Michael Haase – Investor Relations Aneel Bhusri – Chief Executive Officer Mark Peek – Chief Financial Officer

Jennifer Swanson Lowe – Morgan Stanley Heather A. Bellini – Goldman Sachs & Co. Karl Keirstead – Deutsche Bank Walter H. Pritchard – Citi Brian J. Schwartz – Oppenheimer & Co. Inc. Brent Thill – UBS Brendan Barnicle – Pacific Crest Steven M. Ashley – Robert W. Baird & Co Justin Furby – William Blair & Company, L.L.C. Shannon S. Cross – Cross Research LLC Derrick Wood – Susquehanna Financial Group

Welcome to Workday’s Second Quarter 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 conference. With that, I will hand it over to Mike Haase.

Welcome to Workday’s second quarter fiscal 2015 earnings conference call. On the call we have Aneel Bhusri, our CEO; and Mark Peek, our CFO. Following their 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. Statements made on this call include forward-looking statements such as those with the words will, believe, expect, anticipate and similar phrases that denote future expectation or intent regarding our financial results, applications, customer demand, operations and other matters. These statements are subject to risks, uncertainties and assumptions. Please refer to the press release and the risk factors and documents filed with the Securities and Exchange Commission, including our most recent quarterly report on Form 10-Q for information on risks and uncertainties 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. These non-GAAP financial measures, which are used as measures of Workday’s performance, should be considered in addition to, not as a substitute for or in isolation from GAAP results. Our non-GAAP measures exclude the effect on our GAAP results of share-based compensation, employer payroll taxes on employee stock transactions, non-cash interest expense associated with our convertible note and for fiscal 2014, also exclude amortization of acquisition-related intangible assets. 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. Also, the Customer’s page of our website includes a list of selected customers and is updated at the beginning of each month. The webcast replay of this call will be available for the next 45 days on our Company website under the Investor Relations link. Our third quarter quiet period begins at the close of business October 17, 2014. Unless otherwise stated, all financial comparisons in this call will be to our results for the comparable period of our fiscal 2014. Lastly, before I hand it off to Aneel, Workday Rising is coming up in early November and falls within our quiet period. So we are not able to host the investment community at Rising this year and we expect to hold our Analyst Day during the spring of 2015. We will provide more specific details as we get closer to the date. With that, let me hand it over to Aneel.

Thank you, Mike, and hello everyone on the call. Thank you for joining us. I’m happy to say that we had another great quarter across the board. In the second quarter, our customer count for Human Capital Management far surpasses 700 mark and we’re closing in on 100 customers for our Financial Management application. Due to the increasing size of our business and the diverse mix of very large to medium-sized customers, we decided that we will no longer share specific customer counts on a quarterly basis. Going forward, we will share new customer counts only as we reach significant milestones. So when we reach 100 financial customers, for example, we will let you know. While our new customers come from a wide range of industries, we have recently seen particularly strong adoption from financial services. In June, we announced that Unum, a Fortune 500 company and leading provider of financial protection benefits throughout the workplace selected Workday for both HR and finance. In the second quarter, we welcomed two more extremely notable Fortune 500 financial services companies. The one we can mention is Bank of America, one of the nation’s leading financial institutions and our new largest customer to date. We also had a particularly strong quarter in Europe, adding several global customers who will be able to discuss in the upcoming months. Despite the rumors out there, I feel it’s worth clarifying that McDonald’s is not our customer. We would be extremely honored to have them though and if they do join Workday, we will serve Happy Meals at our next Analyst Day. Mark assures me that we have enough cash to cover this. Now I’d like to transition from new customers to live customers, because the real measure of success is the value those customers get from Workday when they use it to transform their businesses. As of the end of the second quarter, more than two-thirds of our total customer base was live and all of them are using the same version, Workday 23. Thank you to the Workday team, including our excellent partners for remaining so incredibly focused on customer success. We’re also seeing some really positive growth in our services ecosystem. On our last call, I showed that HP went live as our largest customer in production. Since then in Q2, HP announced enterprise application services for Workday. HP will leverage its expertise from cloud, mobile, analytics and big data combined with the hands on experience it gained from rolling out Workday internally to offer deployment services to new Workday customers. Another Workday customer, CSC, a global leader in IT services and solutions with more than 70,000 employees, recently announced it will establish Workday deployment practice. We believe strongly in doing business with our customers and we thank HP and CSC for their continued investments in our partnership. To support our increasing customer demand in Europe, we continue to grow our local employee base. In June, we announced plans to create 200 new positions in Ireland over the next three years. Over the summer, I’ve spent time with our employees and customers in our Dublin, London and Paris offices and I was proud to experience firsthand the consistency in our unique employee culture and laser customer focus. Before I end, I’d like to extend a warm welcome to a very new and special member of the Workday team, former IBM executive Randy Hendricks has joined us as President of our Education and Government business. Reporting directly to Dave, Randy will be responsible for sales, services and strategy of our HR, finance, and student applications for our Education and Government customers. And now, over to you, Mark.

