Welcome to Workday’s Third Quarter Earnings Call. At this time, all participants are in 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 third quarter fiscal 2014 earnings conference call. On the call we have Aneel Bhusri, our Chairman and Co-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 in 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 an isolation from GAAP results. Our non-GAAP measures exclude the effect on our GAAP results of stock-based compensation and for fiscal 2014, also exclude employer Payroll taxes on employee stock transactions and non-cash interest expense associated with our convertible notes. The fiscal 2013 non-GAAP measures also exclude the donation of shares to the Workday Foundation. 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 customers’ 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 fourth quarter quiet period begins at the close of business January 17, 2014. Unless otherwise stated, all financial comparisons in this call will be to our results for the comparable period of our fiscal 2013. With that, let me hand it over to Aneel.

Thanks Mike. And thank you to everyone on the call that joined our first Analyst Day held at Workday Rising in September. It was really nice to see all of you and hopefully while you were with us on-site in San Francisco, you got the opportunity to talk with some our customers about their Workday experiences. Customer success is most important to us. So I will start there. In the third quarter we announced that Thomson Reuters brought Workday Live for 60,000 employees in 100 countries on a single day. We also announced in October that Sanofi, one of the largest companies in France, joined us as a brand-new Workday customer. Additionally, Diageo, the world’s leading premium drinks business, went live with the first phase of its Workday deployment in July. And I’m also excited to share that Morgan Stanley, one of our largest financial services customers, went live on Workday for its entire employee population earlier this month. Workday now has more than 550 customers globally and of those approximately two-thirds are live on the system. At Workday Rising we announced a 97% customer satisfaction rate based on the most recent customer survey. This is a number we are certainly very proud of and we remain focused on maintaining super high levels of customer satisfaction as we continue to grow and bring companies live on Workday’s broadening suite of applications. In the third quarter we announced the on-time general availability of Big Data Analytics. Workday recruiting is progressing as planned and we announced that we began building an entirely new application Workday Student to change the way colleges manage students from prospecting through graduation. We also remain extremely focused on broadening and scaling Workday Financial Management. I personally run monthly meetings with the Financials team bringing together the development, product management, marketing, services and sales leaders for the Financials product line to quickly solve issues and maintain the feeling of a fast moving startup much like we were in the early days of selling human capital management. In fact, sales grew nicely in the third quarter with 10 new financial management customers, our best quarter we’ve ever had for this suite. We have increased development resources in this area and we look forward to sharing more positive customer success stories as enterprises continue to move finance to the cloud. Finally, today we announced that Jerry Yang has joined the Workday Board of Directors. As a technology visionary and global business leader, Jerry has great perspective to offer and as we continue our global growth, he will be a tremendous asset to Workday. I will now turn it over to Mark.

Thanks, Aneel, and good afternoon, everyone. We are very pleased with our financial results for the quarter and with the progress we have made in our product and market expansion. In the third quarter, we generated record quarterly revenues continued to make progress towards profitability and added more than 50 new customers, including eight Global 2000 customers and 10 new Financials customers. We are also very pleased with the attendance and excitement at our Annual User Conference, Workday Rising in September. The event was a big success with more than 3,500 attendees compared to 2,500 last year. During the quarter, our Big Data Analytics solution became generally available and we are making significant progress building out our Financials solution. We’re also on track for the release of our recruiting product in the spring of 2014. Operationally, we continue to execute well as we expand our footprint globally. We have made significant investments in our data centers, new product initiatives and expansion of our office facilities to accommodate our growth. We are able to fund these investments because our business model continues to prove itself from a cash flows perspective and we continue to make progress on our non-GAAP operating margin, although, this is clearly a secondary objective to growth and new customer acquisition. Fundamental to our business model is the belief that once we win a customer, we keep a customer for years beyond the initial subscription period. This is driven by a combination of the importance of the application to our customers business, our frequent updates with meaningful features, functionality and improved ease-of-use, and of course, very high customer satisfaction. Our balance sheet remains strong with nearly $1.3 billion of cash and marketable securities and over $350 million of unearned revenue. We are pleased with our accomplishments and want…

(Operator Instructions) Your first question comes from the line of John DiFucci from JP Morgan. Please proceed.

Aneel and Mark, can you talk a little bit more about those 10 new financial management customers and a little bit about their character, are there any public companies in there of any Fortune 1000s and maybe verticals?

No, there are no Fortune 1000s. In terms of the names, we can’t disclose those right now. But I would consider them to be a combination of well-known educational institutions and medium-size corporations.

