Workday Inc at Goldman Sachs Communacopia & Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : Congratulations. So give us a bit of assessment since you took over as CEO. What are the milestones the company has been able to accomplish, and then we can talk about that go forward. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2025 / 3:10PM, WDAY.OQ - Workday Inc at Goldman Sachs Communacopia & Technology Conference

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : Yeah. I want you to talk a little bit more about that five-year out 2030, your best prognostication. I know you had a high-level assessment of the money people, et cetera. Talk a little bit more about how you see that playing out.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : Oh that's my next question.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : Every CEO has gotten that question.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : That's a neat position. And this kind of line of reasoning as to why a SaaS company is relevant in the AI world is just starting to form this context data, the workflow, et cetera. What are the things that the company is doing under your leadership to take these advantages and mold them in a very tight cast to make it like solidly bulletproof for that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2025 / 3:10PM, WDAY.OQ - Workday Inc at Goldman Sachs Communacopia & Technology Conference

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : So let's talk about seats. It's the easiest conclusion to make. Perhaps it's prematurely wrong, but the conclusion is seats are under pressure because of AI. And every SaaS company that has been through the post-pandemic correction has seen seat-based growth come under a lot of pressure. Mark talked about it yesterday, and I'm sure we're going to hear about it from other SaaS companies as well. What is your thought? Is the seat compression just a function of overbuying during the bubble and we're just kind of working through that? Or is there something structural by way of employment? And the employment numbers don't seem to make it very easy. Jobs added was the slowest space that we've seen in quite some time. What is going on in your customer base from a seats perspective? What is your outlook for seat-based growth? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2025 / 3:10PM, WDAY.OQ - Workday Inc at Goldman Sachs Communacopia & Technology Conference

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : The 74 million, that's great to know.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : It's more about it. You sound fired up.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : By the way, this is high energy, right? I mean, this is --

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : So Carl, let's talk about the AI agents that are doing so well, the doubling sequentially, doubling year over year. What are these agents exactly and how are customers getting value from these agents?

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : That's great. I can see that there's a lot of innovation. It's a very different discussion than a year back, just in the space of one year. And I recall that there are points in time when there is maximum skepticism, and we've been through -- you and I have been through these cycles many times before. And I fondly recollect, maybe not so fondly, but February 7, 2016, Tableau and LinkedIn, these are public companies at one point, they had missed their quarters. The stocks were down 50% that day, and it led to de-rating of the sector. And then we had the birth of AWS, or at least the scaling of AWS, and people said, AWS is going to get into the application space and they're going to commoditize. You were at VMware at the time. Remember the fighting -- the fight, you let the deal with AWS.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : Yeah. And you'll be happy to know that all the good work here at the VMware is showing up in Broadcom, we had Hock Tan yesterday. I mean, that business is thriving. It's doing really well.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : So the point is when there's maximum skepticism, those are times that create fertile ground for a debate, and I think AWS is going to commoditize software debate was one that we lived through. Not only that, but AWS is going to commoditize Microsoft and Azure and the whole stock. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2025 / 3:10PM, WDAY.OQ - Workday Inc at Goldman Sachs Communacopia & Technology Conference And actually what ended up happening was AWS created a platform for Workday to scale its business, Salesforce. And the SaaS universe found a way to scale to an orders of magnitude that was just not possible given their infrastructure. So how do you see this AI thing? So how is Workday working with the cloud ecosystem to help scale your AI footprint?

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : Thomas Kurian was here yesterday, talked about how they're scaling their AI footprint and the tremendous work they're doing with TPUs, and the models have come a long way, certainly.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : Do you have a view, since you mentioned it, there are so many models, right? It was a one horse race many years ago. It became a two-horse race, and then there were three, there were five, there were six, there are seven.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : They're all probably worked at customers. So many of them worked at --

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : And it's too early to have a view on these things, right? It's just extremely nascent. I wanted to ask you about your AI monetization strategy. How does your pricing strategy evolve? You could argue that the SaaS industry has gone through a fairly simple pricing, added value, ARPU goes higher, sell more seeds, but then all of a sudden, there's this AI thing. How do you value an AI agent? How do you price an AI agent versus a seat? How are you thinking about the pricing model for AI and how that kind of factors into the growth algorithm?

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : That's great. I'm looking forward to it so much. I wonder if you'll go a few steps forward to actually quantify the AI book of business, which is like the next disclosure that companies like -- other companies in SaaS space have put a disclosure and a target, not that it's helped tremendously because --

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : Okay, all right. So we'll stay tuned for that. I think the key aspect of the confidence building process, at least from the investor community, is understanding that your base business has stabilized first of all. The good news is that Workday is a system of record. The perception is that the space you play in is the least susceptible to AI disruption that may be different in other application spaces. So you've got a solid base of defense. You need to establish that your core business is steady. And then when the AI modernization kicks in, you've got a massive install base. And I don't know if you know Byron Deeter.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : You know him really well. I figured he's the guy that came up with the rule of 40, 50, 60, whatever it is. He's such an amazing partner to Goldman Sachs and someone that I've worked with for 10, 12 weeks. We had him on stage a couple of days back with Ashim and a couple of other VCs, all of -- that you know from -- in fact, Brady is going to be here by the way, today. So he said it best. He said, people are so nervous about SaaS trading at 5 times revenue. Some of them are going to go to 3 and some of them are going to go to 10. I thought that was the single most interesting simple takeaway that companies are going through this transition. I remember Adobe in November 2011 was written off, they're not going to make it. Autodesk was written off. Intuit was written off. And the incumbency is such a powerful thing that we look through the lens of an old man like neither that has lived through these cycles. I would not write these --

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : I expect you to be here in 2030, and I'll be sitting in the audience as a client and watching this unfold. The other thing I want to point out is that I think most people don't -- maybe they do, but you were a venture capitalist. You understand a thing or two about disruption and hard startups and how to vet ideas. You looked at probably thousands of business plans. You have an eye for catching the right talent. So if anybody could pick the right tuck-in acquisition that's promising. I would bet that you know how to do that.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : And you got such great goodwill with your customers. I mean, when we go to Rising, it's like -- it's a cultish thing in a good way, which is --

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : How many people do you have signed up for it?

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : On that note, we have -- this has gone so quickly, and I've enjoyed it that I forgot to check in with our clients to see if you have any questions in the minute and twenty-six seconds that we have. Yes, go ahead. Unidentified Participant (inaudible - microphone inaccessible) start with the open-source model because they may be our research labs. Integrating them, part of Workday, how do you expect to deal with that governance conflict or is there a conflict?

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : All right, Carl. On that note, it's been a couple of decades since we got to know each other. I wish you well in the next decade and beyond. Thank you so much for your support of Goldman Sachs. We really appreciate it. Let's give a round of applause for Carl Eschenbach.