Welcome to Workday's Q3 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. During the Q&A, please limit your questions to one. With that, I will now hand it over to Mr. Justin Furby, Vice President of Investor Relations. Thank you, sir. You may begin. Thank you, operator. Welcome to Workday's Q3 fiscal 2022 earnings conference call. On the call, we have Aneel Bhusri and Chano Fernandez, our Co-CEOs, Robynne Sisco, our Co-President and CFO, and Pete Schlampp, our Chief Strategy Officer. 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 wanna 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. The customers page of our website includes a list of selected customers and is updated monthly. Our Q4 quiet period begins on January 16, 2022. 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'll hand the call over to Aneel. Thank you, Justin, and good afternoon, everyone. Thank you for joining us today for our Q3 fiscal year 2022 earnings call. I'm pleased to report that Workday had another strong quarter. As we highlighted at our Analyst Day in September, we continue to expand our addressable market with a broadening product portfolio and multiple go-to-market levers to drive sustainable growth on our path to $10 billion and beyond. As we've discussed throughout this year, our expectation has been for accelerating growth. While not every expectation comes to fruition, this one certainly has, even faster than we expected, and we're optimistic on the momentum we see as we head into our all-important Q4 and prepare for a great year in fiscal year 2023. Robyn will provide more details shortly, but we are pleased to provide a preliminary view of 20% subscription revenue growth for next year. With continued execution, we see opportunity to grow even faster. Before I hand it off to Chano to provide details on our go-to-market success in Q3, I wanna quickly touch on highlights from the quarter. Starting out with our industry-leading Workday HCM products, we had another strong quarter as we continue to attract new customers and also having strong success growing our relationship with our existing customers. In Q3, we added Asda Stores Limited, ConocoPhillips, Northern Trust, Toll Brothers, and Vishay Intertechnology, among many other new HCM customers. Notable go-lives in Q3 included the State of Iowa and Five Below, to name a few. In addition to strong growth from core HCM, our recently acquired Peakon solution, newly named Workday Peakon Employee Voice, delivered another record quarter. We're seeing the benefits having recently rolled out Peakon globally across our own organization, and we couldn't be more excited about the long-term potential to help our customers better listen to and engage with their own employees. We also continue to see strong traction across our Financial Management suite of applications. Our growing product portfolio, combined with digital acceleration in the office of the CFO, is driving broader adoption of our Financial Management applications. To that end, new Workday Financial Management customers in Q3 include the City of Philadelphia, the World Health Organization, Wintrust, Memorial Healthcare, and Diversified Restaurant Group. Of course, one of the big drivers behind our continued strong customer adoption is our relentless focus on innovation by staying at the forefront of large trends that are secular drivers of future growth. One trend that has been accelerated by the demands of the pandemic is the future of work, which requires new ways of thinking about workforce composition and how to manage different types of workers. We expect to accelerate our efforts in this area with the proposed acquisition of VNDLY, a leading next-generation cloud-based vendor management solution platform. Workday and VNDLY together will deliver a comprehensive total workforce optimization solution that brings an integrated approach to managing all types of workers. It will help customers bridge the gap between internal and external workforce management while enabling a holistic workforce strategy that delivers full visibility into their entire workforce and managing and planning for labor needs, while also helping to control compliance and security risks. We look forward to expanding our efforts in this area, and we'll share more information after the deal closes, which we expect to occur in our Q4. Looking ahead to fiscal year 2023 and beyond, we have an amazing growth opportunity in front of us, and we see a unique opportunity to accelerate our path forward by further ensuring that our purpose, strategic vision, and product roadmap are in lockstep with our go-to-market strategy. To help us do that, we've announced a series of important organizational updates. The first two in late October and two more today that I'm excited to share with you. To help chart and further articulate Workday's strategic vision, Pete Schlampp has been appointed as our first-ever Chief Strategy Officer. Pete has successfully led our industry-leading product organization for the past two years. During that time, he implemented a robust product portfolio strategy that's contributed to our current momentum, both in terms of delivered innovation and financial success. His ability to set a strategic vision and execute makes him the perfect fit for this new role, overseeing and evangelizing our growth strategy going forward. Second, we are