Thanks, Aneel, and good afternoon, everyone. We closed the first half of fiscal 2015 with a very successful quarter generating record quarterly revenues and trailing 12-month operating cash flows. Operationally, we continue to execute well. Although still a small part of our volume, our customer renewal rates were once again very strong. Total ACV on Q2 renewals exceeded $10 million for the first time. We continue to focus on customer satisfaction and believe once we sign and deploy a customer we keep that customer. We also increased the investments in our data centers, new product initiatives and expansion of our office facilities to accommodate growth. Our balance sheet remains strong with more than $1.8 billion of cash and marketable securities over $480 million of unearned revenue and our trailing 12 months operating cash flows continue to be positive. We are pleased with our accomplishments. We want to thank our employees, our partners and our customers. I’ll now walk you through the financial details of the second quarter. Derived billings for the quarter were once again very strong and exceeded our expectations. This was largely driven by several large contracts that closed during the quarter. Looking forward, we expect total derived billings for the third quarter to be approximately $225 million to $230 million. For the year, we anticipate derived billings to be approximately $940 million to $960 million. Total revenues for the second quarter were $186.8 million, an increase of 74% from a year ago. As the vast majority of our sales are currently in US dollars, the impact of exchange rates is minimal. Subscription revenues for our cloud applications were $143.7 million, up 77% from last year. The overachievement in Q2 billings provided modest upside to subscription revenues. The weighted average duration of new contracts signed in our second quarter was approximately 3.3 years. This was down sequentially due to fewer deals with extended contract terms as compared to the prior quarter. Professional services revenue was $43.1 million, an increase of 63% compared to last year. Job one in professional services continues to be the successful deployment of our cloud applications, whether by our ecosystem partners or us. Professional services revenue and margins can be a bit lumpy, particularly with education and government customers. Revenue from large E&G deployments can fluctuate quarter-to-quarter depending on customer specific terms. We found professional services to be the biggest variable in forecasting our quarterly gross and operating margins. However, we are comfortable with the fact that professional services are a critical, enabling force of our core cloud application business. Total unearned revenue at quarter end was $481 million, up 4% sequentially and 48% from a year ago. Over 90% of our unearned revenue is from subscription fees. Short-term unearned revenue was $409 million, an increase of 5% sequentially and 65% from last year. Long-term unearned revenue was $72 million, down 2% sequentially and down 7% from last year. During the second quarter, we continued to average about one year of the total contract value being billed upfront at signing. Looking ahead to the third quarter of fiscal 2015, the strength of our business model and continued momentum provides very good revenue visibility and we expect a solid quarter. Total revenues for the third quarter are expected to be within the range of $200 million to $205 million, or growth of 56% to 60% as compared to the prior year. Subscription revenue is anticipated to be within a range of $155 million to $160 million, reflecting year-over-year growth of 65% to 70%. For the year, we anticipate total revenue of approximately $760 million to $770 million or growth of approximately 62% to 64%. Subscription revenue is anticipated to be within a range of $592 million and $602 million, reflecting year-over-year growth of 67% to 70%. Let’s spend a few minutes on operating expenses and our results of operations. Unless otherwise noted, all references to our expenses and operating results are on a non-GAAP basis, which are reconciled in the tables posted on our Investor Relations website. We had approximately 3,150 employees at the end of our second quarter and continue to anticipate adding more people in fiscal 2015 than we did in fiscal 2014. Remember that approximately two-thirds of our total expenses are employee related. Our second quarter gross margin was 67.6%, up nearly 150 basis points from the first quarter. Subscription gross margin was 84.2% and