#1workday Investor Presentation Q3 FY23#2Safe Harbor Statement This presentation may contain forward-looking statements for which there are risks, uncertainties, and assumptions. Forward-looking statements may include any statements regarding strategies or plans for future operations; any statements concerning new features, enhancements or upgrades to our existing applications or plans for future applications; any projections of revenues, gross margins, earnings, or other financial items; and any statements of expectation or belief. Forward-looking statements are based only on currently available information and our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements, and therefore you should not rely on any forward-looking statements that we may make. Further information on risks that could affect Workday's results is included in our filings with the Securities and Exchange Commission which are available on the Workday investor relations webpage: www.workday.com/company/investor_relations.php Workday assumes no obligation for, and does not intend to update, any forward-looking statements. Any unreleased services, features, functionality or enhancements referenced in any Workday document, roadmap, blog, our website, press release or public statement that are not currently available are subject to change at Workday's discretion and may not be delivered as planned or at all. Customers who purchase Workday services should make their purchase decisions based upon services, features, and functions that are currently available.#3Use of Non-GAAP Measures In addition to financial results presented in accordance with generally accepted accounting principles (GAAP), this presentation includes certain non-GAAP financial measures of performance. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Workday's results of operations as determined in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in the Appendix to this presentation. A reconciliation of our forward outlook for non- GAAP operating margin with our forward-looking GAAP operating margin is not available without unreasonable efforts as the quantification of share-based compensation expense, which is excluded from our non-GAAP operating margin, requires additional inputs such as the number of shares granted and market prices that are not ascertainable.#4Workday at a Glance#5Workday by the Numbers $125B+ Market Opportunity Enterprise Management Cloud For Finance, HR, Planning, Spend Management, and Analytics 9,500+ Global Customers Operating across 175+ Countries $5.30B 23% YoY Growth Trailing Twelve Month Subscription Revenue¹ $8.62B 21% YoY Growth 24-Month Subscription Revenue Backlog² $1.58B 27% Margin Trailing Twelve Month Operating Cash Flow1 Serving 50%+ of the Fortune 500 Including 70%+ of the top 50 Fortune 500 companies 60M+ Global Users 95%+ Customer Satisfaction³ 17,500+ Employees Worldwide 88 Offices in 30+ Countries 1 For the trailing twelve months ended 10.31.2022 2 As of 10.31.2022 3 Based on a survey conducted by Workday of Named Support Contacts in May 2022#6Workday Enterprise Management Cloud Enterprise Planning Adaptive Planning Management Procurement Inventory Discovery Boards ⚫ OfficeConnect Analytic App Analytics & Reporting Human Capital Core HR Tale Workforce Financial Management Core Accounting • Revenue Projects • Billing Intelligent Data Core FRAMEWORKS Analytics Org Hierarchy • Security Machine Learning • (M W Compliance Process Business True Cloud Scale Elasticity Performance • Availability ⚫ Continuous Delivery of Innovation • Single Version •#7AON Cardinal Health charles SCHWAB Chevron Chiquita ChristianaCare™ Citi COMCAST CUSHMAN & WAKEFIELD DELL Etsy FedEx. FICO flex. gsk GlaxoSmithKline GOOD YEAR MORE DRIVEN. Hewlett Packard Enterprise hulu HyVee Serving Organizations of all Sizes and Across Industries LEVI STRAUSS & CO. ING J.B. HUNT Kimberly-Clark KOHL'S LAND LAKES INC. Linked in ... MassMutual Morgan Stanley INCR NETFLIX NORDSTROM Office DEPOT. Panera BREAD patagonia QANTAS Roche salesforce SANOFI SHAKE SHACK SIEMENS THE HOME DEPOT Unilever VISA#8$125B+ Addressing a Large and Expanding Opportunity <5% Penetration HCM $52B Human Capital Management/ Workforce Management Talent Management Payroll FINS+ $73B Financial Management Spend Management Analytics Workforce Planning and People Analytics Employee Experience Financial Planning Platform Student IDC and Workday estimates as of 9.13.2022#9Driving Profitable Growth at Scale Annual Subscription Revenue 1 Non-GAAP Operating Margin² 21% CAGR $3.1B FY20 900 bps $4.5B FY22 22.4% FY22 95%+ Gross Revenue Retention³ CAGR calculations are based on FY20-FY22 results 2 Reconciliations of GAAP to Non-GAAP financial data included in the Appendix 13.4% FY20 3 Measures the annual recurring revenue of our customers as of 10.31.21 that we have maintained as of 10.31.22, without giving credit for additional upsells or price and/or seats related changes. The metric captures only customer and product churn#10While Growing Responsibly and Inclusively ESG and Our Employees VIBE Our commitment to value inclusion, belonging, and equity for all Opportunity OnrampsⓇ Provide candidates from diverse, nontraditional backgrounds with training and job opportunities Investing in Training To help ensure we attract, recruit, hire, and advance employees of all backgrounds ESG and Our Customers Building Inclusive Solutions Investing to help organizations gain valuable insights about equity within their workforce Building Sustainable Solutions Helping customers improve sustainability and resilience of their supply chains Empowering our Ecosystem Workday's adaptable platform enables customers and partners to manage their emissions reduction strategy ESG and the World Around Us Net-Zero Carbon Footprint Achieved net-zero emissions in 2020 and lifetime net-zero carbon footprint in 2021 Commitment to 1.5°C Science-based targets across our entire value chain Driving Policy Change Working to advance polices that support a skills-based approach to talent, and aid in the transition to a low-carbon economy For More Information: Visit our ESG Resource Page: Sustainability and Reporting with Workday Read our Blog: Our Commitments to ESG at Workday Download our 2021 Global Impact Report#11Q3 FY23 Highlights and Guidance#12Total Revenue Subscription Revenue Q3 FY23 Financial Highlights Q3 FY23 Results $1.60B Increase (Decrease) YoY 20% $1.43B 22% Total Subscription Revenue Backlog $14.10B 28% 24-month Subscription Revenue Backlog $8.62B 21% GAAP Operating Margin (1.6)% (340 bps) Non-GAAP Operating Margin¹ 19.7% (530 bps) Operating Cash Flows $409M 6% 1 Reconciliations of GAAP to Non-GAAP financial data included in the Appendix#13Q3 FY23 Customer Wins and Expansions UNIVERSITY of MELIORA Intermountain® Healthcare ROCHESTER Pick n Pay PUMA Fletcher Building Jefferson Thomas Jefferson University Bank of Queensland Reed EZCORP Trip.com accenture novozymes SGS Hendrick AUTOMOTIVE GROUP Co Cochlear®#14Q3 FY23 Business Highlights Workday announced that its Board of Directors approved a share repurchase program, with a term of 18 months, to purchase up to $500 million of shares of its Class A common stock. Workday announced its vision for a more open and connected partner ecosystem, which includes the launch of Industry Accelerators, a new industry program that accelerates customer enterprise cloud transformations with partners. Workday announced new technology and user experience innovations aimed at helping customers meet evolving business and employee needs, including low- code/no-code app development functionality in Workday Extend, the Company's app building solution that helps developers to more quickly and easily build apps on Workday. Workday introduced next-generation skills technology, built on an AI/ML foundation, that allows organizations to easily and securely bring skills data in and out of Workday to deliver more personalized employee experiences. Workday was named a Leader in the 2022 GartnerⓇ Magic Quadrant™ for Cloud HCM Suites for 1,000+ Employee Enterprises for the seventh consecutive year and positioned the highest for overall Ability to Execute.1 Gartner "Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises," by Sam Grinter, Chris Pang, Jeff Freyermuth, Ron Hanscome, Helen Poitevin, Ranadip Chandra, John Kostoulas, Emi Chiba, Rania Stewart, October 31, 2022. % + Gartner Disclaimer Gartner does not endorse any vendor, product or service depicted in our research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Gartner and Magic Quadrant are registered trademarks of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved.