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PLEASANTON, CA -- (Marketwired) -- 08/26/15 -- Workday, Inc. (NYSE: WDAY), a leader in enterprise cloud applications for finance and human resources, today announced results for the fiscal second quarter ended July 31, 2015.

• Total revenues were $282.7 million, an increase of 51% from the second quarter of fiscal 2015. Subscription revenues were $223.7 million, an increase of 56% from the same period last year.
  
  
• Operating loss was $67.6 million, or negative 23.9% of revenues, compared to an operating loss of $61.8 million, or negative 33.1% of revenues, in the same period last year. Non-GAAP operating loss for the second quarter was $0.7 million, or negative 0.3% of revenues, compared to a non-GAAP operating loss of $19.1 million last year, or negative 10.2% of revenues.(1)
  
  
• Net loss per basic and diluted share was $0.37, compared to a net loss per basic and diluted share of $0.38 in the second quarter of fiscal 2015.
  
  
• Operating cash flows for the second quarter were $15.5 million and free cash flows were negative $10.3 million. For the trailing twelve months, operating cash flows were $198.9 million and free cash flows were $77.6 million.(2)
  
  
• Cash, cash equivalents and marketable securities were approximately $1.9 billion as of July 31, 2015. Unearned revenues were $683.1 million, a 42% increase from last year.

"We had a great second quarter, and we're proud to share that we've crossed the 1,000-customer milestone," said Aneel Bhusri, co-founder and CEO, Workday. "We saw strong sales traction for growth initiatives including financial management, education and government industry solutions, and European expansion. We also continued our rapid product innovation with the announcement of Workday Planning, a new application that will round out our financial suite and bring budgeting, planning, and forecasting capabilities into Workday."

"We are very pleased with our solid second quarter results," said Mark Peek, co-president and chief financial officer, Workday. "We generated record quarterly revenues and trailing twelve month operating cash flows. Looking ahead, we anticipate third quarter total revenues to be within a range of $300 and $303 million, or growth of 39% to 41% as compared to the prior year."

Recent Highlights

• In the second quarter, Workday surpassed the 1,000-customer milestone as the company continues to see increased adoption of its suite of applications.
  
  
• Workday announced its intent to deliver Workday Planning, a new budgeting, planning, and forecasting application. When combined with Workday Financial Management and Workday Human Capital Management (HCM), Workday Planning is expected to be the industry's first system to unify real-time finance and HR data with analytics and enterprise planning. Workday plans to make Workday Planning generally available to customers in calendar year 2016.
  
  
• Workday will host its ninth annual Workday Rising customer conference from Sept. 28 - Oct. 1 in Las Vegas. The event will bring the extended Workday community together to collaborate and learn about how Workday helps some of the largest organizations around the world grow their businesses.

Workday plans to host a conference call today to review its second quarter financial results and to discuss its financial outlook. The call is scheduled to begin at 2:00 p.m. PT/ 5:00 p.m. ET and can be accessed via webcast or through the company's Investor Relations website at www.workday.com/investorrelations. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 45 days.

(1) Non-GAAP operating loss for the fiscal second quarters of 2016 and 2015 exclude share-based compensation expenses, employer payroll tax-related items on employee stock transactions and amortization expense for acquisition-related intangible assets. See the section titled "About Non-GAAP Financial Measures" in the accompanying financial tables for further details.

(2) Free cash flows are defined as operating cash flows minus purchased property and equipment, property and equipment acquired under capital leases and purchased other intangible assets. See the section titled "About Non-GAAP Financial Measures" in the accompanying financial tables for further details.

About Workday
Workday is a leading provider of enterprise cloud applications for finance and human resources. Founded in 2005, Workday delivers financial management, human capital management, and analytics applications designed for the world's largest companies, educational institutions, and government agencies. Hundreds of organizations, ranging from medium-sized businesses to Fortune 50 enterprises, have selected Workday.

Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to Workday's financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled "About Non-GAAP Financial Measures."