includes the costs related to providing our cloud applications, compensation and related expenses for operation staff and data center, networking and depreciation. The subscription gross margin improved by approximately 70 basis points sequentially due to increased revenue and the ongoing economics of our subscription model. We expect subscription revenue will increase as a percentage of total revenue over time, but that our gross margins will likely fluctuate from quarter-to-quarter. The professional services gross margin was higher than expected, driven largely by higher utilization rates. Our second quarter operating loss was $19.1 million or a negative 10.2%. This was better than we had anticipated and largely a result of the operating leverage received on increased revenue. Although long-term profitability and cash flow generation are important goals, we believe our focus today needs to be on market expansion, continued product innovation and growth. Product development expense in the second quarter was $59.9 million, up 12% sequentially and up 60% from a year ago. We continue to invest in our product development for new solutions as well as strengthening and extending our suite of HR, payroll and in particular financial management applications. Sales and marketing expense was $70.9 million, up 16% sequentially and up 69% from last year, driven by our expanding marketing programs, increased headcount and increased variable compensation. General and administrative expense was $14.6 million, up 8% from Q1 and up 42% year-over-year. The net loss per share was $0.11 on 184 million weighted average shares. The share count includes 6.9 million weighted average shares from our January follow-on offering. Given our net loss, all outstanding stock options, warrants and common stock equivalents are anti-dilutive and not included in the loss per share calculation. Taking into account our adjustments to GAAP operating income that Mike referred to at the start of the call, we currently expect our fiscal third quarter non-GAAP operating margin to be within the range of a negative 6% to a negative 9% of total revenue and for the year to be a negative high single-digit percentage. The GAAP operating margins for the fiscal third quarter and the full year 2015 are expected to be approximately 21 to 23 percentage points lower than the non-GAAP operating margin. We will provide fiscal 2016 guidance during our fourth quarter earnings call. However, next quarter, in addition to the Q4 outlook, we’ll provide some directional color for Q1 2016. Perhaps tempting to update fiscal 2016 models now, I caution you that we are in the midst of our planning cycle and we fully expect to keep the pedal down on investments and do not expect non-GAAP profitability in fiscal 2016. Other expenses were just under $1 million. For your modeling, our quarterly non-GAAP interest expense from our convertible notes is approximately $1.6 million. From a GAAP perspective, the Q3 interest expense, including $6.1 million of non-cash amortization, reflecting the discount in issuance cost is expected to be approximately $7.7 million. The interest payments on the notes are made during our fiscal second and fourth quarters. Now on to our balance sheet and statements of cash flows. Cash and marketable securities at quarter end were $1.8 billion, down $44 million sequentially. We increased our capital expenditures in the second quarter and also had a one-time payout of $18 million from the change in our U.S. PTO policy that we mentioned last quarter. Operating cash flows in the second quarter were negative $9 million and included the one-time PTO payout of $18 million. For the trailing 12 months operating cash flows were positive $55 million. Free cash flows for the second quarter were negative $37 million and for the trailing 12 months negative $28 million. We expect to invest approximately $100 million to $110 million in CapEx during fiscal 2015. As mentioned before we acquired a leasehold interest in land in Pleasanton adjacent to our existing office space. We are actively evaluating our alternatives for this site, the potential development cost are not yet factored into our CapEx guidance. To summarize, we’re very pleased with our solid second quarter. Looking ahead, we are investing for the long term and see a very large opportunity in front of us. You should expect us to continue making significant investments in our product developments and global market expansion to maximize our long-term growth opportunities. With that let’s begin the Q&A process.

