Welcome to Workday's second quarter fiscal year 2022 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. I will now hand it over to Mr. Justin Furby, Vice President of Investor Relations. Thank you, operator. Welcome to Workday's second quarter fiscal 2022 earnings conference call. On the call, we have Aneel Bhusri and Chano Fernandez, our co-CEOs, Robynne Sisco, our President and CFO, and Pete Schlampp, our Executive Vice President of Product Development. Following prepared remarks, we will take questions. Our press release was issued after close of market and is posted on our website, where this call is being simultaneously webcast. Before we get started, we want to emphasize that some of our statements on this call, particularly our guidance, are based on the information we have as of today and include forward-looking statements regarding our financial results, applications, customer demand, operations, and other matters. These statements are subject to risks, uncertainties, and assumptions, including those related to the impacts of the ongoing COVID-19 pandemic on our business and global economic conditions. Please refer to the press release and the risk factors and documents we file with the Securities and Exchange Commission, including our 2021 annual report on Form 10-K and most recent quarterly report on Form 10-Q for additional information on risks, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Workday's performance. These non-GAAP measures should be considered in addition to, and not as a substitute for or in isolation from, GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results, in our earnings press release and on the investor relations page of our website. The webcast replay of this call will be available for the next 90 days on our company website under the investor relations link. Also, the customers page of our website includes a list of selected customers and is updated monthly. Our third quarter quiet period begins on October 16th, 2021. Unless otherwise stated, all financial comparisons in this call will be to our results for the comparable period of our fiscal 2021. With that, I will hand the call over to Aneel. Thank you, Justin. Good afternoon, everyone. Thank you for joining us today for our second quarter fiscal year 2022 earnings call. I'm pleased to report that Q2 was one of our strongest quarters in company history. When combined with Q1, this was the best first half of the year in terms of ACV growth in over three years. We came into the year expecting our business to accelerate. The pace of digital acceleration across HR and finance is exceeding even our own expectations. Our leadership position continues to strengthen, driven by a broadening of our product portfolio and exceptional execution. The growing Workday customer community now includes 55 million users and 50% of the Fortune 500, of which approximately 90% are live on Workday. Chano will share more shortly on our go-to-market success. Robynne will provide specifics on our raised growth outlook for the second half of the year. Let me share first some of the highlights from Q2. Let's start with Workday HCM. Our position as an innovator and market leader with our differentiated suite of products has never been stronger. We continue to attract new customers. Many of our current customers continue to grow their investments with us. In Q2, we welcomed CVS Health, Iberdrola, Valeo Management Services, California Pizza Kitchen, and HeidelbergCement AG to the Workday family, along with many other new HCM customers. While these new wins are very important to us, we remain equally focused on delivering excellent service to our current customers. That includes delivering on our commitments to them. Amongst the many go-lives of Q2, I would like to highlight Harman International Industries, BJ's Wholesale Club, and Old Dominion. In addition to the strong growth from core HCM, this was our first full quarter with Peakon. I'm pleased to report we got off to a great start, delivering the largest quarter in Peakon history with early success selling back into our installed base, a true testament to the incredible Peakon product and even better Peakon team. We also continue to see strong traction for our financial management suite of applications. We believe that a combination of our expanded set of offerings, including planning, spend management, and Accounting Center, and the acceleration of digital transformations by the office of the CFO are collectively driving broader adoption of our finance offerings. In fact, a highlight in Q2 was nearly 50% ACV growth in the Workday Adaptive Planning business, showcasing our strategy of meeting customers where they are continues to drive significant success. In addition, we continue to see momentum build in our core financial deployments. New core financial customers in Q2 included Cinemark USA, University of Wisconsin System, and Weis Markets. Notable core Fins go-lives included the University of Southern California, KeyBank North America, and Fox Corporation. Moving