WDAY - Earnings call transcript Q1 2023

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Operator

Hello, and welcome to Workday’s First Quarter Fiscal Year 2023 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.

During the Q&A, please limit yourself to one question. With that, I'll hand the call over to Justin Furby, Vice President-Investor Relations.

Justin Furby

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

Chief we On CFO; and our have Chano call, and Officer. Fernandez, Schlampp, our Bhusri Larson, Aneel the Barbara our Pete Strategy Co-CEOs;

we will Following prepared take remarks, questions.

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

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

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

Also, webcast be will presentation, reconciliations our updated a quarter following with XX under of Relations regarding GAAP we this will going presentation list next on these can earnings our in available our the on page investor page website. Company Investor Investor comparable be call is You and with Relations link. website investor customers the press The the forward, our posting results release, of of Relations on the quarter’s additional a and non-GAAP for monthly. measures, Starting days customers’ Investor website, call. replay this selected our our quarterly disclosures including website in and of each includes find

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

Aneel Bhusri

XXXX and Thank call. you, year first conference fiscal Justin, welcome quarter earnings to Workday's

are the must victims loved children, acts by we we parents, life. explain violence be the to the families, feeling. recent begin, the of of pain, and ones of There and heartbroken no Before census are loss words the

California that simple York; to feel in Woods, thoughts live, Our learn, Buffalo, people of and do where and them has day they with are New tragedy. Uvalde, safe such has the errands. work, every Everyone Laguna other endured community worship, Texas; the a right places

delivering subscription XXXX business. acceleration results, growth XX%. reported Turning an revenue now business and fiscal off to of solid coming in exceptional of the Workday year QX our

target deliver focus cloud. the to That companies systems HR have remains which continue several our drive mind, we're an mindful, for can levels the touch even year, broaden At is cultivate call. all on our that Continue we the key QX offering of During do. support as we our later we culture, see to our macroeconomic demand on customer later become strong products the and to remains we the customers, to impact optimistic in however are industry's their time, the what in year, in the in finance these that which strategic our Barbara to see had opportunities top foundational impacting businesses to expected the performance, continue geographies environments move could of backlog close pushed and globally. to select innovation about to our were quarter, they on geopolitical will control, as to to more the industries, Workday current same across we and and and partner conditions and

to the a that Now, Callaway share few Tennessee I'd new customers like the starting business and some were HCM, we QX, last highlights from quarter. Workday of just West Golf many Barclays, of with welcomed Healthcare

Hy-Vee, equally We're example, deliver also and insights the Difficulty]. for now customers. innovate solutions, include new It's important go-lives us. on better analytics, volumes HCM. unique critical to our the also customers over to our large QX live, our a in very We success. ensuring we and in these in to is office Royal our which Workday We're milestone. successfully customer our just XXX customer the new proven known While us, to which crossed ability journeys, customers [Technical remain market Canada, recruiting go satisfaction, X,XXX XXX Bank customers focused wins differentiates have not RBC, Kyndryl drive Difficulty] leader markets are [Technical we ability of transactions, and data continues has recently valuable opening ability and significant customers. X,XXX differentiator that It's Learning, customers over to as of be scalability support our to with of the now to over a our across clear

ways don't of we take for office the increase positioning that granted, strategic we continue CHRO. the within to Something to our find new

and Lehigh several again for of board. Turning Game office Valley in the Tribal Health and financial customer a wins core the including saw suite included to few. Highlights name strength our once the Sentara Healthcare, go-lives continued Hospital, along quarter, American key full Aurora the Advocate across with We, Mohegan CFO. offerings Authority at University,

planning X,XXX of including adaptive now Workday our businesses execute, strategy That many XX% by core globally, Our unified their for resonating now a fins analyze organizations solution to used nearly is of customers. is real-time. being clearly the nearly market with plan, to differentiators one and years and our the in strategy key in provide with organizations

nearing Here's financials some roughly core XX% analytics of customers, including our X,XXX customers.

