WDAY - Earnings call transcript Q1 2022

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Operator

Welcome to Workday's First Quarter Fiscal Year 2022 Earnings Call. At this time, all participants are in a listen-only mode.

We will conduct a question-and-answer towards the end of the call. I would now hand it over to Justin Furby, Vice President of Investor Relations. Thank you.

begin. may You

Justin Furby

Welcome conference operator. first fiscal quarter Thank to earnings call. XXXX you, Workday's

call, Bhusri and On our have Product we the Aneel Sisco, Executive President President Development. our Co-CEOs; and our and Schlampp, CFO; Pete Vice of Robynne Fernandez, Chano

remarks, Following we take will questions. prepared

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

quarterly on we customer regarding our including financial our operations recent the XX-Q our get business ongoing matters. may results, started, forward-looking on to want of uncertainties and impacts information based applications, These statements condition. subject statements assumptions guidance, and this with including risks, and COVID-XX Form to report the we Form that uncertainties include report most the set the in and we information press Securities on of such demand, are differ pandemic that other to our actual factors as to to our and Before release results related some forth those and have refer file statements. and Exchange and cause particularly on Commission, documents on call, are from annual the for risks, and those of the we emphasize global risk assumptions today statements Please XXXX economic additional materially XX-K on

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

is of days list and XX next selected results comparable website. of and the the updated press page Investor release customers Customers monthly. page on our the link. replay website call for non-GAAP under You our our measures, on can these website earnings disclosures available be includes our Investor find Relations company including Also, in webcast this of reconciliations Relations of the with The will a additional GAAP regarding

otherwise Our second to financial Aneel. quarter period quiet comparisons in call period will begins to our Unless that, call of the our be With on this results the for over hand comparable XX, stated, all XXXX. XXXX. fiscal I July will

Aneel Bhusri

everyone. for and first afternoon, quarter for joining call. us you, earnings Thank Thank year 'XX Justin, you good our today fiscal

areas Before person, we momentum jump non-GAAP had product of good results, my for a inherent pleased again the in 'XX. our on of to Workday In friend, delivering winning accomplishment one and to most all with positioning increase once proving starting a the first, I'm addition into the in QX, amazing significant Phil Phil XX%, an Mickelson, our business the operating over is well demand Championship year time. underlying report that congratulations across huge that quarterly PGA great weekend, Workday in of a margins fiscal talented and quarter, great saw strong investor year golfers model. a an and we strong showing being the to us while strength all

HR across and and plan more behind on we support shortly finance, how opportunity. acceleration transformations invest the will results this digital Robynne Our in share to

share HCM. me starting Let with highlights, some Workday

with cloud experience. XX% transition in name of AG, the customers [Cornell with we Workday family, to notable an new world-class differentiated and the to University in Fielmann In HCM Mattel, of and to be welcomed increase QX, products our Cost customers. continued employee to to we go-lives with continue with and We're HCM along innovation. Plus demand Vegas QX, Las many Corp., World their suite Even production systems University], prioritize organizations HCM continue other Five momentum, over all of Sydney the leader ASM Inc. more Market a sales Global, a and We have including few. market our deliver more Below seeing Sands as in to

saw in Workday digitalization We momentum to build companies of Financial QX CFO. as the Management. increasingly office Turning prioritize the within

financials portfolio Adaptive we Planning, saw in known with Solutions. bookings, strength also as In including Sourcing, across Workday as the and such addition our to offerings Spend Strategic acceleration Workday Scout, Enterprise an Finance core formerly Management,

New add-on QX at customers Saks of St. included Werner in wins and FHI Francis Incorporated. System Department Enterprises. Power, and Angeles Los Water and Health with

where firm, was was was broader HR win Our RSM key solution also driver a to a Farmers industry National Union solution to platform during Accounting success a our And quarter, solutions Insurance. FINS of US. win QX, key part Center an on focus contributor first accounting at our our the our PSA Mutual in FINS