Forward-Looking Statements
This press release contains forward-looking statements including, among other things, statements regarding Workday's third quarter revenue projections and future product offerings. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: (i) breaches in our security measures, unauthorized access to our customers' data or disruptions in our data center operations; (ii) our ability to manage our growth effectively; (iii) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications and marketing initiatives by our competitors; (iv) the development of the market for enterprise cloud services; (v) acceptance of our applications and services by customers; (vi) adverse changes in general economic or market conditions; (vii) delays or reductions in information technology spending; (viii) our limited operating history, which makes it difficult to predict future results; and (ix) changes in sales may not be immediately reflected in our results due to our subscription model. Further information on risks that could affect Workday's results is included in our filings with the Securities and Exchange Commission (SEC), including our Form 10-Q for the quarter ended April 30, 2015 and our future reports that we may file with the SEC from time to time, which could cause actual results to vary from expectations. Workday assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.

Any unreleased services, features, or functions referenced in this document, our website or other press releases or public statements that are not currently available are subject to change at Workday's discretion and may not be delivered as planned or at all. Customers who purchase Workday services should make their purchase decisions based upon services, features, and functions that are currently available.

© 2015. Workday, Inc. All rights reserved. Workday and the Workday logo are registered trademarks of Workday, Inc. All other brand and product names are trademarks or registered trademarks of their respective holders.

                               Workday, Inc.
                   Condensed Consolidated Balance Sheets
                               (in thousands)
                                (unaudited)

                                                  July 31,     January 31,
                                                    2015         2015(1)
                                               -------------  -------------
Assets
Current assets:
  Cash and cash equivalents                    $     230,578  $     298,192
  Marketable securities                            1,676,351      1,559,517
  Accounts receivable, net                           156,282        188,357
  Deferred costs                                      18,905         20,471
  Prepaid expenses and other current assets           58,412         42,502
                                               -------------  -------------
Total current assets                               2,140,528      2,109,039
Property and equipment, net                          172,701        140,136
Deferred costs, noncurrent                            20,787         20,998
Goodwill and acquisition-related intangible
 assets, net                                          42,953         34,779
Other assets                                          66,915         53,681
                                               -------------  -------------
Total assets                                   $   2,443,884  $   2,358,633
                                               =============  =============
Liabilities and stockholders' equity
Current liabilities:
  Accounts payable                             $      23,668  $      10,623
  Accrued expenses and other current
   liabilities                                        31,706         24,132
  Accrued compensation                                48,347         56,152
  Capital leases                                         743          3,207
  Unearned revenue                                   601,807        547,151
                                               -------------  -------------
Total current liabilities                            706,271        641,265
Convertible senior notes, net                        502,045        490,501
Unearned revenue, noncurrent                          81,281         85,593
Other liabilities                                     22,312         15,299
                                               -------------  -------------
Total liabilities                                  1,311,909      1,232,658
Stockholders' equity:
  Common stock                                           190            186
  Additional paid-in capital                       2,084,815      1,948,300
  Accumulated other comprehensive income
   (loss)                                                320           (140)
  Accumulated deficit                               (953,350)      (822,371)
                                               -------------  -------------
Total stockholders' equity                         1,131,975      1,125,975
                                               -------------  -------------
Total liabilities and stockholders' equity     $   2,443,884  $   2,358,633
                                               =============  =============

(1)Amounts as of January 31, 2015 were derived from the January 31, 2015
 audited financial statements.


                               Workday, Inc.
              Condensed Consolidated Statements of Operations
                   (in thousands, except per share data)
                                (unaudited)