help As look customers our a around found world through for the serve our was we become businesses upcoming initiatives the values on as Example lens. through be and have year top boardroom you available ESG priority to disclosure we the for new and an announced the of be help of to guide that view office right most ESG decisions requirements. this that of in do two set quickly the a supporting companies CFO, further employees, our us. focus solutions considering increased what's the that can this seen their customers recent especially know, will we Workday on approach core our SEC QX, evolving and

identify reporting First is composition, areas diversity, ESG. help customers against for and for investment. workforce social progress improvement organizational our track workforce within We'll health, goals easily and more

new X second invest product and The in of Test belief continue new create heavily portfolio next highest Ireland. strategic employees announced approximately sustainability in resilience satisfaction will XX%. to in Dublin, note exciting early based we supply our the is front, Scope improve be to and Ireland the partner their our Difficulty]. on supplier plans sustainability, over happy help which [Technical customers. ability April, across shareholders suppliers. two our our customers the people of sustain jobs our That two And Switching our chains. which to We our that increase culture intend to X,XXX further we these European their strengths years, expansion levels to to a for the emissions company to our workforce by great to overall existing the to solutions headquarters customers, deliver

headquarters building. group have critical In customer a Dublin. addition to role in European employees we decided Dublin new build breaking incredible site already a to the development our service on of product ground in on efforts, plays and

As recently of the macro fact only time our company, backdrop comforted crisis, forward, that we've we've cycles strategy, that fundamentals have navigated the and XXXX-XXXX as as before, our younger the in will stronger long-term And remain come a position believe and through look leadership out financial our business we company pandemic. strengthen. confident of by each been uncertainty, most the been these a the

generation, We a for and [indiscernible] for With have to recipe record turn been you, the us. to at best business attracts track I’ll strong proven there with Chano. a a values success culture cash that, growth always Co-CEO, Fernandez. our it’s talent over the scale, robust Over long-term flow of model driven Chano

Chano Fernandez

and I’ve FYXXXX we and quarter must again welcome very and satisfaction. across Aneel, seeing net customer a thank I of and new to to amazing. solid long is to company want for you of you, the to new the we together to the many across time solutions the our as look QX. several commitment teams within our our once had We can to joining I workmates Thank offices what renewals, as opportunity to in special XXX nature achieve And customer many recently say today. testament and I the our the of a strong workmates. continued. our with forward strategic based during global first meet everyone by delivered momentum company than both and drove extending energy beyond. that joined travel more begin

deliver see we’re deals overall some More them seeing move this did to healthy we year. pipeline a QX FYXXXX. confident As future QX second closing see half, push Aneel quarters. timing positioning in key strong of several to us but also mentioned, And the the we’re we pipeline opportunities later into broadly,

As CFO some medium enterprise, driving us, across the parts, HR Voya, footprint significant largest market across we plus the we have standpoint several a remain standard where expanded have across of focused companies QX, we broad sustainable UK technology hotels. solid of at our financial enterprise and XX% Nordics Banking geographic core we and solutions in In world’s customers, And multiple the success. we strategic including France, In Group. where subscription several and CHRO of Orange with auto revenue one highlighted as in large our by footprint our growth increased and we a such existing From driving as where such on and S.A. addition and wins, management people the such and growth. as wins where lands the in of the Booking.com the NatWest companies and Barclays drove In saw our is areas, the strategic with companies. portfolio international our new to Accor Netherlands, strength advanced

we’re as motion strong and emerging solutions. another leading Our established significant financial cloud federal and ones, to government, momentum including market provider area the Industry where ahead. customer we base growth as HCN are U.S. like excited by based healthcare, industries as see the the both we opportunity, continues for well is of very drive such

[indiscernible] and Valley And and go-lives our at including wins Advocate Healthcare. Aurora significant looking Research, team, of supply strategic momentum healthcare of Some targeted transactions Lehigh West in chain product of as our reference Inc., as go-lives Tennessee base at in like Healthcare, our clearly Health came customers, out most well Health and QX off. forward Sentara our as is there paying are areas investments with clear along Hospital,