(Operator Instructions) Your first question comes from the line of Jennifer Lowe with Morgan Stanley. Jennifer Swanson Lowe – Morgan Stanley: Thank you. I want to talk a little bit about the ecosystem build out around implementations and partnerships on that front. Can you talk a little bit about what the trend has been in terms of capacity on trained people to help with the implementations for your partners? And then related to that given that you’re closing in on the 100 signed customers mark for Financial – mark for your Financials business, when do you start – when do you expect to start seeing some of the Financials implementations move into the ecosystem?

So, on the first question of the last I would say 24 months we’ve seen big investments from the large SIs, historically we had small boutique system integrators who’ve been terrific partners from really from day one, be the majority of the implementations. But last few years starting with Deloitte, followed by Accenture, then IBM, now Price Waterhouse, now HP, now CSC, we really have most of the key SIs building out fairly large practices in Workday. So we’re very pleased with the development in the general ecosystem. On the financial side, we now feel conformable we’ve got - as we near 100 customers we’ve got a significant number of them live that we’re ready to rollout services into the ecosystems. So you’ll see more and more of the financial management work done by our ecosystem partners. And they are all anxious to invest in that practice as well. Jennifer Swanson Lowe – Morgan Stanley: Great. And then one last one for me. Any update on the recruiting product now that you’re a little further along with that in terms of that being market?

It’s not really any change directionally from the last quarter, it continues to be a very attractive and positive, I guess, driver for HCM and also a pretty typical add-on these days. So with 23 we added quite a bit more functionality in recruiting, that will continue to be the case and as we add more over time it just makes it easier and easier to turn off some of the legacy recruiting systems. Jennifer Swanson Lowe – Morgan Stanley: Okay thank you.

Your next question comes from the line of Heather Bellini with Goldman Sachs. Heather A. Bellini – Goldman Sachs & Co.: Great, thank you so much for the question. Aneel I wanted to ask a little bit about the competitive environment and see if you’ve noticed anything different in particular on the HCM side of things whether it’s from Oracle or SAP. And then I had a follow-up.

Not really, I guess the only new thing over the last few months is that both of them are offering the ability to trade off maintenance on the legacy applications for some of their cloud offerings. But at the end of the day that still puts pressure on their cloud offerings being credible offerings. And I still don’t see that being the case at least not right now. So they continue to be both very aggressive competitors in terms of pricing and that dynamic really has been the case for the better part of the last several years. Heather A. Bellini – Goldman Sachs & Co.: Okay, great, and then the follow up would be when you’re going in and making that HCM sale, can you give us a sense of how many add-on products you might be attaching now versus maybe six months or a year ago, what the attach rate would have looked like? I’m trying to get a sense for how fast is it to up-sell and cross sell.

So you know on the HCM side, we’ve always – we’ve historically had good attach rates on payroll. I don’t know if we’ve seen anything that’s markedly different in the last period of time, the really big change since 12 months ago is the addition of recruiting. Almost everything else is part of the core HCM product. We try not to be a Company that nickels and dimes the customer so we try to make the purchase process straightforward and minimize the number of SKUs but recruiting is a fairly large SKU. So that’s been the big uptick. And as we bring out new (indiscernible). Heather A. Bellini – Goldman Sachs & Co.: And have you given us a sense – I’m sorry, was going to ask if you could give us a sense of what the attach rate might look like for recruiting?

I don’t think we have enough data at this point frankly within a couple of quarters to give you a good sense of that. I would just say it’s amongst the best we’ve seen across the history whether its expenses or procurement or payroll, I mean recruiting is right there at the top. Heather A. Bellini – Goldman Sachs & Co.: Thank you very much.

Your next question comes from the line of Karl Keirstead with Deutsche Bank. Karl Keirstead – Deutsche Bank: Hi thank you. Question for Mark. I was intrigued by your comment around the ACV on the 2Q renewals and I just wanted to ask you if you could help us understand how an uptick in the mix of bookings from renewals trickles into the P&L. It seems to me that it would lead to upon renewal dates deals potentially getting up sized. Maybe the profitability is a little bit better given the smaller sales attached to a renewal versus an initial booking. So just love to ask you about how a renewal uptick affects the P&L.

