI streamlines the candidate experience. We've been partners since 2021 and share over 200 joint customers already. This brings a dedicated candidate experience agent built on nearly a decade of candidate data into Workday.
The results speak for themselves, with a 70+% application conversion rate. Paradox's experience has powered more than 189 million AI-assisted candidate conversations. Paradox brings a proven at-scale deep domain agent and data set to Workday, especially for candidate experience in the frontline, which adds to our growing list of native Workday-built agents in areas where we have the data and context to be highly differentiated. Our agents and core are only as strong as the enterprise AI platform powering them and allowing us to expand our ecosystem. To talk more about our AI platform, please join me in welcoming Peter Baylis, our Chief Technology Officer. Thank you.
All right. Thank you, thank you. All right. Thank you, Ashna. This is month four for me. As Gerrit mentioned, I joined from Google. One of the reasons why I joined Workday is actually the incredible asset we have, which we talk about a lot, but just to put it in perspective, we really are the best application in the world for people and money. Meaningfully, we've got a trillion transactions a year running through our platform, which is incredibly high volume. That's not just good for our business, but when you think about AI, AI is all about teaching these models that are trained on trillions of tokens on the public internet and all the books available, how to do work, how to actually make AI work for people in these workflows.
When you think about the platform that we have, taking that data and taking that context and putting it to work is an unbelievable opportunity. You see that in the roadmap that we've got, the agents that Ashna mentioned, and also our plans for the platform. If data is the fuel for AI, the work we're doing to open up this platform and open up our context is letting both our dev teams and our partners and our customers' dev teams build like never before. This is such a big shift in how we think about Workday from kind of the siloed, monolithic application. We thought of it as an ERP category. I got my box and my ERP software. It runs. Everything's sitting inside of it. It's got proprietary language, proprietary extensions. You can build a great business in that model, as we have for the last 20 years.
With AI and our new leadership team thinking about the technical strategy of the company, it's time to open this up and open up in a way that's not a free-for-all, but a way that benefits from the governance and the trust and the security model we spent the last 20 years building. It's a pretty amazing time to build. I want to talk about what we're doing on the platform side, as well as what we just announced this morning with Sana to really, really take that people and money assets, the data and the context, put it to work. First, we're doing a lot with our data. You might have seen some of these partnerships announced. A great example of this we've done at the kind of corporate level is Workday Wellness. Workday Wellness takes our data. There are thousands of customers who run their benefits through Workday.
We partner with some of the leading benefits providers: MetLife, Sun Life, Unum, Chime. We basically, it's Cigna, huge names. What they can do is because they've got the benefits data and the worker data sitting in Workday, we can make it easier for our customers to onboard as employers and easier for employees to onboard as well through a data exchange with these providers. Another great example at the corporate level, we've announced this daily pay partnership. Incredibly important problem. Over half of Americans are living paycheck to paycheck. The turnover
The result from this is estimated to be $1 trillion annually for worker turnover. What DailyPay does for its customers is let you essentially have more financial stability based on your pay. By opening up that Workday data for that payroll, 75 million employees, you can get a live view from DailyPay into an employee's financial status. This makes this type of financial benefit far more broadly available and applicable. Instead of having to build custom one-off integrations, we're able to tap into this amazing source of data and power what Carl will call the Workday economy. In this case, having a tangible impact on these workers, especially those that are on that paycheck-to-paycheck basis. I'm kind of a geek, so I'm going to talk a little bit about developers. We talked about Workday Build this morning. Build is a huge shift in terms of how we approach our ecosystem.
We've always had, since even, I think, the Cape Clear acquisition back in 2008, an integration strategy. I got to put my people data and sync it over to this system and sync it over there. It's very bulk transfer, kind of 2000s era protocols. Build, we basically are blowing up the developer platform and making it far more accessible so that no matter what you want to build and how you want to build, the tooling of choice, you can use cutting-edge standards to go and build on Workday. Most importantly, you can do this without leaving the security perimeter or the confines of your most sensitive assets in the enterprise.
Some of the most amazing tech here is enabling us to do this in a zero-copy way so that you can go and run analytics on top of that data, which is incredibly sensitive: payroll, employment records, performance reviews, without any worry about who's touching this and are the right people getting access to the right data. That's a huge, huge change. Open standards, but with security. What this looks like, you've heard a lot about FlowWise, but we're very proud of FlowWise. Incredible open source tool, 40,000 GitHub stars. We had a CIO in the CIO keynote talking about how she was building agents using FlowWise. She encouraged the community to try it out. It's literally that easy to drag and drop and create agents. We've integrated the FlowWise agent builder into Workday.
You want to go build processes and workflows on top of Workday business processes, you can go and do that and run with your permission system or permission model and that trust that you come to expect from Workday. Extend, we talked about Extend. We build applications. We've got a lot of people who build applications. Partners can build applications, custom build applications. The Extend applications live alongside the Workday applications running in our platform. This is an incredible SKU for us. Tons of customer adoption. We announced 3,000 Extend apps in production. Workday is an application of many of our users. Extend is the way to go build new apps. Orchestrations, those trillion transactions, they run through something called a business process. It's a customizable definition of what work means. How do you go pay someone? How do you promote someone? How do you change a job?
Every organization is different. Business processes reflect that. With Orchestrate, you have an ability to go run those programmatically, to go and chain business processes, to go call external systems. Finally, we'll talk a little bit more about this, the data cloud. This is probably the biggest announcement of Build, making it easier to get access to that data in a way that is secure, zero-copy, and incredibly powerful. Developers are excited about this because we've built a really phenomenal developer experience here, including a copilot. You never hear about coding tools and coding assistants. Those are fantastic. What we've done is given our Workday developers a developer copilot that gets Workday, that understands what is a business process. How do we do a SOAP integration versus a GraphQL integration versus a number of acronyms I will spare you from?
It gets you started fast and gets you into a production faster. The most important point for Build, and the most important message I want you to take away for Build, is this next one. Build is built on open standards. We are embracing the best standards across the board for maximum connectivity. Historically, you want to build an application on Workday, you're going to have to learn how to do things the Workday way. We have some really cool technology for doing generative UI and building in place with things like XO and OMS, acronyms you may have heard about if you've followed us for a while. With Build, we're going straight to open standards. We're expanding our coverage and our aspiration that all of Workday, every business process, has an API with a REST endpoint or GraphQL. For agents, we're embracing MCP.
This is the way you expose tools to agents for use. On the data side, we're embracing JDBC so you can run SQL queries against Workday. Never done that before. You can do Iceberg, so you can go run bulk analytics at scale without copying your data. This is incredible. As one customer said, this is a total 180 from the original Workday tech direction, which was much more on keeping this all secure, but also putting up more barriers. We're able to do this within, again, that Workday platform, thanks to new technologies, such that all that people data, all that money data, all that context remains secure within Workday. With the flex credits system, we can monetize this. You want to run our app, we can monetize that. You want to run your app, you can monetize that.
