Ladies and gentlemen, welcome to Workday's Fourth Quarter Fiscal Year 2026 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 Q&A, please limit your questions to one. I will now hand the call over to Justin Furby, Vice President of Investor Relations. Please go ahead. Thank you, operator. Welcome to Workday's Fourth Quarter Fiscal 2026 earnings conference call. On the call, we have Aneel Bhusri, our CEO, Gerrit Kazmaier, our President, Product and Technology, Rob Enslin, our President, Chief Commercial Officer, and Zane Rowe, our CFO. 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 that could cause actual results to differ materially. Please refer to the press release and the risk factors in documents we file with the Securities and Exchange Commission, including our fiscal 2025 annual report on Form 10-K and our 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, in our investor presentation, 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. Additionally, the prepared remarks of this call and our quarterly investor presentation will be posted on our Investor Relations website following this call. Our first quarter fiscal 2027 quiet period begins on April 15th, 2026. Unless otherwise stated, all financial comparisons in this call will be to our results for the comparable period of our fiscal 2025. With that, I'll hand the call over to Aneel. Thank you, Justin. Thanks to everyone for joining us today. It's really nice to be back with all of you. Before I get into my remarks, I wanted to thank Carl for his service to Workday over the past three years. He brought the operational rigor and discipline that we needed at the time to make Workday a larger and more global company. That work helped us set the foundation for this next chapter for Workday. We're all grateful to him. In terms of chapters, we talk internally about this next chapter of Workday as chapter four. First was the founding of the company by Dave and myself back in 2005, based on a new idea of HR and finance in the cloud and built on a set of core values around employees, customers, innovation, integrity, and fun. The second chapter was a period of hypergrowth that led to our success with many organizations around the world and product and technology leadership in HR and finance. The third and most recent chapter, which started in 2023, was all about operational excellence and efficiency as we grew into a Fortune 500 global company. Well, chapter four is now upon us, and it's a return to focusing on innovation. When we founded Workday, we transformed the enterprise by reimagining HR and finance in the cloud. Now we have the opportunity to transform it again by reimagining HR and finance with AI and taking advantage of this new vector of growth. You've all heard the narrative out there that HR and ERP will be replaced or relegated to the background by AI. I personally just don't see that happening. Our application domains are really, really hard to build. I've been working in the HR and ERP space for over 30 years. These are true systems of record that must process transactions with absolute accuracy and speed, enforce complex security models, and comply with statutory and regulatory requirements all over the world. That kind of complexity is very hard to replicate. No amount of vibe coding is going to produce an HR or an ERP system. Importantly, our underlying business processes are deterministic by nature. There is a start and end to a business process. Its goal is to deliver consistent, audible outcomes. AI, for all of its incredible capabilities, is probabilistic by nature. It reasons, predicts, and recommends based on patterns and likelihoods. Maybe it'll eventually become a state machine, a system that follows the same steps and gets the same result every time, but it is not there today. You can't have probabilistic outcomes in running a payroll. It needs to be 100% accurate and completed 100% of the time. What is the future? It's the marriage of deterministic enterprise apps with probabilistic AI that leads to three things: a redefined user experience that is prompt-based, a greatly improved business process automation execution platform with work done by agents and humans, and lastly, much deeper AI-generated insights. Taken together, these changes will lead to much better business outcomes and deliver far higher ROI for our customers. As you'll hear from Gerrit, this hybrid world and architecture is exactly what Workday is building today, marrying the best system of record for HR and finance with the reasoning capabilities of domain-specific LLMs. That's the future. It's like peanut butter and jelly. They just go together. It's all rooted in the trust we've built with our customers over the past 20 years from managing their systems and their most critical data. All you have to do is look back at the past year to know that this hybrid world is coming to fruition. We experienced accelerating agentic AI adoption across the solutions we acquired: HiredScore, Evisort, Paradox, and most recently, Sana. They all had great Q4s. I'm pleased to say that Sana is now seamlessly integrated into the Workday stack. It's very cool. As we move into fiscal year 2027, what should you expect from us? Our core enterprise apps in HR, finance, and student will continue to thrive, recognizing that in some areas like HR, we have high levels of market share. The growth will come from new apps sold to the customer base. The accelerating growth will come from the agents we built on top of Workday, both inorganic and organic. If FY26 proved that customers trusted Workday to buy our acquired agents, we believe that FY27 and beyond will prove that customers will buy our organically built agents that are in early access today. Across the board, these new agents are deeply embedded into the Workday core, are meaningful in their scope, and have significant ROI attached to each and every one of them. Those of you who know me know that I'm an unabashed optimist. I truly believe that our investments in agentic AI will