Workday Sets $11 Billion Subscription Goal as Agentic AI ARR Reaches $600 Million

Workday put agentic AI annual recurring revenue (ARR) at about $600 million at its Tuesday, Oct. 13, Financial Analyst Day and set a fiscal 2028 subscription revenue target of about $11 billion, making AI a central part of its growth framework.

The company’s fiscal 2028 framework calls for subscription revenue growth of roughly 11% and a non-GAAP operating margin of at least 33%. Workday’s fiscal 2027 estimates are about $9.9 billion in subscription revenue, 13% growth and a 31% margin. The fiscal 2028 figures are targets, not reported results.

Workday said agentic AI ARR had more than tripled from its year-earlier level. It projected AI would account for more than 50% of incremental ARR from existing customers this year and about 70% in fiscal 2028. That projection concerns additional recurring revenue from current customers, rather than AI’s share of total subscription revenue. Existing customers buying AI products showed an average ARR uplift of about 12%.

Workday also estimated a $276 billion combined opportunity for its core businesses and AI and platform offerings, including $100 billion for AI and platform. The figures are company estimates.

In August, more than 5,500 customers used at least one Workday-developed agent, an increase of more than 35% from the prior quarter. At the analyst day, Workday showed that about 300 customers had signed Flex Credit agreements. AI drove more than 25% of new annual contract value (ACV).

Workday’s fiscal second quarter, which ended July 31, generated $2.471 billion in subscription revenue, up 13.9% from a year earlier.