Workday Says AI Now Drives More Than 25% of New Contract Value

artificial intelligence pricing saas subscription revenue workday Aug 28, 2026

Workday is pairing annual commitments with usage-based Flex Credits, giving customers room to figure out how much AI they need as their usage develops.

Workday says its AI products generated more than $100 million in new annual contract value during its fiscal second quarter, accounting for more than 25% of all new annual contract value signed during the period.

Annual contract value, or ACV, measures the annual value of business signed.

AI annual recurring revenue is also approaching $600 million, up more than 200% from a year ago.

Those are meaningful numbers. But for subscription operators, there’s another part of the story worth watching: how Workday is pricing AI when customers may not know yet how much they’re going to use.

Workday Adds Usage-Based Pricing

Workday is using a model called Flex Credits for many of its AI products.

Customers make an annual commitment for credits, then use them across eligible AI agents and other Workday services. If one product turns out to be more useful than another, customers can shift where they use their credits. They can buy more as usage grows. Workday also gives customers some complimentary credits so they can experiment before making a larger commitment.

It’s a different approach from Workday’s traditional per-employee pricing.

AI can be particularly tricky to price because customers may not know at the start of a contract how much they’ll use it. Flex Credits give them some room to find out, while Workday still has an annual customer commitment.

Customers Are Starting to Use It

More than 5,500 Workday customers now use at least one Workday-built AI agent, up more than 35% from the previous quarter. Workday has more than 11,500 customers globally.

But usage and paid adoption aren’t necessarily the same thing.

Some customers are experimenting with complimentary credits, so the 5,500-customer adoption figure doesn’t mean all 5,500 are paying meaningful additional revenue for AI.

At the same time, the $100 million in new contract value and nearly $600 million in AI recurring revenue show that customers are making meaningful paid commitments.

CEO Aneel Bhusri said Workday is seeing commercial success with AI and early returns from Flex Credits, while continuing to watch adoption closely.

What Happens After Customers Buy?

This is where the model gets interesting. Are customers actually using the credits they purchased? As they find useful applications for AI, do they buy more?

Then comes the bigger subscription test: What happens at renewal? Workday hasn’t provided AI-specific renewal data that would answer that yet.

Insider Take

Workday’s early numbers suggest customers are willing to make an annual commitment even while their AI usage is still developing.

The harder test comes next.

Are customers using the credits they buy? Do they expand as they find more value? And what happens when renewal comes around?

That’s where operators will start to see whether this pricing model supports durable recurring revenue.

For subscription businesses experimenting with AI pricing, there’s a useful question to ask:

Can you give customers enough room to discover where the value is, while building a recurring revenue model that grows as they use more?

Related Member Resource

For a practical look at how subscription pricing works and what to consider as pricing models change:

How Subscription Pricing Works: A Beginner’s Guide

A practical starting point for understanding what shapes a subscription price, how pricing affects customer behavior, and what to look at before making a change.