on to the innovation front, we are focused on broadening our platform and extending our product capabilities to create additional levers for long-term growth. As a recent example, and to continue seizing on the great opportunity we have internationally, this quarter, we announced our intent to deliver Workday Payroll for Australia and Germany. As you know, our country-specific payrolls are very compelling to customers, and we're excited to deliver these new solutions as levers of growth for these markets. We also recently announced that Workday has achieved ready status for the Federal Risk and Authorization Management Program, or FedRAMP, at a moderate impact level, with full authority to operate estimated for spring 2022. With this achievement, we materially advance our position to help federal agencies accelerate digital transformation in order to help them modernize their business systems and gain real-time insights to address critical challenges across their organizations. Switching to the people front, we continue to invest heavily in our company culture to sustain our belief that happy employees deliver the highest levels of satisfaction to our great customers. On that note, starting in Q4 of this year, we'll be extending a cash bonus plan company-wide to further ensure our people feel valued, motivated, and properly recognized. Robynne will update you later on our margin expectations for the back half of the year. This is a direct reflection of our business momentum and the confidence we have in our Workmates to grow the business to $10 billion in revenues and beyond. With our outstanding first half of fiscal year 2022, we are seeing acceleration in our business. As I look ahead, my optimism for Workday's future couldn't be higher. We have a great team in place and a significant global opportunity in front of us as companies continue to embark on their HR and finance transformation journeys. With that, I'll turn it over to our Co-CEO, Chano Fernandez. Over to you, Chano. Thank you, Aneel, thank you to everyone for joining us today. As Aneel mentioned, we had a fantastic Q2 driven by very strong execution, which combined with a rapidly improving demand environment for enterprise management cloud solutions, is causing our net new business to accelerate at an even faster pace than we expected. The strength in Q2 was broad-based, highlighted by large enterprise outperformance and solid growth in landing new core HR and Fins customers. We also saw a strength landing new customers across our expanded portfolio solutions targeting the office of the CFO and CHRO. For example, our planning and Workday Strategic Sourcing businesses drove significant strength in winning new large enterprise customers in Q2, including the largest planning first deal in our history. Peakon drove significant new logo activity in EMEA, providing us a gateway into selling core HCM and Fins solutions over time. In addition to solid performance from our land sales team, the momentum we've been seeing with our customer base team also continued in Q2, as companies look to Workday as a trusted strategic partner. We had another quarter of strong renewal performance, Our customer base team growth is strength cross-selling a number of solutions, such as core Fins, Planning, Spend Management, health, Peakon, Extend, and our talent portfolio. For example, in Planning, we signed add-on deals with Google, with 1 of the world's largest telecommunication companies, and a Fortune 100 distribution company. In Spend Management, we had a number of add-ons wins at companies such as Bon Secours Mercy Health, CME Group, and Ralph Lauren. We also had a number of notable Extended customer base wins in the quarter, including a Fortune 100 manufacturer, a Fortune 50 energy company, and one of the world's largest banks. Peakon isn't just landing new logos. It is a powerful solution to sell back to our customers. We had notable add-on deals this quarter, including Uptycs and PerkinElmer. From a geographic standpoint, our performance was strong globally, with North America outperforming across all segments, including significant strength from our large and medium enterprise teams and from industries such as healthcare and higher education. In international markets, EMEA was a standout, driving healthy acceleration in new ACV bookings, with particular outperformance in continental Europe, including outstanding performance in France and Spain. We're seeing improving market dynamics and pipeline momentum across our rest of world regions, and we expect those trends to continue as we move into the back half of the year. As we've discussed over the last few quarters, we're investing aggressively in our go-to-market network. Our largest area of headcount investment in the first half of FY 2022 was in sales and marketing, as we added significant new global sales capacity across both our net new and install-based teams, including a doubling down in international markets. We're also accelerating our spend across key brand and marketing initiatives. These