WDAY - Earnings call transcript Q2 2020

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Operator

Welcome to Workday's Second Quarter Fiscal Year 2020 Earnings Call. At this time, all participants are in a listen-only mode.

We will conduct a question-and-answer session towards the end of the call.

And with that, I would like to hand it over to Mike Magaro, Vice President, Business Finance and Investor Relations.

Michael Magaro

Welcome to Workday's second quarter fiscal 2020 earnings conference call.

of have CFO; our and Chano our Vice we our Robynne Tom call Unit. Executive and Planing Co-President Fernandez, President the Aneel CEO; Bhusri, Sisco, Bogan, On Business the our Co-President;

Following Aneel will remarks, take questions. Robynne's and prepared we

release the close was posted and of is call after where website, our this issued being press market is Our on simultaneously webcast.

offerings, subject matters. cause call documents recent include assumptions. to results from materially Securities financial set Quarterly the risks, and new factors product to information forth our These and forward-looking file results, other and Form are regarding those this most customer statements in on on may our Please for operations made XX-Q including and actual the to and and Report uncertainties we on Statements differ uncertainties press statements Exchange demand, the statements. with applications, such risks, Commission, refer release that risk assumptions

measures, discuss in addition In addition, performance. from or considered isolation measures be during not financial of should measures as These today's believe will GAAP in non-GAAP Workday's to call, non-GAAP useful supplemental results. are a which for substitute as we and we

in including the disclosures reconciliations release press can of non-GAAP Relations You GAAP our results find page regarding on these our Investor with additional measures, earnings comparable and website.

Also XX The is list webcast link. replay page website our monthly. updated customer's on days next website selected available call Company the of will the of and includes Relations the this of for customers under Investor be a our

all financial fiscal will period this begins on for of October our Our XXXX. be the third otherwise results call XXth, period in quarter stated, comparable Unless comparisons XXXX. to our quiet

Aneel. hand let that, it me With to over

Aneel Bhusri

we of and transformation hello, to everyone. as very us you continued another with share cloud Thank good details the today. finance our HR. I across you, our drive joining In momentum quarter. digital am partner we customers pleased to QX, Michael. for And Thank

of the some share me with HCM. highlights Let beginning

today, have of expand more globally, system the record. the Global than core of Workday we HCM Fortune their Fortune approximately our of Workday XXX XXX their selected as XX% core HR have and selected the for of also to XX% And As for continue efforts XX% of XXXX platform.

of the added customers second region. Black In Group quarter, North Stanley Aldi Rockwell new Stores the Asia-Pacific, Decker our Gap, and Limited Limited Automation Europe, we some and in the America, included & in in Bunnings Japan

Bank, place success QX globally live, of in direct continued we Notable happy, value go-lives included, the Our Home Deutsche is reflection and on Depot PNC referenceable customers. a and Bank.

amongst incredibly and remains rate part the enterprise satisfaction our customer Our cloud the important customers of success an business enduring longer industry our highest of in term. the software

financial we Fortune management. revenue insurance another first with which a customers. We was a in another approximately company had In added cloud to XX% strong Shifting QX, trend growth. quarter growing XXX financials of

to new customer, added addition Government large of the of this Baltimore, the Veolia, In and City UK, Singapore. we also

customer base including QX, customers a Shack. and their total financial many management H&R Block, applications go-live XXX. customers for are bringing QX, this Also line for on and These Loews in management product which we financial over core equally had new Shake selected of Corporation in to just few importantly, the several our Workday

the Planning XX and Adaptive platform existing planning of the QX, In over In customers. officially great opportunities addition to from Adaptive lapped to we with the we financial new customers added over one see Cloud, strong as upsell first Workday anniversary deals new to continue year and our Business XXX and core performance application, Insights Insights new acquisition.