Okay. Great. And if I might just a quick follow-up on the services and Mark, I think you mentioned that the financial customers and a big uptick this quarter and that actually affected the professional services. Is that because it’s sort of relatively new out there and the partners still have to comp to speed and helping customers with the Financials solutions or is there something else there?

Yeah, I will take that, John. We are at the stage with our financial products as we are ramping up new functionality quickly and bringing out new capabilities. We just wanted to stay closer to this first wave of a very large deployment. We’ve got about -- I think about 25 customers live and we’ve got another wave coming online of bigger companies, and we wanted to just make sure we were connecting services back to our development organization. And having a bigger footprint until a product really is a mature product the way the HCM product is.

So even in the guidance and I think the top end of the guidance anyway implies for Financials -- I’m sorry, for the professional services, was at about the same rate. So, when do you think you’ll start to see that I guess come down a bit?

Well, John, this is Mark. Part of the guide for the fourth quarter really reflects the fact that we have some seasonality in the fourth quarter with the holiday season and so we’re not expecting the sequential uptick that we might normally get. But I wouldn’t expect professional services revenues to decline significantly over time. As we continue to build the business at more customers, we are still doing HCM customers as well as Financials customers and more and more customers that are in the middle market is what we will take prime on those.

Okay. Great. Thanks a lot and impressive job this quarter, guys.

Your next question comes from the line of Heather Bellini from Goldman Sachs. Please proceed.

Just wanted to follow-up on Financials. Question is do they already tend to be HCM customers, maybe breakdown between the 10 new adds you added this quarter? And then also in terms of the sales process to Financials and HCM customers, is the approach different? Are you often pitching them together and just in general, what are the synergies between the two sales approaches for Financials and HCM?

So we are not going to break them down by where they came from. But in terms of the synergies, there is quite a bit of synergies for companies, the administrative function of HR and finance work very closely together in most businesses. So the synergies are obviously very high. We have really three focus or three organizations focusing on selling Financials. We have our mid-market and they sell it as a suite. This is the 1,000, and the 3,000 segment. We then have a Financials-only sales organization that sells the 3,000 and above. And all they do is sell Financials, live or die by selling Financials and then the E&G organization sells Financials with HR, as a dedicated industry business unit. And in the last quarter, all three did well.

Okay. Great. And then, also -- last quarter you talked about focusing more on the 1,000 to 3,000 employee segment, just hoping for an update there, maybe in sales headcount you added or customers you added?

Yeah. We are not breaking out specifically the way that we are segmenting our go-to market, but we continue to have really good traction in the mid-market accounts. And it’s also reflected frankly in the professional services revenues that we saw this quarter where we did more of the primes on of the mid-market, as we build out the IP for that part of market as well.

And just to be clear, we started the direct sales focus on 1,000 to 3,000 a while ago. We just highlighted the last quarterly update.

Okay. Great. Thank you.

Your next question comes from the line of Brent Thill from UBS. Please proceed.

Thanks. Mark, just when you look at ASPs for the past -- versus the past, I know, it’s hard, gives a lot of metrics. Can you just maybe give us a sense of what you’re seeing as you roll these new solutions, in terms of your initial ASP and how you see the user accounts trending, just give us a high level sense of what these look like? And I know everyone respects that you guys are kind of keeping some of the cards close to your vest, but if you can just help us understand how you are seeing that playing out, we would appreciate that?

Yeah. Brent, it’s -- yes, I don’t think it’s not so much how we are disclosing the information. It’s just that we have a really -- a real broad diversity of customers in our customer base from the very largest global enterprises Fortune 500 companies to companies with as few as a thousand people and so when we look at overall ASPs we take into -- really into account the discounting levels that we have in place off of our pricing algorithms. And I – the thing I will say is that we are very disciplined and continue to make progress with respect to the discounting that we have. But that said it varies really from geography to geography and from market to market, as well as competitive dynamics and so it’s just hard to peg a, if you will an average revenue per headcount for Workday and it is just as partly the diversity of our customer base.

Well, I would say, the ASPs in general are impacted by the new product introductions and they’re all doing well and we expect good things out of recruiting coming into next year. In the case of the government business unit, we tend to sell HR and Financials together in one sales cycle, so that’s a very positive driver as well. So the ASPs are impacted both by discounting, but also by the growing product portfolio, which we are beginning to really see the benefits from.