by market. Our the recognized continues strong to get position

to in one innovation of management. continues For in solution that year we grow to Extend, leader and proposition a In and the our supplier focus and including we Workday world, front. in to all Management was as changing of QX, on we enables across a Core all Suites for Workday Gartner Large back, continue in May product and make areas, named Quadrant our broadening latest global RX, Magic the delivering the fifth delivered a Taking Midsize, system. analyze spend row, Global greater advancements year. XXXX execute rapidly release, value advances only step published Workday with feature X business functionality on this And in capabilities plan, and on Cloud Financial a the leaders Enterprises this for

everything of who we these customers of as particularly are such our Underscoring outside team to empathy a times. I more In company. but dedication, the history, score to led the investment have is a in Chano satisfaction and our Peakon Workday. more pleased have continue key our the we all daily we minutes, to be company survey couldn't Workday. our Experience I'm excited and I'm offerings of capabilities innovation with helps feedback add front, customer will maintain of which the culture, provides company. us the on to proud it the success few optimizing be acquisition experience this seeing in all enable believe part Slack retain know, and a to are from employee the ways customers the Peakon and which This our further you who that of across satisfaction, experience, Workday in of allows announce in Peakon closest experience our user Peakon, continued People opportunity challenging as named always be greater basis. also attract in color We Workday, continues during us excited customer the Teams. to at a people greatly our on natural future extended more high of to is all entirely talent smarter engaging Workday so employee world, meaningful now a search latest ensure supported with grateful to success teams ever-changing at to new in Switching Workday we contacts: well heart and and And those welcome XX%. on as as do about satisfaction to of their as vibrant personalized we’re levels to this world-class us their announce Microsoft closed levels support in to to workspaces

more see and of efforts changing service all foundational be their the partner As that ahead, organizations group of this in industries on across to we world. in backbone front employees. a we tremendous of digital transformation opportunity delivering opportunity look a motivated and with will And us to growing

so, more workforce this plan by fiscal scale innovate as to So than XX% have we'll our stronger increase path, and we growth In global path even move to billion. doing hires foundation in on XXXX. new our an forward we $XX or X,XXX on to year

the for to acceleration a in and year set was our stage our This fiscal quarter strong start business.

ahead, Workday's higher. optimism As couldn't future my look be I for

their We and Chano companies in and in a my front have continue embark turn Co-CEO, a you, good that, over of With as Over to finance team I'll Chano. great and to on Fernandez. significant opportunity journeys. to global transformation place friend it HR us

Chano Fernandez

Thank you, Aneel.

acceleration we're as meaningful As off the of in Aneel organizations a 'XX with their as position quarter first increasingly FY the backbone transformation. in mentioned, start digital Workday new strong bookings to

outperformance, in increased bookings 'XX. FY with growth Our strength combined pipeline us bookings driving in provide continued QX generation, confidence with new accelerated in

strength This and with installed by across financial HCM quarter's momentum by and execution the pickup conversion along a year, as our saw the solutions. new strong base rates as improved quarter, again We overall environment. results And team rate. another from sustaining in last had we well driven solid as once renewal net customers high bookings throughout were outstanding new driven business saw

healthy outperformance and we bookings Spend from our also mentioned, America Core Aneel and Planning, saw in across outperformance have geographic Talent Analytics, standpoint, As APJ while EMEA. Financials, driving Management portfolio. From North growth a notable we

strength the to investments our Our continue effort pay professional enterprise where services, such in start healthcare in that an and medium innovation government, And as had our industry-specific exceptional are also dedicated and to our critical and vertical financial go-to-market as continued market success. markets, education team and to year a off.

on in areas, growth. accelerate investing in capacity, 'XX. as development. the biggest marketing look CFO. and including such business And The previously non-headcount As quota-carrying headcount significant the the nature, the long-term of broad-based hiring and one organization additions FY planned to marketing of as investments and and and Aneel focused in said, campaign, also We're areas have global we we plans are presales office sales sustain brand is of

expect we QX, in to on seen, quarters, have growth solution the returns the installed say we now progress. into to forward helped we of up sales began with teams During successfully and Organizationally, updating the these pleased ramping we in new net drive. healthy you with pipeline investments the our that selling the Workday, look are teams both the pleased initial Peakon investment they our and very integrated I market. actively base pace Based this have sales I'm accelerate to this coming and on that

