Welcome to Workday's Fiscal 2024 Fourth Quarter Earnings Call. [Operator Instructions]. I will now hand it over to Justin Furby, Vice President of Investor Relations.

Thank you, operator. Welcome to Workday's Fourth Quarter Fiscal 2024 Earnings Conference Call. On the call, we have Carl Eschenbach, our CEO; Aneel Bhusri, our Executive Chair; Zane Rowe, our CFO; and Doug Robinson, our Co-President. Following prepared remarks, we will take questions. Our press release was issued after close of market and is posted on our website where this call is being simultaneously webcast. Before we get started, we want to emphasize that some of our statements on this call, particularly our guidance, are based on the information we have as of today and include forward-looking statements regarding our financial results, applications, customer demand, operations and other matters. These statements are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially. Please refer to the press release and the risk factors and documents we file with the Securities and Exchange Commission, including our fiscal 2023 annual report on Form 10-K and our most recent quarterly report on Form 10-Q for additional information on risks, uncertainties and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Workday's performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results in our earnings press release, in our investor presentation and on the Investor Relations page of our website. The webcast replay of this call will be available for the next 90 days on our company website under the Investor Relations link. Additionally, our quarterly investor presentation will be posted on our Investor Relations website following this call. Also, the Customers page of our website includes a list of selected customers and is updated monthly. Our first quarter fiscal 2025 quiet period begins on April 15, 2024. Unless otherwise stated, all financial comparisons in this call will be to our results for the comparable period of our fiscal 2023. With that, I'll hand the call over to Carl.

Thank you, Justin, and thank you, everyone, for joining us today. I'm pleased to share that Workday delivered a solid Q4, achieving 18% subscription revenue growth and a non-GAAP operating margin of 24%. These results were driven by momentum across the business and capped off a year of strong execution by our nearly 19,000 Workmates across the globe. Over the course of the last year, we've made key investments across our leadership team, go-to-market and partner ecosystem and our platform, positioning us to drive enduring growth in FY '25 and beyond. I couldn't be prouder of what we've accomplished over the last year, particularly in an environment where deal scrutiny remains high. I'd like to thank our customers, partners and especially my fellow Workmates for making these results possible. My belief in the opportunity ahead for Workday and our value proposition has only gotten stronger in the 14 months since I've joined. With the emergence of AI, shifting talent landscape and pressure to realize operational efficiencies, leaders are turning to Workday as their trusted platform to manage their most critical assets, their people and their money. Customers have come to trust us with helping them navigate these huge transformations from the cloud to AI. In fact, the theme of building trust took center stage at the World Economic Forum annual meeting in Davos last month. Throughout my conversations, it was clear to me that leaders see the business benefits of implementing AI, but they also recognize building trust is key. Workday stands apart in our commitment to the responsible development of AI technologies, its responsible deployment within our own company and our advocacy for its regulation. We've been delivering AI capabilities to our customers for nearly a decade, building AI into the core of our platform, and we're making significant…

Thank you, Carl, and to everyone joining today's call. As Carl highlighted, we are continuing to see solid momentum across the business, fueled in large part by our ability to deliver the innovation our customers need to thrive in today's fast-paced and dynamic environment. There is no doubt that more and more organizations, spanning midsize to large enterprises, are seeing the increasing value in building their businesses upon the Workday platform with AI at its core. Earlier this month, we officially named Carl sole CEO of Workday while I assumed the role of Executive Chair. As I've said before, there is no better person than Carl to lead Workday through this next chapter of growth. He has already made a tremendous impact on the business from day 1. And thanks to his leadership, we are already successfully executing on several key growth initiatives and strategies that he put in place. Furthermore, and most importantly, Carl perfectly aligns with our values-driven approach, and I can't wait to see what the future holds for us with him at the helm. As Executive Chair, I'll remain actively involved but with an emphasis on my true passion as a technologist. Together with our Co-President, Sayan Chakraborty, and the rest of our amazing product and technology organization, I will focus on guiding the future direction of Workday's applications and technology platform while staying close to our Workmates and our customers. How we evolve and expand the Workday platform in the coming years will be critical to our continued growth and scale. To help us do that, we have identified several core elements of our innovation strategy that we plan on building out over the next 12 to 18 months. The first is a continued focus on evolving our Financial Management and HCM applications so that…