Workday has opportunity supplies, A data healthcare great are operational this Not success. space Children’s to of knowledge areas growth but customers our ecosystem. This patients extensibility and is planning example from critical one is need partners on built our also here just develop Dayton resources, industry which their planning, only key the successful to leverage and help when do Another for adaptive innovation our day platform, the been we’ve who consulting accelerating through and ensure is expertise our able driven demand critical of ensure from available deployments, solution was to make several partner they’re of decisions most. partners work chain across supply roadmap. is ecosystem, our the solution one our product and Hospital Using industry. seen a

to partner the course of role foundation coming growth the only Larson. $XX turn laying quarters. plus durable multiple are and than our brings as We as pipelines our Deloitte, of integrators drive correct, focused in us With and report over decades and some call overall me Chief will more over not innovation offices growth welcome QX, subscription with align that, Helping Over the that of XX% plans new and solutions, and Accenture, Barbara. support is our our as who remain the revenue Over partnerships revenue. to new but opportunities against PwC, depend to experience that who Partner across accelerate is CHRO Sam. closing, our directly scale to In built strategic our the healthy we will Officer, assistance enter the ecosystem like to it past two on in to our the to with strategy quarterly ever. QX executing I on CFO, to this and Barbara you, we billion and to CFO positioning effort launch

Barbara Larson

good Thanks, afternoon, and Chano, everyone.

a $XXX by year respectively. million, outside XX% total in $X.XX net Aneel services revenue their solid their and digital $XXX Workday U.S. the transformations. revenue over Subscription and start the was had revenue end and choose XX%. retention with was million, strong billion of quarter XX-month XX% HR backlog of the Growth the was up to representing rates Total to revenue. across solid at was As growth mentioned, continue over growth first XX% Chano of ACV new renewals driven was XXX% driving and we as the $X.XX strategic and of XX%. revenue globe finance as organizations year-over-year partner in up billion, professional QX and

timing Aneel into and revenue As future large our XX%. revenue push from a percentage billion, including total several impacted few X we of the FYXXXX, Chano approximately by quarters XX-month subscription point. up was $XX.XX deals, backlog saw QX growth and subscription backlog ones, Total and which mentioned,

and non-GAAP by a million, non-GAAP of quarter performance resulting of in a of top overachievement Our timing driven was for expenses. income XX.X%. operating combination the Margin line operating certain was margin first $XXX over the

transition QX across began as flow the As $XXX well We the million. flow back in-person to expected, of business travel cash for QX office to as investments the and strong significant a year start and had we made with in cash operating events. resuming to

raised we $XXX in floating our QX will through fixed our due at $X.XX prepaid balance be to of as cash providing term occurs, us Due October. also cash our When we repay weighted the late for in by principle attractive until non-GAAP comes rates, in rate loan in shares. existing the to additional share average share share pay public to this in convertible $X not intend debt diluted debt quarter, will reduction a the billion enabling roughly million it billion offering the when this account debt decrease our X reflected fully while count timing, million future. April plan QX. During non-GAAP We and interest flexibility

and Our largest to investments continue talent top to people be in Workday. our attracting

a employees. to During brand employees, and that the opportunity and than integrated over hiring strong quarter, QX XXX growth culture, drive with significant we have on new our revenue. more ahead. growth The solid successfully the remain net revenue pleased XX,XXX XX% we global ending we leveraging is QX, added with testament our plus our execution to Overall, and company-wide our on in are in $XX focused sustainable leadership position path billion subscription the to

continued back also to end into guidance, while year across now weighted business, which we more taking our Turning reflects account originally anticipated. a than momentum

billion, FYXXXX in for $X.XXX to be guidance growth. our raising are year-over-year of subscription We to the billion $X.XXX revenue range XX% representing

to approximately professional X.X%. services revenue to revenue of QX be sequential our satisfaction with value. in our be that year-over-year we highest with still support QX ensure $X.XXX We partner $XXX our tight in FYXXXX, subscription the $X.XXX business to successful ecosystem expect to growth have growing We our and billion, growth customers implementations help alignment XX% as billion of levels expect million customer continue

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

the grow to year-over-year XX-month expect in approximately QX FYXXXX. backlog of We XX%

FYXXXX expect to continue non-GAAP XX.X%. of operating margins We

cycle, tax reflects which non-GAAP continuously the quarter typical trade-offs. business seasonality second the to full at QX. have margins strength expected the revenue. respectively result QX, growth employee confidence the The priority are margins XX.X%, operating growth But we took GAAP of long-term the of will achieving evaluate The of billion XX our we remains at year points for XX% $XX margins. at non-GAAP and be non-GAAP Investing expect percentage non-GAAP of XX%. margins XX in in beginning our and which operating margin for remains a our annual For compensation effect as and approximately and model than lower rate in FYXXXX

interest our result $XX a $X.XX our with which guidance associated the lowering operating for payments FYXXXX cash takes of to of we approximately IPO, into cash debt. recent are As million flows account debt billion,

We by over continue amazing With turn support customer And thanking work. and customers their and it employees, and expenditures to year finally, million expect to expansion. support for the that, $XXX our partners to this growth close continued continued business begin of capital our hard to I’ll operator I’ll Q&A.