Yes, we’re still dealing with a relatively limited set of data. But of course as we continue on over time with our fundamental belief that customers - that the product is very sticky and the customers will be customers for the long-term, largely because of the innovation that we’ve put into the products and the care that we give our customers. It will become more meaningful. But today what I really wanted to do is to give you a sense that we now had $10 million of ACV on renewal. So it’s becoming more meaningful to the total. But for the most part, it is essentially just serial to the original contract and so it’s being added to deferred revenue and if it’s longer than a year, it will be in the backlog number and doesn’t have a significant short-term effect on the P&L outside of a normal booking. From time to time at the renewal cycle, there will be recounts of employees in a given account so there may be small components of additional revenue, as well as the opportunity to up sell, but at this stage it’s really just renewing the initial contract. Karl Keirstead – Deutsche Bank: Got it, okay, thank you.

Your next question comes from the line of Walter Pritchard with Citi. Walter H. Pritchard – Citi: Hi. Mark I’m wondering if you can talk a little bit about the seasonality in your business. You were seeing it differ a little bit from last year and particularly characterized the impact of large deals on that seasonality, what we’re seeing this year and generally characterize how the large deal performance was in the quarter, was it a big large deal performance or normal?

Yes, as Aneel mentioned in his comments, the Bank of America is a new customer and our largest customer to date, so certainly the overall quarter is impacted by such a great new customer, a great new win. For the most part as we look ahead into the second half of the year, certainly the visibility on existing billings is clear and fairly straightforward. And the pipeline is one in which we take a reasonable approach to it. I wouldn’t call it a conservative approach to it. But the impact of large transactions is that the timing of closing them is always a bit uncertain as to which quarter that might happen, or if it will happen at all, and so we don’t tend to completely bank on large deals, but they are certainly a big part of our overall mix. And frankly, it’s one of the reasons that we are going to move away from giving point data on the number of customers that we have, because our customers do range all the way from Bank of America to companies with a thousand people or so and so the raw number of actual customers we have becomes less meaningful. Walter H. Pritchard – Citi: And then for Aneel on the financial side could you characterize either in terms of deal size or types of customers or verticals is there any change in complexity in that base as you move towards the 100 number of assigned customers?

No I’d characterize where we are today is that we’ve gotten very good at selling to medium size companies. And if you look at our customer list, medium size meaning 3,000, 4,000, 5,000 to 10,000 employees. And where the next push is to go above that size. But very comfortable now with medium size companies and I wouldn’t have said that 12 months ago. We were definitely dealing with smaller companies, but like Netflix going live and Lifetime Fitness with 18,000 employees being life across all of our products, we’re just gaining confidence and continuing to move up market. And increasingly we are seeing as the financial products get traction, the interest in customers in particular non-manufacturing customers to look at getting the whole suite together of HR and financial products in particular, say in our mid-market segment customers would tend to choose fewer rather than more vendors and we’ve seen a nice set of trends in that marketplace. Walter H. Pritchard – Citi: Great, thank you very much.

Your next question comes from the line of Brian Schwartz with Oppenheimer. Brian J. Schwartz – Oppenheimer & Co. Inc.: Yes. Hi, thank you and congratulations on the results here today. I had a follow-up question on the seasonality in the second half. Mark you had previously mentioned that typically about 60% of the years bookings come in the second half and I’m just wondering if anything have changed with that previous linearity assessment?

Well, it’s somewhat remains to be seen as we talked about last quarter, we had some large transactions that were pulled in from the second quarter and the third quarter. And so the linearity content to move depending on the very large accounts, just because of the overall size up their employee basis tend to dwarf the sort of average billings per customer. So we’re not seeing, I would say meaningful change it’s still an enterprise sale the fourth quarter both for customers and for us tends to be seasonably the strongest, which is why it tends to be weighted mark towards a majority in the second half of the year. Brian J. Schwartz – Oppenheimer & Co. Inc.: Thank you. And then follow-up question for Aneel on the financials. You’ve highlighted Bank of America here on the call as a new customer, Netflix as a live, enterprise customer last quarter. Is the medium size segment, is that still sort of the sweet spot here for financials, for the foreseeable future? And what do you feel is the right number of referenceable enterprise customers for financials needed, or product capabilities needed before the business moves up market and a greater fashion from a market awareness and branding perspective for financials? Thanks.