The platform becomes the product, maybe for the first time in Workday history. Now, this is more than just tooling. The tooling is pretty cool. It's pretty kick-ass. I think teams made a ton of progress on the fundamentals exposing Workday in this more standard way. We also have an incredible community. On the partner side, we have over 500 partners engaged. This isn't just hitting your traditional large enterprise HCM use cases. It's going to medium enterprise, international. As one example, Moxie Group built a bank account connector application. It's one-click install from the Workday marketplace into your Workday instance, and it takes the process, what can be literally weeks, to go and get your bank accounts connected to the backend financial systems. It's just one-click install. It takes an hour.
This is huge for ME as well, that is, medium enterprise, because a lot of the overhead of configuring Workday, it's such a powerful system, such a powerful toolkit. We can let partners lower that barrier to entry, especially for those regionalized use cases and ME use cases where you just need that turnkey solution. It's not just on Workday to build all of this. We've got an ecosystem that's making it easier and faster to get started. That is amazing. On the community side, the team's done an awesome job on the developer community. There's certification, there's upskilling. I mean, the headline here and the real proof of a community is how is it growing? In the last year, we more than doubled the developers engaged in our developer community, which shows more and more people are building on Workday.
Frankly, more and more developers are betting their careers on Workday as well. I'll talk briefly about Workday Data Cloud. We had talked about AI. I literally came here because I believe we have the best data and context to feed AI. You see it in our agents, but this Data Cloud announcement is unbelievable. Data Cloud is really three things. Go to the next slide. First, it's a data lake. We're adopting Apache Iceberg. You get zero-copy scaled analytics on top of your Workday data. You can process it in Spark. You can process it in Hadoop if you still run that thing. You can process it in your SQL warehouse. Your data doesn't leave Workday, and you can run analytics queries. The alternative here, I'll spare you the details, but it is a painful process, and you're making copies all the time. Here, it's seamless, zero-copy, done.
Second, I want to query my Workday data. I want to use fancy language, SQL, the lingua franca of data. I can go hit Workday's live data through our JDBC endpoint. I want to get a live snapshot for my application, for my reporting, and so on. I can do that now. Never possible before. Always had to do it through bespoke APIs, or I do a SOAP integration. It is so simple now to go query that data. Finally, we have Prism to go manage all of this, because as we know, data needs management. We have access controls, governance, reporting. Prism plays an important role in bringing that structure around this ecosystem. The ecosystem is real. You heard it from Shridhar who came on stage, Snowflake CEO. We've really partnered with the best in the data industry, Snowflake, Databricks, Salesforce, to make this real.
They're incredibly excited because their customers and our joint customers are so hungry for this. This eliminates so much ETL tool and processing. It was lovely to have Shridhar here talk about his vision for this. The final piece I want to talk about, this one I'm over the moon about, is our announcement we made this morning about our intent to acquire Sana. Sana, you can think of this as an AI-native platform. They started in learning. They have a kick-ass learning platform. It's basically the most beautiful learning platform you can imagine. The leading companies, some of these AI labs, use Sana to create internal content. You go onboard through Sana. You do sales enablement through Sana. It's kind of unparalleled in its quality of a user experience. We're going to sell a lot of it. The really, really cherry on top is what Sana does for workers.
You can think of Sana as enterprise search over all of your data, workflows on top of those different systems, and then agents to go and automate more of those tasks. We hear from Sana customers that have adopted their agent products. They literally have their new browser tab pointing to Sana. You can think of this as, say, a ChatGPT, but connected to all of your enterprise data. I can go and ask, what was the status of that latest Salesforce opportunity? Pulls from Salesforce, pulls from Google Drive, pulls from my calendar, pulls from email to go and answer my questions. This is such a game changer for Workday because Workday, look, let's face it, it's an ERP system. It's a system for people to go manage their people and money. With Sana, it becomes the place where more and more work happens.
Sana customers are in the platform seven times per day on average. That transitions Workday to the place where work is done. That's an incredible opportunity with AI. We're so excited to offer this to our customers. One, for learning as a separate sort of add-on within the Workday learning platform. As Gerrit mentioned with Flex Credits this morning, with Flex Credits, one, they're included allotment in your base SKU. Two, with Sana agents, there's something we can offer to every single one of our 75 million users. No extra SKU, no add-on charge. Pay for what you use. We think people are going to use a lot of this. It's an incredible product, incredible environment. As you saw from Joel this morning, an incredible team. They have such a talent-dense team in Sweden. Joel is a visionary leader. Together, we're going to light up a new Workday for Workday.
With that, I want to turn it over to Rob for an update on our go-to-market strategy. I'll leave you one final message. Workday as a platform is open like never before. We are cooking on our AI agents. We're making it easier than ever for our partners to go build on them. With acquisitions like Paradox and Sana, we'll get an even stronger bench and an even stronger set of capabilities. Stay tuned. Over to Rob.
did it go, bud?
Gosh. Oh, I need a clicker. Awesome. Thanks, Peter. Super excited to be at Workday. It's 10 months now that I've been at Workday. You can see there's a lot of new action, I would say. What's really what I'm really pumped at right now, and I think you guys saw this morning if you were in the Innovation Audience, where we are and what we're doing. I've been traveling the world, kind of talking to customers, understanding from workmates what we need to really drive global expansion, our medium enterprise business, and where growth is going to come from. Gerrit and I have also been working with the products because we've been aligning what we want to do in the product to this growth agenda.
We actually spend time with our teams together quite a few times, once a quarter at least, building out that plan and deciding how we're going to go after the market. This is kind of a really team effort to make things happen. It's setting us up with announcements today for what I believe is an incredible growth opportunity at Workday. I think it's something that I haven't seen in a long time in this industry. I feel so pumped with the opportunity to take to our customers, just think about changing the way we do things in the application business. If you look at the opportunity, you know we, even at our scale, still do a significant amount of our business with new customers. We have lots of market to capture in the new business space. We have billions of opportunity in the customer base.
These two engines of net new and customer base have created a durable kind of growth model for our go-to-market engine. In many cases, we're just getting started in some of these industries. If you look at Workday Federal, that's such an untapped opportunity that we're only getting started in. If you look at the medium enterprise, we're super strong in the United States. It's incredible how Workday has grown the net new business in the U.S. We have huge opportunities internationally to drive medium enterprise. I'll go through that as well. In industries, we're getting started globally in how to drive industries. Full suites and unique opportunity for us across the world. For me, the most exciting opportunity is truly taking AI and the remarkable position we are in with AI to the next level. We'll showcase some of that.
If you haven't had enough of it today, we'll showcase a little bit more. Let's talk a little bit about net new and customer base, and that's how we orient our go-to-market teams. If you look at it, 40% of our business today still comes from net new customers. Think about that. 60% comes from existing customers. Think about this engine grinding through net new customers at 40%. We have 11,000 customers today, 6,000 at the core, 65% Fortune 500. We believe there's still 70,000 customers out there in our TAM. This is especially strong in the medium enterprise. You've got this engine that's driving 60% of the growth through the customer base. Think about all the announcements you made and how that's going to drive the customer base as net new comes through. We will do that in both net new and in the customer base.
