Good morning. Workday has reached a milestone—earning a spot on the Fortune 500 for the first time.
The software company, which offers finance and HR tools in one system, landed at no. 490, on the annual list released this week, pulling in $7.3 billion in revenue and nearly $1.4 billion in profits. The company was founded in 2005 by Aneel Bhusri and Dave Duffield. (Workday is a CFO Daily sponsor.)
Workday’s CFO Zane Rowe said great teams and a commitment to customers have been key. “I’ve become a far better CFO, and we become better as a company, in knowing how our customers think about our products,” he told me.
Rowe was a seasoned tech CFO when he joined Workday in June 2023, but made it part of his job to engage with the finance chiefs who are the firm's most critical customers. He meets with them and asks how they’re driving their business, their thoughts on value creation, and what they expect Workday to do for them, he explained.
Rowe joined Workday from virtualization software developer VMware where he was CFO for seven years. During that time, he served for several months as interim CEO. Before VMware, Rowe was the CFO at EMC, and spent time as former EVP and CFO at United Airlines and Continental Airlines. He has also led North American sales for Apple.
He brought his tech savviness to Workday, which has been building out AI as part of its platform for roughly 10 years, he said. It was in 2023, however, that the technology had its first truly breakout year as generative AI began to proliferate. Customers are increasingly looking to the company to help with greater insight for use cases and strategies for AI, Rowe said.
In February, Workday announced plans to acquire HiredScore, an AI-powered HR technology company focused on hiring processes and talent mobility. Workday CEO Carl Eschenbach recently told Fortune the company has rolled out around 50 AI features so far, including generative AI capabilities for creating job descriptions, for example. The company plans on releasing another 25 AI features later this year.
There’s still “a sort of choppy, macro environment” around the globe, and that’s causing the need for companies to become more efficient, Rowe said. “So by and large, it's actually been a good backdrop for us, and we continue to see tremendous demand for our products,” he said.
For the full year ended Jan. 31, Workday’s subscription revenues were $6.6 billion, up 19% year over year. In the latest quarter ended April 30, subscription revenues were $1.8 billion, an increase of 18.8% from the same period last year. And for the quarter, total revenues were $1.990 billion, an increase of 18.1%.
With a growth mindset, Rowe said he works to keep the teams aligned with longer-term strategies and objectives. For example, Workday’s current revenues are 25% international and 75% domestic, so there’s an opportunity to expand around the world, and build partnerships, he said.
At the same time, Rowe continues to focus on efficiency by implementing Workday’s products across the organization from R&D teams to finance. That includes a product that enables companies to send out pulse surveys to employees to gauge their sentiment. And, from Rowe's CFO perspective, “it’s really what drives success in the finance organization as well,” he said.
Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