that leaders and and powered to strengths all highly opportunities. delivering differentiated with machine in plan one cloud-based we the finance new Analytics breadth for in our Business areas are open Adaptive Cloud, depth market in suite, analyze empowering products, and continue our global critical the learning, HCM and invest Planning to We and solution Insights Workday and we believe that industry-leading our business by as combination with of leverage extend system Prism and execute up a

to about like now spend I few a innovation. talking minutes

As innovation of and is Workday. our DNA you at know, value a core part

all, Innovators. share of I First Workplaces of Workday to Best Fast am Company named XX pleased recently that one the For as

innovation that We growth are of very around proud very fast the as culture our pace world, we Company employee of around even that remains distinction strong. our maintain

a innovation few. release a Workday as product XX our lot upcoming we of look ahead to I'd We just have and mention to like

gap our hear customers their from for workers skills as HR, and their re-skill continue we better future. they workforce develop today’s the critical for and addressing that is First to to look prepare

to We learning to our of skills the skills understand Workday skills minor new with broaden insights into and machine offering cloud to organizations. core skills continue help their better manage leverage two features, built customers across and

be In to month-end occur detect to correct an rather detect opportunity reconciliation flagged management, during as using pressure learning affording they they high potential issues will the when financial close. we’re users anomalies. Anomalies and happen machine than

are patterns Workday. on finance data for Workday boards with to Workday all data front, to allowing discovery users Management HCM, Financial we available visualize data, and HR, the making insights and within And analytics discover quickly and detect both all, insights for

Workday more success Financial October Analyst The at conference. sharing of to Rising, to in many and takes annual there. you forward on product we about customer and customer our market forward Orlando, innovation, XXth seeing October look opportunity our Day in look We place

Robynne. you, to over now And

Robynne Sisco

Thanks, delivered of quarter second $XXX Aneel. of And total year-over-year with growth solid We everyone. reflecting revenue good results, afternoon, XX%. million,

XX%. was $XXX revenue Our million, up subscription

XX% services $XXX XX%. of revenue. the outside $XXX professional total up Revenue up year-over-year revenue million, was US to Our XX% million, representing in at came

of XX% QX headwind Growth backlog over was net business XXX%. was year-over-year. Also across which was once by driven bookings, billion, growth of retention, impacting growth revenue results net $X.XX and Subscription solid a was X%. backlog add-on new again approximately duration

billion Current months growth $X.XX XX unearned in revenue up XX%. total billion. the recognized grew XX% QX, within while next XX% billion, year-over-year, $X.XX Subscription that was of backlog to $X.XX revenue was revenue will be unearned

overachievement non-GAAP margin operating of of resulting non-GAAP cash QX quarter expenses over and year. the XX.X%. certain second from half in by Operating Our QX $XXX to $XXX a for combination operating Margin of was income a line back the was the top flow shifting of million. the performance driven in was million,

continue and in to attracting in We invest our to Workday. people top talent

to successfully at added QX, workforce approximately employees, we XX,XXX. the new over bringing total During and end XXX net integrated the quarter of our

execute with to solid continue are and very half results. operationally our We first well pleased

now I’ll turn guidance. to

our full QX, mind but aspirations. areas products comps providing Our last from very we follows. focus difficult investing keeping performance other and of second as our year, Based to business over face guidance remains in in QX on centered year our support in the are long-term and on half we growth

For FY our the end. we’re to growth billion, to subscription at XX% 'XX $X.XX estimate billion be revenue, range $X.XX in high raising the of

subscription QX at million We to be XX% million, expect our to growth end. $XXX revenue $XXX the high

We guidance revenue for we the are as on raising $XXX XXXX, services continue customer driving focus to professional our highest to fiscal success. of million levels

services For revenue QX, we expect of $XXX million. professional

expected XX.X% in approximately year. be QX The we we GAAP margin to than and For points by is approximately for be anticipate XX margin still non-GAAP and operating non-GAAP for full lower the margins full percentage XX.X% year. QX to the estimate operating margins, the

FY half, $XXX in change in the guidance flow operating our and backlog there revenue subscription low expect still XXs is no to the second cash million. ‘XX growth We of

center real We Pleasanton. million to $XXX $XX continued the our plan There to relates continue to owned $XXX million capital investments million, and customer XXXX in of year for other which outlay development be the support expect full our no estate approximately to is expansion. capital to change our for projects business growth of fiscal

continued and solid customers, hard first year thanking work. for employees to of focus their and on by we’ll partners support half a We I’ll and customer close our continue the our amazing had success.