investments, which we expect will continue in the second half of the year, are focused on driving growth in FY 2023 and beyond, and we are very pleased with the evolution we're seeing in our pipeline, which again saw solid growth in Q2. In closing, I would like to thank the more than 13,000 global Workmates who have enabled us to drive such a strong Q2 and first half results. Our broad and differentiated suite of solutions is winning in the market, and we're incredibly well positioned as we enter the second half of the year. Let's keep the momentum going. Now, I will turn it over to our President and CFO, Robynne Sisco. Over to you, Robynne. Thanks, Chano, and good afternoon, everyone. As Aneel and Chano mentioned, we delivered an incredibly strong Q2. Driven by exceptional execution against a rapidly improving market backdrop as organizations accelerate the pace of digital transformation across HR and finance. Subscription revenue in the second quarter was $1.11 billion, up 20% year-over-year, driven by very strong new business sales, favorable in-quarter linearity, and an over-performance on customer renewals, with gross retention once again over 95%. Professional services revenue was $147 million, resulting in total revenue of $1.26 billion. Revenue outside the U.S. was $318 million, up 24% year-over-year, and representing 25% of the total. 24-month backlog at the end of the second quarter was $6.88 billion, growth of 19%. Total subscription revenue backlog was $10.58 billion, up 23%. Our non-GAAP operating income for the second quarter was $292 million, resulting in a non-GAAP operating margin of 23%. Margin overachievement was driven by a combination of top-line outperformance and favorable expense variances. Operating cash flow in Q2 was $198 million, growth of 26%. In addition to strong profitability from our core operations, during Q2, we also recognized a nearly $100 million mark-to-market gain from the successful IPO of one of our ventures portfolio companies. We will continue to see mark-to-market adjustments from our equity investments, but we expect gains of this magnitude will be extremely rare. Our largest investments continue to be in our people and in attracting top talent to Workday. In the first half of the year, we successfully added and integrated more than 900 net new employees, bringing our total employee count to over 13,400 at the end of Q2. We've made important progress towards our full-year target of adding 2,500 employees and expect the pace of hiring to increase throughout the back half of FY 2022. Overall, we're extremely pleased with the momentum we saw in Q2, and we're very well positioned as we enter the important back half of the year. Now turning to guidance. Based on our strong Q2 and the momentum we're seeing in our business, we are raising our FY 2022 outlook and providing Q3 guidance as follows. For subscription revenue, we're raising our full-year estimate to be in the range of $4.50 billion-$4.51 billion, 19% growth. For Q3, we expect subscription revenue of $1.156 billion-$1.158 billion, 20% growth at the high end, and we expect 24 months backlog growth of 19%. We still expect professional services revenue to be $590 million in FY 2022 as we continue to prioritize driving the highest levels of customer success. For Q3, we expect professional services revenue of $150 million. Investing for growth remains our number one priority. In addition to the increased pace of hiring in the back half of FY 2022, we also expect to ramp non-headcount spending with investments specifically targeted at accelerating demand generation, enhancing our market position, and advancing our strategic product roadmap. Additionally, the new bonus plan Aneel mentioned will take effect on November 1st and is expected to impact our Q4 margins by approximately 300 basis points. Given that backdrop, we expect non-GAAP operating margins of 21% in Q3, 16% in Q4, and 21% for the full year. The GAAP operating margin is expected to be lower than the non-GAAP margin by approximately 24 percentage points in Q3 and 25 percentage points in Q4 and for the full year. Given our strong performance, we are also raising our FY 2022 operating cash flow guidance to $1.5 billion. We continue to expect $270 million of other capital investments to support our customer growth and continued business expansion. I'll close by thanking our amazing employees, customers, and partners for their continued support and hard work. We're off to a very strong start in the first half of the year, and our focus remains on driving accelerated bookings growth. We look forward to hosting our virtual Analyst Day on September 21st, where we will share insights on our strategic innovation and growth initiatives as we look ahead to FY 2023 and beyond. With that, I'll turn it over to the operator to begin Q&A. Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Your first question comes from the line of Kirk Materne with Evercore ISI. Please proceed with your question. Sure. Thanks very much, and congrats on a really good quarter. Great to see the acceleration in ACV growth. Aneel and Chano, I was wondering, can you just talk a little bit more about what you've seen over the last six months? I know you're both more upbeat about the pipeline heading into this year. When you talk about a quarter of this magnitude from a growth perspective, can you talk about maybe what happened in the quarter that you weren't expecting, whether it was deals coming in at a faster cadence, deal cycles getting shorter, deals growing perhaps at the end of the deal, meaning more add-ons, more multi-product deals? I was wondering if you could just add a little bit more color to that, and why do you see that continuing into the back half of the year? What gives you confidence around the pipeline? Thanks. I'll just make a couple comments about what I hear from other CEOs, and then I'll turn it over to Chano. For the most part, CEOs are pretty optimistic about the future of their business, and they also realize that they have to jump on board of digital transformation for both HR and finance. Despite what's been going on with the pandemic, the mindset is back to business. We saw that in the pipeline, and we saw it in people taking actions. They're not sitting on the sidelines anymore, and maybe Chano can add to that. Hi, Kirk. Hope you're well. I think to unpack a little bit, the strength in Q2 was truly broad-based, highlighted by solid growth in landing new core HR and Fin customers. We have significant strength across the business, as we mentioned, but I would call out the large enterprise team as a key outperformer. There was also a strong performance across regions, particularly with a healthy bounce back in EMEA and Continental Europe. We also saw good dynamics in terms of landing new products within the office of the CFO, and Fins and Fins Plus were good contributors as well. Last but not least, there was solid performance in our install-based Fins and renewals. As a whole, it was quite across the board very positive. I would just highlight what Aneel Bhusri said, like this acceleration of digital transformation initiatives coming back to the table and really is coming back across financials and HCM. It is reflected as well in the pipeline when we look at the second half. If I could just have one follow for Robynne. Robynne, obviously a really impressive quarter across the board. When we look at the CRPO growth of 24-month backlog, I assume that still has some of that headwind from the expiry base on it. If we're going to apples-to-apples it, that would probably have been above 20% on this quarter if we try to normalize for that. Is that fair? I assume that expiry base headwind should dissipate a little bit as we get into fiscal 2023. Thanks. Yeah, Kirk, what we discussed last quarter still holds, which is that we're seeing an impact of roughly a couple points to the 24-month backlog throughout FY 2022. You're correct that we don't expect that dynamic in FY 2023 at all. Just as a reminder, this dynamic has no impact on new ACV bookings, subscription revenue, or how we run the business, and our focus continues to be on accelerating our new ACV bookings. We're really pleased with our progress on that front, and you're seeing that show up in the backlog growth numbers, even despite the headwinds that we have this year on renewals. Great. Thank you all. Your next question comes from the line of Brad Sills with Bank of America. Please proceed with your question. Oh, great. Thanks so much for taking my question, and congratulations on a real nice Q2. I wanted to ask a question that kind of goes back to comments you've made last quarter, Aneel, around really the strategy with Fin is to surround the account, surround the transactional system with some of these peripheral systems. You're seeing real strength in planning. It sounds like procurement is really ramping. At what point is there a potential migration that happens when you have one or two of these modules, they're running it for a year or more? Is there a certain tipping point when you might expect some of those conversions on the core transactional system over time? Thank you. Well, it definitely doesn't hurt to have a combination of HCM, maybe a few financial modules in there. I think the more important dynamic is that as we exit running the businesses for the pandemic and try to run business in a more normalized way, the demand for core financial systems is coming back. We saw that this quarter. It was a strong quarter for core financial systems. We saw the entry point with planning being up over 50% as a really strong indicator of what we might see over the next few quarters. It's more than just one dynamic. It's across the board. We saw strength in the add-on modules. We also did see strength in core accounting as well. I'd like to highlight Accounting Center as a really important product for some of the large volume customers we have out there, in particular in areas like financial services. A product that continues to get great traction and great reviews, just opening up more doors for