                                  Three Months Ended     Six Months Ended
                                        July 31,              July 31,
                                 --------------------  --------------------
                                    2015       2014       2015       2014
                                 ---------  ---------  ---------  ---------
Revenues:
  Subscription services          $ 223,742  $ 143,652  $ 424,735  $ 267,059
  Professional services             58,954     43,128    108,918     79,458
                                 ---------  ---------  ---------  ---------
Total revenues                     282,696    186,780    533,653    346,517
                                 ---------  ---------  ---------  ---------
Costs and expenses(1):
  Costs of subscription services    35,287     24,373     67,069     45,832
  Costs of professional services    56,792     41,267    102,924     77,227
  Product development              115,345     77,464    214,680    142,635
  Sales and marketing              106,430     78,523    201,325    146,690
  General and administrative        36,482     26,922     68,699     47,985
                                 ---------  ---------  ---------  ---------
Total costs and expenses           350,336    248,549    654,697    460,369
                                 ---------  ---------  ---------  ---------
Operating loss                     (67,640)   (61,769)  (121,044)  (113,852)
Other expense, net                  (3,779)    (6,953)   (11,015)   (13,952)
                                 ---------  ---------  ---------  ---------
Loss before provision for
 (benefit from) income taxes       (71,419)   (68,722)  (132,059)  (127,804)
Provision for (benefit from)
 income taxes                       (1,998)       493     (1,080)       800
                                 ---------  ---------  ---------  ---------
Net loss                         $ (69,421) $ (69,215) $(130,979) $(128,604)
                                 =========  =========  =========  =========
Net loss per share, basic and
 diluted                         $   (0.37) $   (0.38) $   (0.70) $   (0.70)
                                 =========  =========  =========  =========
Weighted-average shares used to
 compute net loss per share,
 basic and diluted                 189,360    184,319    188,382    183,733
                                 =========  =========  =========  =========

(1) Costs and expenses include share-based compensation expenses as follows:
      Costs of subscription
       services                      $3,173     $1,608     $5,221     $2,663
      Costs of professional
       services                       5,144      3,519      8,598      5,717
      Product development            28,632     16,737     49,443     27,605
      Sales and marketing            13,222      7,377     21,587     14,129
      General and administrative     14,593     11,541     27,189     19,542


                               Workday, Inc.
              Condensed Consolidated Statements of Cash Flows
                               (in thousands)
                                (unaudited)

                                Three Months Ended      Six Months Ended
                                      July 31,               July 31,
                               --------------------  ----------------------
                                  2015       2014       2015        2014
                               ---------  ---------  ---------  -----------
Cash flows from operating
 activities
Net loss                       $ (69,421) $ (69,215) $(130,979) $  (128,604)
Adjustments to reconcile net
 loss to net cash provided by
 (used in) operating
 activities:
Depreciation and amortization     19,888     14,474     38,457       26,997
Share-based compensation
 expenses                         64,764     40,782    112,038       69,656
Amortization of deferred costs     7,735      4,421     12,360        8,373
Amortization of debt discount
 and issuance costs                6,336      6,002     12,586       11,922
Other                              1,095        242      1,832          846
Changes in operating assets
 and liabilities, net of
 business combinations:
    Accounts receivable          (27,570)    (1,441)    32,147       (8,454)
    Deferred costs                (7,082)    (6,433)   (10,583)      (9,896)
    Prepaid expenses and other
     assets                       (7,806)    (2,748)   (15,476)     (10,098)
    Accounts payable               1,428        (23)     4,180       (2,453)
    Accrued expense and other
     liabilities                  (3,521)   (14,602)     2,664      (13,511)
    Unearned revenue              29,665     19,530     50,344       67,908
                               ---------  ---------  ---------  -----------
Net cash provided by (used in)
 operating activities             15,511     (9,011)   109,570       12,686
Cash flows from investing
 activities
Purchases of marketable
 securities                     (476,470)  (365,779)  (862,045)  (1,036,185)
Maturities of marketable
 securities                      429,186    414,242    710,593      767,472
Sales of available-for-sale
 securities                       19,524      8,138     29,524        8,138
Business combinations, net of
 cash acquired                    (7,961)        --     (7,961)     (26,317)
Purchases of property and
 equipment                       (25,792)   (28,409)   (55,972)     (38,282)
Purchases of cost method
 investments                     (15,750)   (10,000)   (15,750)     (10,000)
Sale of cost method investment     3,538         --      3,538           --
Other                                 --         --         --        1,000
                               ---------  ---------  ---------  -----------
Net cash provided by (used in)
 investing activities            (73,725)    18,192   (198,073)    (334,174)
Cash flows from financing
 activities
Proceeds from issuance of
 common stock from employee
 equity plans                     19,172     15,169     22,736       18,165
Principal payments on capital
 lease obligations                (1,016)    (4,418)    (2,464)      (7,162)
Shares repurchased for tax
 withholdings on vesting of
 restricted stock                     --     (3,284)        --       (8,291)
Other                                362         --        779           60
                               ---------  ---------  ---------  -----------
Net cash provided by (used in)
 financing activities             18,518      7,467     21,051        2,772
Effect of exchange rate
 changes                            (210)       (15)      (162)          24
                               ---------  ---------  ---------  -----------
Net increase (decrease) in
 cash and cash equivalents       (39,906)    16,633    (67,614)    (318,692)
Cash and cash equivalents at
 the beginning of period         270,484    246,001    298,192      581,326
                               ---------  ---------  ---------  -----------
Cash and cash equivalents at
 the end of period             $ 230,578  $ 262,634  $ 230,578  $   262,634
                               =========  =========  =========  ===========
Supplemental cash flow data
    Cash paid for interest     $   3,211  $   3,369  $   3,244  $     3,558
    Cash paid for taxes              418        120      1,034          120
    Non-cash investing and
     financing activities:
      Vesting of early
       exercise stock options  $     472  $     471  $     944  $       944
      Purchases of property
       and equipment, accrued
       but not paid               18,642     12,171     18,642       12,171