Well, so first of all, Bank of America was an HCM customer not a financial customer. The one we mentioned in the opening remarks was Unim, which is a very large insurance company that is using both our HR and financial products, so it’s just a clarification there. In terms of references I feel very comfortable with where we are. Reference wise our financial customers are generally happy they are as referencable as our HR customers. There are clearly still gaps that we are closing on an update-by-update basis for the financial products. I’ve talked about it on I think really on every call since we went public. It’s this journey on the path of both scalability and global capabilities that we’re on and every update scalability improved and every update we add more global functionality. Going into fiscal 2016 in January, we’re going to begin to sell our financial products outside the U.S. which will just give you some confidence as our view on the global capabilities. And on scale, we feel comfortable scaling to probably the Fortune 500 size customer maybe not a Fortune 100, so the smallest of the Fortune 500, which is up significantly from where we were a couple of years ago. Brian J. Schwartz – Oppenheimer & Co. Inc.: Thank you. And last question from me, and then I’ll hop back in the queue. Some of your largest system integrators, partners here that we’ve spoken to over the last couple of weeks, they sound very excited right now, about the momentum of the number of new cloud computing business transformation initiatives that they are seeing in their pipelines. So I was wondering Aneel if you could share your own assessment on where you think central IT buyers are today towards adopting a next generation SaaS platform for productivity applications per se year ago, or year and half ago? Thanks.

I think in the world of HR, and the same with whole troupe in the world CRM, the market has flipped. It’s hit a tipping point where, if companies are starting with a Greenfield, they are going to choose cloud versus on premise and for all of the people that are on premise they are increasingly switching to cloud. The functionality is there, the scalability is there, the functionality is now ahead of where the legacy systems sit. And added to that the systems integrators have all over the last couple years gotten much, much better not taking the legacy system out and putting in the cloud system and automating the old processes but actually using Workday or salesforce or any of these cloud solutions to transform the business, where you can look at HR and say we’re going to run it differently and leverage this cloud platform. I think that’s where excitement comes from and a lot of it comes from our focus in HR and talent Management and our focus in finance around really around activity, true activity management and costing, where we can really give you the real metrics that run your business different than some of the legacy systems could. And I don’t think that the industry was that focused on that transformation a few years ago. Brian Schwartz – Oppenheimer: Thank you.

Your next question comes from the line of Brent Thill with UBS. Brent Thill – UBS: Aneel, look forward to that Happy Meal. Thanks for taking the question. Just with regards to the financial product, I think in the past you’ve mentioned that technically Europe you can scale now into the bottom and to the Fortune 500. I’m just curious if there’s any update as it relates to your ability to go into the mid or upper tier on the scalability or is that something to come from rising?

Yes, I think this quarterly release is light on some product announcements and product capabilities because we’re saving them for rising and that’s just a few months away. And as you know, we typically make our big product announcements around rising. On the scalability side, it’s a journey and every update we get better, we got better on 23. I think by the end of next year, fiscal year I just don’t think that scalability issues will necessarily be ones that come up for us. I think we’ll be past those. It’s more about taking each individual process and making sure that we wire in this new processing model to make sure we can scale to the huge volumes, but it’s works that we are doing across the application and its gone well. The hard part was a year and a half ago when we had to design new ways of actually processing transactions for financials to make sure that they would scale. Brent Thill – UBS: Okay and just to clarify on Banc of America on HR, is that a wall to wall HR transformative deal or is that just give us the scope of how far that reach.

Their plan is to rollout Workday for their HR solution globally for the 300,000 employees. Brent Thill – UBS: Great thank you.

Your next question comes from the line Brendan Barnicle with Pacific Crest. Brendan Barnicle – Pacific Crest: Thanks so much. Aneel on the call you talked about several different factors leading to some of the larger deals we’ve seen in the first half, scalability, functionality, cloud adoption. What do think is the biggest one or two factors have been that really lead to that scale and size we’ve seen so far this year?

I think it helps a lot that HP is now live. It set a new benchmark, Flextronics had been the previous benchmark, but HP set a new benchmark in terms of size company that can go live on Workday. So that’s definitely with Bank of America now is HP there’s not really any corporate entity out there that we see that we couldn’t scale to meet their needs. I also think it’s the customer satisfaction where we’re running at north of 95% customer satisfaction as much as level our sales people are customers are best sales people and they talk with each other. And at this point our customers are happy and they are letting other customers know about what you can do with the Workday platform. Brendan Barnicle – Pacific Crest: Great, and then just following-up last quarter on financials, you mentioned that about half of the customers were public sector half, are commercial, any change in that breakdown now after the additional customers this quarter?