Thanks, Aneel, and thank you to everyone for joining today's call. As Carl and Aneel mentioned, Q4 marked a solid close to FY '24 with momentum building across our key investment initiatives. We enter FY '25 well positioned to deliver another year of durable subscription revenue growth, coupled with expanding margins. Turning to results. Subscription revenue in Q4 was $1.76 billion, up 18%, and full year FY '24 subscription revenue was $6.6 billion, growing 19%. Professional services revenue was $162 million in the quarter and $656 million for the year. Total revenue in Q4 was $1.92 billion and for the full year was $7.26 billion, both growing 17%. U.S. revenue in Q4 totaled $1.44 billion, up 16%, and international revenue totaled $478 million, growth of 21%. For the year, U.S. revenue was $5.46 billion and international revenue was $1.8 billion, both growing 17%. As we have highlighted, we see significant long-term international market opportunities, which we expect over time will become a more meaningful driver of our growth. 12-month subscription revenue backlog or CRPO was $6.62 billion at the end of Q4, representing growth of 20% with the outperformance driven by higher-than-anticipated early renewals. Gross and net revenue retention rates remain over 95% and over 100%, respectively. Total subscription revenue backlog at the end of the quarter was $20.92 billion, up 27%. Our non-GAAP operating income for the fourth quarter was $461 million, resulting in a non-GAAP operating margin of 23.9%. Full year non-GAAP operating income was $1.74 billion, reflecting a non-GAAP operating margin of 24%. Q4 GAAP net income benefited from a onetime $1.1 billion valuation allowance release related to our U.S. deferred tax assets. Q4 operating cash flow was $996 million, with approximately $100 million of the outperformance driven by strong in-quarter collections and earlier-than-expected payments. Full year…

Thanks, Zane. Given my new role, this will be my last regularly scheduled earnings call as I fully hand over the reins to the great Carl and Zane. It's been a pleasure getting to know so many of you over the years, and I wanted to give a special thank you to Mark Murphy, Brent Thill, Pat Walravens, Kirk Materne and John DiFucci, who have all been covering Workday since our IPO in 2012, and also to Kash Rangan, who I'm sure wanted to cover us back then but couldn't because his wife was a Workmate at the time. Okay. With that, operator, let's go to the Q&A.

[Operator Instructions]. Our first question comes from the line of Kash Rangan with Goldman Sachs.

I am almost fighting tears in my eyes, Aneel. I was glad to be a part of the family, and now I'm part of the extended family since my wife is no longer a Workmate, but we're still here with you guys. One question for Carl and team, maybe. You gave guidance for next year back in September at Rising. The economic environment, the outlook has generally gotten better, right, or seemingly out of the fear of a recession. And you've got a slew of new products, you've got an expanded partnership strategy. You've got a reseller partnership strategy as well. So with all these new dimensions, what is getting the growth rate of the company -- because the guidance is roughly the same as it was. I'm just trying to understand the level of conservatism vis-à-vis the levers that you have today, macro and micro included, that are definitely putting the company in a better position.

Kash, thanks for the question. Before I answer it, I just want to start by thanking our Workmates, partners and customers around the world for delivering a solid Q4 and an outstanding full FY '24 performance. I could not be prouder of our execution, especially given the uncertainties of the environment at the start of FY '24 and while embracing important changes we've put in place here at Workday. The value proposition of our Workday platform continues to grow, which is evident from our results. The durability and diversity of our business delivers consistent solid growth while also driving operating leverage. I am grateful to Aneel for this incredible partnership that we have, and we can't wait to see what we're going to do together with the rest of our Workmates this year. We are just getting started. Kash, to answer your question, as you know, we have really put in place a number of strategic growth initiatives starting last year, and all of them are taken into account when we think about our guidance for this full year. When you think about what we announced at the Financial Analyst Day, we announced a 3-year growth strategy that maintained pretty consistent growth over the next 3 years as we got larger and we continue to expand our operating margin. Then at the end of Q3, we delivered a preliminary guidance for FY '25, which we reiterated here on this call today. Our growth initiatives are paying off. We have really solid growth. We continue to expand margins, and we will continue to lean into those growth initiatives as we think about the rest of this year. So we're pretty proud that we're maintaining the growth rate we have and still expanding margins, and it's because of those strategic initiatives that you mentioned that we are leaning into.

Our next question comes from the line of Mark Murphy with JPMorgan.

