Goldman Sachs Communacopia + Tech Conf 2025: WDAY CEO Carl Eschenbach on AI Strat, Platform Innovation, & Growth Outlook

Key Takeaways

TL;DR: WDAY CEO Eschenbach refutes SaaS/seat-based model risk from GenAI, citing ongoing seat growth, expanding AI monetization, and a unique data moat driving agent innovation. Core biz remains stable w/ high GP retention, strong int’l/federal expansion, and disciplined AI M&A/integration. Expect more explicit AI-related disclosure at upcoming FAD.

1. Core Biz Health & Growth Drivers

• Install base robust: >11K customers, 97–98% GP retention. CEO: “They're not going away.”
• Seat-based rev. not structurally at risk:
  • Eschenbach: “I fundamentally disagree... SaaS/seat-based cos are in trouble. I just fundamentally don't believe it.”
  • Client headcount still growing (post-pandemic moderation). “Head count growth in our customer base actually accelerated again [last Q].”
  • Right-sizing mainly due to post-pandemic overhiring, not AI-driven.
• Int’l expansion a key lever: Only 25% of biz (~$10B rev.) ex-US. Recent India entry, broader localization.
• US Fed. market push: Dedicated sub, strong leadership, cloud enablement for legacy infra.
• Full suite sales up: More customers buying HCM + Financials, driving higher ARPU.

2. AI Strat, Differentiation, & Monetization

• Unique AI advantage:
  • “Cleanest/largest HR & finance data set in the industry.”
  • Deep system of record/engagement: “Privileged position... trusted w/ mission-critical data.”
  • Contextual workflow data—not just LLMs, but domain-specific, contextualized data.
• AI agent innovation:
  • Multiple high-value, domain-specific agents live/rolling out: (e.g., recruiting, contract negotiation, payroll, financial audit, biz process agents)
  • Some AI solutions/agents doubling Q/Q. E.g., Evisort: +100% Q/Q.
  • Quality > quantity: Focus on enterprise-grade, impactful agent functionality.
  • AI monetization: Some AI bundled (“table stakes”) for free, but discrete agents as add-ons (fee-, consumption-, or volume-based).
    • “75% of customers using AI in platform today.”
• Upcoming catalyst: “Further disclosures on AI growth coming.” (FAD next week; new AI biz disclosure/quant expected.)

3. Platform Evolution & Ecosystem

• Shift to platform co: “From apps co to apps + platform co.” Fuels 3rd-party/partner dev, innovation (“Workday economy” w/ partner count doubling every 6mo), deeper customer lock-in.
• Open Source & Agent Builder Acq. (Flowise): “First open-source co acquired... agent builder platform. Integrate atop WDAY... keep open-source community alive.”
• Customer/partner engagement: Accenture, Deloitte, etc. building on WDAY platform.

4. AI Partnerships, Cloud Infra, & Model Selection