Workday, Inc. (NASDAQ:WDAY) Q3 2023 Earnings Call Transcript

Raimo Lenschow: Yes. And then one follow-up is if you think about selling in this kind of slightly more tougher environment, can you talk a little bit maybe about the steps you’re taking in terms of sales execution to kind of make sure you continue to deliver in this market. I’m thinking about higher pipeline coverage kind of making sure you kind of — you time the deals better, et cetera. Like where are we on that journey of implementing these kind of recession handbook kind of selling kind of policies that we used to take out in the older days?

Chano Fernandez: Yeah. Doug, do you want to add some color there on the sales strategy in the market?

Doug Robinson: Yeah, sure. I think Aneel or you, Chano, might have mentioned it after Q1, but we pivoted to our ROI-based and TCO-based way to engage with customers right at Q1. Of course, we’ve always done business cases with our customers. But entering a tougher environments, it comes down to TCO, hard dollars that you can take out, system rationalization productivity. So I think it’s showing up really focusing with our customers on the HR side. So there’s no doubt, tight labor markets. And so that’s driving, I think, the TCO on that side of it. And it was touched on earlier by Aneel. We had a really good Q3 as it relates to financials. So FINS plus performed well. And those are ROI-driven as well. And those are companies looking for sure, it might start with an aging — retiring older systems, but it pivots pretty quickly when they engage with us to that plan, execute, analyze and offering up more business agility in an uncertain environment.

So those are the things from a go-to-market, from a field deployed resources standpoint that we’re spending a lot of time with customers on the business case.

Raimo Lenschow: Perfect. Thank you. Well done.

Operator: Thank you. Our next question is from Brad Sills with Bank of America Securities. Please proceed with your question.

Brad Sills: Great. Thank you so much. I wanted to ask a question around backlog for next year. I think, Chano, you made some comments that you feel good about Q4 pipelines heading into Q4. And the question on everyone’s mind is really what about next year. There’s a lot of moving parts. In your conversations with office of CFO, office of HR, what are they saying with regard to budgets for next year? Do you feel pretty confident that you can sustain this kind of growth into next year as well?

Chano Fernandez: Well, Brad, thank you for your question. Right now, we’re exactly on those discussions, right, where companies are going through their planning and budgeting cycles, and it is a question of prioritization of projects. And we’re having those discussions that, that was commenting on that are really TCO and ROI-based, right? So clearly, here where you see some different scenarios on our guidance, particularly depending on what happens on some of the new local sales cycles that might put some lengthening. And clearly, even though they might be building right now, maybe fall outside of next year or some of them that just may be pushing forward. But right now, we’re having most of those discussions. Overall, we feel good given the momentum we have and given the momentum on the new pipeline build and the conversations we’re engaging with the strength of our customer base, our medium enterprise and the diversity of our business, as Doug has commented.

But clearly, we are cautiously monitoring what’s going on in the environment.