as you of insights many share long-term Workday more seeing product at strategic we October, to forward look market and Rising our initiatives opportunity. on in We

the Operator, begin let’s process. Q&A

Operator

from [Operator Canaccord. from Richard question comes Your Instructions] Davis first

Richard Davis

thanks much. Hey, very

a obviously them with little like pigeonholing a and things working they thing it, user was, said stuff talked into early that's Platform of you’re few specific like they Service mix a not the on best a of there like the I But that. your and database they is and that. So kind like they and as are really

main the gating the are what or point that thing need guess, running issues fully question I is, this But does address what available widely to kind and full to available? become make we this of Thanks. speed of kind

Aneel Bhusri

call availability today Thanks well-defined it’s question general limited of line. next into GA, calendar across the where the is XXXX, It’s available, Richard. XXXX, of will particular we for it have set aspects And set product. in we to of year means we which actually but the areas of be a APIs through going expect APIs available what around in and widely all product broader the available year

Richard Davis

quick up then follow on And Got it. technology. a

one guys I don't You at do is people. - know for system the big was a of of things the they had WakeMed, of said just that record already is it's talking they And they one but and know to a on problems that credentialing - all paper. someone you what I you

are could and not you driver way way, guys working you all but all and a not so on records like direction? it's private - you that so other and and a that, it's just there digitize Is - because in stuff that license, that it's safe stuff that this stuff it's

Aneel Bhusri

and introduced a professional professional Workday for services which people. Altitude actually you just is described both is what at Credentials, month services We professional conference our back, conference which services our our partners our exactly

blog new Richard. a our and Rising. you been development XX you’ll you for us. see lot Credentials under Ruggiero more what – accomplishes very which a It’s actually about it can in Workday and for months at about It's Jon learn described it you Workday wrote exciting a area exactly see website

Richard Davis

Perfect. Thank much. so you

Operator

from from Markets. comes question next Your Brent KeyBanc Bracelin Capital

Brent Bracelin

what international business. Robynne One afternoon. I It the if looks I could. and think, in Global less at the look if for XX% one like of XXXX. penetration the you only Aneel, you expansion Aneel international than about, strategy, having talked was for XX% revenue Good

Can you’re accelerate international to us where are of really you the expansion? your internationally? relative What to at there kind just Thanks. efforts footprint remind

Aneel Bhusri

So Fernandez, as in a our then President, it, I’ll to weigh ask at Chano take well. I’ll crack

national followed in - US to focused France, big countries. into the very markets, really result, We’re has as on markets Japan, but multinational the UK, the a have moving GX, really Germany, it been on large multinationals, Korea, of outside Europe, we’re large Mexico, sort those and focused selling the so GXX

the and And on and both combination, a say It’s of the I We’ve done Asia-Pac results. pleased HR more still you say the markets the for markets just those three as with and is and going US today. aggressively. Zealand in are actually add cloud us Australia, finance region online moving four coming at - into Chano? it's point, we to outside years would into the or well. the New we’re market Anything quite on this well early is I’d where those behind want into US

Chano Fernandez

the to with I international in is there. commenting, highlight would very progress Aneel that We pleased and we remain focused results like are as markets. our

I France really we think we traction. same US and methodology having like we’re large the in others, great and since seeing great and from implementation seeing of enterprise, the and Germany, are focus, the top markets Nordics, project on into our success traditional enterprise took to some and medium results

far but know great to be us from a great still opportunity customer you and and early markets, so the lot in days captured satisfaction of international So progress.