                               Workday, Inc.
                  Reconciliation of GAAP to Non-GAAP Data
                     Three Months Ended July 31, 2015
                              (in thousands)
                                (unaudited)

                                                     Amortization
                                            Other       of Debt
                             Share-Based  Operating  Discount and
                            Compensation   Expenses    Issuance
                   GAAP       Expenses       (1)         Costs    Non-GAAP
                 --------   ------------  ---------  ------------ --------
Costs and
 expenses:
Costs of
 subscription
 services        $ 35,287   $     (3,173) $     (76) $         -- $ 32,038
Costs of
 professional
 services          56,792         (5,144)      (170)           --   51,478
Product
 development      115,345        (28,632)    (1,068)           --   85,645
Sales and
 marketing        106,430        (13,222)      (327)           --   92,881
General and
 administrative    36,482        (14,593)      (516)           --   21,373
Operating loss    (67,640)        64,764      2,157            --     (719)
Operating margin    (23.9)%         22.9%       0.7%           --     (0.3)%
Other expense,
 net               (3,779)            --         --         6,336    2,557
Loss before
 provision for
 (benefit from)
 income taxes     (71,419)        64,764      2,157         6,336    1,838
Provision for
 (benefit from)
 income taxes      (1,998)            --         --            --   (1,998)
Net income
 (loss)          $(69,421)  $     64,764  $   2,157  $      6,336 $  3,836


(1) Other operating expenses include employer payroll tax-related items on
 employee stock transactions and amortization of acquisition-related
 intangible assets.


                               Workday, Inc.
                  Reconciliation of GAAP to Non-GAAP Data
                     Three Months Ended July 31, 2014
                              (in thousands)
                                (unaudited)

                                                     Amortization
                                            Other       of Debt
                             Share-Based  Operating  Discount and
                            Compensation   Expenses    Issuance
                   GAAP       Expenses       (1)         Costs    Non-GAAP
                 --------   ------------  ---------  ------------ --------
Costs and
 expenses:
Costs of
 subscription
 services        $ 24,373   $     (1,608) $     (42) $         -- $ 22,723
Costs of
 professional
 services          41,267         (3,519)       (46)           --   37,702
Product
 development       77,464        (16,737)      (788)           --   59,939
Sales and
 marketing         78,523         (7,377)      (238)           --   70,908
General and
 administrative    26,922        (11,541)      (767)           --   14,614
Operating loss    (61,769)        40,782      1,881            --  (19,106)
Operating margin    (33.1)%         21.9%       1.0%           --    (10.2)%
Other expense,
 net               (6,953)            --         --         6,002     (951)
Loss before
 provision for
 income taxes     (68,722)        40,782      1,881         6,002  (20,057)
Provision for
 income taxes         493             --         --            --      493
Net loss         $(69,215)  $     40,782  $   1,881  $      6,002 $(20,550)

(1) Other operating expenses include employer payroll tax-related items on
 employee stock transactions and amortization of acquisition-related
 intangible assets.