creating tighter alignment across our product and technology organizations under the leadership of Sayan Chakraborty, who is now EVP of product and technology. Under Sayan's leadership the past two years, the technology team has infused Workday with game-changing innovations like machine learning, enabled customers and partners to innovate in our platform with Workday Extend, build strategic cloud partnerships, and helped ensure that Workday is amongst the most reliable, scalable, and secure platforms in the industry. His long and successful track record in delivering industry-leading innovations, along with his deep understanding of customer needs, makes him the ideal leader to map out our combined product and technology path going forward. Earlier today, we announced a couple more changes. First, we are pleased to share that Doug Robinson, EVP of global sales, has been promoted to Co-President of Workday. Doug will serve as Co-President alongside Robynne Sisco. As Co-President, Doug will continue to lead our global sales organization, but also take on an expanded leadership role across the company, helping to spearhead cross-functional initiatives that will help Workday reach new heights. We're also happy to share that Barbara Larson, SVP of accounting, tax, and treasury, is being promoted to Chief Financial Officer, effective February first of next year, reporting to Robynne. The transition of the CFO role from Robynne to Barbara is part of Workday's strategic succession planning, an approach that focuses on developing leaders from within. Barbara has been a rising star since joining Workday more than seven years ago. During that time, she has held several leadership positions across our finance and product organizations, providing her with the right foundation to step into the CFO role and lead our finance organization into the future. With Barbara's move to CFO, Robynne will now focus more on her co-president responsibilities. This will include an increased emphasis on engaging with some of our most strategic Fins customers and prospects to increase Workday's footprint within the office of the CFO, in addition to continuing to lead her current organization. It's an exciting time to be at Workday, and we're looking forward to the impact Pete, Sayan, Barbara, Doug, and Robynne will continue to make as we all strive to inspire a brighter Workday for all. 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, and thank you to everyone for joining us today. I want to start by offering my congratulations to Pete, Sayan, Barbara, and Doug. You're all amazing leaders and fantastic colleagues who have worked tirelessly to push us forward as a company, and your promotion to these roles is incredibly well-deserved. As Aneel mentioned, we delivered a solid Q3, driven by a strong execution combined with healthy demand for financials and HCM solutions. The strong conversion rates that we experienced in the H1 of the year continued in Q3, driving net new business acceleration that once again outpaced our expectations. In addition, our pipeline generation remained very healthy, setting us up incredibly well to achieve our full-year acceleration targets and providing incremental confidence in our goal of sustaining 20%+ subscription revenue growth on our path to $10 billion in revenue. Strength in Q3 was once again broad-based, with solid growth in landing new core HR and Financials customers. Performance in North America remained strong across the large enterprise, while the medium enterprise and international markets both drove significant outperformance. EMEA was a highlight, with the standout results in the U.K., Spain, and Switzerland. In addition to solid performance from our land sales team, the momentum within our customer base team continued in Q3, driving continued strength in net revenue retention. We once again saw a very strong renewal performance, and our customer base team drove strength cross-selling a number of solutions aimed at the CHRO and CFO, including core Financials, Learning, People Analytics, Planning, and Spend Management. We were also excited by the strength we saw with Peakon, which has been part of Workday now for a couple of quarters, and which drove record performance, including the signing of its largest-ever deal. Customer base expansions with Peakon in Q3 included Banco Santander and Daimler Truck North America, and new Peakon first customers, including Holland & Barrett and S3. Extend had another fantastic quarter with wins of Bristol Myers Squibb, Cardinal Health, Burlington Stores, and US Foods. Not only does the extensibility of our platform help us go deeper with our customers, it also allows us to engage our partner ecosystem in very strategic ways. A great example of this is through our partnership with Deloitte, who built an emissions planning model in Workday Adaptive Planning to address critical sustainability objectives related to carbon reduction for governments in Asia Pacific. This ESG solution has global applicability and is one of several examples of partners adding their IP to enhance the value of the Workday platform. Our industry approach is winning in the market, and strengthening our government vertical was one of the many highlights in Q3. As Aneel mentioned, we were selected by the City of Philadelphia for financial management, in addition to planning, sourcing, Extend, spend