by a QX, for significant the up our has well we and solutions portfolio relationships. the am pipeline number the Financial our customer acquisition hundreds of say our and been well, just We core within in opening delighted deals customer in solution closed customer HCM across as targeting base always upsell March, of that live and Peakon value a broader success services are is performed had CHRO core momentum. CFO, incredibly excited customer of Workday. meaningful very Although customers' CIO. Ensuring doors new already taking offerings at to I our as the Management and organizations have success

critical, but the of pace innovation our with not acceleration of Our partner take and partners. strategically also is enabling side customer more Workday only engaging even platform, our ecosystem helping co-innovating on

keep let's the globe. our workmates terrific I over momentum for of With Robynne. thanks all will team, to to of to Sisco. on FY 'XX, the and Workday leadership and would a Finally, across to you our Robynne it behalf the entire say turn Over to like Thank going. I CFO, you, President that, start

Robynne Sisco

good and Chano, afternoon, Thanks, everyone.

we add-on a an revenue in first the an As XX% backdrop renewals. billion, XX-month look against digital the of Aneel million, net HR revenue the end driven backlog Chano Professional sales, was XX% strong by bookings finance. favorable customer total to was strong billion, of their $X.XX $XXX of execution total. solid Subscription mentioned, and outside and QX the year-over-year, as Revenue driven and on and new business accelerate both by across billion. improving XX%, organizations $X.XX came strong driven overperformance at transformations in-quarter across up and quarter revenue delivered the million, new market the quarter new pace $XXX by growth linearity in was representing was U.S. at business. $X.XX first services of

of XX-month in revenue amount As in to FY the of the call, 'XX couple persist 'XX. that of historical of an of contract subscription we relatively the percentage expect of the more created earnings XX%. renewals a year impact ACV This discussed throughout flat on purely before in of up QX I at growth lengths renewal headwind backlog dynamic was function a Total growth to of points, FY we coming is billion, this growth fiscal from will $XX.XX that for end last is a year. mix a QX return last level backlog normal

and a non-GAAP Our the in combination driven of line by of overperformance income XX%. favorable variances. Margin non-GAAP top expense margin was resulting operating first for quarter a overachievement operating approximately million, $XXX was

external Specifically, had costs Peakon. and hiring lower-than-expected related it resources, ramp to and took up to we longer

driven the by ramp $XXX of and QX and ambitious We growth of XX%, flow was of the investment in support have have margin very targets in our confidence remainder a customer the operating million, growth for our these to throughout year. expansion ability year continue collections. combination in investments cash Operating strong aspirations to of

our mentioned, people talent continues to Workday. investment in our be to in and As top biggest attracting Aneel

to roughly from began growth we of to QX, our environment normalizes. including support of workforce employees, over very to hiring, successfully During end we're XX,XXX QX, pleased net to the pace XXX the integrating momentum we we and are new ramp XXX Overall, adding at over invest the in bringing quarter and saw the total Peakon, continuing with the employees. as

guidance. Based are raising to 'XX our in QX outlook on now over-performance and guidance QX, we follows. our providing Turning FY as

revenue, subscription of XX%. billion, to $X.XXX estimate $X.XXX year to in raising range we're For growth our full billion of the be

to add 'XX. X percentage in As to than our subscription a FY reminder, Peakon point overall growth is revenue less expected

with approximately growth in prioritize still of growth, revenue our QX of expect professional $X.XXX we as be customer 'XX X% FY the revenue highest subscription We levels to respectively. and year-over-year be expect and $XXX services to billion We $X.XXX XX% QX in million continue QX to X.X%, success. to driving sequential billion,

we services #X professional QX, in for million. For our QX. remains revenue into expect of priority. expect I account mentioned we growth renewal Investing earlier, the backlog XX% Taking XX-month headwinds $XXX growth of

an Aneel count our well position product pace marketing hiring non-head a demand accelerating mentioned, our product, we increased of the of advancing strategic enhancing in and as 'XX sales, at map. generation, ramp with company on focus the and across expect As targeted specifically spending road FY market as