First off, Aneel, I wanted to thank you for everything over so many years and that -- to let you know that I'm incredibly grateful. Carl, I wanted to ask you, it feels -- you and/or Aneel, I should say. It feels like Workday has been quietly gaining a reputation as a lighthouse for AI, and you're focusing on the safe handling of all this data and not overcharging. As you introduce these products in the upcoming release that you mentioned, what type of productivity boosts are you expecting to achieve for an HR practitioner? And I'm just wondering, is it strongest in the talent areas of skills and hiring, which I think you're mentioning more? Or do you think it's going to be more broadly applicable in other areas like budgeting and supply chain and so on and so forth?

Maybe I'll just take the high level and I'll turn it over to Carl. AI is going to be important across all those applications. But the first area that we've seen quite a bit of interest and traction has been on the talent management side, both through our Talent Optimization and Skills Cloud products and now through the acquisition of HiredScore. It's a natural area for AI to showcase. But as you think about an area like budgeting, hugely powered to think about effectively a Copilot driving smarter and smarter plans automatically for you and being able to replan on an almost instantaneous basis. And the world is so dynamic right now, it's really what you need. So in terms of productivity, I'll let Carl talk about it.

Yes. Thanks, Aneel. Yes, Mark, I do think the first place we're seeing true productivity gains is around what I would just describe as talent acquisition. And when you think about the addition of HiredScore, that we just acquired, along with our recruiting platform, our Talent Optimization platform and our candidate engagement platform, it gives us the ability to deliver a full suite for talent acquisition around how we identify talent, how we engage with them, how we source or recruit them and then how we retain them for internal mobility. So I am really confident in our ability to deliver a strong ROI to the recruiting and talent organizations, with us having what I think now is one of the best full platform suites for talent acquisition going forward.

Our next question comes from the line of Keith Weiss with Morgan Stanley.

Aneel, congratulations on the new responsibilities and great job on building a great company. My question is for Zane actually, and it's, I think, more about sort of guidance. This quarter, subscription revenues was about $5 million ahead of your guidance. I think this is probably the smallest beat that we've ever seen from Workday in terms of subscription revenues. It seems like there's a lot of dynamics going on with early renewals and like how that impacts CRPO. Was there any impact on subscription revenues? Or anything that can help us understand sort of the skinnier-than-typical beat in terms of subscription revenues that we saw in the current quarter?

Sure, Keith. Yes, I mean, subscription revenues came in obviously ahead of our guide and as you point out, still ahead of where the Street was. I'll point out, fourth quarter is a big quarter for us and we had a really busy January. So some of that may have been reflected in the quarter as far as if you think about just linearity throughout the quarter. So there was some impact into the quarter. But as we look to FY '25 and we think about the buildup heading into FY '25, as you pointed out, we've seen good CRPO growth through all of last year. And as I pointed out in my prepared remarks, we don't necessarily anticipate that level of growth above the subscription revenue growth that we've seen just because of the renewal activity on both the scheduled side as well as the early renewal activity. So there's some of that built into the guide. There's nothing that I would point out in the fourth quarter other than it was a solid fourth quarter. We feel really good about the momentum we have in the business. We feel good about the outlook. As Carl pointed out, it's consistent with the outlook and the guide that we gave a quarter ago. So we feel great about where we're sitting right now. I will also point out the aggregate level of CRPO. If you look at that versus the upcoming guide for the year, we're actually at a slightly higher level than where we were for the same time of the prior year, so the same time last year. So again, we feel like we're very well positioned heading into the year. It was a good fourth quarter and we're all ready to execute into FY '25.

Our next question comes from the line of Kirk Materne with Evercore.

And Aneel, I'll echo my thanks and best wishes on your new role. I think my question is for Carl. Carl, obviously, platform deals this year seem to have been a pretty big lever for you all, especially in the mid-market. Can you just talk about your confidence level in the pipeline around platform deals as we go into fiscal '25 and just sort of what that looks like?