Operator

J.P. Thank is you. question-and-answer a Morgan. Our We’ll first now conducting [Operator be Murphy Mark session. from Instructions] today from coming question

Your line is now live.

Mark Murphy

a guidance opportunities for year. for if And instance, a congrats at by vertical. see America customer’s across much their on your build of business I’m invest to North characteristics by curious confidence Thank the brazing terms there of and slipped, just that and were much you today? contrast if the to higher any geo you in were in pipeline you Europe how willingness versus level, that the the common spread or compare do or very or

Chano Fernandez

Mark. I include later QX. that year. of area, not it Sure. we particular them Though, closing terms are pushes the in different Each or reasons, some necessarily would call region these in focused macro we and were in opportunities. of related, for larger by as on product whether push deals the our one Hi, of not mentioned,

in are but continue could QX, solid several mindful environment, to in it, markets. and particularly including remains uncertain we that We international results monitor we definitely Europe have across the regions

Operator

Thank you.

Rangan Next Kash today Goldman Sachs. question from from is coming

live. now Your line is

Kash Rangan

to downturn, the different, What from Workday. Aneel are with call product Thank and GTM you go in you. the are through investments, you Aneel, order something close people clarity deals you for pursuing on a what they’re that potential front, clarity, it? hiring. get tactics it the weather this hearing How it’s tactics it you’re they these deals so changing and maybe whether Chano. to as to so much Thank guess, for forward question for you Chano the so much. could customers what for looking I call question are

Aneel Bhusri

is of is terms pipeline cloud tactics, – in Well, continuing.

We’re and do their we probably being through maybe customers that smart about hire way we in hadn’t value proposition, to with every continue think way the helping ways downturn. a

got terms more payback. probably the important You through of now. And in to think value proposition it’s

want off Chano, playbook. anything And just dusting so there? we’re you add that to

Chano Fernandez

digital being and And would priority. close conversations a and I’m doubles back some remain transformation from push monitor deals say from of have strategic customers, investments, those terms many I is Workday right we’re coming just suddenly hearing CEO what I core in What that that of I’m very now, at the large ones. the there very

very in that they’re in going are We related not this are closing the point time. macro reasons to confident really half. second There at

The cannot and first like, seems remain very our of started be that other to a strong really Kash good month us. is give QX Suncor a the we fact I to – May for

Operator

Thank you.

Next Materne ISI. from question today coming is Kirk from Evercore

Your is live. line now

Kirk Materne

the Chano, feel you just to the But taking they you closing can made, weren’t from macros macro getting all I there later in that on some was the point be for related. Yes. in that so year, you Thanks which seems concern question. confident follow-up deals last these worse.

still time, So just half year. deals of might been and going their not have I’m that half confidence concerned, to need you cash in you’re deteriorated fall they want in I particular said, of seeing to their level to separate the these things or strategic of in now because say to sort just are just these more from of in back the freaking have about be. the or should versus to just what in whatever getting they terms close just the time sort And earmarked kind year it maybe begin some back macro out of that customers they’re were – deals with. they’re it’s deals – business, needed order, but the maybe seeing get their

companies just now. people different the think I it’s things right point I an from on think important conflicting make, So macro hearing software to because are

Chano Fernandez

the is I due can’t tiers large is as some we one uncertainty that was they’re to of macro. to macro that Certainly, What highlighted point in that trying the understand, I there really Aneel push Kirk. not control. is has clarify

executive in For that happen example, changes last month. a C-level the

those process And that a feel to the want decision whole. implementation of comfortable, key some through makers are just as particularly process the to review role

in The So remaining that confident comes commitment these of terms priority from remain couple typical those on year. a the really part is that the having half strategic of in and of that and push. on being deals customers a close discussion the they done reason a to the deals second of