There's a significant opportunity with funds, with HCM, with agents, with Workday Bold, with what we're going to do with Sana to actually continue a huge opportunity here at Workday. The platform is another significant lever. If you look at how we've taken it from an extend to a totally open environment, the ability to build agents, understand data in an open, trusted, extensible way, we think that is unique. I think we speak a lot about the data model. If you just think about the foundation data model that was built here for the last 20 years, it means that every customer in the world has the same data model, the same object, the same definition of that object. Whether you're in funds or in HCM, there's only one object. That allows us to do things in AI that's remarkable.
I think there are no application businesses in the world that have such a clean, pure, curated data model. That allows us to build Illuminate agents, as Ashna presented early on. That adds tremendous value to our customers. We know what value, we know how to target the agents. We know which agents to build because we understand the process model. With Workday Bold and FlowWise, our customers, our partners can now create and scale new solutions. Workday Bold gives our partners a completely new opportunity. With customers, it expands the conversation. Workday Bold expands the conversation with the CIO, advances new revenue streams, makes it easier to use Workday. Right? How will we continue to drive growth in both net new and in the customer base? The platform, as I said. We'll start with customers at the center of everything we do.
That's how we've built the last couple of months with this team, to focus on what our customers want and how do we accelerate the growth with them because of the needs that they have. We'll drive it with the AI momentum that we spoke about. We'll expand key markets, especially with medium enterprise. We're doing a lot of work on medium enterprise with Workday Go to change the direction. We continue to expand our international business. We're going to continue to expand our ecosystem. We'll continue to expand industries. That'll be the focus of our go-to-market growth model that will continue to drive across both product and technology and the go-to-market. That's how we think about these things. This, I believe, is a game changer. We announced it today.
We thought long and hard about how to create a competitive pricing model for AI that our customers would understand, that our customers would understand the value that they get. We wanted customers to be able to drive the AI strategy at their pace. We want it to be simple, predictable, and completely transparent. No hidden fees, no locked licenses, no user-based costs, no bolt-ons. Flex Credits, the way to consume AI. It's a way to consume APIs, a way to consume storage. It's all fungible, interchangeable, completely transparent. The customer has a console, can see what they're using. Whenever we deliver an AI or an API feature or function, they have access to it immediately without having to go through a commercial discussion with us.
All the agents that you saw that were for Feb 1, those customers that have the base model, the moment it gets released, they can turn it on. We've built full calculators for the customer, consoles for the customer, and for the salespeople to be able to explain it. That'll be completely transparent ROI usage. That'll mean our engineers are going to have to build the best products in the world. With this model, we believe it lowers the barriers to entry, drives really durable growth because as consumption increases, customers will buy more credits. More usage will happen. That's why we believe this model of simple, flexible, transparent is the right approach for us. It's going to be a game changer in the market. Our salespeople are fired up. Patrick did some work with customers. I'll tell you the feedback from our customers has been super positive.
I think they've all been struggling to understand this. We think we'll unleash a new set of areas for Workday's growth. If we look at an international market, we can look at the UK playbook. We've got a great business in the United Kingdom. We're taking this playbook that we used in the UK as the major lever to continue to drive growth across the world. You think about it. We are the HCM leader. We have a verticalized go-to-market model in the UK. We have an emerging enterprise model. We had a strong first half. We're going to continue to invest in this playbook as we take it around the world. There are some incredible proof points of wins that we had. Some of the names are up there. You just think about Decathlon in France. They're running financials. They are implementing financials.
If I look at DBS Bank in Singapore, in Asia, Development Bank of Singapore, financials and HCM. You can read the other names of this. Masan Group in Vietnam, incredible opportunity, one of the largest companies in that area, all going with financials and, in their case, HCM as well. Full suite. We've entered new markets. India, we announced the leader in India. We have millions of users in India already. Now we have a direct sales model, channel, partner model in India that we're lighting up in that market. We think that's an incredible opportunity that we haven't touched. We will announce the Middle East, probably just before GITEX. For us, opening these markets continues to be critical for expansion in our net new and our customer base. We're doing this faster than ever. As an example, I think Ashna mentioned it.
We'll have a data center up in the first half in India. We're doing the same in the Middle East. We added some significant talent. Jess, Sunil, Volker, Arvind, these are all leaders, proven skill sets, know how to accelerate businesses. We're super excited to attract this kind of talent to Workday. We will also announce a leader for the Middle East at the same time we announce that we're entering into the Middle East. Super excited about that. Our medium enterprise continues to be a core growth engine for us. Over 50% of our TAM is in the medium enterprise. As I said earlier on, the U.S. is leading the way. It fuels 40%. Full suite fuels 40% of the deals in the net new medium enterprise business. Financials is 50% of the deals. Financials is 50% of our deals in medium enterprise.
With the umbrella of Workday Go and bringing on a Max Vessel to be the Product Manager for medium enterprise, you're going to start to see speed and agility driving across the medium enterprise with solution sets that actually map to those services that map to what medium enterprise customers want and integrating them from a different way we do large enterprise. Today, we already have customers going live in 60 days with our partners under Workday Go, and that momentum, we believe, will continue to accelerate, specifically with net new. It's already showing that it was the right idea. It's been the right brand. We've got the whole company behind that. If we look at industries, I mean, this is something which is game changing and definitely differentiates us in a significant way. Today, we have over five industries with more than $1 billion in ARR.
Super, super durable go-to-market model in this. We think other industries will scale to that. We mentioned what we're going to do with frontline workers that attach us to many industries that will continue to drive over 70% of the workforce of the globe coming to play when we actually bring frontline workers into play. Our federal business, we launched Workday Government as a separate owned entity to really focus on U.S. federal. We spoke about the data center, the solution set that we have with employees working on mission-important stuff for U.S. federal. We believe that's a $2 billion opportunity just in HCM alone, and we have an opportunity in financials as well. We also think we'll be able to take, we know we'll be able to take our public sector, our business, state and local business, and student business to places like the UK.
We're already in Australia in certain cases. There is a unique opportunity with the government. In Singapore, we're already running a significant part of the government there already for both HCM and finance. If you look at Paradox, Paradox together with HireScore and our recruiting agent showcases that we are by far leading in the world of recruiting and all aspects of recruiting. It completes the whole recruiting cycle, even with contingent worker. A piece that I'm super pumped with and the work that we've done is all around the ecosystem and the partners. We've got 21,000 certified consultants around the world implementing Workday, driving the projects down. We actually launched the deployment assistant, guess what, to drive the cost of projects down. We're going to do more in that space.
If you look at on the sales side with partners, 20% ACV sourced through partners now, 10% of customer-based expansion is sourced through partners. We have over 100 apps on Workday Bold. Those apps customers are selling. Ashna mentioned EU pay transparency. We're actually reselling that. Kainos built it. Workday are going to sell it into market. Differentiated plays. Kainos has a significant business on Workday Bold. I actually believe that Workday Bold will absolutely expand this footprint in a significant way because you don't need to actually understand Workday. You're going to have all these open source tools available to you, these agent builders, which you can use FlowWise. Now, get on the website, build yourself an agent. You'll see how easy it is. This will open up new revenue streams, new opportunities for us in a significant way. We opened up a reseller for the first time.