management, and several other solutions. We also signed platform HCM and Financials deals with the City of Worcester, Massachusetts, and Mobile County, Alabama, and we had wins across a number of other state, city, and local governments, both in the U.S. and internationally. Successes such as these highlight the importance of taking an industry approach, and we expect to continue to make significant investments across key industries from both a product and go-to-market standpoint. As we've discussed throughout this year, we're investing aggressively in our go-to-market effort, and we made continued progress on this front in Q3, adding global sales capacity across both our net new and customer base teams. We're also accelerating our investment across key brand and marketing initiatives. These investments, which we expect will continue in Q4 and into FY 2023, are focused on sustaining 20%+ subscription revenue growth. In closing, I would like to thank the more than 14,200 global Workmates who have enabled us to drive such a strong Q3 and year-to-date results. We are very well positioned as we enter the all-important Q4, and we have our eyes set on record pipeline generation targets as we look to lay the foundation for a strong FY 2023. Now I will turn it over to our Co-President and CFO, Robynne Sisco. Over to you, Robynne. Thanks, Chano, and good afternoon, everyone. First, I'd like to say that I could not be more excited about the leadership changes, and I'm incredibly proud to share the president title with Doug and to pass the CFO mantle to Barbara. I look forward to continuing to partner with both of them. As Aneel and Chano mentioned, we reported a strong Q3, once again accelerating subscription revenue growth as organizations across the globe look to Workday as their strategic partner in driving their HR and finance digital transformations. Subscription revenue in Q3 was $1.17 billion, up 21% year-over-year, driven by healthy new business sales and strong customer renewals, with gross retention once again over 95%. Professional services revenue was $156 million, resulting in total revenue of $1.33 billion. Revenue outside the U.S. was $336 million, up 23% year-over-year and representing 25% of the total. 24-month backlog at the end of the Q3 was $7.12 billion, growth of 20%. Total subscription revenue backlog was $10.97 billion, up 24%. Our non-GAAP operating income for the Q3 was $332 million, resulting in a non-GAAP operating margin of 25%. Margin overachievement was driven by a combination of top-line outperformance, some favorable expense variances, and significantly more back-end loaded hiring in the quarter than we anticipated. Operating cash flow in Q3 was $385 million, growth of 31%, driven by the margin strength combined with very strong collections. Our largest investments continue to be in our people and in attracting top talent to Workday. In the Q3, we meaningfully ramped up the pace of hiring, successfully adding and integrating approximately 800 net new employees, bringing our total employee count to over 14,200 at the end of Q3. Overall, we're extremely pleased with our results and execution in Q3, and we're very well positioned as we enter our final quarter of the year. Turning now to guidance. Based on our strong Q3 and the continued momentum we're seeing in our business, we are raising our FY 2022 outlook and providing Q4 guidance as follows. For subscription revenue, we're raising our full year estimate to be in the range of $4.533 billion-$4.535 billion, approximately 20% growth. For Q4, we expect subscription revenue of $1.216 billion-$1.218 billion, 21% growth. We project 24-month backlog growth of 19.5%. We still expect professional services revenue to be $590 million in FY 2022, with $145 million in Q4 as we continue to prioritize driving the highest levels of customer success. Based on our Q3 outperformance, we now expect full year FY 2022 non-GAAP operating margins of 22%. For Q4, we estimate non-GAAP operating margins of 16% as we continue the pace of hiring and growth investments and begin our new performance cash bonus program in Q4. The GAAP operating margin is expected to be lower than the non-GAAP operating margin by approximately 24 percentage points in Q4 and for the full year. We are updating our FY 2022 guidance for operating cash flow to $1.65 billion, 30% growth, and we still expect $270 million of other capital investments in FY 2022 to support our customer growth and continued business expansion. While we're early in our FY 2023 planning cycle and have an important Q4 to close, we'd like to provide a preliminary and high-level view of FY 2023. We currently expect subscription revenue of approximately $5.44 billion, 20% year-over-year growth. We expect subscription revenue in Q1 of FY 2023 to increase approximately 2.5% sequentially from Q4 FY 2022. As we shared at our recent Analyst Day, we are focused on driving sustainable subscription revenue growth of 20% or higher on our path to $10 billion in revenue. Given the strength of our market position and the accelerating trends we see across HR and finance digital transformation, we expect to increase the pace of our top-line focused investments. Taking into account these investments, our expectation of COVID-related cost savings phasing out, and the full year impact of our new bonus program, we continue to expect FY 2023 non-GAAP