the is the a billion. margins lower year margin expected 'XX our non-GAAP approximately range GAAP a non-GAAP flow $X.X change The year year are full of There no percentage guidance FY second XX% margin to that, than full quarter QX XX operating operating to and operating and Given the to of be we non-GAAP margins cash XX% the throughout of XX%. to points the in margins. for expect moderate with

and at real $XXX estate of of investments we purchase year, the campus control capital $XXX headquarter buildings. of to completed core not expect our other we X any million affords Pleasanton million important owned QX, of expect our This During the strategy to for is buildings campus. continue further our remainder investments purchase do and the We us close FY driving on growth growth. a focus over continued by amazing and our support expansion. partners and I'll and customer our hard to to off the our support to to that, great their I'll operator thanking start it We're for employees, business continued And Q&A. finally, With for 'XX, and bookings customers turn remains work. accelerated begin

Operator

[Operator Instructions].

comes question ISI. of with line the Our first to Kirk Materne Evercore

Kirk Materne

go not of bookings to the want sort the to last your of half I quarter of and of Aneel, the the building to pipeline about in sort quarter back sort this back accelerate opportunity only comments year. actually but

think it. on so obviously how investing we that about still about to the the give Just and Just loaded? opportunity? that. years? necessarily back-end should feeling out more think are second pipeline You're going bit I on us Is obviously, opportunity, that buildup, little you your some you everybody that good playing against because the hears doesn't I feel about but that reflect quarter it maybe assume over a how enthusiasm perhaps idea be But the more color

just I in there's thought want to So no sure make process. the change longer-term

Aneel Bhusri

in expected Well, more in we remember revenues growth frankly, lag even than bookings I and optimism. accelerated my that bookings subscription QX, had so And growth. just usual

up had too. of But then, already a us new with started. the I that a business. great renewals it over the accounting has of really products new acceleration business and while with I Chano. So across for it course, all performance optimism. a quarter, acceleration net turn to might But net takes And that think to better-than-expected lot we catch in leaves

Chano Fernandez

you, Yes. Thank Hi, Aneel. Kirk.

where know, looking and different the terms in with for few pipeline no pipelines our to that's of second year half. installed new second teams. the right? ACV year healthy of a QX relates to of we and seasonality half, the close have net we targeted increased HCM and We across having ahead year, new you And supporting the this on have confident strength stand of As it meaningful bookings very second had part performing in we've we base feel be both FINS, how a the today, and accelerated the both rest should in definitely the bookings. across last strong half as Based quarters

So I would today, across say, second QX excited and expect strong both. we results half, based on I'm where and we about are both the

Kirk Materne

one follow-up. I That's could if just ask great. Chano, And

You count or of mentioned regions? to starting perk revenue. investment And time? head expect some heavy pretty nicely they up these we you your reps. in that still at only the be so additions, for in are International there'll Can point quota-bearing on a of this all pretty international is XX%

Chano Fernandez

Yes.

end better that that is year, would for opening are is some be the we've COVID You terms international -- should more would be that in that part of saw across new again, expecting to in last the be should international acceleration of markets kind expecting after QX net market performance in already And at booking. now we of we it new, last net our course, certainly verticals execute. should us that expecting And ended recovering strong seen that net new we of be I of quota-carrying reps particularly going year, We that base, playing. we international in as last headwinds the of performing are forward. hiring be with installed the and pipeline

Operator

comes with from the Hynes Our next question DJ Canaccord. line of

DJ Hynes

that, X looks think investors years, like there? next if know to a to mix the of X to over going for But get do what I double to get you the versus expand or the going of land say, Chano. big-picture if is this I it's one question. better from don't Aneel ask sometimes I'm questions business

Aneel Bhusri

a for definitely Chano. That's question

Chano Fernandez

been of business Yes. base more see say representing more I Scout, new some Clearly, is land traditionally especially if landing nowadays, and of the get Planning. would just balancing our we the we business balanced. was It's representing more much PICO installed definitely clearly today talking products as bookings. we've and out that XX% more with

some So logos -- hard to these of bookings to new be that with that meet of when balancing for these it want very do both products excited the but transformation. exactly to in Honestly, portfolio going they as be very equal as motion The and right is certainly of customers also not me is trying it's it's where to play well, net land to are still out. a kind our but the when part stronger when days fronts they're significantly because in strong new installed the playing clearly remain significantly base we you say too. of new on we're our to we're and a accelerating. now us net breadth of allowing journey, net today broader, only that on some But now is and ready land motion, logos, should