We're allowing channel resellers to resell Workday. We've closed quite a few deals in Asia. That's a success model for us. We're launching it now in Europe. We'll win India. We launched it from day one. Channel reselling will become a motion in the marketplace, which specifically will be, in my opinion, super successful in the medium enterprise. Strategic partnerships, we've mentioned that a couple of times. Strategic partnerships around CHIME, daily pay, this earned wage access, right? This is the wellness solutions. This is actually an economy monetizing data that adds value to our customers, employees. It is an incredible opportunity in the market. Today, this business is already bigger than $100 million ARR. This business, we believe, will continue to expand because the information value that we're adding to our customers is incredible. I want to wrap by going back to where we started.
I want to basically say, I believe that coming out of rising, this is an amazing opportunity for our sales, go-to-market, customer-facing organizations to provide next-level changes in how we go to market and the value that they see. This is probably one of the most exciting times I've had working in this industry, taking solution sets and thinking about how to actually just reinvent them in the industry. You can just imagine a front end where you're actually going to Workday, which looks like a search tool or a natural language processing. Nobody else in the industry can do that. I think it's going to ignite our sales teams. It's going to ignite our customers, and it's going to be a massive differentiator for us. Thank you. Now I'm going to ask Carl, Zane, and Gerrit to join me. I could feel them waiting at the back here. 2:42.
Hey, hey, hey.
Yeah, I don't think we need this anymore.
I think we're done.
You're doing fine. You're good.
Set.
OK, great. We are going to, while they're getting ready, we're going to go around the room. We went a little long, but we'll try to get to as many.
I wasn't long.
As many as we can. I'm going to give them a second. I'm going to go with Kirk Matern first while they're getting set up. Kirk, I'll give you the mic.
We have never studied this, OK? That's the first time, choreography.
OK. Thanks very much, Kirk Matern with Evercore. I appreciate you all having us here. A lot to digest at this event and at the keynote earlier. Maybe I'll start, and maybe this might be for Gerrit. If I came to Workday five or six years ago, there would be that Frankensoft picture on the screen where it would say, hey, look, you can't acquire and you can't bolt on new technologies to an older core and really innovate. I'm sure if I went down to the valley today, people would say, Workday is buying Sana and they're just putting a new skin on an old core. Like that's not how you do it. Can you just talk architecturally why M&A makes sense in the age of AI for you all? Meaning, why is the combination of Sana and the core better than, say, a native AI solution?
I think the pushback is going to continue to be like these native guys are going to come out of nowhere. I'd love for you to answer that if you could. One clarification, Zane, I assume the revenue guidance includes M&A. Just an easy one for you. Thanks.
OK, let me start. Great question. First of all, how you integrate with AI is different from how you integrate classical business applications, if you will, right? For AI, the integration model really is contingent on having a unified data stream in which you can integrate both data assets to build AI models with. Secondly, to your question about the core, what is the surface that you're giving an AI system to interact with? If Workday would have just left the core as it is, right, what you said, just basically trying to bring AI over on top of it, that would be very ineffective. Quite frankly, I think, as I said, this is, I think, what you see from many vendors. What Workday has done basically is provide a system which allows two things. One, that we constantly accumulate and curate the right business context for AI models.
You can think of that like a Google search engine inside of Workday that AI models use to understand what's going on in the business context. That's something that Workday has built as a part of its core. The second thing that Workday has built is basically opened up the workflow model that Workday has, the business processes with APIs. It's not driven by a classical UI anymore, but through APIs like MCP, the Model Context Protocol, where now an AI agent can understand the context from that context service I was speaking about and then basically find the right business process API to take an action on. There is system engineering work in the core of Workday to interface with AI. What we have done, and what Peter is focusing on, what I'm focusing on actually is the art of designing an AI system. AI systems are complex, right?
You have to think about many, many components and how you build them in a way so you can leverage all of that rich investment in the 70,000 business tasks that Workday has. The challenge, just to tip that off, but you said, why not an AI-native startup? My question would be, where is it? The reality is, that white coding, code generation, they're really good for a specific set of tasks, if you will, right? They're very good for function augmentation. They're very good for small standalone apps. When you think about a very large network of 70,000 tasks that interface with each other, basically, you need to build a process model for that. You have a process model architecture for that. You need to have a state model for that.
You need to have a very scalable, very efficient way, a very resilient way of providing that in the cloud, right, with high margins and high reliability. All of this is the foundation that we are leveraging. You can think about AI, last comment, as an accelerant. AI is going to make everyone faster, no question about it. I'm a software engineer. I learned the trade early on, and I've worked as a developer for many, many years. AI is going to make every developer faster and every developer more productive. That means every developer. We at Workday, we have now thousands of engineers using Cursor, Bold, all of the latest and greatest AI engineering tools. All of our engineers, they're getting 10 times faster as well, right? We have 10,000 people in product and technology.
If they get 10 times faster, we're going to outrun any startup with 10 people going 10 times faster.
Kirk, just to be clear, our philosophy around AI and acquisitions hasn't changed. As you look at that framework, it includes M&A, as it always has, especially tuck-in M&A. We would call out anything larger than that were to apply. As I mentioned earlier today, none of our guidance includes Sana, obviously, at least for this year.
Right in the middle here, Mark Murphy with JPMorgan. Great show. Thanks for having us. To me, the rocket ship in the portfolio, based on everything you show on screen, is actually HireScore. The recruiting agent, you had this 250% growth in five quarters. I think it's underappreciated. It also feels like a vector where machine learning is ultra-leverageable. The metrics that you're showing make it look like there's a bigger efficiency gain adopting that than if a developer is adopting GitHub Copilot or Cursor based upon those metrics. Can you talk about what is happening there that is driving such a vector in the recruiting arena? Almost more importantly, is that a precursor to what's going to happen in other adjacencies when you say, OK, there's an agentic model that is starting to click and it's starting to fire?
Is that what it's going to look like elsewhere with that kind of hyper-growth rate?
Yeah, maybe I'll start. Thanks for the question, Mark. Yeah, so the recruiting agent, obviously, we acquired about 18 months ago through the acquisition of HireScore. It's been a rapid-growing part of our AI strategy. It's quite simple. You put in a recruiting agent, and you pretty quickly can see a 50% increase in productivity of your recruiters. It's as much of a cost avoidance as people are still growing their headcount. They're avoiding having to hire additional recruiters because of the power of the recruiting platform itself called HireScore. On top of that, there's additional value. Customers see an acceleration in time to hire of up to 40% when they put in a recruiter agent. It's driving productivity of people, and it's driving acceleration of people as you onboard them. I think what's really powerful is how we didn't stop there, because that's for back-office workers.
It's for white-collar workers. With our announcement last month that we announced at earnings a few weeks ago, and with the addition of Paradox, we've taken a conversational AI approach to the frontline worker, which means it's mobile-first. Now we have the best suite from an AI recruiting platform in the industry, from back-office workers to frontline workers across all types of workers and full-time employees, contingent, and gig workers. All of those are quantifiable. If you saw some of the demos, I don't know if, Mark, you were at the session today. We showed the demo. One of the customers of Paradox is Chipotle. They talked about the value that they get out of the platform today and how quickly they can continue to bring people up in a very rapid way. We took it a step further.