enable Workday to re-accelerate growth, increase customer satisfaction, and set us up for long-term leadership. I will end by saying that I'm excited to be back. This is a fun time to be a product person. Now I'll turn it over to my friend and leader of all things ERP and AI, Gerrit Thanks, Aneel. Hello, everyone. Aneel described the opportunity really well. AI is changing how work gets done. We are unlocking its transformative power for HR and finance. The foundation for enterprise AI is taking the right action inside a governed business process with the right permissions, oversight, and policy configuration, whether that's hiring and onboarding, payroll, or the financial close. Simply connecting powerful language models directly to enterprise data, well, that risks creating lawless agents that may have vast capability, but they have zero guardrails. We are building Workday as a context and tools engine for AI with deep HR and finance data, a business process framework, and a strong security model to deliver enterprise-grade accuracy and business outcomes. Based on this, we leverage AI for entirely new business processes. We built for enterprise AI transformation, where, for instance, every employee can have a career coach who develops them along their journey. Every sales team can have an AI contracts agent specialized in every engagement. Every candidate can have an AI personal job search agent, every finance professional, their personal AI analyst, and every employee, their own AI HR business partner agent. Now let's look at some real customer AI usage in Workday. We measure every time an AI model produces a result in Workday as an AI action. In full year 2026, we delivered 1.7 billion AI actions across the Workday platform, and this is all organically developed AI in Workday. You can also see this incredible momentum commercially. In Q4, we generated over $100 million in new ACV from emerging AI products. That's growing over 100% year-over-year, and our overall ARR from these solutions is now over $400 million. We expect AI usage and business impact to continue to expand meaningfully in FY27. Today, we have 12 new organically developed role-based agents that are now starting to move into general availability for all our customers, and more than 400 customers are already using them and get real ROI. With our self-service agent, early access customers have reduced HR case volume by 25% and increased their employee productivity by 20%. With our R1 release in March, in addition to our self-service agent, planning agent, deployment agent, payroll agent, and business process optimize agent, are all entering into general availability for all our customers. Here is another real highlight for us, the release of Sana Core and Sana Enterprise into general availability. Sana Core brings conversational AI directly into Workday, so employees can get answers and complete tasks using Workday agents. Sana Enterprise extends the same experience beyond Workday by connecting enterprise tools like Outlook and Google Drive and so many more, so employees can find information, create agents, and automate workflows all in one place. That will create an entirely new way for our 75 million users to engage with Workday. Sana Core and Sana Enterprise went into GA on February 15th, which we executed with world-class speed from project start to finish in just 3 months. We used AI to dramatically accelerate our product innovation cycle time. We accelerated key API development by roughly 30X on Workday's core platform using AI. More than 75% of our software engineers are using AI coding assistants, and more than 50% of the committed code is AI-generated. We have seen an incredible 22% growth in engineering output over the last 6 months, measured by the number of code updates we delivered. Our strategy is to build new business processes designed around virtually unlimited AI reasoning to automate entire business processes into the background with AI agents, and to deliver a beautiful AI-first user experience that brings super intelligence to work. With that, I'll turn it over to Rob. Thanks, Gerrit, and hello, everyone. It's great to be on the call today. As we look back at Q4, one thing is very clear: our customers trust Workday with the parts of their business that have to run flawlessly, from payroll to closing the books. That trust continues to show up in our high retention rates and in customers expanding the use of the platform year after year. With over 11,500 global customers, expansions remain our largest growth engine. In the quarter, we expanded with customers like Anthropic, Ally Financial, and Otis Elevator. In Q4, AI played an increasingly meaningful role. It was involved in roughly half of our customer base transactions, and expansion deals that included AI were nearly 50% larger on average. While it's still early days, we've seen great initial traction with Sana since the acquisition closed in November. We're starting to see customers go all in on agents and agentic workflows. Accenture is a great example. They're reinventing HR and recruiting at scale, using our AI solutions to elevate the employee and candidate experience while driving improvements in productivity, speed, and agility. Accenture has also been a key design partner for us, helping to develop our agent system of record. With our Flex Credits pricing model, customers can better align their spend with the value they're getting. Accenture, Nike, and Merck are among the first of nearly 50 customers signing on to use our new model. We expect Flex Credits adoption to continue to grow as we expand our AI roadmap and mature the model. We're also investing in our customer base motion, including forward-deployed engineers, to activate agents faster and with less friction for our customers. Turning to net new, we formed several strategic relationships in the quarter, including Boston Children's Hospital, the New York State Unified Court System, and Sargent & Lundy. We're seeing particularly strong momentum in net new medium