In its most recent shareholder meeting, Workday showcased significant advancements in sales, customer acquisition, and product innovation, reflecting its commitment to delivering enhanced value to its clients.
In the third quarter of fiscal year 2025, Workday reported a subscription revenue of $1.959 billion, marking a 16% increase from the previous year. This growth is attributed to strong customer relationships and the integration of artificial intelligence (AI) innovations. The company projects its fiscal 2025 subscription revenue to reach $7.703 billion, representing a 17% growth, with a non-GAAP operating margin of 25.5%.
Workday continues to enhance its platform with AI-driven solutions. The introduction of AI agents, such as the “Recruiter Agent,” automates tasks including job description creation, candidate sourcing, and interview scheduling, streamlining recruitment processes. Additionally, the acquisition of Evisort, an AI-native document intelligence platform, aims to bolster Workday’s capabilities in managing unstructured data, providing customers with more efficient tools for financial and human resources operations.
Workday’s financial growth and product innovations signify a robust platform that continually evolves to meet customer needs. The integration of AI-driven tools enhances operational efficiency, allowing customers to automate routine tasks and focus on strategic initiatives. By employing strategic negotiation tactics, customers can optimize their investments, ensuring access to advanced solutions while maintaining cost-effectiveness.
To maximize value and achieve cost savings when negotiating Enterprise Agreements (EAs) with Workday, customers should consider the following strategies:
Understand Full-Service Equivalent (FSE) Calculations: Workday’s pricing is based on FSE counts, which categorize workers into different types, each contributing a specific percentage to the total FSE count. By negotiating the inclusion of various worker categories—such as part-time or seasonal employees—with lower applicable percentages, organizations can reduce their overall FSE count and associated costs.
Negotiate Renewal Terms and Fee Increases: Workday agreements often include annual fee increases based on an Innovation Index combined with the Consumer Price Index (CPI). These increases can compound over time, leading to substantial cost escalations. By negotiating caps on these annual increases—such as limiting them to a maximum percentage—customers can control long-term expenses.
Plan for Growth with Discount Provisions: If your organization anticipates growth, negotiate Growth Event Discounts into your agreement. These provisions offer discounts when there’s a significant increase in FSE counts, helping manage costs associated with organizational expansion.
To fully capitalize on Workday’s offerings and secure favorable terms, it’s imperative to approach contract negotiations with a well-informed strategy. Engage with experts who can provide insights into Workday’s pricing models and negotiation levers. By doing so, your organization can achieve significant cost savings and enhance the value derived from Workday’s innovative solutions.