We showed an agent specific to the industry, how you can start to optimize your workforce when you need more people because people are calling in sick. It all starts to come together. It's very quantifiable. This is why I said in my talk earlier with Justin, it's not about the quantity of agents. It's the quality of agents. If you can drive true business outcomes, people lean in and buy into it.
Maybe, Carl, to add to that, to your question, we have multiple agents where we see that momentum. Contract intelligence agent, incredible momentum, taking down contracting times, efficiency gains, 65% and greater. I think AdventHealth, one of our customers, took their contracting cycle from one week down to one day. Per your question, the recipe always is, if you have high volumes of work where human labor usually is the major bottleneck, either in time or cost, right? AI can come in and basically take that inefficiency and turn it into a much lesser software spend compared to what the human spend would be. That is what we are seeing across the domain: recruiting, contracting, frontline work, all of our agents. Like Carl has said, we differentiate by basically our quality criteria for releasing AI is measured by ROI.
Basically, we set a business objective in saying, what does this agent need to return for it to be financially viable? Once it meets that metric, we release it. We have incredible momentum from the year to come.
Right. Now, Mark, I just want to make sure you understand. Yeah, recruiting agents growing. We announced last quarter Eversort growing 100% quarter over quarter, and it's not a million dollars. It's growing fast. Extend Pro is growing. It's doubling. The amount of people wanting to integrate, build agents, or bring in their own AI solutions into Workday is doubling year over year. It's not an agent. It's our entire suite that we brought to market over the last year. I think that's only going to accelerate with all the great announcements you heard today.
Customers have wanted the consolidation in these areas. They don't want pitch solutions all over the place because it's really hard to stitch them together. Even if you're in a financial institution, like one of the large banks, you need frontline workers. That's an important part of your hiring. It's not only that you need HireScore for the skilled workers. You need both. This is completing, I would say, what our customers have really been looking for.
Hi, it's Brent Thill with Jefferies. Zane, on the margin guide, good to see the commitment to mid-30%. Maybe you can help us walk through how you get to that level. One of the questions we've gotten is back when you announced the RIF, you mentioned you would hire all those people back. You've hired about 1,000 of the 1,750 back, I believe. Are you still committed to hiring back, or are you going to slow the headcount pace? Is that one element to helping on the margins? Thanks.
Yeah, Brent, I'd say first and foremost, growth helps all, right? As we grow, we get more efficient, and the whole platform becomes more efficient. We are hiring right now. How we hire and where we hire is what makes the difference as well. I mean, we're becoming more and more global. We're doing more hiring internationally as we follow the sun. As you see, whether it's go-to-market and a lot of even the AI and the acquisitions are international. You'll see us do a little bit more of that. Over the last number of years, we've shown progress across a number of areas. We're very thoughtful in where we grow, how we scale the business, how we look at each functional area with the people, the process, and the systems I talked about. Look, I mean, we are very thoughtful. We are hiring back.
I think we were more vague on the timing. I believe we'll continue to see that growth. All that being said, we're also being very thoughtful about those investments. Where we see more growth, we'll invest more. Where we see less, we'll pull back. That's what you've seen us do over the last period of time here. That's what you should see us continue to do for the next number of years. It's with that same diligence. We highlighted all the AI that we're building into our own products. We're using AI across this company. We're leaning in heavily. The teams are getting far more productive. It's not just being productive. It's actually then holding them to that and driving their productivity across the org. It's going to be a lot of work. Trust me, we don't put up these numbers and say that they're easy gets.
We'll continue to be diligent in how we grow the top line and at the same time grow the bottom line.
Go ahead. Sure, it's OK.
Hey, Rahman and Chirvanpakis, hey. Robyn, Carl, one for you. As you go out there and meet new clients, international, going down market, et cetera, it's not that these markets don't have solutions at the moment, or they have something. It's kind of a replacement market. What are you seeing in your customer conversations about what's driving the change there? Where are they with their old solutions, like first-generation solutions, et cetera, to kind of do the change and come over to you guys? Thank you.
Yeah, I mean, on the international markets, first of all, we are super successful in the UK, Australia, New Zealand, Canada, and the U.S., obviously, with a full suite. What I would say in a number of these markets, the differentiation and why some of the changes happen is because the industry solutions are unique to how we operate. They haven't seen it in areas like student and state and local and health care. Those create changes where customers will actually replace the solution. Customers are getting tired of some of the older solutions out in the market. They're looking for new opportunities with new companies, with new ideas that are future-proof the ERP system for the world of AI. We feel like it's now ready and ripe for us to go into those markets and look for those replacements. With HCM, we kind of lead the world.
With finance, it's clearly we have to differentiate with what we're doing in AI, and that's going to make a huge difference.
Yeah, I think Rob said it well. I'd add two things. Listen, as we've gone down market, a lot of these people are in, let's call it 1,000 to 3,500 number of employees. They have multiple point solutions. If they expect to continue to grow and scale over time, they're looking to consolidate all those point solutions, which is where we often talk about our full suite momentum in the medium enterprise. They can come to us. They can replace NetSuite and maybe another HCM provider into a full platform from Workday and give their users an incredible experience. The second thing I'd say is a lot of the people that we engage with and we inflect with at that stage are people that want to grow well into the future. They know they're not going to do it on their current model.
Some of them actually, or it's a business model decision. They're working with an EOR, an employer of record. They're saying, no, we're bringing that in-house because we're scaling. We want to go bigger, bolder, faster. We need a platform to do that. I think it's a business model. I think it's a consolidation play around one platform delivering all your services from HR to finance and planning. I think that's a different discussion than a lot of them are having today. The last thing is there's typically one buyer. In the enterprise up here, we all go and talk to HR. We go talk to finance. We talk to the IT organization. There you find someone who owns all operations and all systems. It's a faster, quicker sale.
Hey, guys. Brad Stills over here, Bank of America. Thanks so much for hosting a great event. A lot of great innovation on display here at the conference. I wanted to ask a question of you, Zane, on the margin framework here with the different levels of margin expansion at different levels of growth assumption. What are some of those discretionary investments that you could either pull back on in a lower growth environment or accelerate in a lower growth environment or pull back on in a lower growth environment? I guess it sounds like AI is not discretionary. That is something you'll continue to invest in any scenario. Just where are the discretionary areas of investment? Thanks.
Sure. Yeah, you know, if you recall, I shared on the first slide all the KPIs that we look at with a number of the growth vectors in the company. Much like all of you look at your portfolio, we have a portfolio of great opportunities and assets as well. Candidly, as we look at some of them that maybe aren't growing as much and then others that are, as we look across all of those KPIs and look across that portfolio, there are always opportunities, whether it's leaning more into those that are growing more, looking at more countries, thinking about that partner relationship a little bit differently. Otherwise, on the other side of it, if you're growing a little bit slower, we look at how many resources we're putting into that part of the product.