enterprise deals. ME customers drove roughly 60% of net new ACV in FY26. To accelerate time to value in this segment, we're expanding Workday Go globally, helping customers get up and running faster in a more standardized way. At the same time, some net new large enterprise deals are taking longer to close, particularly in Fed, SLED, and Healthcare and across parts of the commercial market. While this impacted the volume of net new deals that closed in Q4, most opportunities remain active in our pipeline, and a few have already closed in Q1. As we look at our international business, we see significant opportunities ahead. We're making good progress in Canada, EMEA, ASEAN, and Japan. We've been investing in local talent, partners, product localization, and new routes to customers with Workday resellers. While there's still work to do, we believe international will become a much bigger part of our growth story over time, and partners play an important role in scaling. In Q4, about 25% of our net new ACV was sourced through our partner ecosystem. They're helping customers go live faster, expand more efficiently on Workday, and enhance the value of our platform. Workday Wellness is a great example of how we're expanding employee services while creating new revenue streams with partners. In Q4, we welcomed Lyra Health, Empathy, and Airvet to the program. As we move into FY27, the team and I are focused on turning all of the innovation Gerrit talked about into tangible outcomes for our customers, faster time to value, broader adoption, and deeper platform commitments. We are well positioned to build on this momentum and play an even more important role as customers modernize their HR and finance operations. With that, I'll hand it over to Zane to share more details on our results. Thanks, Rob. Thank you to everyone for joining today's call. As Rob mentioned, our results this quarter reflect the deep trust customers place in Workday to manage their most critical assets. This is creating durable expansion opportunity, particularly as adoption of our AI solutions accelerate. Turning to results, subscription revenue in Q4 was $2.360 billion, up 16%, and full year FY26 subscription revenue was $8.833 billion, growth of 14%. Revenue in the quarter benefited from the successful delivery of the DIA contract, which added nearly a point to Q4 subscription revenue growth. Total revenue in Q4 was $2.532 billion, growth of 15%, and for the full year was $9.552 billion, up 13%. U.S. revenue in Q4 totaled $1.91 billion, up 15%, and international revenue in the quarter was $626 million, growing 13%. For the year, U.S. revenue was $7.18 billion, up 13%, and international revenue was $2.38 billion, up 12%. 12-month subscription revenue backlog, or CRPO, was $8.83 billion at the end of Q4, growing 15.8%. Total subscription revenue backlog at the end of Q4 was $28.1 billion, up 12%. Average contract duration in the quarter was down year-over-year, driven by a higher mix of renewal and customer base activity. Gross revenue retention rates remained strong at 97%, demonstrating the mission-critical nature of our platform and our high customer satisfaction. In addition, net expansion rates remained consistent through FY26, contributing roughly 60% of our subscription revenue growth for the quarter and the full year. Non-GAAP operating income for the fourth quarter was $774 million, representing a non-GAAP operating margin of 30.6%. Margin strength was a result of solid revenue growth, ongoing efficiencies we are driving across the business, and a slightly slower ramp in hiring. Full-year non-GAAP operating income was $2.82 billion, reflecting a non-GAAP operating margin of 29.6%. Q4 operating cash flow was $1.28 billion, resulting in full-year operating cash flow of $2.94 billion, growth of 19%. Free cash flow for the quarter was $1.22 billion, and for the year, it was $2.78 billion, up 27%. We repurchased $1.5 billion of our shares during the quarter and $2.9 billion for the full year. We had $2.9 billion in remaining authorization as of quarter end. We ended the year with $5.4 billion in cash and marketable securities. Our headcount as of January 31 was 21,070 workmates around the globe. Now turning to guidance. We are focused on driving adoption of our agentic solutions, including Sana, Paradox, and other Workday agents, as well as our Data Cloud, which ramp in availability throughout the year. We expect FY27 subscription revenue of approximately $9.925 billion-$9.950 billion, growth of 12%-13%. We anticipate Q1 FY27 subscription revenue to be approximately $2.335 billion, growth of 13%. As we mentioned last quarter, this year's sequential performance is impacted by the DIA contract, which added nearly a point to Q4 subscription revenue growth and is not expected to continue in Q1. We expect CRPO to increase between 14.5% and 15.5% in Q1. We expect subscription revenue to increase roughly 5% sequentially in Q2. We anticipate FY27 professional services revenue of approximately $710 million as we continue to leverage our partner ecosystem. For Q1, we expect professional services revenue of $180 million. We expect FY27 non-GAAP operating margin of approximately 30%, and for Q1, we expect a non-GAAP operating margin of 30.5%. This outlook incorporates an accelerated pace of AI investment across both product and go-to-market. We expect the Q1 GAAP operating margin to be approximately 19 points lower than our non-GAAP operating margin and the full-year FY27 GAAP operating margin to be approximately 18-19 points lower. The FY27 non-GAAP tax rate is expected to be 19%. We expect FY27 operating cash flow of $3.450 billion and capital expenditures of approximately $270 million, resulting in free cash flow of $3.180 billion, growth of 15%. As Aneel mentioned, we are focused on what we believe is a generational opportunity for AI to revolutionize our HCM and finance solutions, as well as open new markets. While we remain committed to our medium-term subscription revenue growth targets, we are prioritizing incremental investment in our agentic AI roadmap to capture a larger market opportunity. We remain focused on both GAAP and non-GAAP margin expansion, albeit at a slower pace in the near term than what we previously communicated. We believe this investment will drive a more durable growth profile that optimizes for long-term operating profit and free cash flow. We look forward to sharing our progress over the next several quarters. With that, I'll turn it back over to the operator to begin Q&A. Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, press star one a second time. If you're called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. To be able to take as many questions as possible, we ask that you please limit yourself to one question. Again, it is star one if you would like to join the queue. Our first question comes from the line of Mark Murphy with J.P. Morgan. Your line is open. Thank you so much, Anil. Welcome back to the CEO role. I'm curious, how you know, how you picture shaping the next chapter for Workday, specifically as it relates to differentiating the AI strategy. For example, I'm wondering if you see some ways to push a more aggressive, pace or a more organic, you know, AI product roadmap, maybe trying to achieve the zero day close kind of a vision or agentic consolidation, or, you know, some other type of truly breathtaking outcomes? Okay. Well, it's good to be back, Mark. It's good to hear your voice. I'm very optimistic about what we're doing on the agentic front. You highlighted two use cases that we're actually building. I'm gonna turn over to Gerrit in a second. When I look at where our business is today, the core is rock solid. We built these great HR and financial applications, and they continue to grow, and we have this opportunity to build these agentic solutions on top. We've already shown that the acquired solutions are generating pretty rapid growth. As the organic solutions, which are even more deeply embedded and frankly, harder for anyone else to replicate as they come to market, and we get the customer adoption we're seeing, I'm very bullish on where we're headed. I'm gonna turn over to Gerrit to talk about those two use cases. Yeah. Thank you, Aneel. As Aneel has said, we have a very big ambition for what we describe as lights out finance. We are looking at a full automation of all the key processes across our suite, including HR. Since you specifically asked about the finance space, the model that we are looking at is applying continuous AI to the finance processes. Think about a compliance autopilot, which continuously tests and verifies ledger and transactions, all based on analysis of all transactions that are coming in, and then even optimizing them with our document and contract intelligence, you know, for instance, for real-time bookings, making sure they are set at the right value, at the right discount rates, with your supply chain. Those are just a few select example, and I think you can all summarize them under the lights out finance vision. You heard me earlier mentioning that, but I still wanna come back to that one more time, all coming together through the Sana AI user experience. We are thinking about both, backend automation and AI front-end innovation. Thank you very much. Our next question comes from the line of Kirk Materne with Evercore ISI. Your line is open. Please check your mute button. Your line is live. Sorry about that. Aneel, welcome back. Thanks for taking the question. I guess, you know, Gerrit outlined a lot of progress you guys have been making on agentic, yet, you know, the guide for next year seems, you know, fairly conservative, a little bit below what people were thinking about. Does that reflect, I guess, just your general view that some of the agentic offerings are gonna take a little while to sort of, you know, make their way into your account base, or or some of the execution issues in the fourth quarter, you're trying to account for that in the guidance? I was wondering if you could just give us some color. Obviously, coming in, you have the opportunity to sort of reset the bar. Just kind of trying to get some perspective on, you know, what went into the full year guide. Thanks. Yeah, I guess, first of all, Kirk, it's good to hear your voice. You know, I'm back in the saddle. It's only been a few weeks. I'm pretty optimistic about this year. I would hope that we significantly surpass that. But, you know, I'm an optimist, but I see the opportunities on the agentic front that probably are more second half based in terms of the agents coming into production and being used by customers. I love our Flex Credits model, which is moving towards this consumption model. You know, I'll probably put that over to Zane in terms of where we came out. I'm very optimistic about this year. I don't know if, you know, you remember me when I was a CEO before. I do try to be conservative on the guide and then beat it. Hey, Kirk. Yeah, just to add to that, I mean, we still feel like we've got good momentum. The guide hasn't changed materially from what we indicated, you know, 90 days ago. I'd say business in general is similar to what we saw. Rob called out a few areas within the quarter. You know, we mentioned obviously, you know, you're lapping a DIA contract that did have some impact in the fourth quarter. We still believe in our Federal business and are excited about what that will bring to this upcoming fiscal year. Not a big shift or change. Obviously, we called out some of what we saw in the fourth quarter. We expect to see some of those transactions and deals still come to fruition through FY27. As Aneel alluded to, we're excited about Flex Credits, but recognize that's probably more of a second half motion, and then you expect to see the revenue come in ratably beyond that. That's sort of an overview of the guide, but no shift in guidance philosophy other than you know, as you can tell, Aneel's excited about us beating it. Our next question comes from the line of Keith Weiss with Morgan