operating margins of 18%. Investing for growth will remain our focus, and we'll continuously evaluate growth margin trade-offs. We currently expect to resume margin expansion after next year, putting us on a path to reach 25% margins at $10 billion in revenue. I'll close by thanking our amazing employees, customers, and partners for their continued support and hard work. With that, I'll turn it over to the operators to begin Q&A. At this time, we will be conducting a question-and-answer session. If you would 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 to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. Please limit yourself to one question. One moment while we pull for questions. Our first question comes to the line of Kirk Materne with Evercore ISI. You may proceed with your question. Thanks very much, and congrats on the quarter, and congrats to everyone that's on their promotions. Aneel and Chano, you know, first of all, thank you all for the preliminary look ahead to fiscal 2023. You know, Aneel and Chano, can you just talk a little bit more about what you're seeing in the pipeline today that gives you confidence in that 20%+ outlook for subscription revenue growth? Just kinda curious if it's the volume of deals you're seeing in the pipeline pick up, the size of deals. You know, and maybe if you could just add a little color on the core financial opportunities as well, that'd be great. Thanks so much. Chano? Yeah. Kirk, thanks for your question. I think not only did we see a strength in Q3 new business, but the pipeline momentum that we have described the last several quarters continued as well with a strength I would say across regions and solutions as well. I think it's a much more balanced and predictable pipeline when compared to a few years ago as our product portfolio has expanded and as we have seen really healthy momentum across both motions, landing and expanding. We have our sights set on another record pipeline quarter in Q4 to help lay out the foundation for a solid FY 2023 and beyond. The trends we've seen in our pipeline support our view that the momentum in the business is sustainable and support our goal of sustaining 20% plus subscription revenue growth. In terms of core Financials, it was really a contributor to the strong quarter we have, both core Financials and the Fins Plus category as a whole, Kirk. That's great. If I could ask just a quick follow-up for Robynne. Robynne, is there still the 24-month backlog number still being weighed down by a lower renewal cohort? And can you just remind us what that is and maybe when that normalizes if that's still playing out right now? Yeah, Kirk. As you'll recall, coming into this year, we discussed a 2-point headwind to 24-month backlog growth this entire year stemming from the flattish renewal base that we saw coming into the year. For the most part, that's played out as we thought, although our really strong renewal rates throughout the year have somewhat offset that dynamic to give us the results that we've been reporting to date on this front. When we look ahead to FY 2023, we are expecting to return to a more normalized rate of growth in the renewal base and therefore expect that headwind goes away. Super. Thanks so much. Congrats. Our next question comes from the line of Kash Rangan with Goldman Sachs. You may proceed with your question. Hi, thank you very much. It's great to see how you promote internal talent, starting with Doug. It's a very long list. It's great that you're able to create the next generation of management, including both Chano and Barbara and Robynne, et cetera. My question has to do with the net new ACV back to the base. We've been at it for two years, and there's no stopping of any or no slowing down of momentum in that business aspect. Can you talk, either Chano or Aneel, about the opportunities ahead as the product portfolio continues to build. You still keep adding new customers. Again, the base opportunity continues to be vibrant. Can you just expand a little bit more about how you plan to make that even more of a focus going forward? Thank you so much, and congrats on a very strong quarter. Well, I might just touch on the new products, and Chano can touch on the go-to-market piece. You know, I think one of the great things we have had both through internal development and through acquisition, most recently Peakon and now VNDLY, are products that we can sell back to our really broad-based financial, you know, HR customer base. On the finance side, we do the same thing with Scout, and we hope to do that with Zimit and Planning spin across both product lines. That really has changed the game. We have these really powerful add-on products that are best in class that are attractive to customers, and maybe Chano can talk about how we're doing that. Yeah. Thank you, Kash, and thank you, Aneel. I think, you know, the value proposition of the innovation and the solutions that Sayan and Pete and the team are building is just fantastic, right? I would say it's no single solution is the one driving the momentum, Kash. It is really broad-based strength across the full portfolio of HR and financial solutions. I think that drove strength as well in the renewal rates in our customer base, which I believe speaks to how strategic we are for our customers, right? We're expecting this momentum to continue, and we share with you