Brent Bracelin

Robynne. one And for follow-up Helpful. quick

the last should at compare XX% tough given Just about growth should during XX% I but it compare year we think ago? growth, our plus year-over-year. assumptions half, think looking QX at for calculated peaked you’re we that like year second looked that How that a – put around in consideration talking calculated about growth billings QX billings

Robynne Sisco

metrics across our compares mean, the half of the back in I tough got year. Yeah, we’ve all of

you. So would backlog growth mind. earn we I keep in the unearned revenue definitely expect numbers that gave be with - that that subscription our largely rates would line in

So that what from be. can would you billings infer

Brent Bracelin

Okay, you. color. Helpful great. Thank

Operator

comes question next Murphy from JPMorgan. Mark from Your

Mark Murphy

Aneel. you, Thank Yes.

there. and headlines the are all cross-currents that given Just out

had have problems to Brexit by driven or some few We trade companies encounter the a situation. software start

your You know, this are looking guidance real results at in showing and real contrast, health, consistency.

anything they CEOs, from worth not? any macro is curious terms in just whether or hearing business there if confidence or you’re the side of on have incremental other what mentioning concerns So

Aneel Bhusri

look I the product healthy. all at pipeline very when across are they So lines, our

pipelines. the you in our uncertainty China, doing we’re there feel. So no they not air. is in any on are impact question, the seeing And uncertainty more But talk the think I business closer the there to they is to CEOs,

and see and wait a taking to we’re listen think our just I So mode. customers

companies haven't down any think for tech we are. a the But to uncertainty air I – pipeline. slow would you tea lot seeing in to know materialize, seen I issues trying here, that leaves there’s we’re But the way We trying most would are we which haven’t. things way of the in be the read it same and

Mark Murphy

Okay. That sense. makes

As am well of adding great you Robynne from having just it’s to of I are wanted I mentioned, that kind hear to inferring a XXX an a company just - and Fortune financial what enterprise customer, as curious, scale. you're

You’re moving that’s I with past. financials the think, been forward described in you because so how first, rare is it,

I’m is product of it wondering just of readiness something kind maturity else? reflection So or enterprise a or

Robynne Sisco

first pipeline, a couple first it's - I of with our think and quarters our Yeah, flow. lumpy mentioned Mark, we that they those those of in starting financials large and had expect We financials large had to were a ago We of deals see see of that those. I deals would will actually both wins kind will which all be that change. been still as ebb things.

I point enterprise and while a space now ready now our as is the think at been up is convergence that a ready has But well. in and product for large where do market we’re

Mark Murphy

Thank you.

Operator

Research. Your from question from comes Bernstein next Mark Moerdler

Mark Moerdler

Thank you Two very the much. separate I appreciate. on Congrats quarter. questions.

you First follow-up financials. opportunities or any I’m number then the is of a mature? pipeline sense in question. the And early pipeline are of a that to size starting how get opportunities the seeing of is, of entering to trying one stage the the for change

Chano Fernandez

for are Mark, I we’ve we we I and been both world. in second the as and - building mean, beyond, we have be the and what pipelines rest when would look I of commenting, financials US with at half think, pleased the the we what

healthcare we traction are more the what a large verticals, seeing commented in in mainly consistent of before. financial couple Those with are and We opportunities. very services

faster we - yes, growing is our But that our pipeline is yes core it up our on financial being lately. than moving see market business and than clearly

Mark Moerdler

would good clean hasn't margins how I’m Perfect. going and GAAP the should we return interesting. be forma to that GAAP how quarter that's the about, helpful. Very to Excellent. going improving, are margins. drive? Pro color don’t investors turn something is What margin given to think generally any I’m when start the will factors talked the ask, to quarter about was, positive. the can improve and And

Robynne Sisco

Yeah, our of we we’ll our stock continue forward. is future in part portion spend here a near at you going XX% and declining philosophy important so a know, as Workday, compensation very of now, but should so revenue, nothing that to expect the good

start reach look we expect revenue, GAAP the non-GAAP would as the profitability. XXXX when mid that's towards So to to 'XXs we towards

Mark Moerdler

Okay. you. I Thank it. appreciate

Operator

ISI. next Kirk Your from from question Evercore comes Materne

Kirk Materne

relative the into thoughts your it’s to I much was the quarter. year very guess, were curious a going maybe Aneel, congrats Adaptive Thanks and I it? I after know on high about on guess, you your just I which how acquisition, done, thoughts the on some just expectations,

maybe know that's anything on it’s financial color maybe conversations year help whether surprising would you, that’s out to maybe a more positive be organization the a just been a little thought how great. panned broadly, around of on you And relative more what kind to basis stoke ago bit you just