I did not mention that specific breakdown, I don’t actually think that’s accurate. At some point we’ll give them more accurate breakdown. The majority are commercial, but we have quite a few public sector customers and I would say there was no real change directionally in percentage in the last quarter. Brendan Barnicle – Pacific Crest: Great thanks.

Our next question comes from the line of Brian White with Cantor Fitzgerald. Brian your line is open. Mr. White if your line is on mute, please un-mute your line.

Operator let’s go to the next one.

Certainly, your next question comes from the line of Steve Ashley with Robert W. Baird. Steven M. Ashley – Robert W. Baird & Co: Thanks you very much. I just like to talk about the international business, you actually called it out and in your prepared remarks and in the press release. I know you just hired a new GM in Asia-Pac. My question is in terms of Management capability or needs, are there anything, any major positions or anything you need to fill out to help drive the international? And then secondly, in terms of datacenters and what you’re currently doing in terms of building out a physical presence overseas and what your future plans might be around that? Thank you.

So we had a very strong quarter in Europe and in Australia. And as the customers give us the go-ahead, we’ll share some of the names over the upcoming quarters. In Europe, it’s becoming a fairly, I wouldn’t say mature, but it’s a really solid business now. We have a great leader in Chano Fernandez. We’ve made some great hires across Europe. We have two datacenters in Europe. We have a big development and support presence in Dublin. So, Europe is up and running and is starting to show some of the same signs of adoption that we’ve seen in the U.S. Asia Pacific is earlier. Australia is the first place where we started to gain some consistent traction. We’ve had some good wins in China. We’ve got a presence in Japan that hopefully will pay dividends in the next six to nine months. The one place where we really haven’t made a move yet is Latin America and that’s something that we think about and talk about, but we have not hired yet an executive to cover the Latin American geography. We feel very good about the other geographies. Steven M. Ashley – Robert W. Baird & Co: Perfect. Thank you very much.

Your next question comes from the line of Justin Furby with William Blair. Justin Furby –: Hi, thanks very much. Aneel, I was wondering if you look at the pipeline for the next couple of quarters or even the next year, if you look at between recruiting financials, big data, could you sort of stack or impose. And then, I guess if you look out three to five years, what’s your sort of latest (indiscernible) where you think financials as sort of a percentage of new business? William Blair & Company, L.L.C.: Hi, thanks very much. Aneel, I was wondering if you look at the pipeline for the next couple of quarters or even the next year, if you look at between recruiting financials, big data, could you sort of stack or impose. And then, I guess if you look out three to five years, what’s your sort of latest (indiscernible) where you think financials as sort of a percentage of new business?

In terms of the pipeline, honestly, I couldn’t give you a very specific answer. I think all three are the growing pipeline. I’d say that the small sum right now is big data. A lot of customers are waiting to see what happen, when we bring big data into the Workday datacenter. There’s a lot of interest in it and then I’d like to see what happens when we bring it into the datacenter. We’ve also got some really important product announcements coming in November around big data. With respect to financials and recruiting, they’re both exciting products. Financials is a sweet, recruiting is a module. It’s an easy attach to HR. So it’s not really apples-to-apples comparison. We look out three to five years. I would hope that financials is on a new booking spaces on par with HR if not bigger. I would say probably closer to five years now just given the momentum in HR. From a revenue basis, given the subscription, analysis is going to take a long time for the financials to catch up. But on the new booking spaces, I would hope down the road the financials market is a much bigger market. Our history of PeopleSoft was that towards the tail end of the company financials was a bigger business for PeopleSoft and HR, but not by a lot. Justin Furby –: Okay, great. And then just one quick follow-up on the financials. It sounds like you’re scaling nicely with the product. I’m just curious if you look at what’s the biggest push back from customers today? If it’s not scale, what are some of the areas of inertia that you’re seeing in terms of new deals? William Blair & Company, L.L.C.: Okay, great. And then just one quick follow-up on the financials. It sounds like you’re scaling nicely with the product. I’m just curious if you look at what’s the biggest push back from customers today? If it’s not scale, what are some of the areas of inertia that you’re seeing in terms of new deals?