                               Workday, Inc.
                  Reconciliation of GAAP to Non-GAAP Data
                      Six Months Ended July 31, 2015
                              (in thousands)
                                (unaudited)

                                                     Amortization
                                            Other       of Debt
                             Share-Based  Operating  Discount and
                            Compensation   Expenses    Issuance
                   GAAP       Expenses       (1)         Costs    Non-GAAP
                ---------   ------------  ---------  ------------ --------
Costs and
 expenses:
Costs of
 subscription
 services       $  67,069   $     (5,221) $    (262) $         -- $ 61,586
Costs of
 professional
 services         102,924         (8,598)      (524)           --   93,802
Product
 development      214,680        (49,443)    (3,381)           --  161,856
Sales and
 marketing        201,325        (21,587)      (958)           --  178,780
General and
 administrative    68,699        (27,189)    (1,103)           --   40,407
Operating loss   (121,044)       112,038      6,228            --   (2,778)
Operating
 margin             (22.7)%         21.0%       1.2%           --     (0.5)%
Other expense,
 net              (11,015)            --         --        12,586    1,571
Loss before
 provision for
 (benefit from)
 income taxes    (132,059)       112,038      6,228        12,586   (1,207)
Provision for
 (benefit from)
 income taxes      (1,080)            --         --            --   (1,080)
Net loss        $(130,979)  $    112,038  $   6,228  $     12,586 $   (127)

(1) Other operating expenses include employer payroll tax-related items on
 employee stock transactions and amortization of acquisition-related
 intangible assets.


                               Workday, Inc.
                  Reconciliation of GAAP to Non-GAAP Data
                      Six Months Ended July 31, 2014
                              (in thousands)
                                (unaudited)

                                                     Amortization
                                            Other       of Debt
                             Share-Based  Operating  Discount and
                            Compensation   Expenses    Issuance
                   GAAP       Expenses       (1)         Costs    Non-GAAP
                ---------   ------------  ---------  ------------ --------
Costs and
 expenses:
Costs of
 subscription
 services       $  45,832   $     (2,663) $     (88) $         -- $ 43,081
Costs of
 professional
 services          77,227         (5,717)      (135)           --   71,375
Product
 development      142,635        (27,605)    (1,470)           --  113,560
Sales and
 marketing        146,690        (14,129)      (511)           --  132,050
General and
 administrative    47,985        (19,542)      (358)           --   28,085
Operating loss   (113,852)        69,656      2,562            --  (41,634)
Operating
 margin             (32.9)%         20.1%       0.8%           --    (12.0)%
Other expense,
 net              (13,952)            --         --        11,922   (2,030)
Loss before
 provision for
 income taxes    (127,804)        69,656      2,562        11,922  (43,664)
Provision for
 income taxes         800             --         --            --      800
Net loss        $(128,604)  $     69,656  $   2,562  $     11,922 $(44,464)

(1) Other operating expenses include employer payroll tax-related items on
 employee stock transactions and amortization of acquisition-related
 intangible assets.