Aneel Bhusri

actually and lot had there first plan Tom the obviously at and with an CEO momentum. my - Dave a it’s the people meeting our Dave for there all-hands yesterday year. - all my in key And at co-founder is of were great been good Duffield Yeah, We’ve a the I a are company, great friend. year. a Bogan,

fit that actually think product imagined, Airbus would choosing base happen probably and I up the Tom wins expected line. product or with big either customer than Adaptive a market the really it’s be played great Workday and some have was like that has it I way, the out and had we’ve to What we faster would happen AstraZeneca

Adaptive out the standalone with thing, to starts healthy be at it of worked it pieces cultures. positive think I attached important and really the extremely so most think well being really Workday, very and similar has all very, I continued to the independent business very has

care We places integrity we we making that, our acquisitions five both both more look first and were are - Adaptive, - customers, really If at would about our really few there about unfortunately there those year. phenomenal care far employees, are like so. high probably and between, a

Kirk Materne

in the - items year. That’s just half mean the guess great. it pushing Maybe Was one is second one Robynne expectations? quick half just a versus one-off spending pushing seems mentioned into that that bit some little so strong, more Robynne. I the hiring are of for maybe you second I

Robynne Sisco

program slightly nothing of good jeopardize what program out all but nothing of the and that that's hiring, moved and I we year. of going advertising the things was, this little slippage would like Most just spend, that a the the going work we and on year. Yeah, later call, impactful planned are other types behind was were in very start to have quarter initiatives to that

Kirk Materne

Sounds good. much. Thanks very

Operator

Your Alex next from comes Zukin RBC. from question

Alex Zukin

for cadence I've guys. Thanks financials I or you deals? can you my starting about Adaptive question. to guys. Adaptive. quick talk maybe Are wanted of Hey of leading got first ask just And on, to kind a core taking more to on Hey, the maybe follow-up. see

Aneel Bhusri

the increasingly on product, Adaptive helped priorities, There CFO is planning. in And the top has is if the best pipeline and a of you were mean, I at finance and look no at is, planning workforce the for both for the for question. It’s list planning financials. to key way class

okay ready quite with for planning into follow so a and that, is core conversation. can point financials, broadens a later. entry up great and the if door get still it not we’ll we’re it's with customer And the And

no appeal. just think broadens it it I question, broadens the it the - appeal. just There’s But

think as I does well. Analytics Prism that

really So broader having has for product the that for footprint base customer financials important been us.

Alex Zukin

one And conceptually how going to way about that think should Is maybe for subscription think any backlog we or numbers about there Perfect. on the the of just Robynne. kind forward? then, of Adaptive impact

Robynne Sisco

Yeah.

in So disclosed that $XXX bought inherited when backlog. we QX, Adaptive them we we had of a million

got QX impacted so that of last the number which And as year, we well. bookings benefit obviously

very us QX starting for in a into it’s So QX. tough and comp

Alex Zukin

Thank you. it. Got

Operator

comes question next from Your Morgan Stanley. Keith from Weiss

Keith Weiss

the quarter. you Thank congratulations for good taking Hi. guys, on question and a

customers into progress, go, definitely in continue new more You to international. it’s and good make the fold kind particularly to adding of

the terms of penetrate that existing take other to into the of upselling get existing of equation to and on the sort further of some HCM an of update progress maybe with side broader that's in wanted the sort the into ability portfolio and customers, I customers? going how

Chano Fernandez

Keith, I’m speaking. Chano

are business We that doing. is pleased on how

ratios, the I would financials, base with terms In installed starting planning, into and selling, of our clearly recruitment, HR then attach learning. prism, back say

very think as which rates well, perspective the our I attach we of from products great, our most it said doing is taking off from HCM. is are before, and pressure growth because core a

have on stay But number we Rising. those will attach this disclosed Analyst but year. of around do some the tuned, rates Day We Workday sure I’m progress. usually good

