Workday, Inc. (NASDAQ:WDAY) Q4 2023 Earnings Call Transcript

Mark Murphy: Excellent. And just a quick follow-up for Barbara. Is the trend of seeing some of these very sizable planning deals in the pipeline, which I think you might have mentioned a quarter or two ago, seeming to continue here as you look forward into FY 2024.

Barbara Larson: Do you want to take that one? It’s about the plans in the pipeline.

Aneel Bhusri: Yes, I’ll take it. Yes. Planning was — we had a really strong planning performance in Q4, and we do see more of it coming. In fact, there’s — two of the areas and changes we’re making for this fiscal year is increasing sales capacity in two ways: one, with dedicated sellers to help convert the planning customers or those planning first customers into core financials, Accounting Center, Prism Analytics, some of the other solutions that are a nice follow-on to the office of the CFO. And then the second is dedicated land sellers for the planning business for Adaptive. We’re increasing sales capacity there. And that’s not just a US phenomenon that we actually see that opportunity internationally as well, as Carl highlighted earlier.

Mark Murphy: Thank you, very much.

Operator: Our next question comes from DJ Hynes with Canaccord. Please proceed with your question.

DJ Hynes: Hey, thanks very much for taking the question. Curious if you’re seeing any additional signs of large projects being put on hold. I think last quarter, we talked about some services revenue disruption, understand kind of the ecosystem handoff is influencing the numbers a bit in the guide. But curious if that was kind of a one-off event or something that’s starting to show up a little bit more broadly with implementation cycles?

Aneel Bhusri: Doug, why don’t you take that one?

Doug Robinson: Yes. They’re not seeing — if I understood your question correctly, wholesale stoppages of projects. It’s more about round trips of approvals. And I do think companies are looking for — CEOs are looking for productivity gains and operating margin leverage. And so, every investment is getting extra scrutiny. And I think one of the things I’m really, frankly, quite proud of in this quarter and in this year is that, I think our sales team did a great job of anticipating that and really building solid business cases in conjunction with our customers to get those projects over the line. But no question, these cycles happen, take a longer bit of time to close on the pure net new large transformational projects.

Aneel Bhusri: Yes. The only thing I’d like to add is just, thank Doug and Patrick and our teams around the world, we knew these deals would get extra scrutiny, and we were prepared for it. The level of deal inspection we had throughout Q4 was taken up a couple of notches — and we saw the outcome of that in, if you will, the close rates in Q4, and we anticipate that going forward.

DJ Hynes: Got it, got it. And then, Doug, maybe a more strategic question for you. Just as you talk with customers about evolving to become kind of a skills-based organization, right, adopting ML and AI strategies, like how much change management has to accompany the technology adoption, right? And I guess I’m curious, like, how deep we bought into this playbook or your partners? Is this something they’re leading to or leading with in their go-to-market conversations?