#15Q4 FY23 Total Revenue Subscription Revenue 24-month Subscription Revenue Backlog Non-GAAP Operating Margin GAAP Operating Margin Full Year FY23 Total Revenue Subscription Revenue Non-GAAP Operating Margin GAAP Operating Margin Non-GAAP Tax Rate Operating Cash Flows Full Year FY24 Subscription Revenue Non-GAAP Operating Margin As provided on Q3 FY23 Earnings Call on 11.29.2022 Guidance Summary Quarterly Guidance $1.630B $1.632B $1.483B $1.485B - Increase (Decrease) YoY 18-19% 21% n/a 17.5% ~23 points lower than non-GAAP Full Year Guidance $6.200B $6.202B $5.555B $5.557B 19.2% ~23 points lower than non-GAAP 19% $1.640B Full Year Guidance $6.500B $6.600B n/a 19% 30 bps n/a Increase (Decrease) YoY 21% 22% (320 bps) n/a n/a (1%) Increase (Decrease) YoY 17-19% +150-200 bps#16Appendix#17Reconciliation of GAAP to Non-GAAP Data Three Months Ended October 31, 2022 (in thousands, except percentages and per share data) GAAP Costs and expenses: Share-Based Compensation Expenses Other Operating Expenses² Income Tax and Non-GAAP Dilution Effects³ Costs of subscription services $ 259,397 $ Costs of professional services 176,396 (25,598) $ (26,577) (14,100) $ (623) Product development 565,727 (149,279) (1,899) General and administrative Operating margin Sales and marketing Operating income (loss) Other income (expense), net Income (loss) before provision for (benefit from) income taxes Provision for (benefit from) income taxes 470,196 (61,186) (9,206) 153,708 (51,556) (531) (26,321) 314,196 26,359 (1.6)% 19.6 % 1.7 % 4,163 (22,158) 314,196 26,359 | | | | | │ $ 219,699 149,196 414,549 399,804 101,621 314,234 % 19.7 % 4,163 318,397 52,563 7,933 60,496 Net income (loss) Net income (loss) per share, basic¹ Net income (loss) per share, diluted¹ 1. SSS $ $ $ (74,721) $ (0.29) $ (0.29) $ 314,196 1.23 1.23 $ $ SSS $ 26,359 $ (7,933) $ 257,901 0.10 0.10 EA EA $ (0.03) $ 1.01 $ (0.05) $ 0.99 2. 3. GAAP net loss per share is calculated based upon 255,753 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 255,753 basic and 261,777 diluted weighted-average shares of common stock. The numerator used to compute non-GAAP diluted net income per share was increased by $0.9 million for after-tax interest expense on our convertible senior notes in accordance with the if-converted method. Other operating expenses include amortization of acquisition-related intangible assets of $21.2 million and employer payroll tax-related items on employee stock transactions of $5.2 million. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2023, the non-GAAP tax rate is 19%. Included in the per share amount is a dilution impact of $0.02 from the conversion of GAAP diluted net loss per share to non- GAAP diluted net income per share.#18Reconciliation of GAAP to Non-GAAP Data Three Months Ended October 31, 2021 (in thousands, except percentages and per share data) Costs and expenses: GAAP Share-Based Compensation Expenses Other Operating Expenses² Income Tax and Non-GAAP Dilution Effects³ Costs of subscription services $ 200,700 $ (21,340) $ (12,859) $ Costs of professional services 159,024 (29,105) (1,043) Product development 455,615 (135,591) (2,870) Sales and marketing 366,323 (55,645) (9,642) General and administrative 121,656 (39,437) Operating income (loss) 23,945 281,118 (772) 27,186 | | | | | $ 166,501 128,876 317,154 Operating margin 1.8 % 21.2 % 2.0% ― % Other income (expense), net 21,557 301,036 81,447 332,249 25.0 % 21,557 Income (loss) before provision for (benefit from) income taxes 45,502 281,118 27,186 353,806 Provision for (benefit from) income taxes 2,090 65,133 67,223 Net income (loss) $ Net income (loss) per share, basic¹ $ Net income (loss) per share, diluted¹ $ 555 0.17 43,412 $ 0.17 $ $ 281,118 1. 2. 3. 1.10 GAAP net income per share is calculated based upon 248,468 basic and 254,760 diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 248,468 basic and 262,577 diluted weighted-average shares of common stock. The numerator used to compute non-GAAP diluted net income per share was increased by $1.3 million for after-tax interest expense on our convertible senior notes in accordance with the if-converted method. Other operating expenses include amortization of acquisition-related intangible assets of $19.7 million and employer payroll tax-related items on employee stock transactions of $7.5 million. