WDAYWorkday, Inc.

We note that fluctuations between periods in subscription revenue was due to various factors including increases in new customers, expanded offerings to existing customers and strong customer renewals. We also note your reference to changes being due “primarily” to these factors.

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Where a material change is attributed to two or more factors, including any offsetting factors, revise to describe the contribution of each factor in quantified terms. Please also revise to use more definitive terminology, rather than general or vague terms such as “primarily,” to describe each contributing factor. Refer to Item 303(b) of Regulation S-K.

We respectfully acknowledge the Staff’s comment and advise the Staff that in future filings, beginning with our Quarterly Report on Form 10-Q for the quarter ended October 31, 2024, where we describe two or more factors, including any offsetting factors, that contribute to a material change in subscription revenue, we will quantify, where possible, the extent to which each factor contributed to the overall change. Set forth below is substantially the form of our proposed revisions, with respect to a three-month period, shown in bold underline.

ITEM 7.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Revenues

Subscription services revenues were $X.X billion for the three months ended October 31, 2024, compared to $X.X billion for the prior year period, an increase of $X.X billion, or XX%. Approximately XX% of the increase in subscription services revenues was attributable to expansion within our existing customer base, and the remaining XX% was attributable to new customers.

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We note your disclosure of both gross and net retention rate. Please revise to disclose information about each of these metrics, including a description and definition of each and how they are calculated. Also, tell us whether management considers these to be key performance indicators and what consideration was given to disclosing the actual retention rates for each period along with a discussion of significant

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fluctuations between periods. In your response, provide us with the actual gross and net retention rates for each period provided. Refer to SEC Release No. 33-10751.

We respectfully acknowledge the Staff’s comment. As there are several parts to the Staff’s comment, we are responding to each part of the Staff’s comment separately under the below sub-headers.

Please revise to disclose information about each of these metrics, including a description and definition of each and how they are calculated.

We advise the Staff that in future filings, beginning with our Quarterly Report on Form 10-Q for the quarter ended October 31, 2024, we will disclose information about gross and net revenue retention rates, including a description and definition of each and

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how they are calculated. Set forth below is substantially the form of our proposed revisions, shown in bold underline.

Our growth with existing customers is further reflected by our gross and net revenue retention rates exceeding XX% and XX%, respectively, as of October 31, 2024.

Gross revenue retention rates measure the percentage of recurring revenue retained from existing customers. The metric takes into account only negative impacts such as recurring revenues lost to product or customer churn, and does not account for additional revenue earned from add-ons or net expansions, which include volume and price adjustments. Gross revenue retention rates are calculated by taking the current period-end annual recurring revenue (“ARR”) of our customers that we retained year-over-year, excluding add-ons and net expansions, divided by the total ARR at the end of the corresponding prior period. Our high gross revenue retention rates demonstrate that the substantial majority of our customers renew their subscriptions.

Net revenue retention rates measure the net change in recurring revenue from existing customers. The metric includes both positive and negative impacts on revenue, such as add-ons, net expansions, and product and customer churn. Net revenue retention rates are calculated by taking the current period-end ARR of our customers that we retained year-over-year, including add-ons and net expansion, divided by the total ARR at the end of the corresponding prior period. Our high net revenue retention rates demonstrate that our customers are expanding their usage of our products and investing more in our solutions over time.

Our gross and net revenue retention rates are based on ARR, which represents the annualized value of active subscription contracts as of the end of each period. Each subscription contract is annualized by dividing the total contract value by the number of days in the contract term and then multiplying by 365. We exclude certain subscription contracts from the calculation, including contracts with terms less than one year that are distinct from our core product offering, such as contracts for tenants which are used for implementation and testing. To the extent that we are negotiating a renewal with a customer after the expiration of the subscription, ARR is not adjusted until a draft renewal agreement is signed or the customer churns. We calculate ARR on a constant currency basis using exchange rates set at the beginning of each fiscal year. ARR is a non-GAAP financial measure and should be viewed independently of, and not as a substitute for or combined with, revenue and unearned revenue.

Tell us whether management considers these to be key performance indicators and what consideration was given to disclosing the actual retention rates for each period along with a discussion of significant fluctuations between periods.