Stanley. Your line is open. Excellent. Thank you for taking the call, and welcome back, Aneel. It's great to be talking to you again in the CEO role. In the conversation in talking about the sort of organic innovation, should part of our takeaway be that the M&A strategy is going to take a more of a backseat? It seemed pretty prominent throughout FY26 or calendar 2025. Should we expect you guys to be moving away from M&A and those and buying the AI technology and moving more towards organic growth? And then maybe, like a follow-up for Zane. Within that 12%-13% growth that we're looking for in FY27 on the subscription revenue line, can you give us any indication on what the inorganic contribution to that number might be? You know, in terms of acquisitions, I'm not gonna say we're not gonna do any, but we're leaning in pretty heavily on organic development and organically built agents, and I'm super bullish. It's not that I'm new to what we've been doing. I have been close with Gerrit over the last 18 months, and I'm really excited about what's coming out to market. That is our primary focus. We'll be opportunistic if we see another company that's exciting, like Sana or a Paradox or HiredScore, we might do it, but that's not our focus really right now is on the, on the organic development of agents. Keith, as it relates to the guide, similar to how we framed our guide in the past, I'd say not a material component of that is inorganic. As Aneel alluded to, we're focused on organic growth, and were there to be anything more significant, we'd call it out, similar to what we did last year, as far as its impact on our overall growth trajectory. Not much expected in the FY27 outlook as we have it presented today. Excellent. That's super helpful, guys. Thank you. Keith. Our next question comes from the line of John DiFucci with Guggenheim. Your line is open. Thank you for taking my question. I have a lot of questions for Gerrit, but I'm gonna ask a question 'cause it wasn't asked yet for Zane, and I think it has to be addressed. On the last conference call. Oh, by the way, welcome back, Aneel. It's good to see you. On the last call, Zane, you said there'd be a $15 million non-recurring revenue in the fourth quarter. Your guide implies a $25 million sequential decline in subscription in 1Q, which doesn't really seem to make sense for a subscription model. I mean, you did say it's even if it was a full 1% impact to subscription in the fourth quarter, that would be $20 million. Still $20 million in a $25 million decline. I don't know. Can you just help explain what's going on there? 'Cause I know I'm gonna have to do that. Sure, John. I'll help you out. As we called out in the fourth quarter, we had the DIA contract, which is not included in our forecast for Q1. Sequentially, there's an impact there. As you note, as with any sort of year that we have less days in Q1 as well, which brings sort of a natural seasonal component to our typical Q1. In addition to that, Rob called out some of the deals that pushed from Q4. Many of them closed in Q1, but a lot of them also are expected to close through the course of the year. Nothing material beyond what I called out with the DIA contract that clearly had a benefit in Q4 and is not expected to continue in Q1. Yeah, let's say it was $20 million instead of 15. It's a $25 million decline. In a subscription model, unless some people just didn't renew this quarter, at the end of the quarter, but I think somebody said in the prepared remarks that, I think it was Rob, that the retention rates were, you know, high, as they always are for you guys. I don't know, maybe it's just prudence, but it doesn't make sense that excluding the DIA deal, even the 2 days delta between the fourth and the first quarter. I don't mean to dwell on this, it's just important. It's just numbers here. Is it just prudence? Is that what we should be thinking? No, I mean, look, I mean, we haven't changed our guidance philosophy. The days, you know, do matter, you know, as you think about the sequential growth, you know, as I call that with DIA. I'd actually say we've seen good consistency on the renewal, on the renewal side as well. Gross retention remains at 97%. You know, obviously, we're focused on executing well in Q1, we'll continue to focus on that, but nothing more than that as you think about the sequential decline, at least that you're calling out this year. Okay. Thank you, Zane. Thank you. Sure, John. Our next question comes from the line of Brad Zelnick with Deutsche Bank. Your line is open. Great. Thank you so much, and welcome back, Aneel. It's great to have you back to the party. My question for you, I appreciate the 27 guidance and the need to invest given the moment, but specifically, any finer details you can provide as to where those $ dollars are going, and how much time do you envision that it takes to stabilize growth overall? I think in response to Kirk's question, you talked about in the back half seeing agentic adoption kick in, but I think investors at this time are really focused on total company growth across all app software. Yeah. Just any insight you can provide on seeing the agentic offerings, particularly the organic ones, translate to overall acceleration. Thank you. I think the business is very stable right now. What I'm very focused on is re-accelerating growth. You know, you don't get many chances in a career to go through two technology waves where I was there at the start of the cloud. I was actually there at the start of client server. I'm old enough. I was there for that too. AI is just a huge opportunity for Workday to re-accelerate growth. The core is stable, it's more about getting to higher growth rates. I'm pretty optimistic. As I've seen what Gerrit's building, I do see the organic agents really coming to market. They're in early access right now, but they're a consumption-based model, there's a delay before we see the actual revenue from it. I think we end this year, the second half of this year, really strongly, and we set