Aneel Bhusri

there. and logos on top the I different that than we China also customer geared with base really It’s do still would customer then still our on new a as other just embarked out consulting very towards a cloud from base, that’s probably been peers better we one new could but net of since the more are progress dedicated add, firms. put think it's I pricing clear from study we’ve good focus more

it’s for us. area interest high of So an

Keith Weiss

makes follow-up That a Got And Robynne. it. for sense. then

the - kind kind the the conservative gave like customer that Aneel does of methodology guys any inputs your in understand, putting in of the at that pipeline, guidance the of but like it’s terms year? the I your was did all, - base, to on uncertainty not of more that back you at within of speaking forecasting the Given half impact and use you any up

Robynne Sisco

in that loaded back-end know, more other as than been years. all said we’ve you we’re we along have this So, year

we’re forward we’ve focused got definitely to quarter. our guide that account updating and you in and large next on So pipeline executing that we’re against more looking and into a taken we’ve

Keith Weiss

Thank it. Got you.

Operator

from Your Rangan comes next of from question Merrill Kash Bank Lynch. America

Kash Rangan

a Fortune the mentioned very much. I about XX wanted core XX% bit Workday you the to penetration of on personal Aneel, only XX% also you of on - XXX XXXX. have Thank Hi. fantastic Congratulations HCM that mentioned quarter. and ask standardized Global little team product. you a

XXX. to this difference market the does generally is to Global do core levels so like you Fortune equally the do markets therefore, HCM have global put words how Global What player tends you targeting of given Are mouth, this XXXX where especially the scale you Fortune share one that on product market the share. In order think how as growth not line, get do dominant you for to get versus your that still with to a and rate penetration but in the in we XXX to the of number Thank position on sustainable between dominant the or company kind Fortune need scale, XXX? you. the think with have that

Aneel Bhusri

So I’m the to by market that at but XXX. is There have XX% still accounts obviously to do there aspirationally like the XXX the in sign in continue of is that XXX. probably expect we’re we rise. Fortune yet. I the probabilities, going that way, the Fortune Fortune And we’d - not XXXX decisions to have still made to share same not

around the the of we was also group make XX% XXX - XXX. Fortune we The have to know we're there first Fortune decisions and

the care as Fortune For as of we long have the XXXX. don’t why Global execute can't see and continue I penetration we take to rates customers, rest, high can of

all the yet that selling we’re opportunities not There expand reaching that It’s some opportunities in. are and continuing in to. countries incumbent not probably in are Number and things. on places two one, to those globally they’re were

to we that factor have So in.

as systems. these their migrate that’s there early probably as companies most begin some focus to talked earlier with are still of as us on be of we those markets very in legacy for migration their number the and two, important to And so about cloud

opportunities to customers modules opportunities it’s HR into so it we confidence that back to with, and continue are even haven’t opportunity long-term the and modules there gives that brought these even market many a yet. out be there me go we But can

confident, very growth. to big continue it’s support market to So a our enough

Kash Rangan

Is a And still from on Wonderful. if couple guys have case of back? Thank it a of of you that as That's installations. was for you you. tailwind me. replacement words SaaS a legacy quarters it couple the

Aneel Bhusri

Legacy in record SaaS meeting that systems failed, the or failed bolt-ons either replacing that we're from... meaning cloud core of

Kash Rangan

Exactly.

Aneel Bhusri

From trend our you competitors continue When one competitors to at of us. XXX, an our for get a - neither that the - I think opportunity you that of be to and large look us will for when candidly Fortune over in that proof even production employees XXX,XXX be giving or part by employees the real have and customer a just not of happy. over into winning success huge XX,XXX them been and our production having has them points are

XX% stats of the of Workday, is or XX that the that XX are XXX think Fortune approximately already using are, XX% live, the I we of have right.

that a people where project, to when that’s the next thing make the works, is, sure come a And and So sure advantage. into huge and wanted have hopefully they that’s we get it play. failed thing

Kash Rangan

you Thank so much. Wonderful.