DJ Hynes

Yes. Yes.

to question Look, Okay. think the may of it's biggest kind are the -- back have where do hiring in say Like faster a back think engine. there? and this, would And levels? been you margin HR -- the expected pre-COVID you what I That's the you on what -- maybe follow-up challenges been helpful. kind bit a or ramp hiring. that that up of upside pace of the up than of And alluded to terms you Kirk's getting harder to guys say to

Robynne Sisco

I see... So take you So one? why as can don't that

Chano Fernandez

Robynne, that please. Take one, Yes.

Robynne Sisco

you And over We us net hires. relatively from year. came headcount Peakon, Sorry, last XXX the we compares that had were Chano. saw across XXX company, to organic. accelerate while new entire QX. flattish XXX in And look When

QX the we And you feel expect that should really specific to about out want at rest and we anything are that. of to QX. stay ramping, accelerate the Chano, to And the of heightened sales to good pace good then in year. if across don't we coming areas So pace that of for add hiring feel know you I it all and

Chano Fernandez

the maybe important of in terms having to would hiring highest I area is that thing of -- The is in intent the one our already as the an No. we only And investment is go keep we sales to been ramping company. year. potentially just throughout up QX, add we've being across

Operator

of Our question next Weiss line Keith with Stanley. from comes the Morgan

Keith Weiss

we're question. sounds Robynne year It momentum And models really coming Or a to back and that, of Thank tricky sort A of is about? base question the the -- you really guys year. subscription year? dollar and for is big a the growth something a base should from the start renewal deal weaker expiry gross really for we any with year. across impact last from each basically and that that us nice be seasonality been taking Is like about in even that way. you've every is of impacts these are this that warning to that to Is there flat the thinking because quarter? going kind

Robynne Sisco

bounce Yes. while will impact a around growth. do renewal we bit, it expect year. Keith, this of keep will in at so look little normal year. throughout But a historical of the couple points range when levels, impact be throughout we the that mind, there's a will quarter every And

that every feeling we -- to throughout exact normal very we that do to wanted precise more difficult quantifying that you will So a not for give the persist will year, next expect be magnitude. return this to year. But quarter it's and impact, the levels

Keith Weiss

couple couple that is of points, of And you're it. of bookings to a Or you Like it about which points talk RPO a growth? about? specific when the points then couple talking one? growth of is Got a

Robynne Sisco

XX-month backlog growth.

Keith Weiss

are pretty those up Like And renewal rates about staying solid? then that's renewal? that, like underlying just contracts the for themselves,

Robynne Sisco

correct. That's Yes.

overperformance flattened scheduled of previous base is renewals, so And revenue, backlog. just renewal QX, This factor good in subscription renewal rates fact, reiterate, a to just just we purely of again, an really this feel terms that. had deals. on which to impact about we In of is no

Keith Weiss

Got it.

Okay.

guys well, you are doing the in control that outperforming. on the just contract that all renewals it actually bit are It's factors creating have little are a really timing of a So like drag. sounds your

Robynne Sisco

That's correct.

backlog the and number, yes, XX-month number the well. as On total backlog

Operator

the Our line Kash comes Goldman next from with Sachs. of question Rangan

Kasthuri Rangan

I Robynne, you. question a have for

Just starting logic your year, to but this new being a accelerate. little the renewal with net bit extending your base challenging is

renewal migrations pulled into that for so far on update a growth year little think quarterly two. quicker migration? going stronger also, probably call, does give talked you year, respect earnings what about a an to mean base, year? backlog Aneel Can So next FINS on maybe with conference next 'XX, previous just as Chano, being or with us And a financial we've I in to by to what so move you've seen intent core customers’ or