Okay. Aneel, if I can follow up just quickly on higher education, it seems like given the legacy there in terms of your success in that market, can you just give us a sense of what -- how that is -- how you are having an impact there and it seems like you are seeing an uptick a little bit faster maybe then some of the other verticals or maybe I’m misreading that?

So there is two pieces to it. About three years ago, we started building out specific HR and Financials capabilities for the education and government marketplace and they have unique requirements in the case of Financials. There are things like grants that you have to cover and we have built that. And then at Rising we announced the student system initiative that really Dave is driving and we have got great reception to that initiative and we have, I think, eight design partners now signed up who are actively involved and helping us shape that product line. So, I think it’s a great test bed for Workday diving deeper into an industry and given PeopleSoft heritage and Dave’s heritage, higher ED is a great place for us to start.

Great. Thanks.

Your next question comes from the line of Ross McMillan from Jefferies. Please proceed.

Okay. And Aneel, I wondered if you could just talk a little bit about the Big Date Analytics product and where are you seeing the sort of early adoption, what sort of data is being brought into that from external sources? Thanks.

It’s interesting. It really started out as a platform that was being sold with HR but as we started to gain traction with Financials, the used cases are frankly far broader and more powerful Financials. So you couldn’t imagine any kind of data that is being created we can effectively store. So, I would say, if you look at the early customers, those are mostly HR used cases, the two that we announced, Spectrum and the McKee Foods are both using it for HR cases, bringing in third-party either compensation data or third-party data from other transactional systems. So those will be the typically used cases. When we get into the Financials world people are looking at a lot of things around customer profitability, segmentation, industry segmentation, geographic segmentation and those used cases, frankly, are still developing right now. The product’s really been only available for a few months, so we are learning along with the customers.

Would you expect standalone sales with Big Data Analytics or is it always going to be in tandem with another application you sell?

For the time being I will expect it’s always in tandem with either the HR suite or the Financial suite and ideally with both suites. The ideal situation, which I think, we will see more and more of this people will just buy the full HR suite, the full Finance suite and then the Big Data piece actually effectively becomes their enterprise warehouse…

Yeah.

… as opposed to just an HR warehouse or a Financial warehouse.

Okay. That’s great. And maybe just one quick follow-up for Mark. Just wanted to make sure I had this, so your comment on Q1, I think it was with reference to billings and you said it will be down sequentially and about flat with the Q3 numbers, did I hear that correctly?

Yeah. That’s correct.

Okay.

Down sequentially from. Q4.

Yeah. Thanks very much. Great job, guys.

Your next question comes from the line of Karen Russillo from Wells Fargo. Please proceed.

Hi. Thank you. In the past you guys have talked a little bit -- you talked about when you came up with the recruiting product and product that that was in response to requests from customers that were -- that wanted you to develop this product, coming out of Workday Rising, can you kind of give us a feel for what the early read looks like for you and how we should think about that next year, is this going to be something that you expect to ramp even faster than the Financials product?

It’s hard to compare. I think the -- that buying pattern around recruiting will be tied to existing HR customers that generally have a recruiting system and are looking at retiring that legacy either on premise or cloud system. The reception at Rising was fantastic and it’s not just because it’s Workday does recruiting, it’s because we really rethought and re-imagined recruiting around two core concepts, we thought about it from a manager’s perspective and we thought about it from mobile perspective. And as a result it doesn’t look like any traditional recruiting system, it looks like the recruiting system you built like we did with a clean sheet of paper. It hits the market in the spring as a first release, but I suspect that people won’t really use it to retire legacy until the following August release. So, I could see customers signing up for the subscription in the early half of next year but not really taking it into production until your August update is out and that August update largely will be or that late summer update will largely be a good platform for replacement of legacy and other odd demand recruiting systems.

Okay. Great. Congratulations on the quarter.

And I was going to say, I expect a pretty high attach rate of new sales with recruiting once it viewed as a core module.

Your next question comes from the line of Jennifer Lowe Swanson from Morgan Stanley. Please proceed.

This is Jon Parker calling in for Jennifer. I want to echo everyone else’s comment great quarter guys and great results out there. Maybe just first question from me, can you talk a little bit about the competitive environment, I mean, clearly your results are showing that, you guys are continuing to totally rise to the top, but obviously, you have some competitors that have been, talking about their products and SAP with SuccessFactors and sort of traction there. So help me what you are seeing in the environment any, just help, you are holding pricing tight but any changes you are hearing out there will be great?