up a really amazing following year where, you know, we turn into a consumption platform just like the hyperscalers. That's a material change from the FT model we've had for, you know, the entire time I've been part of the company, I'm really excited to get to that place. It won't just be our agents, it'll also be all the third-party agents that get built that leverage our APIs, that will also be based on that Flex Credit consumption model, too. There's a lot of upside that I see coming forward. I would just start with or end with what I started with. The core is very stable. Our systems are embedded in our customer sites. We have long-term contracts. It's our opportunity now to build on top of that. Helpful. Thank you so much. Our next question comes from the line of Raimo Lenschow with Barclays. Your line is open. Perfect. Thanks. Aneel, welcome back as well from me. Quick question on for Rob, actually. Like, you know, yeah, your, one of your mandates was to kind of think about more international build-out. Can you talk a little bit about what you've seen there, in terms of progress? Thank you. Yeah, Raimo, thank you. Look, we continue to see progress in our European business. We've had a couple of really solid quarters. Asian's been solid as well in growth, so the Southeast Asian model, we've actually opened up India, where we've closed one or two deals already, and our Canadian business is actually doing really, really well. I feel like we're doing a really focused job on driving those markets, and we'll continue to see that benefit come through in 2027. My expectation is that these organic agents will actually help us reignite as well in our customer base in Europe, and in Australia, New Zealand, and parts of Asia as well, including Japan. Okay, perfect. Thank you. Our next question comes from the line of Michael Turrin with Wells Fargo. Your line is open. Hey, great. Thanks very much. Appreciate you taking the question. It seems one of the key questions on Workday seems to be whether you're able to offset just the lower seat growth environment, if that's the world we're in, with more product expansion. I think Gerrit mentioned $400 million now in emerging AI, ARR, and I was just wondering if there's anything else you can tell us around how that impacts the economic profile of those customers who are adopting? Are expansion rates you're observing greater? Any quantification around how much? And just as a small second part on Rob's comment on four Q deal elongation, I'm wondering if there's any way for us to size any impacts on CRPO there. Thanks very much. Look, I think the some of the deals that moved from Q4, as I said, you know, we see them closing. We don't see them moving out of our pipeline. We just see them elongated. I think we can, we're covering that pretty well with these new products that we sold into the non-organic agents, which were a significant part of our Q4 business. As we bring these different releases of organic agents on board, we already have the consumption Flex Credits model in action in Q4. We saw some success with customers, I mentioned in my, in my script. We'll continue to see as we launch more of these organic agents, that the consumption model will actually apply. That's why we're pretty positive about the back half of the year as well. When we see, you know, on the AI agent side, you know, on the economic equation, you can basically see it in two key models, if you will. On the one side, you know, the agents are really delivering efficiency gains, and to a large degree, you know, transferring labor costs into software costs. We just talked about Self-Service Agent, which we have just, you know, put into general availability in three months, and our early access customers have already seen a more than 20% reduction in case volume, right? Those are not people anymore who have to answer these cases, but a Self-Service Agent processing them autonomously. Payroll Agent, which is now going into GA, one of our big organically developed agent, doing payroll compliance, payroll corrections. It's a huge back-office spend doing that automated and highly accurate. It's a huge efficiency gain for these companies. That's basically category number 1. You have category number 2, right? A lot of the agents that we are doing are really leveraging AI to solve unsolved business problems. Think about contract intelligence, document-driven accounting. You know, the reality is that customers don't have an army of lawyers and contract experts matching every transactions against all of their supply chain contracts. Now with our AI model, they can basically make sure to optimize their spend and procurement and have real net savings based on having full contextual awareness of all of their commitments, all of their supply chain, and the transactions happening in real time. Those are delivering ROI then on basically, you know, true business returns. And we have both of these agents, right? Backend automation and new value scenarios. Thanks very much. Our next question comes from the line of Karl Keirsted with UBS. Your line is open. Okay, great. Thanks, Aneel, welcome back to the arena. I had a question for you, maybe zooming out a little bit, this is a broader question. Aneel, you were the disruptor 20 years ago, you and others forced incumbents at the time, Oracle and PeopleSoft, et cetera, to react, in many cases, it took them years to actually pivot, and some frankly didn't make it. I just wanted to ask you whether you think a number of SaaS companies are going to do something similar and rearchitect their cores, AI enable their cores? How challenging do you think that process might be? Is the period 20 years ago that you lived through a good analogy? Thank you. It's a great question. I do think it's different. In the transition from client-server to cloud, it was basically throwing away the old architecture and building a new architecture. In this move from cloud to AI, the difference is AI is built on cloud, right? Every cloud company out there is moving