Operator

next comes from & Company. Cowen from Your Wood Derrick question

Derrick Wood

Thanks.

hoping to sharpen changes some reasons on? about regions changed comment you in First the up your the talk what focus you're with maybe and leadership kind of one the for during leadership new and your Aneel, just quarter. the structure leadership you Could international or structure just

Aneel Bhusri

I’m that going to Chano. over to turn

Chano Fernandez

the remains are very organization. for with said, the big within focus - happy remains us sales a And international as we progress. international Derrick, Yeah, we

that had were We couple also for better opportunities improve. there of performance countries where we and said a to

of that So process. that's part

very that few within with promoted am. really, excited has I company opportunity quite and Personally, and a years about we for are us really We been the ahead. the someone -

Derrick Wood

Robynne, back-end I you this And loaded it’s Okay. more mentioned guess a year. loaded or last back-end quarter again, of quarter, quarter,

You XX% backlog low maintained half. the for growth second the

QX? color color Can it’s QX to what growth us towards Any think of QX kind whether you higher more there weighted know, you would some in be and around, as you just give versus helpful.

Robynne Sisco

is QX last Derrick, weighted year. it more Yeah, towards than

the really the when the and half we of just And large last - seeing have even we’re to not really quarter. So it particularly the into second Adaptive the more had we top that, but a comps than on we're distribution And facing year mean deals loaded into this acquisition. year comes then I second fourth difficult back-end from quarter. lapping sorry, then

Derrick Wood

Thanks. Okay.

Operator

Barclays. Your from Lenschow from next question Raimo comes

Raimo Lenschow

little Hey, two from Adaptive, as back when to go focused on like core but Can it me well. kind SMB Congrats and was technology that questions. Aneel, got were like the I up. more was you of the scale you've you it bit also really then And one Could to - you quick you. good Thank on like just channel? just the about convinced of it, talk a word progress there. - made then, partner partner the evolution

Aneel Bhusri

scaling companies well modeling in on of the and they yet already working their engine not the biggest the was the marketplace. products world. underway. was public, It had not Adaptive, the but the to re-writting been time known acquisition at were the They of So well for work

we in of a this got earlier with that the delivered we're And gone, chunk the very, work like have it continues. But confidence companies part companies. of very year, AstraZeneca and Airbus, now very sell you to large how has pleased it know big the two

So really well. was that the underway already has scaling efforts gone

- that - we we that world-class the was system the and now was really just front in companies got on a have we've really to world-class, - They world to the a the because largest scale they continue Adaptive it. team and I say development

- big a I cost. for enterprise. side in the it's the it - was think investment large That's sales an the a other it's also big part of was it -

been leverage organization had Adaptive if part dividends I By paid enterprise think for gone big well. them. and that to that's becoming of high-end public our Workday, able were a they have big would investment immediately as sales

partner of of evolution On to broad strong base continue channel, the a have we the partners.

got we've big course, SIs. Of all the - big the

the product XX embracing has months and in this they're of been line of the think they’re trends big embracing I two financial last Adaptive.

some excited we helpful to to sort close for as us learned that right that the very that of in They’ve some partners Adaptive the big very not we’re situations now. the historically of SIs more be in products. big to got the expect about as are going and competing have SIs and was of larger

Raimo Lenschow

Excellent. All right. you. Thank

Operator

question comes Your Mark from from Baird. next Marcon

Mark Marcon

afternoon. Good

was add the base? little you bit focus attachment wondering, with me regards my of existing client a heightened Aneel, congratulations. Let driving to within could terms more I the in if elaborate

think visible terms would be scale you long opportunity how dimensionalize from take up the that to would that and Could in and that outside? do of quickly you the how