We respectfully advise the staff that we do not consider gross or net revenue retention to be key performance indicators. We do not use these metrics in managing our business, such as deciding where to make investments and making day-to-day business decisions. Instead, these metrics serve as supplemental data which provide investors insight into the durability of our business and customer satisfaction, which are drivers of Workday’s long-term growth.

Since we do not consider these metrics to be key performance indicators, we do not disclose the exact figures. Providing these amounts with greater precision may suggest that small fluctuations are indicative of fundamental changes in our retention patterns, which we believe is unfounded and potentially misleading for readers. In future filings, to the extent any changes in our revenue retention rates are material, we will consider the need to include further disclosure to provide adequate context for an investor to understand significant fluctuations in revenue retention between periods.

Provide us with the actual gross and net retention rates for each period provided.

We advise the Staff that, as requested, we have provided the table below showing our historical gross and net revenue retention rates for each period provided in the 10-K.

Gross revenue retention rate Net revenue retention rate

Year ended January 31, 2024

[*]

Year ended January 31, 2023

Year ended January 31, 2022

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In connection with our response to the Staff’s comments, we acknowledge that we are responsible for the accuracy and adequacy of our disclosures, notwithstanding any review, comments, action, or absence of action by the Staff.

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Please address the following as it relates to your response and proposed revised disclosures to prior comment 2. • We note you currently disclose that gross and net retention rates exceeded 95% and 100%, respectively, for the periods presented in your recent Form 10-K and Form 10-Q filings.

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To the extent you intend to provide similar disclosures in future filings, revise to ensure that the amounts provided appropriately reflect your current net retention rates. You state that net retention rate is calculated by taking the current period-end ARR of your customers that you “retained" year-over-year. Clarify whether you calculate ARR using existing customers from the corresponding period and compare that to ARR for the current period from the same set of customers. If so, revise to clarify as • 1. such. To the extent you do not use the same customer base for each period in your calculation, explain further how this measure factors in customer churn. • Tell us the amount of subscription contracts that are excluded from your calculation of ARR. To the extent material to total subscription contracts, revise to disclose the percentage of ARR that is excluded from such measure.

We respectfully acknowledge the Staff’s comment and advise the Staff that upon further consideration and in light of our planned quantification of factors contributing to changes in subscription services revenues, we no longer intend to include disclosure related to net revenue retention rates in our SEC filings. As stated in our response to comment 1 in our Prior Response Letter, our future filings will include the percentage change in subscription revenue versus the prior period attributable to existing and new customers, respectively.

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We believe that the net revenue retention rate is largely duplicative of the change in revenue from existing customers as a measure of our business performance.

As gross revenue retention provides insight into the recurring revenue retained from our existing customers, we currently intend to continue disclosing our gross revenue retention rate in future filings. Furthermore, upon further consideration and in light of your comments, we plan to disclose the actual, then-current gross revenue retention rate for each period in future filings.

●You state that net retention rate is calculated by taking the current period-end ARR of your customers that you “retained” year-over-year. Clarify whether you calculate ARR using existing customers from the corresponding period and compare that to ARR for the current period from the same set of customers. If so, revise to clarify as such. To the extent you do not use the same customer base for each period in your calculation, explain further how this measure factors in customer churn.

Response: We respectfully acknowledge the Staff’s comment and advise the Staff that the net and gross revenue retention rates are calculated using ARR attributable to existing customers from the corresponding period and comparing that to ARR for the current period from the same set of customers. We will include this clarification in our future filings when we disclose our gross revenue retention rate. As discussed in our response to comment 1 above, we no longer intend to disclose net revenue retention rates in our future filings.

●Tell us the amount of subscription contracts that are excluded from your calculation of ARR.

Response: We respectfully acknowledge the Staff’s comment and advise the Staff that the excluded subscription contracts represent approximately [*]% of ARR. We further advise the Staff that the excluded subscription contracts have a less than [*]% impact on the gross and net revenue retention rates for each of the periods presented.

●To the extent material to total subscription contracts, revise to disclose the percentage of ARR that is excluded from such measure.

Response: We respectfully advise the Staff that we do not consider the amount of subscription contracts that are excluded from our calculation of ARR to be material. In future filings, to the extent the excluded subscription contracts are material in relation to ARR, we will disclose the percentage of that exclusion.

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In connection with our response to the Staff’s comments, we acknowledge that we are responsible for the accuracy and adequacy of our disclosures, notwithstanding any review, comments, action, or absence of action by the Staff.

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