towards AI, but every AI company is actually built on the cloud. By the way, every one of these AI leaders actually runs Workday, just for what it's worth. Anthropic, Google, and OpenAI all run Workday. It's orthogonal to that last transition 'cause it's about the data, not about the process. I think that the keys for all the enterprise apps companies are, number one, to make sure that they have the right data model, to, you know, to inform the large language models and make sure they're getting the best reasoning results. In order to do that, it's a big investment in APIs. You know, we're pretty far along on that path, but I think that's gonna be the case for all the SaaS companies. The second piece is identifying where the savings are gonna come for from customers, 'cause every technology transition is about ROI and productivity gains. If there's no ROI or productivity gain, there is no technology transition that really amounts to anything. We're working really hard to figure out how do we improve business process execution for our customers at a lower cost? I think that's where the agentic model fits in. What can agents do to replace human labor? Obviously, longer term, we've got to figure out what we're gonna do with the humans that are displaced. I think that is an important thing to think about. It's a different mindset. It's a role-based mindset as it relates to these agents. What roles are gonna get replaced by agentic solutions, and how will that improve the way work gets done? But it is different than the last generation 'cause cloud's not getting replaced, it's getting built on top of. Okay, got it. Very helpful, Aneel. Thank you. Our next question comes from the line of Brent Thill with Jefferies. Your line is open. Thanks. Zane, on the operating margin guide, I think the street was looking for perhaps a little more, move up. I know you mentioned go-to-market and AI. Is there anything else that we should consider on the guide on op margin, why you're not seeing any operating improvement on margin? Yeah, Brent, you know, obviously, as you've heard, we're focused on the investments, in particular with AI, you know, thinking through both the engineering side, the delivery adoption side, and all of the go-to-market elements. I think with Anil coming in, it gives us a chance. You know, we've made good progress over the last three years. We're not done yet. We'll continue to focus on margin and efficiencies and growing that number. With this year, we really want to anchor in. We think this is the opportunity to dig in, and to really grow the business and lean in more on that side, leveraging AI and the capabilities that we have organically. It's just a focus on that. Again, we feel like we've got opportunities beyond this year to continue to grow it, and we'll just see how the year progresses. Yeah, I'm optimistic on upside to the margin guidance, Brent. By the way, good to hear your voice. I'm optimistic on that, it's predicated on believing in our growth story, which I completely believe in. You know, margins will grow with reaccelerated growth. As we get these organic agents working with our inorganic agents. By the way, the inorganic agents, I don't think we get enough credit for how well they've done in a very short amount of time. I'm particularly excited about what we're gonna see with Sana, both as our new user experience, prompt-based user experience for all employees in the organization, also as we move into some new areas that you'll hear about down the road. You know, I think that growth is gonna drive incremental margin upside that probably not easy to lock in right now, but I see it coming down the path. Anil, if I can just ask one quick follow-up. Just you've had, you know, some departures, Patrick Blair, head of sales. Can you talk through how you're working through that transition with some of the sales changes in the field? Yeah, I'll turn that over to Rob. Hey, Brent. Yeah, Brent, well, it's pretty simple. With Patrick moving on, the regional leaders, we have real confidence in and have been doing a really good job over the last couple of years, especially bringing on new solutions and products and driving that business. They'll report directly to me. It's all about. In AI, it's all about speed and of decision-making and urgency. It allows us to move faster, and it puts a lot of the decision-making right at the customer, where we want it. We also, you know, tying into that, it also allows us to build activation engines for where we're going with forward deployment engineers to drive consumption faster, and we wanna get that out into the market with incredible amount of speed. That's really the focus and around the changes. Yeah, I would just say that I am excited that Rob is flattened the organization. You know, in this world, flatter organizations move faster, and I'm excited about where the sales organization's headed. Thank you. We will now take two more questions. Our next question comes from the line of Alex Zukin with Wolfe Research. Your line is open. Yeah. Hey, guys. Thanks for taking my question. Aneel, welcome back as well from me. Maybe a quick tech one for you. You talked about monetizing first-party agents, both organic and inorganic. I wanted to ask you specifically how you're thinking about monetizing third-party agents who you have Workday Data Cloud. As you see more kind of investment construction going across these kind of multi multi-system agentic frameworks, how do you guys make sure that you monetize that for the value and the data context that you provide? Zane, I just really simple one for you: Should we still think about the 35% operating margin targets for FY28 as on the table or not? On the first question, Alex, you know, I think you should think of us as an evolving layer on top of hyperscalers. In the same way that they charge for consumption of compute cycles and application cycles, we're going to continue to flex that muscle. There are some vendors out there, including some of our peers, that I would consider