on our Analyst Day that $10 billion opportunity that we're seeing in our customer base and, of course, expanding as we keep adding more customers. We keep planning to keep adding some of the investments that we're doing across go-to-market, Kash. Those going to customer base, obviously. As we've been highlighting, we are planning to strengthen for next year the land motions clearly our solutions around Peakon and Workday Strategic Sourcing, Adaptive Planning and clearly VNDLY going forward as well. We are pretty excited by the opportunity ahead on the customer base. Bravo. Thank you so much. Our next question comes from the line of Mark Murphy with JP Morgan. You may proceed with your question. Yes, thank you very much, and I'll add my congrats to everyone who's taking on a new role, Doug, Barbara, Pete and Sayan, much deserved. I wanted to ask, Robynne, I'm looking at the sequential change in the 24-month subscription backlog for Q3. It's actually a bigger number than we've seen the last couple of years. So I'm just curious if what we're seeing is the conversion of that pipeline build that I think you said was starting maybe nine to 12 months ago, as you expected, or are you seeing something that's converting faster or in period, like from Peakon or other products, or, you know, is it maybe something else that's just driving that sequential strength? Yeah, Mark. I mean, maybe I'll just point out a few things, even though we really are seeing strength across all of our business in multiple different ways. The few things that I'll call out is our conversion rates have remained on the higher side, right? That has certainly helped us convert more pipeline. We also, as we strengthen our sales motion on some of our acquired companies or products that we can sell independently, those tend to have shorter cycles, and so we're seeing an impact there as well. Lastly, I'll call out, we just have seen really strong renewals. Really strong renewals and uplift to those renewals, and so that has really helped us with sequential growth and backlog as well. Okay. Three different legs to the stool. Thank you, Robynne. Then just a very quick follow-up that, you know, you had announced some major new HCM logos. I think Aneel commented on ConocoPhillips, Northern Trust and Toll Brothers, big companies. Any comment on who the incumbents were, and just Chano, that you said the pipeline generation remained healthy. Should we infer that, you know, you see pretty strong indications among the Fortune 500 for Q4? I would say on your first question of who the incumbents were, usually, as usual, 80% of those are coming from our main two legacy competitors, right? It's no difference here, Mark. You know, to your question, on the pipeline expecting into Q4, I would just say that there is good, strong pipeline, great momentum. Usually some of the largest logos, you know, tend to lean in our largest quarter, which is Q4. Understood. Thank you very much. Our next question comes from the line of Brad Zelnick with Deutsche Bank. You may proceed with your question. Great. Thank you so much, and I echo my congratulations as well on a strong performance in Q3. I wanted to follow up on Kirk's question on backlog and the flat renewal cohort this year. Just how we should think about the growth in what's due to renew, which Robynne, I know you characterized as being more normal. But even if not numerically, and I know the more exciting part of that equation is the growth that you're able to add on to these renewal opportunities and expand them. But how should we think about the typical upsell cadence? Meaning, how often might you see customers take new modules and new features and capabilities when they're made available, maybe intra cycle versus upon renewal? Like, is the renewal itself more often than not the time that you'll see them expand versus, you know, co-terming midterm? Thank you. Yeah, we're seeing that dynamic shift a little, Brad, over the years as we've focused more on building the customer base team. They're having continuous conversations with those customers outside of the renewal cycle. Where if you go back several years, I'd say 3-4 years, most of the add-on business came during the renewal cycle, and we've really seen that change with the investments in the back to base go-to-market. Now those conversations are continual. We're seeing a lot less add-on just in the renewal cycle and more add-ons, you know, as products become available or as customers' needs shift. The renewal is still a great opportunity to engage in a conversation with those customers. You know, it still is an opportunity for us to sell, but less dependent on that renewal cycle, to actually get add-on business. I don't know, Chano, do you have anything you would add to that from the go-to-market side? That's exactly the dynamics we've been seeing and the shift we've been observing during these last few years. It's less dependent on those renewal cycles when customers are adding new solutions. Thank you. If I could maybe sneak in one quick follow-up for you, Robynne. Seeing the growth in total backlog exceeding that of 24-month backlog, we actually had picked up from partners just in general, beyond even Workday, customers looking to go longer and longer duration in anticipation of inflation and price increases. Just curious if you have any comments on duration that you're seeing