Operator

Thank you.

is from Michael question Next Turits from Wells Securities. Fargo coming

Your now live. line is

Michael Turits

Obviously scenarios. deal been We’ve for delays Thank the the of call, mentioned a the it. you that downturn in questions taking feeling Appreciate you question. number you’re of some around seeing.

is, wondering of had selling portfolio. back adoption helps product if brought remarks. already and diversify you the the of the some customer something a things prepared had that focus in help that is extend? feel in of additional if on started you previously delays you of sales can base to Is some One to just under useful the the that these I’m the you all And that some stats perspective? you’ve the around modules motion from some at

we So back those to Thank can some of as well. you. maybe point

Chano Fernandez

our Michael, sales with we feel strategy and go-to-marketed confident strategy.

at we happened those of to it stronger. we felt COVID, that motions we’re the onset that adjusted As

enterprise and medium example, planning. for base, customer some like others example, For

watching we to feel right one prioritize And will now. will monitoring area another definitely that the we be So one, very and if the closely doing over be situation we same. need we

Operator

you. Thank

from Zelnick Our from next question coming is Deutsche Bank. Brad

live. now is line Your

Brad Zelnick

job and install opportunity last years. so of just But couple last into light space such which there’s Great. and base much we question, selling having you Thank if background following as the the an the a base the about noise, think I’m great the in degree apologize and airport. to here done on that

any to the to perhaps the to that how the product deteriorate perhaps create if wondering, cases back a innovating there’s and there’s Is it there we shouldn’t customer into can think that in what to that with guys some keep backdrop even that sell thinking limits base? limit opportunity ability might acquiring product in actually base extent that additional the Just challenge much a absorb? is you just or reason

Aneel Bhusri

going from two say early in modules. running just back would a early customers our the the and of to base I a one days lot or product of still perspective are

no anything really want to on you constraint that. there’s add opportunity. don’t – to any the I market if So see size Chano,

Chano Fernandez

what with said, you agree Aneel. I

solutions our important think very are I happy. I that agility their incredibly to we’re our bringing they seeing and far enabling because in And approach that value believe remain adaptability. and as they’re value as with customers business

We have a huge opportunity in our it so customer base And is that has Day. through. we much innovation even quantified just that on our coming last Analyst there because increased

Operator

Thank you.

Our Sills from coming next Bank question is Brad from of America.

line now is Your live.

Brad Sills

it’s Great. guys ask hearing about keep to standing relatively out area we my that Thanks question. I for from as an strong. taking wanted channel the planning,

couple You’ve out called quarters. for of it now a

what’s you’ve us this made on recently help understand, in you. could going behind Thank progress Is planning to planning? that strength you core with there? If integrating What’s just fins? the

Aneel Bhusri

out of for continuous of pressure lot maybe replanning, business a sooner pretty reflect engine, and well even legacy a planning. just planning, suited lot plan does continue at say now get environment companies better about do months, environment workforce the planning across there. multiple this cases, financial tools. pandemic product it puts every and think a macroenvironment our not would I few works product the and and And dynamic think to And think I that to the are products but mode level, this causing a maybe more really use are almost in a I And of planning. to

Operator

from you. next The Wolfe is Alex Thank question from Research. Zukin coming

Your line live. now is

Alex Zukin

the Hey for guys. question. Thanks taking

bit I deals that And then pushed pipeline have commentary So of quarter recalibrated the to commentary towards want based financials? on kind commentary that? those versus deals. just macro longer. around were within what a the or HCM disentangle the kind of of the the taking the you’re on How Is hearing thoughts first your little the you out about pipeline the year maybe of and maybe many push seeing in versus things more of geared

Aneel Bhusri

Chano?

Chano Fernandez

confidence deals that said in I terms we or said we region of What of commented, terms didn’t We a particular couple in pipeline a Alex. opportunities. moved to QX, us still some that we half see of for any good Hi, were and XXXXX. goals that momentum, pipeline year. is good we do push well we all in the the have the the QX product in and that Yes. said FY there is to from a pace second deliver terms on difference of But that see the creating of strong large we’ve as pipeline been or that give

Operator

question you. Thank from next The Stanley. from Keith Morgan coming Weiss is

now Your line is live.