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2022, the projected tax rate was 19%. Included in the per share amount is a dilution impact of $0.02 from the conversion of GAAP diluted net income per share to non-GAAP diluted net income per share. 1.10 1.13 $ $ SSS $ 27,186 $ 0.11 $ 0.11 $ (65,133) $ (0.26) $ (0.28) SSS 286,583 1.15 $#19Reconciliation of GAAP to Non-GAAP Data Nine Months Ended October 31, 2022 (in thousands, except percentages and per share data) GAAP Costs and expenses: Share-Based Compensation Expenses Other Operating Expenses² Income Tax and Dilution Effects³ Non-GAAP Costs of subscription services $ Costs of professional services 737,301 $ 524,398 (76,918) $ (45,022) $ 615,361 (79,999) (5,297) Product development 1,655,071 (449,764) (17,146) 439,102 1,188,161 General and administrative Sales and marketing Operating income (loss) Operating margin Other income (expense), net Income (loss) before provision for (benefit from) income taxes Provision for (benefit from) income taxes 1,358,198 (180,233) (32,640) 1,145,325 427,832 (146,795) (3,772) 277,265 (133,242) 933,709 103,877 904,344 (2.9) % 20.4 % 2.3 % % 19.8 % (48,789) (48,789) (182,031) 933,709 103,877 855,555 59,021 103,534 162,555 Net income (loss) Net income (loss) per share, basic¹ Net income (loss) per share, diluted¹ $ (241,052) $ $ $ (0.95) $ (0.95) $ 3.68 933,709 $ 3.68 $ $ 103,877 $ 0.41 $ 0.41 $ (103,534) $ 693,000 (0.41) $ 2.73 (0.49) $ 2.65 1. 2. 3. GAAP net loss per share is calculated based upon 253,975 basic and diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 253,975 basic and 262,742 diluted weighted-average shares of common stock. The numerator used to compute non-GAAP diluted net income per share was increased by $3.5 million for after-tax interest expense on our convertible senior notes in accordance with the if-converted method. Other operating expenses include amortization of acquisition-related intangible assets of $64.3 million and employer payroll tax-related items on employee stock transactions of $39.5 million. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2023, the non-GAAP tax rate is 19%. Included in the per share amount is a dilution impact of $0.08 from the conversion of GAAP diluted net loss per share to non- GAAP diluted net income per share.#20Reconciliation of GAAP to Non-GAAP Data Nine Months Ended October 31, 2021 (in thousands, except percentages and per share data) GAAP Costs and expenses: Share-Based Compensation Expenses Other Operating Expenses² Income Tax and Non-GAAP Dilution Effects ³ Costs of subscription services $ Costs of professional services 575,646 $ 462,652 (62,478) $ (40,195) $ $ 472,973 (83,331) (9,211) 370,110 Product development 1,341,482 (395,345) (25,573) 920,564 Sales and marketing 1,050,974 (158,121) (36,512) 856,341 General and administrative 347,391 (111,197) (6,091) 230,103 Operating income (loss) (15,488) 810,472 117,582 912,566 Operating margin (0.4) % 21.5% 3.2 % % 24.3 % Other income (expense), net 115,491 115,491 Income (loss) before provision for (benefit from) income taxes 100,003 810,472 117,582 1,028,057 Provision for (benefit from) income taxes (2,623) 197,954 195,331 Net income (loss) $ Net income (loss) per share, basic¹ Net income (loss) per share, diluted¹ $ $ 5959 102,626 $ 0.42 $ 0.40 $ 3.19 810,472 $ 3.29 $ $ 117,582 $ 0.48 $ (0.81) (197,954) $ $ 832,726 3.38 0.46 $ (0.85) $ 3.20 1. 2. 3. GAAP net income per share is calculated based upon 246,348 basic and 253,917 diluted weighted-average shares of common stock. Non-GAAP net income per share is calculated based upon 246,348 basic and 261,734 diluted weighted-average shares of common stock. The numerator used to compute non-GAAP diluted net income per share was increased by $3.9 million for after-tax interest expense on our convertible senior notes in accordance with the if-converted method. Other operating expenses include employer payroll tax-related items on employee stock transactions of $60.1 million and amortization of acquisition-related intangible assets of $57.5 million. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2022, the non-GAAP tax rate was 19%. Included in the per share amount is a dilution impact of $0.07 from the conversion of GAAP diluted net income per share to non-GAAP diluted net income per share.#21About Non-GAAP Financial Measures To provide investors and others with additional information regarding Workday's results, we have disclosed the following non-GAAP financial measures: non-GAAP operating income (loss), non-GAAP operating margin, and non-GAAP net income (loss) per share. Workday has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. Non-GAAP operating income (loss) and non-GAAP operating margin differ from GAAP in that they exclude share-based compensation expenses, employer payroll tax-related items on employee stock transactions, and amortization expense for acquisition-related intangible assets. Non-GAAP net income (loss) per share differs from GAAP in that it excludes share-based compensation expenses, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, and income tax effects. Workday's management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Workday's financial performance. Management believes these non-GAAP financial measures reflect Workday's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in Workday's business. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Workday's operating results and prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. Management believes excluding the following items from the GAAP Condensed Consolidated Statements of Operations is useful to investors and others in assessing Workday's operating performance due to the following factors: Share-based compensation expenses. Although share-based compensation is an important aspect of the compensation of our employees and executives, management believes it is useful to exclude share-based compensation expenses to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies. Share-based compensation expenses are determined using a number of factors, including our stock price, volatility, and forfeiture rates, that are beyond our control and generally unrelated to operational decisions and performance in any particular period. Further, share-based compensation expenses are not reflective of the value ultimately received by the grant recipients.#22About Non-GAAP Financial Measures (cont'd) Other operating expenses. Other operating expenses includes employer payroll tax-related items on employee stock transactions and amortization of acquisition-related intangible assets. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of its related amortization can vary significantly and are unique to each acquisition and thus we do not believe it is reflective of ongoing operations. Although we exclude the amortization of acquisition-related intangible assets from these non-GAAP measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Income tax effects. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. In projecting this long-term non-GAAP tax rate, we utilize a three-year financial projection that excludes the direct impact of share-based compensation and related employer payroll taxes, amortization of acquisition-related intangible assets, and amortization of debt discount and issuance costs. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate. For fiscal 2023 and 2022, we determined the projected non-GAAP tax rate to be 19%, which reflects currently available information, as well as other factors and assumptions. We will periodically re-evaluate this tax rate, as necessary, for significant events, based on our ongoing analysis of the 2017 U.S. Tax Cuts and Jobs Act, relevant tax law changes, material changes in the forecasted geographic earnings mix, and any significant acquisitions. The use of non-GAAP operating income (loss), non-GAAP operating margin, and non-GAAP net income (loss) per share measures have certain limitations as they do not reflect all items of income and expense that affect Workday's operations. Workday compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review Workday's financial information in its entirety and not rely on a single financial measure.#23workday