I don’t think we are seeing anything new in the competitive environment. I think the only thing that’s changing is we are beginning to get real traction with Financials and either the legacy vendors really has a solution built for medium and large companies for Financials and the cloud, with a few cloud architecture. So, we are translating our success in HR and moving it into Financials and then in the HR world nothing has really changed, it’s the same too and ultimately at the lower end of the market and their tactics really haven’t changed and the products are not changing quickly enough.

Okay. And then maybe for, Mark, I know you guys haven’t really had a major renewal cycle come up at given sort of the duration of your contract and higher revenue but I think as we think head into 2014, we start to see that base of renewal start to pick up a little bit? I’m kind of curious how you guys are thinking about the opportunity in your base, given all the new products you guys are having in the market and how you are thinking about getting your sales guys aligned, with those renewals, so any commentary you could provide us, it helping us thinking about that opportunity? How you guys are going to capitalize that would be great as well? Thanks a lot.

Sure. The renewals will, as you pointed out will continue to ramp just as we move forward in our maturity as a company. But that said, it’s still small relative to net new customers and new bookings. But as we look at renewals with customers, one thing to keep in mind is that we keep really strong engagement with our customer base throughout the life of the contract with them and so we are consistently communicating with them, our customer network is really strong, our customers actually collaborate together and work well together. And so we don’t see the renewal cycle necessarily as a single opportunity to sell new things to our customers because we always have contact with them and they have a good connection with what we are doing as a company and the new products that we have.

Great. Thanks a lot guys.

Your next question comes from the line of Peter Goldmacher from Cowen. Please proceed.

Hi. Thanks. Hey, just a quick question on the billings number, that billing number was, I think a lot stronger than we are all thinking about. Can you help us understand some of the parts and plan that number like the -- now that I think you’ve anniversaried the wholesale chip and invoice duration and maybe the impact of some large deals and quantify, if there will be were larger deals or if you are seeing deal sizes pick up, you talked a little bit earlier about more product impacting deal sizes positively, if any more details would be great?

Sure. Well, Peter, when we guided last quarter, we had indicated billings to be approximately flat to the second quarter which would have indicated mid 70s percent growth. We continue to see a trend of having closer to one year ACV on cash upfront and certainly billings has impacted by that. But this quarter to an extent may have been slightly above where it was in the second quarter and had some modest impact on overall billings. But it was really just a trend around volumes during the quarter with the number of customers that we had. And we’re seeing more of a steady state on looking at ACV, or looking at billings and trying more closely to ACV. That said, it will take a couple of years before it sort of cleanly flushes out because we did have contracts a year or two years ago in which all three years were included upfront. And it’s going to be a bit volatile from quarter-to-quarter.

Okay. Thanks a lot.

Your next question comes from the line of Walter Pritchard from Citigroup. Please proceed.

Hi. Thanks. Mark, I’m wondering if could talk just a little bit about your hiring plans as you go in Q4 here and look out at next year. Should we think about a ramp up to build a lot of capacity, or do you feel like you have got a lot of capacity you need on board here to start fiscal 2015 at the level you would like?

Walter, we’ll continue to hire in the fourth quarter and through the fourth quarter and into the first quarter for next fiscal year, particularly internationally. As you know, our focus from one of the key initiatives that we have from a go-to market perspective is our expansion in Europe and in Asia-Pacific. And to that extent, we’ll be hiring at your levels that are above, maybe were from a productivity or efficiency perspective you might expect in a more mature market like we have in North America. I thin, our guidance for Q4 reflects -- on operating margin reflects our headcount plans. And then, as we exit the fourth quarter and I talked to you about our results for the full fiscal year, we’ll talk more about fiscal ‘15 and our expectations rounds some of our investments.

And then just for Aneel on the professional services side with Financials. I’m wondering, do you need to sort of bring on new partners, or new practices within partners that you have or where they are relationships that you may have to still build at this point, or do you have the relationships in place either with existing partners or existing folks at those partners to be able to ramp the professional services relationships on the financial side?

I would say, for the most part, we’re just going to our existing partners and they are very excited about our financial products. We’re not really needing to add any new partners. They are just building a sister practice for Financials. It is a different skill set. They might seed it with one or two Workday. People that know the HR product just from a technology perspective, but generally they are bringing in accounting people into the mix and they are all ramping nicely.

Great. Thank you.

Your next question comes from the line of Raimo Lenschow from Barclays. Please proceed.