Gerrit and the team are doing a great job in P&T really assessing all of that, doing a zero-based budget on where are we putting our resources, where are they paying dividends, and how can we continue to gain efficiencies throughout the organization. What we've committed to is regardless of the growth, you're going to see improvement. In some cases where we're growing more, it may be through more tuck-in acquisitions, other elements that may have slight dilution if you think about margin, but then you're getting that higher growth rate. At the same time, if things cool off a little bit, we'll continue to find opportunities to pull back where we're not seeing the returns that we would otherwise expect. That's the dynamic. Candidly, that's the dynamic we've had all along. That's how we look at the next number of years.
We feel like we've got this broad portfolio and tremendous opportunities. What I really appreciate is this is the team. I mean, we're 20,000 strong that when you say, look, we really need to conserve here or lean in here, everyone gets on and does it. It's an impressive opportunity ahead and a great organization to continue to drive that performance.
Brad, I'll give you one more that we don't often talk about. It's happening real-time inside the business today. It's what I describe as organizational efficiencies and organizational design. What I mean by that, both Rob and Gerrit in the last couple of months have rolled out new organizational models. As we've done that, we've taken silos, if you will, of operating people in each of Rob's functions. Now there's one operating model for all the customer operations globally. Gerrit had a bunch of fragmentation around the platform, around the UI, around the UX, around security. We're consolidating and streamlining the organization model. With that comes efficiencies. We don't need more headcount to drive the business forward. We have enough headcount. We weren't aligned in the right way to really drive the business in the most efficient, effective way because as you grow, silos emerge.
To grow faster, the silos need to come down. I think we're doing that.
Hi, I got the mic. Alex, you'll be next. Cashrong and Goldman Sachs, a terrific financial framework. I really love the confidence you have in the business. You're buying back stock, margins up to the right. More of a technology question. You've seen that in prior tech cycles that there is a destructive architecture, a destructive business model. Workday itself grew on the heels of that disruption. As you look at this cycle ahead, there is a view, and I would love to get your retort to this view, that the SaaS to AI architectural transition is very disruptive. There is a new stack for AI. It's about the context compute and models. SaaS gets relegated to just basically a data context layer. You open up the APIs. There's going to be a new breed of agents. The value is not short of that agent technology.
The VCs are very excited about this new opening up. In fact, some of them have been posting on X saying that SaaS CEOs better watch out. You're going to be whatever, right? What is wrong with that argument?
You know, there's something right, and there is something wrong in that argument. I guess it makes for a good headline if you are one of these AI startups. What's right about this argument, Cash? Of course, you need to architect differently for AI, right? This is my big criticism with a lot of the other vendors who are not doing this. They basically have legacy and AI and hand it both over to the customer and saying, there you go. This is, I think, where there's such a big disconnect between the excitement and the promise of AI in the enterprise space and the real value delivery.
That's the truth, right? AI requires dedicated engineering. That's why at Workday, we have dedicated AI engineering building an AI-ready core. That's a part of it, right? You need to do the heavy work. It's genuinely changing major parts of the stack. That comes to public. This argument is just completely wrong. That is that just because how you engineer an AI system changes also means that suddenly everything that you have described on a semantic level, right? How a business process operates, what that business process is. We just talked about recruiting and contracting, right? How these functions operate, what the business context is, what follows after what, right? What are the steps? That conceptual model, right? That still needs to exist somewhere. Now, you could be a radicalist and saying, I'm just going to assume.
I'm just going to assume everything is going to just sit right into the model, right? Theoretically, in 1,000 years, I don't know, right? You don't know what happens in 1,000 years. Maybe, right? That's possible. Today, there is not a single piece of research, frontier AI, that indicates that we are anywhere close to being there. What every vendor is doing basically is building a system that runs a workflow with AI on the side and constantly basically making sure the AI stays connected to the process. It's the other way around, right? It's not like the AI is driving the process and using the APIs. The process is running and driving an AI thing now to replace points where human judgment came in, right? That's the breakthrough of AI. It's computational judgment in a way, right? It takes what we humans do and gives it a computational form.
We had processes like in recruiting where you got a resume. Is it a good hire or a bad hire? I don't know. On contracting, right? What are good terms? What are bad terms? In shift management, someone calls in sick. What do I need to do, right? These processes are run instead of stopping and saying, I'm now going to ask a human. It's basically having an AI operator taking that part over and making it automatic. That's the current state of AI as it exists. It replaces that piece. Per your very good question, right? What it requires now for the vendors of the future is saying, we design a business process system that works with AI co-intelligence on its side, but which is designing a workflow model which basically constantly drives the AI and not the other way around.
Yeah, Cash, let me. I am not entirely as smart or technical as that young man over here to my left. That's why I hired him. Let me just simplify it for how I think about it. Most AI solutions in the enterprise are very task-oriented. They're accelerating tasks that we do as humans. That's the tip of the iceberg. There is going to be a whole bunch of that. The real power is when we transform the business process and the workflows of the business. That's where you start to get subfunction change and efficiencies. That's the power of AI. To do that, you have to have the workflow, the data, and the context. We have all. Everything else is task-oriented. You play with ChatGPT. You play with Gemini. It's all tasks. The real business value is when you transform business through the use of AI.
Quite frankly, we're not even engaging with it. It's happening on our behalf, and we don't even know it. That's real AI in the enterprise. That's what we're doing.
Hey, guys. I don't know how to follow Cash's question. If I think about the kind of two things that really stood out to me today, it was the Sana acquisition and the way that you described it, both as a UI for the new Workday, as almost like an enterprise search capability, as well as an agentic system. First, I just want to understand how we think about the monetization of Sana, whether that's something that's just AI diffusion to everyone. This is the way we're all going to interface and interact with Workday in the future. Secondly, both the $450 million ARR and the, I think, the $150 million or $100 million agentic.
As we think about the transition to a platform, the monetization model going towards more consumption, transactional, how much of the growth kind of prism that you've laid out, when do we see that consumption element start to actually kind of layer in and factor into the model as a percentage of the growth rate?
Yeah, so a couple of things. I think Sana monetization.
Yeah, please.
The revenue. Yeah, we are incredibly excited about Sana. In most technology innovation cycles, there is also a profound change in basically how people are consuming information. Think about mobile, for instance, and iOS. We think about Sana like the iOS for enterprise in the future. We see it being like a power combination with Workday because we have incredible distribution. We have 75 million users already. You can 100% expect us to leverage that to bring Sana as an experience to every one of them. The beautiful thing about Sana is that it's not just an incredible enterprise search and enterprise action experience. It also gives us the opportunity to encompass many, many more workflows that people are not doing in Workday today. People engage with Sana today on average seven times a day in the current form.
We truly believe if we bring this to all of our customers and we open up that AI extensibility for them, many, many, many things that they are doing today with legacy ticket-based automation, programmed exits, DIY AI systems, they will just naturally fall into this because it's so easy. The art of good engineering is making it so easy that people almost fall into success with it. They cannot even imagine another way of doing this anymore. That's what we are creating with the Sana experience. For the commercial monetization option, before I hand it over to Rob, flex credits, every customer gets a part of that in their base subscription, which means that it's always on. You don't need to do anything. It's just there. It's working for you. It's a base entitlement. As you go beyond that, customers can subscribe to more as their usage expands. Maybe, Rob, if you want to add to that.