Robynne Sisco

year's as I've last mentioned more fully as year felt such new headwinds So from across the key before, is backlog. business this Kash, metrics impact

bookings compound able about, time. has But will this confident Aneel feel mind take we that year the QX year. the acceleration our really ability bookings and accelerate growth be this from the It results talked new to keep headwinds to to in into As year, to last offset underscore that. model in cumulative

the as So targets year. execute backlog we first expect the year, move through the see thing in to bookings number should against is stabilization we as you this our

next some whether talk fluctuations, too but growth. really Now A about stabilization or quarter-to-quarter early happens that there to will is not. to the reaccelerated be still precursor year little

and to finish. we have through move see the how We year

Chano Fernandez

Yes.

core in where to also not reacceleration And of after coming market. we product-based the did Aneel manufacturing. would QX, QX, to. solid to the and have the wins QX, now better know, There here are emerging as for a And quarter quarter pipeline burner Planning, is Spend Analytics. these the enterprise CFO, includes of much is and FINS opportunities only tracking, positioned in we seeing FINS of to strong selling I we like to part we In fantastic including are we which solution already Financials, one, mentioned, example. momentum is several well. broader another fact, have you which key It set that our go had and referring have limited opportunities as office a on we Management highlight finance like retail are we as strategic also had in I'm into are industries through in story, wins nice the very more a FINS more just well, QX. solution, growth FINS

installed best So we're the really product customers and our trying portfolio out base of levels. the to many both make with

Operator

from question next comes Bracelin Brent with line Sandler. of the Our Piper

Brent Bracelin

or I for to in in to here. Aneel Chano go Perhaps wanted bookings back this QX. acceleration here

think would reaccelerate on QX. were in in it came thinking compares, we half, I in easier second part bookings here but the

FINS the compare the So invest as of the CFO, through unexpected other the But It QX? you know of is you the wasn't you drivers more of seeing seeing cycles? acceleration. walk kind drove the of acceleration up easy enterprise as shortening going me here office sales in pick than in part Can sounds like Are anticipated? it. you are just I to forward. compares the just walk appetite through are factors that kind of

factors walk drove there accelerated just that us through So bookings.

Aneel Bhusri

big high-level execution I part a a terrific And of also whole by was a perspective So maybe I'll talking give host think then team. of it CEOs. Chano's from with

everybody but think a everybody, we pandemic I of was can, deals beginning do quarter lot happened look actually the looking it that's I'll in earlier to us it think be travel they defer Then to terrific we behind also on that including forward is are And to where We expected, won't putting that, people pipeline It when to the now. say a than just normalcy would QX, I probably closed. what I happened. forward and Chano topic. us. for future. I as seem industries looking as begin the forward companies. for but bodes And think show return to well airlines, execution. up to And now, not in much are the including

Chano Fernandez

Yes. Aneel. Thank you,

I think, execution Robinson all, first Doug by team. great of and the

of you, half the said thank and last generation momentum So already producing in year, back. Clearly, guys, for kind good you were And last the did. last second pipeline we during year. QX is what we year

of QX. mature that course, already of closing was Some in be to pipeline,

the back Financials, with it solutions, quarter are among or that said, net course, a the of out think of produced new breadth logos, the major net good acceleration. and acceleration. our Planning, as with helped X and Management, I of really as our had The came others. of Spend I were some very kind the installed well, they Peakon quarter. both only part I new some a in significantly, base really of mentioned had X that we factor, though, product big weeks part logos, portfolio,

a were of different that and I remarks World, number saw accelerated commented there of my prepared -- EMEA both them elements. Rest of in I So my made both bookings. APJ, the

think solutions, HCM I well. installed and and So balanced say as was across it mainly would I base, on geographies picture Financials a

So it around this was quarter.

there companies support where message be the digital here seems keep just think transformation, we there, is momentum. so is really are I upon realizing resonating, that need to that true momentum the backbone to to executing

Operator

Karl question comes next of line UBS. the with from Our Keirstead

Karl Keirstead

your has is or with in just I above quarter your revenue quarter growth years, over back look XQ the about XQ. X When and subscription a pattern subscription revenues fourth Robynne, got in third growth line where thinking I'm actually sequential Workday Hey, guidance. last