Keith Weiss

of Maybe other you statement guys Thank for taking about the bit question. sort taking talking the Excellent. of margins. income side the and little a

for this operating Can very nervous guide in you’re full really QX. Why you economy. better I hear, all could of just move? little how As Why to then stance the QX margins in us The not? we’re those and macro to doesn’t the help you full definitely approach sort us going expectations. understand basically through the were And backdrop? can not guys’ year margins a year operating could think guess, highlight talk your I enabled exceeded – Barbara, year given margins into you what you guide? talk us a bit more push about maybe to about

all We’re throughout OpEx protect line and with the difficult if durability that very of nimble How a into do guys margins be nervous more macro about you operating cash free climate? protect year, those this can we to get growth. that flow

Barbara Larson

saw around is of terms performance our a the guide. perspective lever and And in over the then full year. be QX, From a in there question, later us. year the us see certain still you really for Keith. really was in why It’s Thanks is the expenses in year, the going those timing which margin we levers always holding to early for pushing of hiring to out

around we’re hire, to us. continue but environment monitor continuing We the to

in of and opportunity model. strategic that leverage confident with remaining brand, provide to have We’re ahead could really these an the long-term our of environments our we us opportunity of terms our us. positioning And type

Operator

you. Thank

& Needham Company. Our next Berg question is coming from from Scott

is line now Your live.

Scott Berg

Hi, on strategy everyone. I and you guess, the side year? right there framework? or on for less Thanks your a some this that to environment reasons the the positive whatever that way my you’re maybe now are Is or changed there the other taking seeing around tilt positive of moving anything your a for have go-to-market are, investing around questions. deals given hand maybe the one

Aneel Bhusri

Chano?

Chano Fernandez

Thank you, Scott, Scott. Yes. Thank for your question. you,

we confident on we very long-term As said, remain opportunity. the will

certainly are environment. be monitoring going cautiously We to the

a situation that well as fine the the or go-to-market on, of requires, confident to as may is terms investments in from have moving perspective, that area one balancing is we we be investments environment. sales of strategy in from our either of year and evolving tuning that during the as an We are and but we goodness, this one area energy either strength more terms in it perceive, will

Operator

you. Thank

is question next Raimo from from Your coming Lenschow Barclays.

Your live. now line is

Raimo Lenschow

et to very looking it into sizes, of kind the you unlucky from, go more kind is odd root Is I'm kind HR of learning quarter from like in You're it And when kind had trigger of you by you. breakdown happened like question and approach together. terms looks deals what this cetera, came if on, you're there of sales deals you maybe smaller the anything? Chano it the product execution, quarter you Thank get look, of than of to sold learning cause different from then how a does did analysis? more related, anything also because you in for an eventually. system if forward terms and The not commentary macro it's got

Chano Fernandez

partnership. C-level can partner what a with to plans. becoming much When here on basis, are Great we the on deals question we a through those. no are of that the do our there in ensure and changes, confidence of want are is you of you cycles. for some with And Thank customers the we about long-term to have executives the the thank it going that's them Raimo in in of anticipating and of doing, implementations customer. We terms terms new overall the because certainly deployment executive for some they

fill customer applies we break this, when some value down a to whole or of In into it customers. solution really terms ones, is of those our base deals the the of ability of to split the smaller the

So enterprise more much the dear giving business out overall smaller is in a that will better stability terms clearly having that there. to components thriving of Raimo, our outcome motion medium is

Operator

Thank you.

coming is from Brent Jefferies. from question Next Thill

now line Your live. is

Brent Thill

Many the giving what asking that of macro confidence the deal your confidence stiffer now? these are headwinds, tell year, of these even you the in in giving economists Thanks. from to the can expecting are in close are when I back right little beyond to many going what's you bit think a terms half push that get