Hey, thanks. Just following on the hiring comments, just talk me through, how you are planning to ramp up the guys on the Financials side of the business. You mentioned earlier Aneel that you have like a specialized sales force there. But given where the product is and at the Analyst Day, you were not quite sure when you kind of basically hit that margin and where you see the acceleration. How do I have to think about like your plans on filling that out, are you just pre-hiring basically at the moment full gear? And then, just by the time they get productive anyway, then your product is ready or how do I have to think about that process? Thank you.

Well, the product is ready. The product has been ready for a bid. It’s about what markets they can go into. So, today, a mid-market services company, mid-sized company, up to several billion dollars in revenues, we are a great solution for them. We’re a great solution for education and government institutions. The scalability project that we had undertaken a year and a half ago is now two-thirds of the way done. For a global Fortune 500 company, we’re not there yet and that’s probably a year way. But there is a big chunk of the market that is available to us today, which is why we’re beginning to get fraction. We have -- by the end of last quarter I think we had 25 live customers. We will at least hopefully double that by the end of next year. It’s not a lot higher than that. So, it’s more about like HR, we started out in the mid-market and we moved up market. We’re doing the same with Financials, so it’s a market ready product today. And as our product adds more scalability, adds more functionality, the sales people just call on bigger and bigger customer. So they are not really just hanging out, they are out there being productive today.

Okay. Perfect. And so the guys that they are selling at the moment, they are just kind of basically scale them up into the bigger accounts when you are ready for that.

Yes. And we have some flagship big accounts. We had announced J.B. Hunt a while ago and we’re working on their deployment as the customer. So, when we see a customer that’s a good fit for where our product will be in the next 12 months and we have a reasonable chance to sign them, our sales people will go out and sign those today. In the case of higher education, we already have some very large institutions live -- Brown is live on Financials as an example. So, in education and government in particular, we are already well into the larger organization in that marketplace.

Perfect. Okay. Thank you.

Got it. Okay. Thank you. Your next question comes from the line of Brendan Barnicle from Pacific Crest Securities. Please proceed.

Thanks so much. Aneel, I wanted to follow-up on Walter’s question on professional services. We’ve seen a lot of SaaS companies over the last year, had some challenges and not have enough capacity for all the demand in terms of new deals that they are selling. You guys have seemingly kept on top of that. How you been able to stay on top of that and how do you continue to plan around that given the high volume of new deals you are signing?

Well, I’d say there are two pieces. We do a very rigorous job planning with our partners about bringing people online whether it’s extension -- Accenture or Deloitte or IBM or PWC. We plan with them about the capacity. We need them to bring online to help us scale the ecosystem. Our smaller boutique vendors are doing the same, day nines of the world, the appearance of the world. They’re all doing a great job ramping up. I’d say, the unique part of Workday is that, we have a great team and a great leader in Jim Bozzini and an orientation that we will fill in the gaps wherever we need to. Jim ran us a 4,000 person professional services organization at PeopleSoft and that’s not our goal. But when we need to flex up to meet the demand, we will flex up and we know how to bring on people very quickly. And we measure the company and measure the success based on the customer satisfaction rating. And so, we get a sense of when the ecosystem might be running a little thin on new resources and at that point, we’ll flex up our ability as well to fill the gap.

So that leads to my final question for Mark. Mark, the initial outlook for next year is terrific, that’s very helpful. But as we think about the services fees, would you expect that, that business growth about at the rate that was this past year? Should we start to think about some deceleration in that growth, given it’s not necessarily what you want to have as a longer term emphasis?

I think that -- and again, we’ll get a little bit more into guidance for the full year when we talk to again at the end of February or early March. But I would expect it to grow at a little slower rate uncertainly in fiscal ‘15 than it grew this year. And that said, we are going to expect it to -- as a business to likely grow sequentially once we get through the Q4 seasonality. I think that, as we look ahead to fiscal ‘15 and do our planning, and as I mentioned in the guidance, we expect billings for the first quarter to be down sequentially from the fourth quarter. And so we expect really the seasonality to really to follow that curve and be a little bit different than it has been historically just really reflective of the fact -- that of our size at this point. And so we don’t expect sequential increases in Q1, for example, in billings as we had last year.

Great. Thanks, guys.

Your next question comes from the line of Richard Davis from Canaccord. Please proceed.