Yes, sure. Thanks for the question, Kirk. As we've said for the last year, we are focusing on delivering a full platform solution to our customers, both HCM and Financials, and we have seen a nice uptick in our selling motion there. In the medium enterprise, we're seeing a big uptick, so our full platform sales are going up, but we're also seeing it in the upmarket as well in large enterprise. And then there are certain industries where we see it like state and local government. We see it in health care. Our health care business had a really big quarter, a 50% growth year-over-year. So it is definitely a selling motion we're leaning into. And I think, quite frankly, we're just getting started. Our Financials platform continues to gain momentum in the market. We're able to sell FINS back into our existing HCM customers, so they become full platform customers. And net new sales, a lot of them are full platform from day 1. So the full platform approach we're taking is clearly paying dividends and driving our growth. We will also be -- starting next week, we'll be transitioning. In the past, we've talked about some pricing and packaging where we'll be selling more suites and bundles. That's something we'll be educating our field on next week. It's been in pilot. It's -- the pilot has gone well. And we're quite hopeful about how we're going to change pricing and packaging to encourage customers to have an easier way to buy a full platform from Workday.

Our next question comes from the line of Brent Thill with Jefferies.

Aneel, I'm glad you had that meal at the Truckee Diner. I'm sure you're thankful for that. Thanks again for everything. Carl, I think just back to Keith's question, when we see 22% backlog in Q3 going to 20% in Q4 and down to 18% in Q1 on the guide, I think everyone appreciates the steps and initiatives you're taking, but the growth numbers are kind of working in the wrong direction relative to the initiatives that you're taking. And I realize that perhaps this takes some time to play out, but I think everyone is trying to understand the environment is getting better, yet the backlog numbers seem to be declining quarter-over-quarter and then in Q1. So I'm just curious if you can help bridge what's going on.

Brent, yes, I'll start. This is Zane. We are very pleased with the backlog build. And as we pointed out, we focused primarily on subscription revenue build, and backlog is influenced by not only scheduled renewals but also this early renewal activity, which we now lap. If you recall, we started talking about that a year ago. So again, the 20% backlog growth that we saw this quarter actually came in, if you recall, about 1 point higher than even our expectations. And a big contributor of that was the pull-in that we saw through this early renewal activity. And we would expect backlog to have some variability on a quarter-to-quarter basis as you think about how you build backlog and how it's aligned with not only new ACV growth but the scheduled renewal growth. So it's coming in, I'd say, very close to our expectation. As we point out and as I mentioned over the last number of calls, we don't expect to see, in particular with CRPO, the sustained growth level coming in higher than subscription revenue growth in perpetuity. And we feel really good about the aggregate. If you look at the aggregate CRPO level as a percent of the guide, you can see it's actually at a higher level than what it was last year. So we feel really good about the build. But as I caution, there will be some variability as we expect on a quarter-to-quarter basis.

Yes. Also, Zane, I just wanted to touch on the renewals dynamic. It's a conversation we've had now, I guess, for our fifth earnings call in a row here. But it is, again -- early renewals is an output of customer demand. And when customers want to buy product from us and consolidate onto our best-of-breed platform as opposed to having all these -- or best-of-suite platform versus all these best-of-breed solutions, it drives early renewals. So our teams don't get paid on early renewals. It's basically customer demand and early renewals is an output, right? It's not something we go out and focus on. So we're very pleased with the demand we see from customers, both net new and our customer base and selling back into them, which does drive early renewals. But that can vary, Zane, as you know, right, in any given quarter.

Our next question comes from the line of Brad Sills with Bank of America.

Congratulations, Aneel, on your new role here. I wanted to ask one on the verticals here. It's a big focus. You've been talking about this for a couple of years now. I know government, higher ed, health care, those have been relatively strong for quite some time. Can you give us a sense for which one in the other list, retail, hospitality, financials, tech and media where you see some of the fruits of the efforts that you've been making here to build on the product and go-to-market where we could see some incremental strength in any of those verticals?

Yes. Maybe I'll start, Doug, and then you can add, if you don't mind. I think the industry strategy or the vertical strategy we have here at Workday plays nicely with, if you will, our segment strategy. That's why we talk a lot about the diversity of our business. But to your point, health care continues to be a very large segment for us. We talked about retail and hospitality last quarter was the second, if you will, vertical that crossed $1 billion in ARR. We talked about the continued momentum around higher ed and full platform sales there. And then also around financial services, we didn't call it out and specifically in the earnings call as a vertical, but we had a number of very significant financial sales back into existing HCM customers around financial services. So that was a great indicator that full platform is resonating around financial services as well. So our industry strategy is playing out, and we saw another really strong quarter across those key markets. Doug, I don't know, maybe you have some additional color you'd like to add.