us for core accounting. That's great to hear. One more, if I may, please. In the past, about a year ago, you talked about some pandemic headwinds. Since then, you've obviously seen those improve. What are you hearing from the office of the HR manager and the office of the CFO in terms of willingness to make investments now in digital transformation now that we're kind of exiting things? Clearly, your results are showing that those projects are coming back in the back office. I think the mindset for companies that hadn't gone through the transformation was that it was really hard to run their business with a remote workforce or a hybrid workforce or whatever model they had to go to without the flexibility and ability to work from home with that cloud systems like Workday offer. If you're on legacy systems, it was a really hard time. So I think folks have said, "Hey, even if we are still dealing with some of the issues around the pandemic, we got to get on with it. We got to move on to the modern systems." That's been a real big driver for us. Great to hear it, though. Thanks so much, Aneel. Your next question comes from the line of Keith Weiss with Morgan Stanley. Please proceed with your question. Excellent. Thank you guys for taking the question, and very nice quarter. A couple of questions or a multi-part question, digging into the nature of the strength that you guys have been seeing in this first half of the year. It's really in two parts. One, in terms of, is what you're seeing just kind of a release of pent-up demand? Last year, 2020, was a very difficult year to get these big enterprise transactions across the line, so I'm assuming a lot of it was kind of pent up in the pipeline. Is there more of a combination of sort of pent-up demand and new business coming into the pipe, or new digital transformation initiatives getting an extra boost, given what happened last year? Similarly, last year, one of the real bright spots was how well the upsell motion, meaning the base motion, propped up overall growth for the company. Has that sustained with new business ramping up? Have you been able to keep that good balance of new business in the door as well as upsells into FY 2022? Thank you. I'll take the first part. I think it is a bit of both. There's no question there was some pent-up demand that's impacted the first half of the year, but I really think the pandemic forced a speed change and a change in mindset about how quickly people had to get into the cloud and move into the digital transformation projects for HR and finance. While it might've slowed down last year, I think it's picked up, and now I think it's going to be that way going forward. Even companies that had waited for a long time are now acting today. A bit of pent-up demand, but I think more a positive change in the marketplace going forward. Chano, you want to add to that? I would just say that jointly with healthy new logo activity, to your question, Keith, we're seeing a very solid quarter with significant growth rates on our installed base, and it is not just one single solution, right? When you look across Accounting Center or Help or Extend or Peakon, people analytics, they're all contributing. The upselling and cross-selling within a satisfied customer base remains very healthy. It's really the business having good momentum on all engines. Excellent. Nice to hear it, guys. Thank you. Your next question comes from the line of Mark Murphy with JPMorgan. Please proceed with your question. Yes, thank you. I'll add my congrats. Robynne, our thinking was that the pipeline inflection that you saw a couple of quarters back would not convert to bookings really until later this year and into next year. Just given the upside, did you see it a bit faster cycle of pipeline conversion than normal, or do you kind of still see it lining up relatively more toward year-end? Yeah. Well, as you know, we always have a really important and strong back half of the year, and that's not changing this year. We did have very, very good pipeline conversion rates in Q2, and maybe Chano, I'll let you comment on that, being on the front line there. Hi, Mark. Clearly, some of the land motions convert faster, right? The Workday Strategic Sourcing or some of the Planning or Peakon standalone motions, those will convert faster than the core HCM and core Financials products. Obviously, the strength coming already from the pipeline that it was built during the second half last year has already started to play out and will play out more during the second half this year. Okay, understood. Thank you. Just Aneel, a quick follow-up for you. I was wondering about the cadence of finance teams. We know that they paused their spending during the pandemic, and now they've been wanting to accelerate their move to the cloud. Do you think that is the part of this kind of remaining consistent where they might pull in some of the projects they had planned in 2024, 2025? I'm sort of wondering, with the Delta variant headlines in the news, is that going to intensify that or