Hey, thanks very much. Aneel, I know you have your kind of API partners in relationships with ISVs, talk about just kind of how you think about market -- going to market at all with other ISVs. And the genesis of the question was that was at Dreamforce along with 120,000 my closest friends. And I know that you guys had a small booth, but it doesn’t seem like you’re super tight with the Salesforce and other than just both of you guys are cloud. But I was just trying to kind of get a sense of how you think about partnerships with other ISVs? I know you work with service providers, but just how that fits in your thinking? Thanks.

Well, I would consider ourselves very closed to Salesforce. We don’t have a big booth there because they are not HR and finance people coming to Dreamforce, right. There is some IT folks, but it’s largely CRM folks and some IT. It doesn’t map perfectly to our buyer. We tend to do well at the HR, at the HR shows and at the finance shows. But we have a presence there because of the partnership with Salesforce. I think, when you look at the partnership we have with them and they’re first and foremost as an ISV partner. It’s all about integration costs out of the equation for customers and making sure that our systems work together seamlessly. It is the same with Cornerstone when we partner for learning. We basically try to do some of the integration work in a prepackaged way and that shows how the cloud is. The cloud is very different than the on premise systems. The cloud vendors, all are looking to interoperate to make the customer lives easier and that really is the key message. And that interoperability will extend to collaboration systems like Dropbox over time and Box and others. I think we live in a world of APIs and the Workday’s and Salesforce’s get that because we’ve grown up at the same time as the consumer Internet, the legacy guys don’t get that

Great. No -- that’s helpful. Thanks very much.

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

We will now take two more questions. Your next question comes from the line of Mark Murphy from Piper Jaffray. Please proceed.

Yes. Thank you. Aneel, when you dissect the booking strength that’s being reported here for Q3, to what extent would you attribute it to a greater volume of net new core HR purchases, and to what extent would you possibly attributed to an upward inflection in the attach rates of all of your various add-on modules?

I think Mark is quite better to answer that question. Mark?

I think really it’s a combination of both, certainly as we have more geographic expansion and you saw it by the announcement of Sanofi this quarter. We have broader market to play and so we’re just getting more net customers. But on top of that, we have strong attach rates with products like Time Tracking, like Payroll and our largest quarter for new financial customer. So it really is a combination, but most of our new customers I think we may have had one Financials-only customer this quarter. Most of our new customers include HCM then with some attachment on top of it.

And Mark, just as a quick follow-up. Are you still viewing Payroll as your number one add-on module and whether you are or not, can you comment on from which vendors are you displacing Payroll business? And if you could specifically comment on ADP and Oracle and SAP, and maybe any other Payroll vendors that you think are relevant to that discussion? Thank you.

So, I would say Payroll is still is our number one attach product but in many cases I don’t even think of it as attach product because it’s part of a core HR Payroll sale that includes taking out both of those legacy systems. The top two systems we’re taking out not surprisingly are the two legacy vendors of SAP and Oracle and Oracle representing PeopleSoft. In the case of ADP, from time to time we’ll replace them but we also have a good partnership with them and it’s really a market segmentation, if the customer wants full outsourced Payroll including cutting checks and tax filings, but we don’t do that part, we just do the software piece. If they are larger and/or already running Payroll in-house either on PeopleSoft, Oracle or SAP Payroll, then we tend to be a really good replacement. So, I’d say ADP is at sometimes a competitor, sometimes a friend, we’ve won business together, we’ve replaced them, I don’t what they would say about us, but I think they hopefully would say the same things. Most of the time, when Payroll in the large companies we’re replacing one of the legacy vendors.

Thank you.

Your last question comes from the line of Derrick Wood from Susquehanna Information Group. Please proceed.

Great. Thanks. I guess another question on the billings growth upside, have you seen any change in terms of the time to ramp the productivity for new reps?

Not significant change, certainly as the Salesforce gets more experience and has longer tenure, the existing reps are more productive. But with respect to new reps, it’s about the same. We have very rigorous training for our reps and in the sales cycles and in this business along.

Okay. And then one other, you’ve seen pretty impressive leverage on the G&A side about 8% of revenue in the quarter? I guess anything particularly that’s driving that that’s pretty impressive for a high growth company and should we think that 8% level could be a good medium-term run rate from here?

Yes. Since most of G&A reports to me and I haven’t submitted my budget yet, I’m not going to make a commitment with my boss sitting next to me on 8%. I think part of it was just, a year ago we were gearing up the IPO and to be a public company and so as a result in G&A we had a relatively easy comp.

Well, and we run our Workday which makes things a lot more cost effective.

That’s, yeah, that’s really true.

Okay. Thank you.

Okay, everyone. Thank you very much.

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