                               Workday, Inc.
    Reconciliation of GAAP Cash Flows from Operations to Free Cash Flows
                       (A Non-GAAP Financial Measure)
                               (in thousands)
                                (unaudited)

                                  Three Months Ended     Six Months Ended
                                        July 31,              July 31,
                                 --------------------  --------------------
                                    2015       2014       2015       2014
                                 ---------  ---------  ---------  ---------
Net cash provided by (used in)
 operating activities            $  15,511  $  (9,011) $ 109,570  $  12,686
Purchases of property and
 equipment                         (25,792)   (28,409)   (55,972)   (38,282)
                                 ---------  ---------  ---------  ---------
  Free cash flows                $ (10,281) $ (37,420) $  53,598  $ (25,596)
                                 =========  =========  =========  =========

                                 --------------------
                                    Trailing Twelve
                                     Months Ended
                                       July 31,
                                 --------------------
                                    2015       2014
                                 ---------  ---------
Net cash provided by (used in)
 operating activities            $ 198,887  $  54,555
Purchases of property and
 equipment                        (121,336)   (67,380)
Purchases of other intangible
 assets                                 --    (15,000)
                                 ---------  ---------
  Free cash flows                $  77,551  $ (27,825)
                                 =========  =========

About Non-GAAP Financial Measures

To provide investors and others with additional information regarding Workday's results, we have disclosed the following non-GAAP financial measures: non-GAAP operating loss and free cash flows. Workday has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. The non-GAAP financial measure non-GAAP operating loss differs from GAAP in that it excludes share-based compensation expenses, employer payroll tax-related items on employee stock transactions and amortization of acquisition-related intangible assets. Free cash flows differ from GAAP cash flows from operating activities in that it treats purchases of property and equipment, property and equipment acquired under capital leases and purchased other (non-acquisition related) intangible assets as a reduction to cash flows.

Workday's management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Workday's financial performance and the ability of operations to generate cash. Management believes these non-GAAP financial measures reflect Workday's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in Workday's business, as they exclude expenses that are not reflective of ongoing operating results. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Workday's operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. Additionally, management believes information regarding free cash flows provides investors and others with an important perspective on the cash available to make strategic acquisitions and investments, to fund ongoing operations and to fund other capital expenditures.

Management believes excluding the following items from the GAAP Condensed Consolidated Statement of Operations is useful to investors and others in assessing Workday's operating performance due to the following factors:

• Share-based compensation expenses. Although share-based compensation is an important aspect of the compensation of our employees and executives, management believes it is useful to exclude share-based compensation in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies. For restricted stock unit awards, the amount of share-based compensation expenses is not reflective of the value ultimately received by the grant recipients. Moreover, determining the fair value of certain of the share-based instruments we utilize involves a high degree of judgment and estimation and the expense recorded may bear little resemblance to the actual value realized upon the vesting or future exercise of the related share-based awards. Unlike cash compensation, the value of stock options and shares offered under our Employee Stock Purchase Plan, which are elements of our ongoing share-based compensation expenses, is determined using a complex formula that incorporates factors, such as market volatility and forfeiture rates, that are beyond our control.
  
  
• Other Operating Expenses. Other operating expenses includes employer payroll tax-related items on employee stock transactions and amortization of acquisition-related intangible assets. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of its related amortization can vary significantly and are unique to each acquisition and thus we do not believe it is reflective of the ongoing operations.
  
  
• Amortization of debt discount and issuance costs. Under GAAP, we are required to separately account for liability (debt) and equity (conversion option) components of the convertible senior notes that were issued in private placements in June 2013. Accordingly, for GAAP purposes we are required to recognize the effective interest expense on our convertible senior notes and amortize the issuance costs over the term of the notes. The difference between the effective interest expense and the contractual interest expense and the amortization expense of issuance costs are excluded from management's assessment of our operating performance because management believes that these non-cash expenses are not indicative of ongoing operating performance. Management believes that the exclusion of the non-cash interest expense provides investors an enhanced view of the company's operational performance.

Additionally, we believe that the non-GAAP financial measure, free cash flows, is meaningful to investors because we review cash flows generated from or used in operations after deducting capital expenditures, whether purchased or leased, and purchased other intangible assets, due to the fact that these expenditures are considered to be an ongoing operational component of our business. This provides an enhanced view of cash available to make strategic acquisitions and investments, to fund ongoing operations and to fund other capital expenditures.

The use of non-GAAP operating loss has certain limitations as they do not reflect all items of income and expense that affect Workday's operations. Workday compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review Workday's financial information in its entirety and not rely on a single financial measure.