Yeah. When you think about flex credits, the growth comes almost immediately because customers have all the agents, APIs, and they have available allotment with their base installation. They switch it on, and then they start consumption usage. When you look at it, we released, say we had four agents. We go out, got 12. When we hit February, we hit another 14. You've got 36 agents, and Workday builds producing APIs, right? When you talk about Sana, it is going to be running a flex credit model against that. The more they use that, the more we're going to get usage on the model, the more it's going to drive revenue growth into the future. The model is going to be massively dependent on the quality of the applications and the usage that companies drive. The go-to-market model will change because customers will have access to it.
The beauty is now we have to activate the customer, let them know what's coming, the value that they're going to get. Our teams are going to work with them on value equations. This is what the value is. This is our producers. We have calculators for customers. Customers will have access to the calculators themselves. We believe that there'll be a flywheel, not only with agents, but with creating agents, building agents with FlowWise, and then driving the whole Workday build economy. As more and more marketplace opportunities come, maybe it's driving more APIs and more usage. That's how we think we're going to drive it. It's a unique opportunity to drive immediacy because it's built on top of existing solutions that customers have, and the value is very, very clear. I just want to add on learning. Sana is a significant part to our learning application.
One of the things that new learning needs is experience. People don't want to work with content stuck in filing cabinets anymore. They don't think it's that high quality. Sana allows individuals to create learning journeys for themselves on the fly. If you want to learn, well, I don't really understand what prompting is, and I want to understand prompting with Workday, it'll create a learning experience for you immediately. When you think about us going into the medium enterprise, the medium enterprise don't need the filing cabinets. I can tell you that now. What they need is an experience. When we spoke about getting really focused around the medium enterprise as well, it's bringing those solutions down and really in consumption pieces that will drive when the CEO looks at it and says, oh, I can use Workday now. Oh, I can create a learning journey.
Anybody can do that. Oh, my business analyst can create an agent. You serious? Show me. Sana has basically a no-code agent builder. FlowWise is a low-code agent builder. That's going to be game-changing in many, many markets that we go after.
Yeah, and on the business model, Zane and I laid out a framework. Thanks to the work of Julie and her FP&A team, along with Ali, a combination of Ali. I'm getting there. A combination of Ali, who runs strategy, and then Rob, as well as Gerrit. We have these interlocks where we think about, hey, what have we seen in the early traction of our AI adoption? You saw it, $450 million in aggregate now, $150 million here. We look at what we have coming in the roadmap. We have factored that into the growth plans we articulated. It's still early. Who knows? Some of these like HireScore took off way faster than we anticipated. Eversort is doing that.
We are going to keep updating and iterating on our model between that interlock that takes place between our strategy team, our FP&A team, our go-to-market team, and our product team. Zane and I look at that. That's what gives us the framework and the rubric to think about how we're guiding in the future.
Obviously, we'll continue to be transparent with that as we build momentum, especially with the flex credits.
You got the full set. It was a good question.
Yeah, hi, Stefan Slawinski from BNP Paribas. Thanks for all the presentations today and for taking our questions. Zane, just wanted to follow up on that financial model, the 20% earnings growth and free cash flow per share growth out to 2028. That's certainly impressive. Just wanted to maybe double-click on the top line outlook and how you see that growth CAGR and growth path through to 2028. Do you see a potential, I guess, slowdown into next year from the implied growth at the end of this year? Is there anything that you're seeing there in particular? Is that just kind of caution at this point? Any potential re-acceleration in 2028? Is that when we could see flex credits come through or more of the AI contributions driving higher growth? Anything on the kind of trajectory there would be appreciated. Thank you.
Yeah, I'd say, look, I mean, we'll give you a lot more insight towards the end of this year in how to think about FY27. We're very excited about the longer-term growth, both the organic growth that you've seen, the go-to-market opportunities, and then the inorganic growth that we've highlighted just more recently. Obviously, we've got some great opportunities to continue to grow this business. We don't want to get ahead of ourselves, which is why we laid out the framework the way we did. As you can tell, and Carl mentioned earlier, we've got a heavy growth bias. With that free cash flow, the reason we laid it out the way we did is because of the rule of you can actually drive free cash flow under a wide variety of growth rate scenarios. That's what we're here to execute against. Our natural bias is to grow more.
Obviously, we talk about growth a lot. We talk about all of these tremendous opportunities. That's what translates into the strength of the business and the strength of the free cash flow in the business. Of course, with the, you know, including that buyback, we see tremendous opportunity on free cash flow growth per share. We continue to be diligent on that front too. More to come later on this year as we look into next year. As you can tell here, we're very excited about the growth beyond.
OK. At the risk of some groans in the room, we're going to have time for two more questions, and then we do have time on the other side of this. I'm going to go right here.
Justin's literally on his knees here, just trying to hide from us, I'm convinced.
Oh, hey, yeah, thanks, Justin. Karl Kirsten at UBS. Maybe a two-parter. The decision to trim your fiscal 2027 from $15 billion to $13 billion, is that just good advice from folks in this room to have more conservative guidance, or Zane, did something, you know, perhaps change in the last year? I know it's not a super robust environment, so maybe it's that it proved to be a little bit tougher than you thought. The second part is, to be clear, in that revenue guidance, how much AI uptake are you assuming in there? When are these flex credits really going to kick in? Is that a, would you deem that to be a big contributor to your fiscal 2028 outlook?
Yeah, I'll start. I know Carl's going to be anxious to jump in on this one too.
I like responding to Carl.
No, I mean, you know, obviously, I wouldn't say there's been a shift in guidance. I think over the last year or so, I'll point out that we have held to a number that we put out here a year ago. All that being said, we always take criticism, thoughts, and advice from anyone in this room. We're always good listeners. Look, as Carl mentioned, we want to put out a number that we feel good about, both with the things that we can and the things we can't control. There's a lot out there, and we've experienced it this year with certain elements where you can control, and we can lean in more, and other elements that you just can't. We believe we've got a good guide. We believe we've got a very strong, diverse business, and that's what we've articulated.
There are a range of outcomes, and those of you who we spend a lot of time with always tell us, look, what we care about is where you are three years from now and the investments you're making to deliver three, four, five, six years from now. That's what we're focused on. In a few instances, there are areas where otherwise, if you wanted to dial up growth more one year versus another, you may change your view on that. You may not do some of the go-to-market actions and some of the geographical growth that we're doing today because we know those are only going to pay off two or three years down the line. Those are the types of things where we're optimizing for the midterm. We want to be thoughtful around what next year looks like.
We love to always beat, raise, and continue to drive growth in the business, and that's what we'll execute against. The dialogue that we had with Carl was that was a good number to put out there. It's within the framework that we feel very good about. I know you'll.