from maybe commercial accounts, or I know government tend to do larger deals. What, if anything, is there to comment on duration? Thank you. Yeah, you're absolutely right that when the total backlog growth exceeds the 24-month, it's because we've seen durations lengthen. We've seen this fairly consistently over the last several quarters and even the last several years, where the total outpaces the 24 months. I do think that there is a trend there of inking larger contracts, but they do tend to move around by industry and by customer. As we've said before, you know, we are happy to have a contract length, you know, that our customers are comfortable with. We won't do one under three years, but anything above that, we really leave to them. It's not something that we manage to, but we're certainly happy when customers want to commit to us for longer periods of time. Awesome. Thank you again. Our next question comes from the line of Brad Sills with Bank of America. You may proceed with your question. Oh, great. Thanks, guys. I'll echo the congratulations on a nice Q3. I wanted to ask a question about just the general environment of the office of HR. It would seem that with the Great Resignation and the difficult hiring environment that you'd see an increased focus on digital transformation projects for, you know, more productivity in general for HR. I'm curious if that is manifesting in your pipeline, not just for core HR, core HCM, but the productivity tools like learning, analytics, recruiting, Peakon. Is that reflected in your pipeline? Do you think that's something that might be coming based on what you're hearing in the office of HR? Thank you. Pete, you want to take that one on? Yeah. I think your question is spot on. What we are seeing the trends towards, as you said, kind of spurred by the great resignation happening with the pandemic, all of those things are generating trends that we're seeing in demand from our customers for our products like Learning. I would also put, I'd also call out our talent optimization SKU, which is composed of the career hub and the talent marketplace to allow employees to move within the company. Learning, as I said before, and also, you know, I'll also mention the VNDLY intent to acquire that we announced today as well, which allows companies to be able to kind of flex their workforce based upon these talent demands. We're definitely seeing that from a demand standpoint from our customers. We've had great quarters, a great quarter this last quarter as well with all those products. Sure. Thanks so much. Our next question comes from the line of David Hynes with Canaccord. You may proceed with your question. Hey, thanks for taking the question. Maybe I could build off Pete's comment there. He brought up VNDLY, so it seems like a good segue to ask the question there. The product seems to be kind of a crossover between HR and finance. So can you talk a little bit about like where the buying center resides there and really what the pain point is? Like, how would organizations typically manage that process if they didn't have a platform like VNDLY? Yes. I'll start with the buying center. The buying center has traditionally been in the procurement space, but has more recently been trending towards the HR space. So actually that's a great fit for us because we sell to both of those buyers. It really, for us, looked like a nice kind of piece of the puzzle between our human capital management, our financial management, and our spend management solutions. Traditionally, this has been solved, you know, the vendor management systems have been around for a while. VNDLY is really a second-generation cloud-based vendor management system. Great focus on the user experience configurability. You know, the one thing I will also mention there is that it is deployed by enterprises, but also about 50% of the time deployed by managed service providers. VNDLY happens to have a great relationship with managed service providers as well, and we see that as a channel for us to continue to use as we go forward. Yeah, yeah. Okay. Makes sense. And then Robyn, maybe a follow-up for you. I think kind of coming into this year, we had talked about net new bookings acceleration this year leading to faster subscription growth next year. With the updated guide and view of next year, we're at 20% and 20%, and I realize it's a preliminary view of next year, and any good preliminary view embeds some conservatism. Is it fair to assume that if Q4 ends up kind of how you're planning, we could still see subscription acceleration next year? Yeah, Vijay. I mean, we certainly see upside from the 20%. To your point, Q4 is gonna be a really important quarter for us in shaping the subscription revenue next year. We're really focused on executing against Q4, and we'll have a new look for all of you on the next earnings call when we see how we've closed Q4. Yep, of course. Makes perfect sense. Thank you, guys. Our next question comes from the line of Michael Turrin with Wells Fargo Securities. You may proceed with your question. Hey there. Thanks. Good afternoon. Appreciate you taking the question. You mentioned 800 net new hires during the quarter. Is there any further commentary you can add just on the pace of hiring into Q4? Are you finding able to stay on pace with that 2,500 target to start off the year? Is there any difference between