I wouldn’t say there’s areas of push back or inertia. With the CFO, it’s a new buyer. We’ve gotten the story and the message down in terms of selling to the CHRO. The good news is that the CIO in many cases is already up to speed on Workday. So they’re comfortable with the technology. But it’s showing a CFO who’s typically a conservative buyer, a new way of running their financial systems, not just a new technology platform. And so, we’re getting better and better at selling to them and marketing to them. And there are industry capabilities that many of them are waiting for in order to be able to swap out of PeopleSoft recipe, Oracle. This past update we included average daily balance, which was an important feature for financial services. We’re rolling our professional services automation. We’ve made big investments in Education and Government, functionality like rents. So, all of those matter in terms of being able to turn off a legacy system. We have to have enough of a functional footprint to turn those off. And those are the kinds of the questions that come up. Justin Furby –: Okay. great. Thank, guys and congrats. William Blair & Company, L.L.C.: Okay. great. Thank, guys and congrats.

Operator, we’re going to take two more please.

Certainly. Your next question comes from the line of Shannon Cross with Cross Research. Shannon S. Cross – Cross Research LLC: Thank you very much for taking my question. I wanted to look into the international business a bit deeper. Can you talk about how those customers are trending relative to what you saw in the U.S., just in terms of verticals or are they sort of following the same trends in terms of adoption that you saw in the U.S.? And then I had a follow-up. Thanks.

It’s very similar and the reason is that if you look at our success in the U.S., it’s largely driven by large multinationals. And whether you’re a large multinational based in the U.S. or based in the UK or based in France, you largely have the same needs of information, the same needs around talent management, around accounting across the globe. So, the same solution that worked for Flextronics, which by the way most of their population in China happen to work well for Lenovo, the same group that works well for Johnson & Johnson in the U.S., the same solution works well for Sanofi in France. And I think that’s what we’re seeing. The next wave for us is actually addressing the middle market opportunity in Europe, which are beginning to rollout going into next year. But the large multinationals across the globe largely act in very similar ways. Shannon S. Cross – Cross Research LLC: Okay, great. And then, maybe sort of a follow-up there. In terms of the investments you’re making and you said you’re targeting middle markets and international, but I think during the call the comment significant investments to come and continue to focus on investing the business was a key comment. So, how you think about the hurdle rates for investment, where you put your dollars? Is this going to be more international versus U.S., more R&D versus SG&A? Just any color you can give us on the continued investment.

You’ll see a set of new product announcements in Rising in November. That’s probably all I really can talk about on the product side. I don’t know if Mark wants to talk about anything on the SG&A side.

Yes, certainly with G&A we’re building our internal platform to be a much larger company and on sales and marketing we are selling multiple products to different buyers in different geographies and we’re going to continue to make investments, particularly internationally and in selling financials. Shannon S. Cross – Cross Research LLC: Thank you.

Your final question comes from the line of Derrick Wood with Susquehanna. Derrick Wood – Susquehanna Financial Group: Thanks. A couple of questions on the CSC announcement. First, it sounds like you’re selling to the 70,000 employees on the HCM side. Was that a deal that closed in Q2 or is that still for plan? And then the second was, can you share with us the amount of resources maybe from a headcount perspective CSC plans to devote to the practice or maybe some timeframe as to when they get up and running in terms of ramp to market?

They have signed as a customer. I don’t know which quarter it happened in. In terms of the size of their footprint, I think it’s best coming from them. They’ve got some pretty aggressive plans about creating Workday practice, but I defer to them and let them talk about if something get wrong.

And CSC was a Q1 deal.

Yes, Q1 deal. Derrick Wood – Susquehanna Financial Group: Okay. And just a follow-up on the renewal business, Mark. Any commentary on the duration – contract duration looked much different from a new customer perspective.

Yes, it’s somewhat customer by customer, and, again, we don’t have a lot of data points, but we’re tending to see the average via a couple of years as opposed to just over three on a new deal. Derrick Wood – Susquehanna Financial Group: Great, okay. Thank you.

We thank you for your participation in today’s earnings call. You may now disconnect and have a great day.