Sure. So in addition to the usual suspects of sort of those top industries that you excluded from the question, 2 that stand out. Professional services, I think we even highlighted the Randstad win. But we're seeing industries like professional services or business services where you bring people and money together are the perfect sort of scenario for a full platform opportunity for Workday. So we saw really good performance there in Q4. And then the second, which doesn't really sort of capture maybe the attention it deserves at times, which is medium enterprise platform deals, cuts across all of the industries you mentioned and includes the ones that, again, are the health care, FSI, public sector that you know well from us. So those are the 2 that I'd call out, Carl.

Yes. Thanks, Doug.

Our next question comes from the line of Alex Zukin with Wolfe Research.

I wanted to maybe ask just the [indiscernible]. First, maybe in terms of the quarter itself, the fourth quarter, if you kind of dissect the large enterprise traction and activity versus kind of your traction activity in the mid-market, how would you say this fourth quarter trended versus previous? And then maybe, Zane, on the guide, is there any way to dimensionalize how much hired source -- or HiredScore, sorry, revenue you're including for the full year, just given you're reiterating a prior guide now with some acquired revenue?

Sure. Yes, I'll start on the inclusion. It's considered part of the prior guide. It's not a meaningful part of the total revenue guide, and we obviously include it in our cost base as well. So not meaningful when you think about the guide for this year but obviously very strategic for us, and we're very excited about what it will contribute beyond FY '25.

Yes. And on the LE versus the medium enterprise, I'll let Doug start and then I'll add some color.

Yes. So I'd say that Q4 was very similar to Q3 in terms of ME, LE both hitting really solid growth rates. And I'd draw the distinction between Q3 and Q4 where ME really snapped back. The first half of the year, I think we had even called this out in previous earnings calls, we saw certain industries within medium enterprise have some softness. But in Q3, and this held true in Q4 as well, medium enterprise, particularly medium enterprise net new, snapped back, so we saw really good growth dynamics in both ME and LE for Q4.

Yes. And on the LE side, Doug, as we said in my prepared remarks and just we answered in the prior question, we had a really strong quarter again in health care, a good state and local government as well and then higher ed. They're 3 strong categories, right, that actually fall into our large enterprise business that once again had really strong performance in the quarter.

Our next question comes from the line of Michael Turrin with Wells Fargo.

Maybe one for Zane on margin. You're up to 24% operating margin here, guiding for 24.5% as a starting point for next year, so within striking distance at the low end of that longer-term target range you framed out. I just would love to hear you spend some more time on how you're approaching the balance between growth and margin from here. And then on free cash flow, appreciate the Q4 commentary and the outperformance there. It looks like the initial fiscal '25 free cash flow outlook is relatively consistent with fiscal '24. So outside of that 4Q, kind of just anything else you can add on what might be the puts and takes on free cash flow is helpful.

Sure, Michael. Happy to talk a little bit about margin. I'd say it's consistent with the conversation we've had, candidly, through all of FY '24. But as we outlined at our Financial Analyst Day, Carl and the team have really taken, I think, a thoughtful approach across those investment buckets that we've highlighted to everyone, including our international expansion, the focus on FINS, on AI and leaning into partnerships, and obviously, as we've highlighted this quarter, also highlighting organic growth and M&A growth. And we've really balanced the investments that we're making and contemplated that with the outlook and the buildup for FY '21 -- sorry, FY '25, but also aligning for our longer-term outlook and continue to focus on not only investing in the right areas, but obviously, that driving long-term growth and contributing to a margin expansion over that period of time. So it's a balance that we continue to focus on. The team here are looking at each of those investment areas and categories and thinking about how to adjust those dynamically where we see opportunities around the globe, quite frankly, and leaning in where we can and at the same time, as you would expect, as we continue to focus on being more efficient as an organization and thinking about our global presence and focusing on those efficiencies so that we can not only scale the organization but reinvest in some of these key areas. And that's, I think, represented in the outlook that we have, both the top line growth and then the margin expansion coming in nicely aligned with the midterm outlook that we provided at Financial Analyst Day. And I would say operating cash flow and then free cash flow aligns with that. I highlighted the fact that in FY '24, we clearly benefited from some strong collections and early collections. We don't necessarily anticipate that reoccurring next year, and we factored that into the guide, into our OCF guide for FY '25. So we're pleased with the growth there. If you adjust for the $100 million as well as the extra pay period that just so happens to align because of the leap year, you get back to OCF growth that I believe is in line with the business growth. So we feel really good about the cash growth in the business and obviously feel very good about the top line growth and the margin expansion that we're seeing.