defer that a bit, or more of a zero issue from the Delta variant? Time will tell. Right when we thought we were coming out of the pandemic, we get hit with the Delta variant. It's just such a changing, unpredictable world right now. The last data that I saw from Gartner suggested that projects from this year and for some of next year would be pushed out, but projects from 2024 would be pulled into 2023. I think our pipeline suggests that the pipeline's getting better for Financials, and it should continue to get better. I think going into next year, more projects will get pulled into next year. Understood. Thank you. Your next question comes from the line of DJ Hynes with Canaccord. Please proceed with your question. Congrats on the nice start here to the first half of the year. I wanted to ask about the hiring environment and progress on that front. Two questions, maybe one for Robynne and one for Chano. Robynne, you're at 900 net new employees of, I think you said 2,500 targeted. How does this seasonality, right, 35% in the first half, 65% in the second half, compare to kind of internal plans as well as prior years? Chano, just given the headcount ramp expected in the second half, if I gave you 10 new sales reps, how would you allocate them between hunters versus back to base reps? Maybe you could talk about how that might be different than it would've been a year or two ago. On overall hiring, DJ, so as you know, we came into the year with really, really aggressive hiring plans. I would've hoped we would've been a little further along than 900 at this point, but it took us some time to really ramp the recruiting engine, because as you know, we had paused hiring a lot of last year, so we had to get that going. It's not surprising that we are going to be back-end loaded. We feel really good about our recruiting engine right now. We feel good that we're going to be able to accelerate hiring into the back half of the year, and we're still targeting those 2,500 hires. We feel good about where we are, but maybe a little bit of a slower start than what we had hoped coming into the year. Okay. DJ, thanks God that Robynne is more generous than you on giving me some more headcount, that 10. If I would be to play out with the 10, I would say that the first kind of angle I will be looking at geographically, and clearly we are allocating more sales capacity today in international markets where we see a significant opportunity ahead. This is not just for second half this year, but clearly it's FY 2023 and beyond as well. That would be first dimension. The second one would be clearly, yes, between a balance between net new logo and installed base, but also you need to consider that we have some of the land first motions across Peakon or Planning or Strategic Sourcing. Those plays into account as well. We see opportunity clearly across net new logo activity, across the install base and some of the land motion. Balanced picture, across those, and clearly with a more pivot investment within our international markets than within North America today. Okay, perfect. That's helpful color. Thank you, guys. Your next question comes from the line of Brad Reback with Stifel. Please proceed with your question. Great. Thanks very much. If we think about the $1.1 billion of 24-month backlog increase year-over-year, are we at a point now where half of that's from new customers versus growth at existing? Any sort of color on that would be super helpful. Yeah, Brad. As you can imagine, the bigger we get and the longer we've been in business, it will shift that backlog component more towards renewals than net new. That shift has been something that has been in process for quite some time. This year is different, as we pointed out earlier, that we actually have flat renewals year-over-year, we're getting a little bit more of a proportion towards net new this year. We expect that trend will reverse again next year as we get back to more normalized renewals growth. Great. Thanks very much. Your next question comes from the line of Michael Turits with KeyBanc. Please proceed with your question. Hey, guys. Great. Congrats on the quarter, very nice. Robynne Sisco, it's a nice margin beat and a raise on the year. Seems like it's more than just revenue upside, and this is despite what has been very aggressive hiring and lots of discussions of investment. Is this a change at all in your operating philosophy or structure such that you're able to get this margin upside and where accelerating revenue to? Good part of our margin raise was the over-performance on the top line. That's a very big chunk of it. We had some expenses slip from Q2 into the back half of the year, some of our programmatic spend. As I just mentioned before, we were hoping to do a little faster hiring, so we have some savings from that as well. As we look at next year, though, keep in mind that a lot of the hiring we're doing this year is going to have a full year impact next year. Some of the programs we're going to put in place in the back half of this year will roll