Aneel Bhusri

I we’re there. hard our for always update high you we’ll typically conference do user in of at the satisfaction. we We have do at to think but to out that at for and meeting. call, customer from of It’s that XXs us. we’ve thinking. the Rising. kind more that with When to And short want analyst next - tend new buy a we’ll the at come customers the is, modules, been in there opportunity There is on margin you

been Financials for have or last accounts. new for and so XXX X,XXX that's But base a over Adaptive. closing HR for rightfully on we and four years the focused getting on three customers have X,XXX But now in

to probably have we need go a on our systematically the systematically, and more a that to more sales with now or So adjust big probably a we how side. about thinking little footprint base, bit to bigger not back installed base

Mark Marcon

guidance guidance, regards the typically has conservative. been with then the I revenue And Great. year-over-year subscription to understand compare. the

that it conservative. know perspective, sequential anything that looking perspective? this from it there from Is a seasonal seems sequential at seasonal a would drive You

Robynne Sisco

between QX, have QX Well, and seasonality some and in QX we our subscription and mostly QX. do revenue, QX -

Mark Marcon

Sure.

Robynne Sisco

of on Based days. the number

which don’t get QX when account Obviously, was We sentiment. Aneel from of in that. saying. things little get a we account, a overall he So we we bit take QX lot we and into what a QX take into do then guide. tailwind about talked in

well we having The the as back-end this more terms do weighing fact than our that in us than back we've on is year through past, this halfway obviously, in a year. half more to generally is in the now had guidance loaded close of

we as before, And get execution. back through the said So we’ll as the you I half we’re focused of update year. on

Mark Marcon

Great. Congratulations again.

Operator

take We will two questions. now more

Karl question Keirstead Deutsche Your from from next comes Bank.

Karl Keirstead

one simple for thanks. Robynne, you. Hi,

that outperformance on three million $XXX You margin than more is, would flow happened down one had or have bit to is or that XQ little other might things side, be two over mentioned way worked cash the limited. there a trust of here limited. that months the you. I cash flow maybe some ago quite Thank the what to were performance? its line contributed

Robynne Sisco

Yeah, that of it. part definitely Karl, was

with out of quarter would quarter a into collections than we thinking came also had stronger gone have. number We the the we

invoices it’s so and predict us we're a in and end half. for low by we little due hard seasonal given business the where the land the to a quarters do the at QX are of to quarter going quarter Obviously, of our lot back

of So really unknown. is slide out an a whether or they bit pull-in

our So flow. we were with performance pleased cash on the

Karl Keirstead

Got it.

That Thanks Okay. me. it was lot. from a

Operator

We will take Walravens our JMP from Securities. from Pat final question

Pat Walravens

Great. I you. things quarter, about checked heard Prism. when Aneel, Oh! Thank this good actually we

then opportunity, and they going us your tell time could you if that’s long partner wondering was billion I how an Tableau, would $XX opportunity. maybe be to some see clearly that so buy spent so And

you perspective - work Salesforce? your companies general that’s the for maybe just in analytic and in maybe you So space for could like

Aneel Bhusri

Yeah, a you to be strong has been continues a Prism strong performer, know performer.

we quarter with another very So good Prism. had

in and people resonating the and to financial on usability and spend our in prepared go. way of being I we and highlighted with top analytics analytics, think a comments analytics see the we’re is that package customers. see first, It’s of idea applications it sit set of can but really going more more that of the this Prism, you analytics dashboards

big doing you in you strong the deep lot we’re work kind have show transactional a engine, of a to It’s of a culmination of ways. of the what analysis can it’s that when many with part So do data.

it will just more Prism, because it's chug continues a and the few with Analyst we months, you exciting. we So Meeting it happening we it’s detail to only QX. When what’s in get very didn’t to along mention show about

Pat Walravens

you. Thank great. right, All

Aneel Bhusri

At and data Tableau. HR It's competitive types with versa. some lot We using focus drive financial people companies of on in and Mark to internally, like really for not Workday. the are day, types our of happy data we the situations and the that in Tableau actually very I’m vice do. analytics end used a

good that probably it’s a very Mark So good company he very move and it’s a for acquired.

Pat Walravens

that you Thank Great. for perspective.

Operator

a joining good That concludes Have night. the us you Thank QX Workday today. earnings call. for

Workday (WDAY) 29 Aug 192020 Q2 Earnings call transcript