Yeah, Karl, this is not about FY2027. We tried to lay out a framework for the next three years. We tried to give you a number that we feel good about and we think we're going to be able to hit. I anchored you to 13 because I feel really good about 13 next year. If things go our way, we hope to, you know, drive that north of there. I don't want to keep putting a number out there like I do every quarter with all of you. Your question is, are you going to get there? You're going to get there. We get there. We get there. We get there. We're putting a number out there. I feel really good about it. It's durable growth at scale for the next few years. I think we're going to drive really strong results against that.
As far as the flex credits, as you know, listen, it's early. We just launched it today. It actually goes into production in the new year, really, in February. We don't know the impact it's going to have. As I said, we're planning for it to have impact on the business. If it accelerates faster, that'll take us north of the 13 that we're guiding for right now, at least for the next few years, and take us towards the high end of the range. I don't want to put a number out there, Karl, that you don't believe or we don't have confidence in conviction that we can hit. We can hit these numbers over the next few years.
Thank you.
Thank you, guys. This is Keith Weiss from Morgan Stanley, right in the middle here.
Hey, Keith.
How's it going? Good to see you guys.
Right in the middle.
Exactly. Tried to hide, but I couldn't. Thank you for an excellent presentation. One of the things that struck me was the scope of what you guys are trying to do now. It's not just the TAM number. You gave us a huge TAM number of $188 billion, but it's the types of things that you're looking to do going forward. It's not just about managing people and managing the finances, which was the core of Workday, but you're also now going to manage the agents. A lot of us think of agent management as something that's more technical. Maybe like ServiceNow does that. You're also looking to automate workflows across the organization. We used to think of that as like a workflow automation platform. Maybe a UiPath does that.
Now Asana, it makes it seem like you guys want to be the user interface into what information workers do all day long. We thought of that as something that Microsoft does, or maybe Slack does within Salesforce. It seems like the extent of what you guys are trying to do is much broader. How do you think about your right to win? When you talk to customers, what makes you guys feel comfortable that Workday is the right platform for doing these parts of the equation that a lot of us thought would go elsewhere? A lot of us thought would go to other types of vendors.
Yeah, I'll let Gerrit start and then.
Yeah.
I'll follow up.
Definitely. Thank you, Carl.
You know, because we wouldn't go into these markets if we didn't think we had a right to win, and if our customers weren't asking us to enter these markets. Really important, Keith.
Yeah, so first of all, right to win, definitely, Keith, look, we are playing to win. We are at the table because we want to run it. Specifically to your question, the place that we are, the place that we are calling, if you so will. First of all, with Sana, let's just work back from the experience. There is not a single solution today in the market which does what we can do together with Sana. Sana basically is going to revolutionize the entire UI experience for Workday in the ERP space overall. Yes, that will allow us to accomplish tasks that we couldn't before. We just talked about this, right? AI gives everyone incredible latitude, including us.
Of course, when we have the best user experience for the AI age as an enterprise solution, we're going to leverage that to go into areas where we are not as today. Our customers will build the agents, like Rob has said, with Sana's no-code agent creator. Our partners will build them, right? We're seeing this today with the Workday Marketplace. It is natural for us. Workday has been doing this. Workday expanded from white-collar to contingent to gig work and on to frontline. Those are all extensions to our platform. Sana is basically driving this from the user experience first by creating this knowledge and AI experience that, frankly, no one has today. This does not mean that we are going into office productivity at all. You can give Sana a document in Word. You can link a Google Doc into it. That's all part of the ecosystem.
We're not trying to be a productivity suite at all. Secondly, when you spoke about what we think about our platform strategy and workflow automation, and if this model looks like a UiPath or a ticket automation system, people are doing this with Workday today. It's what Carl has said. Enterprises are complex. Every enterprise platform is an integration platform. I've worked at SAP. I've seen and done it firsthand. I've worked at Google. I've seen it from the other side firsthand. Regardless of who you are in that space, customers are building, extending, and working with your platform in various ways and build own workflows with it. We have customers coming to us and telling us, we want to do more with the assets that we have in Workday because two of our key assets, workforce and financials, live inside you.
You're running major processes for us, from writing the invoice to closing the books, from recruiting to someone going to retirement. These are large process chains. Us offering this kind of extensibility, that is the definition of right to win. I think it's comical that some vendors say we have an IT-based solution and we're going to offer an automation suite around you, right? It makes zero sense. It's the wrong people. It's other ones building it. The context model is different. It's truly us fulfilling what I think is an unmet need. I believe because we are doing this in a much more modern way than everyone else is doing it, it will naturally expand. Our core focus is going to be around people and money. To your last point, agents. Maybe a misconception here, right? We are not trying to be a technical infrastructure control plane for AI.
You said it, right? There are companies doing their hyperscalers are doing it. Quite frankly, everyone has them, right? Everyone has one version of an agent control tower. That is not our strategy at all with the agent system of record. Agent system of record is fulfilling two very important needs. One is enterprise AI security. When you log in, if your company is using Workday through Okta, do you know what Okta does? It checks in Workday if you're currently employed at your company, right? If your user principal is still valid and still exists. There is an interconnection between the security model and your workforce model. With AI, it's going to be the same. You heard this today with Microsoft Entra ID integrating in Workday. We have the same integration on the security plane between your digital workforce and Workday as you have it with your human workforce.
Secondly, we talked about AI accuracy. Giving AI organizational context matters a great deal because an AI agent behaves differently if it's supporting a sales team in North America than when it's supporting a services team in Germany. That context, where does it exist, right? All of that information about all of this process model, it exists in Workday. We are not a technical infrastructure player. We are a business application platform. In ASR, we are giving AI agents, our own and third-party agents, the business context. We are a business control plane, if you will, for AI. That is uniquely valuable. It does not exist in the industry. That is why you see Microsoft, Snowflake, and all of these other vendors partnering with us because they understand this allows them to take AI from a tech play to an enterprise play.
Yeah, and Keith, the only thing I'd add, Gerrit said it so well. He mentioned we're doing a lot. We are, but there's nothing that we're doing that is not tightly aligned or coupled to the core platform of Workday.
Exactly.
We're bringing a new front door to Workday. We're optimizing workflows in Workday. We're bringing agents to market for planning, for finance, for HR, for industries around Workday. We're not going into an analytics market. We're not going into some new ITSM market. We are focused on driving value that our customers are asking us to deliver in their existing platform. It sounds like a lot, but it's all in the desire and hope of driving deep value to our customers in the adjacent markets that they're asking us for.
Okay, we are going to close. I'm going to turn it back to Carl just for a few closing remarks, and then we'll.
First, I'd like to thank, where's Justin and Annie, the two people, give them a round of applause for putting this on. They do an amazing job, and as you could imagine, there's a tremendous amount of work and effort that leads up to a financial analyst day. I sit up here with, I think, three of the strongest leaders in our industry, them along with the other 20,000 workmates that I get to serve alongside of. They're working hard. I'll say it again. We're underappreciated and we're undervalued. We're going to innovate like we've never done before, and we're going to drive our customers and our industry well into the future. Thanks for joining us at our FAD. Thanks.