XQ growth the in that the past. a in been talking XQ that and gave wondering perhaps a that. sequential than X% And total bookings more of acceleration I'm guidance little phenomenon? little you have and X.X% could for implies the for that more a perhaps that is about if us does seen So skew we've bit a XQ of bit Aneel you Chano just imply address XQ

Robynne Sisco

to expect the we're has seasonality. out lot And predict most we are. with trends be further us growth to any quarter. We not for our always, And so linearity to Karl, QX. core do saw strong for seeing significant as massive sequential changes the in in in harder A of example, it's QX we Yes. of quarter. the within linearity,

will quarter. saw different. guidance So QX anything the tied flow year. wanted next we're in we really early make you be you around the But call, but see it massively guys We'll to still give and the we the within the don't how to at better sure just deals were seeing. of what But we linearity QX

Karl Keirstead

Okay. to think Robynne, last X on has That that. about like, in flow. cash I done, looks seen if we've sense. it you, okay And $X ever Workday quarters. of flow makes ask follow-up billion a don't to the cash it's operating

So could we the models going provide and margins you anything our between higher thoughts margins and Robynne, for cash operating terms but any good on, us you the collections, the mentioned around cash else And fiscal the relationship full build as flow? of flow funky year? out in

Robynne Sisco

Yes.

flow due cash the contraction is operating So year. happen part our of the to we expect margin this year to that throughout flattish

some but X So to fact, flow that a become the will is amount on headwind our invoices upside see I weeks where annual last a certainly, on year-over-year. biggest really January, month flow well significant guide, done January, come in growth we And very cash due. cash. We've of cash of our have

I certainly go the guide And billion. through our so year. wait-and-see we upside as But take from a see some need attitude of $X.X we just to

Operator

from line comes of question Bernstein Research. Mark next Moerdler with Our the

Mark Moerdler

strong Congratulations accelerate. continue year. to we on to see the the that Hopefully, start

questions. So X

to revenue margins it there First, is Or bit margins and for stronger of follow-up. something guiding year, year to strong Is expectation? while sustain I you're employee acceleration year? more bit throughout a up Or the a less -- that. got full then And else? a the of guiding due rest the T&E the hiring then is

Robynne Sisco

Mark. There's Yes. several actually there, things in

saw to the hiring as in goals still hiring increase strong potential year, in last guidance year, really to plans. timing going our our we have COVID-related some I raise margins revenue the as are the lull particularly for the revenue expenses of So ambitious the raise have can last variability cause we that but is confidence as we X% throughout mention into earlier, of year. I'll the that as some the as our in said, the we investment you And well benefits And know, -- and tied is, you office-related And hiring we from as our reach travel this well. then thing margin year. our getting was mentioned expenses

to of So we expect half the we that moderate the into as significantly get back year. savings

Mark Moerdler

sense. makes That

like the of sounded but was the you year out in terms back the cadence. year. last growth. question because there quarter, mature, of When -- the to versus built And -- called the Going the it the the you in fact pipeline more later strength less was earlier -- in it in was pipeline

that because how that talked saw about we process terms in where terms accelerating maturation close? the driving seeing that when of Does the we are what You've are pipeline terms in in in online? effect it is the fall What it's any QX? in has But Is you should continued. a are and strong toward where of have pipeline maturation -- stuff that's process? out? Or -- of the it

Aneel Bhusri

Chano. you, That's

Chano Fernandez

Mark, wouldn't pipeline. sorry. notice mature accelerate there motion to of the as faster and installed and our cycles, more of big have faster have land sales Clearly base, in Yes, significant significant with those higher and are Mark business really we tend -- any they and transformational projects. have products, we say SKUs changes I a than

course, last skew of that second cycles the creating The We end were we is the X we playing half say, that clearly year not rest those of still close some a of the That that -- this let's and pipeline that of pipeline of our, the pipeline. during quarter. the within months. we significant see some quarter. XX -- can So majority mostly will quarter little of can the at our next playing bit, most that can or creating be take maybe be And even year. of to should make for

Operator

with Company. Needham of & the line question Berg next from Our Scott comes

Scott Berg

shorter have ones. I just two

Chano. probably of First for all,

size at modules there more you're upfront the of adding previously. versus your on As terms to composition are number sale or quarter, difference that you maybe you deal maybe what are saw initial maybe than any modules customers buying this that look Our seemed that show of lands on has in work pre-pandemic?

