Workday, Inc.

Ladies and gentlemen, welcome to Workday's fourth quarter fiscal year 26 earnings call. At this time, all participants are in a listen-only mode. We will conduct a question and answer session towards the end of the call. During Q&A, please limit your questions to one. I will now hand the call over to Justin Furby, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Welcome to Workday's fourth quarter fiscal 2026 earnings conference call. On the call, we have Anil Bushri, our CEO, Garrett Katzmeier, our President, Product and Technology, Rob Enslin, our President, Chief Commercial Officer, and Zane Rowe, our CFO. Following prepared remarks, we will take questions. Our press release was issued after close of market and is posted on our website, where this call is being simultaneously webcast. Before we get started, we want to emphasize that some of our statements on this call, particularly our guidance, are based on the information we have as of today and include forward-looking statements regarding our financial results, applications, customer demand, operations, and other matters. These statements are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially. Please refer to the press release and the risk factors in documents we file with the Securities and Exchange Commission, including our fiscal 2025 annual report on Form 10-K and our most recent quarterly report on Form 10-Q for additional information on risks, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Workday's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results, in our earnings press release, in our investor presentation, and on the investor relations page of our website. The webcast replay of this call will be available for the next 90 days on our company website under the investor relations link. Additionally, the prepared remarks of this call and our quarterly investor presentation will be posted on our investor relations website following this call. Our first quarter fiscal 2027 quiet period begins on April 15th, 2026. Unless otherwise stated, all financial comparisons in this call will be to our results for the comparable period of our fiscal 2025. With that, I'll hand the call over to Anil.

Thank you, Justin, and thanks to everyone for joining us today. It's really nice to be back with all of you. Before I get into my remarks, I wanted to thank Carl for his service to Workday over the past three years. He brought the operational rigor and discipline that we needed at the time to make Workday a larger and more global company. That work helped us set the foundation for this next chapter for Workday, and we're all grateful to him. In terms of chapters, we talk internally about this next chapter of Workday as chapter four. First was the founding of the company by Dave and myself back in 2005, based on a new idea of HR and finance in the cloud, and built on a set of core values around employees, customers, innovation, integrity, and fun. The second chapter was a period of hypergrowth that led to our success with many organizations around the world and product and technology leadership in HR and finance. The third and most recent chapter, which started in 2023, was all about operational excellence and efficiency as we grew into a Fortune 500 global company. Well, chapter four is now upon us, and it's a return to focusing on innovation. When we founded Workday, we transformed the enterprise by reimagining HR and finance in the cloud. Now we have the opportunity to transform it again by reimagining HR and finance with AI and taking advantage of this new vector of growth. You've all heard the narrative out there that HR and ERP will be replaced or relegated to the background by AI. I personally just don't see that happening. Our application domains are really, really hard to build. I've been working in the HR and ERP space for over 30 years. These are true systems of record that must process transactions with absolute accuracy and speed enforce complex security models, and comply with statutory and regulatory requirements all over the world. That kind of complexity is very hard to replicate. No amount of vibe coding is gonna produce an HR or an ERP system. And importantly, our underlying business processes are deterministic by nature. There is a start and end to a business process. Its goal is to deliver consistent, audible outcomes. AI, for all of its incredible capabilities, is probabilistic by nature. It reasons, predicts, and recommends based on patterns and likelihoods. Maybe it'll eventually become a state machine, a system that follows the same steps and gets the same result every time, but it is not there today. You can't have probabilistic outcomes in running a payroll. It needs to be 100% accurate and completed 100% of the time. So what is the future? It's the marriage of deterministic enterprise apps with probabilistic AI that leads to three things. a redefined user experience that is prompt-based, a greatly improved business process automation execution platform with work done by agents and humans, and lastly, much deeper AI-generated insights. Taken together, these changes will lead to much better business outcomes and deliver far higher ROI for our customers. As you'll hear from Garrett, this hybrid world in architecture is exactly what Workday is building today. marrying the best system of record for HR and finance with the reasoning capabilities of domain-specific LLMs. That's the future. It's like peanut butter and jelly. They just go together. And it's all rooted in the trust we've built with our customers over the past 20 years from managing their systems and their most critical data. All you have to do is look back at the past year to know that this hybrid world is coming to fruition. We experienced accelerating agentic AI adoption across the solutions we acquired, HiredScore, Evisort, Paradox, and most recently, Sana. They all had great Q4s, and I'm pleased to say that Sana is now seamlessly integrated into the Workday stack. It's very cool. So as we move into fiscal year 27, what should you expect from us? Our core enterprise apps and HR finance at Student will continue to thrive, recognizing that in some areas like HR, we have high levels of market share, so the growth will come from new apps sold to the customer base. The accelerating growth will come from the agents we built on top of Workday, both inorganic and organic. If FY26 proved that customers trusted Workday to buy our acquired agents, we believe that FY27 and beyond will prove that customers will buy our organically built agents that are in early access today. Across the board, these new agents are deeply embedded into the Workday core, are meaningful in their scope, and have significant ROI attached to each and every one of them. Those of you who know me know that I'm an unabashed optimist. I truly believe that our investments in agentic AI will enable Workday to re-accelerate growth, increase customer satisfaction, and set us up for long-term leadership. I will end by saying that I'm excited to be back. This is a fun time to be a product person. And now I'll turn it over to my friend and leader of all things ERP and AI, Garrett.