Aneel Bhusri

has too. the somewhat rodeo value a in have is weathered we demand ever storm is right the that's first was economic during we of which weathered proposition, to our not you worst Chano XXXX, storms, through – first the COVID not XXXX of about I've environment suppressed seen. and while storm as weathered the downturn, it's a period first And at lot PeopleSoft, weathered This our Dave lot I storms as of go back long

just a figure way. so And we'll out

Our not your world systems HR, are choices. run I class to financial have business. mean, you ERP to have products

our demand forward cycles. to and I we and to are there'll figure spend And that think be where sales companies so, goes some out just need cautious,

Chano Fernandez

If that may of talking large when we're a deal, bread, it's many. I talking on some Aneel these we're add not those

from to doing through are we to are staying work that a to these continue them is a to happen. sales our deals strategic, what So few, are directly we going prospects. priority to these transformation continue our we're very, very and process, remain And and is hearing what projects close

So confident. what's me giving that's

Operator

next Marcon from Mark coming Thank from is Baird. question your

line now live. Your is

Mark Marcon

Good thanks question. taking And for afternoon. my

isn't first I recall that seen rodeo and You and going before, this before. this through before your this you you've mentioned

dislocation it to before, For it for haven't this that of through short-term who does does those you it how ameliorate? on getting deals track, Like back take bit schedule, on in little can them been getting pushed terms out? get unfold talk the quickly a kind how of about typically

Aneel Bhusri

say thing I would is the first QX. Well, this

traumatic people their look coming So it a going business. think a here. back more, got will at close real then three was as Chano over kind that from It's thing to environment. more was the frankly before environment's like. behalf new QX the arms environment, know And went to more want anything? next I of time quarters to to back least same COVID be but not happen the as arms I We'll great bit And When add on we'll of demand two my lot answer, of not function I their quarters. they the deals challenging. out then one lot environment. get this at suspect lot a We'll there's know new took that around forcing COVID perspective little the QX. was business. no a what a for And going to a to they'll that's take companies more customer's you for get to know back to lot around

Chano Fernandez

fine. That’s

Operator

you. Thank

two We questions. more have time for

Mark next from from question Our Bernstein coming is Moerdler Research.

live. now is line Your

Mark Moerdler

you much. ask macro results, on effect in is the you. you there Are very any on for to due any FX? either inflation impact in hire other to ability you any pressure the Thank on I'd making issues my salaries some time U.S.? seeing from appreciate you I Thank reported questions. seeing to issues like are or results specifically, pressure or

Barbara Larson

Mark. take I'll one, that

retain the hedge sheet to based globally. of FX, attract inflation some over definitely of a and about we expenses. FX, continues cost, for last couple we balance of perspective strong program. QX, hedging well feel on due terms impact market the competitive be talent on but certain but our it then given In terms In talent, material revenue was in subscription our really very to our hiring ability quarters, good actively as to as wasn't there our And it

Aneel Bhusri

actually second would stronger companies. for I the which environment is be early on the funding stage part, start-ups, Yeah,

dried you're that up these and really return has watching market a environments. stability If quality and there's to always during

have and a left program actually people boomerang we're couple recruiting where who last might in we this to gone start-up. so years have the And

start-up to back people that actually getting pretty successful we've been doesn't so and good Now look the company.

Operator

Thank you.

Your Pfau William from final question today is coming Matt Blair. from

now Your line is live.

Matt Pfau

there's up, follow-up past for of some lot in your the the and with commentary that's years making specifically the potentially around into been how platform? software about the To feeling in, a environment plug space, two start-ups anything that over HR Great. to there funding coming are funding Thanks. you you valuations interesting acquisitions on out drying

Aneel Bhusri

things we're looking have cutting detail bet we're technology, are great massive great strategy those that who product, that There team, lot interesting, companies we for a edge are going but of about in not always than That's but ranch. that our to other for a be transformational that I a can't are. the M&A looking really talk say acquisitions not

to pursue will the situations in acquisitions. we not look So to Peakon more of Bentley or have at we're we environment, or kinds we really years, they're or price. that it's Adaptive And can this But the ones of find in maybe those dropped the continue couple cost extent at last bigger whether those. some looking effective scout,

Operator

you. ladies reached our question-and-answer does of end and Thank We've today's teleconference. And that session. conclude gentlemen

thank your your today. You for participation you We time and this wonderful day. at may disconnect line have a

Workday (WDAY) 27 May 222023 Q1 Earnings call transcript