Chano Fernandez

difference of being new that, Clearly, net highest There the logos the most well. composition from highest pandemic. But Financials really become another is of to customers I other execute consume more enterprise the I and the from tends see continues to composition significant higher SKUs. And when a landing with And partnership are there in wouldn't there some medium to the our SKUs is is phenomenal say difference would or really, start say course, that differences didn't had than there the significant that other usually they they quarter. team right? with Workday, that, to highlight. we

Scott Berg

of there Robynne outperformance be like? renewals be you out. out, future period from I called this called be out it that enough guess to that any additional because was Got periods? that outperformance color the anything follow-up you might is may to the forward, say, significant call it renewals for carried noticed question it. on was And the Or what my but the as on you to able

Robynne Sisco

other lowering very counts, Scott, pleased the in XX%. renewals increase an in Yes. gross even QX from well the as continued space so counts. again worker we customers worker increased the increase some enterprise retention with over end were customers saw impacts as as to the At we medium past year, in over bankruptcies once some actually with

to trends, in and really on this year, improvements bankruptcies we workers are see So see we'd some we assumed in this overperformance pleased front. as we and QX approached the

start expect we're year. through So strong and renewals good really to the off a to continue

Operator

of comes of with Securities. line the Sills question next Our Bank from America Brad

Bradley Sills

in you're what if like the departmental starting a there's in all that's wins move It the particular? into I add-on bigger planning, wanted FINS. wider the But organizations sounds FINS assume are the strength this you've in customers seeing for modules multi-department the sourcing, deals these going Or towards due Is And seeing I into question are still? -- to to where pipeline I wider and on that customers and made could, progress ask please. -- lot look those color way, across more in for of with another on are vertical lands a just pipeline there. applications, like kind coming with coming the you initially any more pipeline pipeline deals FINS? FINS

Chano Fernandez

your Thanks question. Yes. for

We're I what FINS now. and much right the seeing financial we're address the of enterprise us and are in to clearly are And has have some offering. not that Accounting is have strategic before. the offer very would on around of solution now. departmental necessarily we of view. with more starting really some a departmental the complete Center seeing in Carta big areas wins. we certainly much playing that Clearly, I for enterprise in market we're in I FINS then is was we formidable finance customers, And customers references course, prominent -- large the we up past. is not the working referenceable many appreciating than SKUs a terms say, becoming in us of address of but that very on that -- today just FINS last to we could financials cloud been more that more and broader the But the think Then, least, think number significant have like that helping player the been maturation in point right market we've more pipeline offering some services, it very not a

been of and we've different awareness around it's some would So that the I one our of brand would combination international I in say starting just out say well the it's solution. single of some our factors. the do are also factor. I Even as investments think a don't with CFO FINS of office markets helping to

theme. just it's So one not factors, many different single

Operator

of Our next question Oppenheimer. Schwartz Brian line comes from with the

Brian Schwartz

that have businesses HCM I'm sense and whether it's in still work. more you composition, maybe employees in when initiatives, this do either year? pipeline holding your prioritized are back just certain I Chano. question on for in It's the And return just to get the or later one more back could FINS wondering, the on conversations or office to

Chano Fernandez

question. Brian, you, your Thank for Yes.

seeing we're certainly to work clearly in We'll Aneel with -- our office the have projects right prioritizing was on that would so. But back need plays executives of should been But of of overdue it there done. and the get well They've they sort how C-level demand, conversations kind we I in employee and HR customers. think been say, to are offerings. I out. our terms of and and now, starting as engagements CFO seeing done of the commenting see it of how to pent-up that start they're some to reconsider some

of we're that on in as and as what seeing transformation one terms enterprise that whole, the think it's of that play very digital backbone So acceleration I transformation. that well a we

Operator

you participation gentlemen, and Fiscal your for on you Ladies of This Thank conclude thank for Year XXXX your presentation. Enjoy today's today's Quarter your the Call. rest day. First does Workday's Conference Earnings conference.

Workday (WDAY) 27 May 212022 Q1 Earnings call transcript