Workday Inc Q3 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : So Aneel, I think you hit on this a little bit last question, right, but the challenge that we're hearing from execs today is around kind of employee engagement and preserving culture during the pandemic. And look, I think a lot of that falls in the C-suite, but some of it also to HR. So I'm curious if there are opportunities that -- or considerations that kind of influence how you think about your HCM product road map as work from home or work from anywhere kind of becomes more permanent. Aneel Bhusri - Workday, Inc. - Co-Founder, Co-CEO & Director Well, I've said this in the past, if there are trends that are beginning to take hold before an economic downturn, in many cases, they tend to get accelerated. And I talked about like telemedicine being one of those, where telemedicine has been around for a long time. The pandemic kicked, and all of a sudden, it's exploding. This idea of a Talent Marketplace, first internal and then external, is one of those areas for us where if you're in a low hire mode as a company, you're trying to get work done, you're really trying to understand the skills you have amongst the employees, what skills do they need to add with reskilling and learning and how can you source that work -- that work that needs to get done from your existing employee base. This idea of a Talent Marketplace has definitely gained traction. And the idea of this gig work or project-based work, I think, is getting traction faster because of the environment we're in. And I'd throw reskilling into that as well. The other piece is much deeper understanding. I'm trying to get a sense of how employees are feeling about their work environment. We all have heard mental health is an issue in the workforce today given the remote work. And so within Prism and within our People Analytics, we can do sentiment analysis and get a sense of -- with the polling questions that we do out of our HR system, get a sense of how people are doing it. I think you'll see more investment from us in a fairly significant way in employee engagement to really understand how we're doing as -- company by company, how we're doing -- or how they're doing relative to engaging their employees in a positive way. And if I would add one last thing is the big investment we're making in our -- and sharing our VIBE work, value, inclusive, belonging and equity, creating an index, helping companies get a handle on their diversity and how they could be better. And that definitely has been accelerated by the environment we live in. So actually quite a few changes as a result of this environment.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : I've got 2 for Robynne. Robynne, if you don't mind, can we go back to the 4Q subscription backlog guidance of 14 to16. So that's a 7- to 9-point decel from 3Q, but it's actually only a 1 point tougher compare. So maybe you could elaborate on the compare comment you made, maybe you meant on the net new ACV front. And then also, is there any duration compression that might be impacting that 4Q number? And if not, just generally, whether this reflects a demand backdrop that feels just incrementally tougher, perhaps, than what Workday saw in 2Q and 3Q?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Okay. That's helpful, Robynne. And then my second question is just on the go-lives that Aneel commented on earlier, kind of an amazing go-live quarter for Workday actually, if I caught them all, Walmart, Accenture, UPS, GE, that's a lot of very large go-lives. Did any of those or collectively, did they trigger any milestones that might have impacted the 3Q numbers in any way? Aneel Bhusri - Workday, Inc. - Co-Founder, Co-CEO & Director I don't know if they triggered any milestones in terms of the number. I'll leave that to you, Robynne. Again, as Chano mentioned, just very appreciative and proud of Emily and her team and our -- and I'd say our business partners as well who figured out how to get these large customers live during this pandemic. And one of those going live in the quarter would be terrific, having 4 of them go live in the same time frame is really remarkable from a services perspective. And as far as I know, they're all still very happy.