U.S. and international there to call out? Thank you. Yeah, we were super pleased with the hiring in the quarter. We've been really ramping our recruiting engine and our process throughout the year. It honestly took us a little longer than we had hoped, given the market when we came into the year. We were really excited to make such great progress in Q3, and it's certainly our hope and our goal to actually have similar hiring in Q4 so that we can get really close to that 2,500 net new employees for the whole year. It's a challenging market, but we feel like we've got the momentum to do that. We're really focused on executing. Great. Thank you. Our next question comes from the line of Brad Reback with Stifel. You may proceed with your question. Great. Thanks very much. Robyn, as we think about the renewal pool returning towards its normal, growth cadence next year, is that linear over the course of the year, or will that be somewhat more back-end loaded? Understanding that 4Q always has seasonality, but just that year-over-year growth opportunity. Yeah, Brad. You know, that's a really hard thing to predict because one of the things that we're seeing, one dynamic we're seeing as we have more add-on business outside renewal cycles is renewals moving around quarter to quarter. If somebody wants to add on several products, their renewal is two quarters away, it's highly likely that they're just gonna do an early renewal and wrap it all in. We don't see anything unusual in any one quarter that I would call out, but it is a dynamic that's fairly difficult for us to predict, and we do expect some variation quarter to quarter. Overall, in terms of looking at the whole year, we're excited to return to a normal growth rate and not be facing the headwind that we faced this year. That's great. Thanks very much. Our next question comes from the line of Brent Bracelin with Piper Sandler. You may proceed with your question. Good afternoon, thank you here. I wanted to go back to the 2022 outlook and guidance up here. I know you guys were clearly optimistic at the September Analyst Day, but if I just rewind nine months ago, I think you entered the year guiding to 16% subscription growth. You've now had two quarters of accelerating subscription growth, and you're raising the outlook for next year. It's a pretty big change in nine months. Is the story here driving the optimism for next year all about the $10 billion cross-sell in the base, or is there other factors that are really driving kind of the optimism here in the business? I know similar optimism to a couple months ago, but love to kind of understand the pace of change that you've seen here this year and the momentum that you're kind of looking forward to next year. Thanks. Well, you know, I'd say that the pandemic was a once in a lifetime event in many ways, quite a bit obviously sad and negative. On the business side, it did change everything. Whether it's the shift to remote work or hybrid work, or as you look at the broader base of contingent workers and the great resignation, as you call it. I think what it forced customers to do was to look at their platforms and say, "Are we ready for this new world?" In many cases, they weren't. You know, we were fortunate that the way that we built our cloud products and the solutions we have are a perfect fit for where the world is headed. I think we're benefiting from that. Increasingly in a labor-constrained world, you know, what we're doing with Peakon, what we're doing with VNDLY, what we're doing with our own products in terms of helping people optimize their human capital is huge. Also, you know, during the pandemic, we saw a lot of big financial projects being put on hold, and now those are slowly coming back. There's optimism that even more of the financial projects are gonna be coming back next year. As you think about the role of competition here, do you think you're in a better position to gain share next year based on the moves that you've made here, and that's part of the optimism? Or do you think this is more of a broader industry recovery that you're expecting next year? That's all I had. Thanks. You know, I think it's both. You know, at the end of the day, we started out with zero customers, and our main competition had thousands of customers. Every customer we've gotten has been, you know, has been at a competitor's expense. We've now passed 50% market share on the HCM side of the Fortune 500. We're getting that same kind of momentum in financials. I do think it's coming at the expense of what I would consider to still be legacy competitors. I don't think they've quite yet fully made the transition to the cloud. Our next question comes from the line of Brent Thill with Jefferies. You may proceed with your question. Thanks. I was wondering if you could just drill a little bit into planning. I think last quarter you mentioned 50% ACV growth. Any stat or any update there? Just directionally, it seems like with all the supply chain concerns, there's a tremendous opportunity for you to help a lot of companies out at this point. Any color around that business would be greatly appreciated. I mean, planning continues to be a very meaningful growth driver for us and one of the bigger components of the themes last, and the acceleration was in this quarter. While we did not call out the specific growth rate this time, our momentum remains