into next year. We also expect that certain costs will layer back in, such as travel, return to office, and hopefully in-person events that we can start doing again. Additionally, the bonus program that Aneel talked about with about a 300 basis point impact on margin, that will continue into next year and beyond. It's a performance-based plan, so it could vary with our results, but we expect that impact to remain fairly consistent through next year if we achieve our targets. Keep in mind, though, that the impact from the plan on margins will vary over time based on top line growth, hiring, and performance against our goals. Just keep all of those things in mind when you think about longer term margins. Great. That's really helpful. Thanks. It sounds like Fins is going very well. Can you give us some sense of where Fins ACV is coming in relative to HCM ACV? We saw growth in both Fins and HCM ACV, and both contributed to our overachievement in this year. Both contributed to our guidance raise, and we're seeing really strong growth across both of those in our pipeline as well. I guess I didn't mean a total. I'm not trying to pull that out of you. I'm just saying, in terms of individual deals, is it coming in at larger levels than HCM for individual customers? In terms of pricing, We are still, in the world of HCM, we sell to absolutely the biggest companies in the world, like a CVS Health. In finance, the bigger companies haven't yet moved to the cloud. Right now, I'd say the average HCM customer at the high end is bigger than the finance customer, but that's changing, and they will equalize over time. Okay. Thanks. Your next question comes from the line of Alex Zukin with Wolfe Research. Please proceed with your question. Thanks, guys, for taking the question. I guess one element that seems interesting is there's a lot more of these new land motions around, I think you mentioned planning, you mentioned Peakon, spend management. I want to get a better understanding how much of the bookings is kind of this now coming from this new land motion? Because it does feel like the opportunity for dollar-based net expansion or expansion and going back into those customers is going to be higher. It's a little bit different than historically when you had such a large land that the upsell was more difficult. Yeah. That's you, Chano. Clearly, Alex, the majority of the dollars are, of course, still coming from the core HCM and the core Fins transformation as a whole. These land motions are clearly, what they are providing is much more significant volume upselling, particularly on the install base, but as well, getting us into new customers that we're expecting to cross-sell later on to our core products. Of course, the majority of the ACV is obviously still from the bigger transformation projects. Understood. Robynne, maybe kind of dovetailing on Michael's question, is it possible to get a little bit more color on some of the tailwinds on margins this year and how to think about them layering out of the model for next year, particularly as we get back to some of those pre-COVID go-to-market motions and travel, and with the bonus pool? In addition to my commentary answering Michael's question, I guess the only thing I would add is that we still have six months to go until we're in the next year. Things like travel, how much it comes back, are still uncertain. It's a little hard to predict right now above and beyond the drivers that I mentioned earlier. We'll share more with you on FY 2023 margins at a later date when we get closer and we've closed another quarter or two. I would add that I do think travel and entertainment budgets, I think those will change going forward, even when we get out of the pandemic. We've just learned how to work smarter without having to have people on site everywhere. You can do a lot of work from your office or from at home, then you can concentrate the few trips on really meaningful activities. I don't think that's specific to Workday. I think that's specific to a lot of companies that were just used to spending a lot of money on travel that probably will not spend like that again. Perfect. We will now take two more questions. Your next question comes from the line of Raimo Lenschow with Barclays. Please proceed with your question. Hey, thank you. Thanks for squeezing me in, and congrats from me as well. Chano, can you talk a little bit about the importance of the new payrolls that you announced, I think Germany and Australia, just in terms of the international build-out? We all agree there's a big opportunity. The question is, in terms of financial functionality, HR functionality, are you quite there yet to kind of capitalize on that? And then I had one follow-up. Raimo, we really understand and acknowledge how important local payrolls are to our strategy and our customers. If you look at payroll for Germany, and you know that country well, workforce management over there and the number of manufacturing companies, when we are providing them solutions around HCM, having payroll is