them at some level, parasites on Workday. They get a free ride on our underlying system of record, and we're going to put an end to that. If you run stuff off of Workday, whether it's from our agents or third-party agents, there's a consumption model tied to it. Gerrit's really been the driver of that, so I'm going to ask Gerrit to weigh in on that, on that as well as it relates to Flex Credits, and then Zane can answer the second part of the question. Yeah. You know, the model that Aneel has described, you know, really works, that we have a tiered pricing structure for AI or programmatic access to the Workday platform. The way how you should think about that is that we capture consumption in form of API calls. You know, they are monetized on Flex Credits. That's the most basic unit. If a third-party agent chooses to access that layer, you know, we capture the value on our side via simple API calls. If they want to get richer information, like you has indicated, we also have Data Cloud. Data Cloud, again, is available on Flex Credits. It provides richer context. If, third parties want to aggregate agents, right? Because we shouldn't think about APIs like in the old days, where you have modern agents and legacy APIs. APIs and agents are, you know, eventually one and the same thing, right? Our agents, they're all exposed as APIs because we embrace the open ecosystem. You can use them in Microsoft, you can use them in Google Gemini. Those, you know, APIs, those agent APIs, they have a premium price tag to them, right? Because they complete meaningful work. They are not just a simple SOAP or REST API. If you're now a customer or a partner or an ISV, you have all of these choices, right? You can subscribe to our applications and we capture that on Workday pricing. You can build your own agents, and then you can decide whether you want to consume raw APIs, data context, or highly differentiated agent APIs, which are basically aggregating large chunks of work across HR and finance for you already. Hey, Alex, just to add the framework question that you asked. You know, as we've discussed, the intent here with incremental investment is to move up our growth. You know, we're holding to the range between 12% and 15% that we highlighted at our last financial analyst day, but we believe these initiatives will move us higher on that range than where we otherwise would have been. As I mentioned earlier, we're investing more into this fiscal year, and we'll update later on in the year at our next financial analyst update on where we believe, A, the growth would be, and then where we believe accordingly sort of operating margin would be at that point in time as well. If you recall, there was a sliding scale, and Aneel's focus is on driving the growth more so than just hitting that operating margin exclusively. Super helpful. Thank you, guys. Thank you. Our final question comes from the line of Gabriela Borges with Goldman Sachs. Your line is open. Hey, good afternoon. Thanks for taking my question. Anil and Gerrit, I wanted to link together a couple of the points you're making. This idea of AI being built on top of cloud, and then the potential for Workday to monetize any other vendor or corporate-built tool that extracts richer information out of Workday. My question to you is: How do you manage the risk that vendors or customers build solutions next to Workday that leverages all the domain experience that you've built, but ultimately, Workday becomes part of this bigger stack, such that the incremental value is being accrued in the intelligence layer, which would be outside Workday? Maybe just talk to us a little bit about how you manage and mitigate against that type of risk. Well, I'd first of all say that the API layer that ultimately will become the same with the agentic layer, whether we have the apps on top or a third party apps, have apps on the top, it's our intelligence layer. It's our metadata, it's our security model, it's our data model, it's our business process framework, and people underestimate the power of our business process framework. There are 20 years of knowledge into these HR and financial applications that, even with the best AI, it's going to take 5, 6, 7 years to replicate, and, you know, we're not standing still. We want to get to a model where we're pretty much indifferent if it's third parties or us, building the apps on top. We get compensated either way through the consumption model. Gerrit? Yeah, Gabriela, I think it's a great question, so it allows us, you know, to really cut through the chase, I think. You know, look, the reality is the question is where, you know, this intelligent system is being built and what's driving that. From, you know, what we see, I think what research shows today that, you know, the idea that you create just, you know, a big model and connect it to a database of data, and it just figures everything out, is utterly unviable, right? It just creates, you know, a completely lawless AI, which has no understanding of enterprise processes, compliance, determinism, repeatability. You basically have to build an HR and finance system for AI, right? That, that's the intelligence layer, right? It's not bimodal, you know, smart model and dump data. It's actually about a AI-enabled ERP. That's the intelligence layer that Aneel spoke about that we are building. We are opening that up via APIs at the same point in time because we believe in the openness of the ecosystem and the openness of the engagement layer, right? We are great partners with all of the AI companies out there. At the same point in time, the reason why they work with us, and as Aneel put it, why they use Workday, is because you need to have an HR AI and an AI finance system. That's the intelligence that we are building, where we create value and, frankly, where we capture value. I appreciate the call. Thank you. Ladies and gentlemen, this concludes our question and answer session, as well as today's call. We thank you for your participation, and you may now disconnect.