very strong. We feel really good how we are competing and winning in this market. Despite all the strength we have seen in planning over the last couple of years, we have significant long-term opportunity. As we shared at our Analyst Day, only about 30% of our customers having attached financial planning and about 10% attached workforce planning. We have a lot of opportunity ahead. Thank you. We will now take two more questions. Our next question comes from the line of Karl Keirstead with UBS. You may proceed with your question. Thank you. Maybe a couple for Robynne. Robynne, maybe you could elaborate on the 24-month backlog guide for 4Q. Really strong number, but it's a similar growth rate to 3Q, yet it's a 2-point easier compare. Anything else on your mind as you thought through the inputs to that 4Q guide? Yeah, I mean, I would just say that we're really, you know, really pleased to be providing the preliminary view of 20% sub-revenue growth for FY 2023. Keep in mind, to achieve that, we need to sustain healthy bookings growth, which we fully expect to do in Q4. Backlog's gonna move around. It's not a perfect measure for several reasons, including the renewal headwind this year. We feel really good about the momentum in our business and in our outlook. We certainly would hope to overachieve the backlog guide, but we'll have to see how Q4 goes. Yep. Okay, that sounds good. Then as a follow-up, congrats on the couple of what looks like relatively small acquisitions. Maybe I missed it, but Robyn, any financial impact from these two deals once they close that we should keep in mind with respect to either revs or margins or backlog to call out or immaterial? Yeah. I mean, these companies are both really early in their growth cycles and therefore really minimal impact on our revenue guide for next year. We do, however, expect those to be high growth markets, and so we're therefore planning on investing in those spaces to support the growth opportunity and all those incremental investments as well as transaction costs for VNDLY and existing expense bases for both have all been captured in our margin guidance for both Q4 and FY 2023. Yeah, got it. I figured that was the case. Thanks for the answers, Robynne. Our next question comes from the line of Derrick Wood with Cowen and Company. You may proceed with your question. Great, thanks for squeezing me in. Some companies have talked about more accentuated summer seasonality. Just curious how linearity tracked for you in Q3. You know, you keep hearing how Q4 is such an important quarter. Any color on, you know, linearity there and just any anecdotes to give around what you're seeing in terms of larger enterprise opportunities as you head into the end of the year? Chano? We haven't seen any particular shifts in terms of linearity. It was good, a strong quarter. Clearly, our first month is August, usually it's more quiet, but it was good and solid if I compare to last year and two years ago. I think we had a good September overall, but I wouldn't say nothing, no special call out there. You know, in Q4, there are always very large deals, in this case in the pipeline for both, I would say HCM and Financials. Of course, there is a solid kind of pipeline across a very deep number of different solutions, geographies and you know, the whole portfolio and volume business across medium enterprise and customer base that will give the predictability. Clearly, you know, for us, delivering a good solid quarter is in keeping with the same conversion ratios and execution on the great large opportunities that are lined up for Q4. We're excited about them, but of course, we have to execute upon them and basically do as, you know, as the teams know that they can do. If I could squeeze one more in. You talked about how you're pleased with your own hiring, even though it's a tough market. I wanted to ask about how you're feeling about your partners and how well-staffed they are and to support your accelerating growth and if you see any reason for them to be having any constraints on their own staffing. Yeah, I can answer that one. I mean, we're pleased how the partners are progressing. They added around 800 resources to the ecosystem in Q3, and they continue to be ramping up new resources during Q4. We feel very happy as well how much, you know, they're investing on training and ramping up resources that they see the opportunity. I will, you know, just remind to all of you that they keep deploying around 80% plus of our, you know, solution portfolio. We clearly are doing much more with them. I mentioned this example of the ESG solution around planning in, you know, for public sector, basically in the Asia-Pacific region, that I think, you know, is one that they can be deployed globally. The relationship we're really building with our partners these days is, you know, beyond implementation. It's building up new solutions and IP jointly, and they keep really investing. For most of the large SIs, Workday is, you know, out of the top three kind of strategic practices. We, you know, we are pleased how they're doing, and they keep investing within Workday's future together. Thank you. Ladies and gentlemen, thank you for your participation on today's conference. This will conclude Workday's Q3 Fiscal Year 2022 Earnings Call. Thank you again for joining us today. You may disconnect your lines at this time.