of tremendous importance for us to capture a bigger part of the market. I could say the same out of Australia. This is expansion really into these markets is very significant and critical to our strategic initiatives that we do have for growth within our international markets. We feel very good about it. Obviously, it's going to take us a couple of years to develop those. Even today, customers knowing that that is our strategy, we think that is going to open more doors for consideration on some customers that are looking more for a provider that obviously can close the loop as well in terms of the pay and the workforce management and time tracking and scheduling as a whole. When it comes to financials, we just keep doing improvements in terms of our international capabilities. I think if you look at some of the analysts, they're highlighting those. Some of the customers as well, they're highlighting those, too. We just keep becoming stronger in terms of our financials solution from an international perspective in terms of the local regulations, and all basically the localizations that are required. That, in some cases right now, is highlighted today more as a strength than any other things when some of our customers are becoming Workday customers. Honestly, it's also a great point that many are going successfully live in EMEA with our financial solutions, and those are working very nicely and becoming referenceable customers for us. Perfect. That's very clear. Thank you. Then one follow-up. When we talk with the system integrators, they are seeing a lot more activity of people sketching out, mapping out processes, etc, which is kind of a first step towards changing the finance system. What are you seeing there in terms of how quickly those kind of projects are evolving in terms of and also showing up for you guys. Are we still in the same pre-pandemic cadence of six to nine months lead time of trying to sketch out what you want to do and how you want to do it, and then doing it? Do you see an acceleration there because people realize there's a little bit more urgency here? Thank you. Congrats from me as well. Yeah, it's a great question. What we're seeing is, I think, more projects taking place. That is obvious. As you were saying, some customers are doing what they call a phase zero, which is this mapping of the processes and understanding what would be the future compared to with the as-is kind of processes that they do have today. They're working that with the system integrators. I think those, A, are being worked faster because there is more urgency there for transformation, being all the pains that, and difficulties that some customers have been facing during the pandemic phase. B, clearly, there are many more projects taking place as well around the financials transformation, is gradually improving, is what we're seeing there as more customers are moving financials to the cloud. Perfect. Thank you. Your final question comes from the line of Scott Berg with Needham & Company. Please proceed with your question. Hi, everyone. Congrats on the quarter, and thanks for taking my question. First off, you just announced the company achieved ready status for the FedRAMP program. How should we think about the sales opportunity in that segment, and what products do you expect those customers will adopt the most? Well, it's already in motion. We already have customers in the federal government. They're more quasi-FedIT agencies than full FedIT agencies that are using Workday. As we go through the cycle, it's a long sales cycle, but those sales cycles will begin, and we're fully on the schedule middle of next year. I would think you'll start seeing the pipeline build and hopefully some good wins beginning to happen, quasi agencies first and then full agencies sometime next year. In terms of HR and financials, we're a good fit. We're going to find requirements that we're going to have to build specifically for federal government. We are, in general, a good fit for both solutions for the federal government. Great. Thank you. Then just one more quick one. You mentioned it a little bit earlier, kind of talking about Australia and Germany and the expansion there with payroll. Can you give us a little bit of color on how much further should we expect the company to take its payroll functionality after those two markets are complete? I'd expect that we're going to continue to invest in payroll integration across the globe. We might add one or two more payrolls over the next few years. You're not going to see us add 10. Unless we find a great company to acquire, which we haven't seen yet. What we are doing is going country by country, and where we don't have a payroll, really trying to build a tighter integration. Right. Which is honestly what most of our customers do with their global payroll demands anyways. Awesome. Thank you. Ladies and gentlemen, thank you for your participation on today's conference. This will conclude Workday's second quarter fiscal year 2022 earnings call. Thank you again for joining us.