Workday is aiming for about $11 billion in subscription revenue in fiscal 2028, with artificial intelligence (AI) expected to supply most of the added recurring revenue from current customers.
At its Financial Analyst Day Tuesday, Oct. 13, Workday said AI contributed more than half of new annual recurring revenue (ARR) from existing customers this year. The company expects AI's share of incremental ARR from existing customers to reach about 70% in fiscal 2028. That figure concerns AI's contribution to new recurring sales among current accounts; it does not indicate AI's share of Workday's total subscription revenue.
Workday reported about $600 million in agentic AI ARR, more than triple the year-earlier amount. It also said existing customers buying AI products had an average ARR increase of roughly 12%. Workday's August figures put the number of customers who had used its own agents above 5,500; the company said the total rose more than 35% from the quarter before.
Workday's fiscal 2028 targets are subscription revenue growth of about 11% and a non-GAAP operating margin of 33% or more. The fiscal 2027 estimate is roughly $9.9 billion in subscription revenue, with a 13% increase and a 31% margin.
AI accounted for more than one-quarter of new annual contract value (ACV), Workday said. Workday's analyst-day presentation counted roughly 300 customers with signed Flex Credit agreements.
Workday estimates that its AI and platform offerings account for $100 billion of a $276 billion opportunity that also includes its core businesses. The combined figure is a market opportunity estimate, not a revenue forecast.
Workday's fiscal second quarter ended July 31 with subscription revenue of $2.471 billion, 13.9% higher than a year earlier.