Our next question comes from the line of Karl Keirstead with UBS.

Maybe I'll direct this to Zane. And Zane, back on the CRPO, so a 2-parter. For the 20% CRPO growth that you put up for the January quarter, are you able to disclose what the early renewal impact was? I think 3 months ago, you had mentioned that it was a little bit more than 1 point. Curious what it was for January. And then when we look forward, just to clarify, is the guidance for 18% CRPO growth for April, have you now fully lapped this early renewal dynamic such that we should think about that being more of a normalized or clean compare? Or does this dynamic still represent a headwind that maybe in a couple of quarters you work through and you get a bit of a recovery in the year-over-year growth? I'd love to understand that without obviously asking for specific guidance.

Sure. Yes, of course, Karl. Yes, as you mentioned, in the fourth quarter, the 20% included about 1.5 points of early renewal activity, some of which we expected. But with the growth that we saw, obviously, just in ACV growth as well as that early renewal activity that came in ahead of our guide, I mentioned it came in, I believe, 1 point ahead of our guide. So we were very pleased with the CRPO growth in the quarter. But I'll also point out, we're still focused on subscription revenue. We are lapping a period of higher than traditional growth tied to these early renewals. And as I mentioned, I believe, at our Financial Analyst Day where I gave an example, at times, duration and the level of renewal activity, both scheduled and early, can have a fairly significant impact on that CRPO growth. So as we look at our scheduled renewals from FY '24 to FY '25, we actually continue to see nice growth, if you look at it on an annualized basis. But I'll point out, you do get some variability on a quarter-to-quarter basis, which is why we're now actually even including a range into our expectation heading into Q1. So you do -- you lap some of that early renewal activity that we've clearly benefited from, but we don't necessarily anticipate that growth that we've seen in at least the prior number of quarters to continue at that rate. And candidly, we're thrilled with the increase that we see in CRPO, but again, that's not the only driver to our forecasted subscription revenue growth, which is the key area that we focus on. So netting it out, we feel good about our CRPO aggregate levels, and we would expect to see some variability, which is included in our first quarter guide.

Our next question comes from the line of Derrick Wood with TD Cowen.

Carl, you guys hired a lot of sales reps focused on selling core FINS over the last few quarters. Can you just give us a sense of how you're feeling about ramp to productivity times, how we should be thinking about kind of where we are in year-over-year growth and fully ramped sales capacity into the new year and just how you're thinking about sales hiring plans through fiscal '25?

Yes, sure. Thanks for the question, Derrick. So you are right. Last year at this time, we announced we were doubling down our efforts on the go-to-market side around Financials, and that included hiring out a whole bunch of new sales reps, which we did, and that continued throughout Q4. And what we do is every quarter, we look at our key metrics on how we're performing against that investment. We look at the pipeline. We look at new logo wins. We said it was up pretty significantly here in Q4. We look at our competitive win rates, which continued to tick up throughout the year on Financials. We also take a look at new ACV, which we said was up year-over-year on Financials. And then the drag effect on all of that is full platform sales, which were also up in Q4 on a year-over-year basis. So we are pleased with the investments we've made on the go-to-market side around Financials, and we will continue to lean into that as these people become more and more productive. If you think about it, a lot of them have been on board only 6 or 9 or even 3 months, so we haven't seen the impact of the full investment at this time. It's also important to note that we're investing in Financials, not just directly in our own sales force but how we partner with our ecosystem. And also, we continue to invest in the product side of the business around Financials so that we have a much more global and localized platform around the world because we see that as a big opportunity as well. So net-net, we're very happy with the investment. We'll continue to lean in. We think it's a huge market opportunity. We've said many times, only 20% or 25% of workloads have moved to the cloud. And then if you combine that with our competition pushing customers to a new platform, it's a rich opportunity for us going forward.

And our last question comes from the line of Brent Bracelin with Piper Sandler.

I get the noise here and renewal timing issues impacting CRPO. Wanted to double-click into subscription revenue growth. We've seen 6 quarters of slowing growth in the subscription business. You're actually guiding to growth to accelerate for the first time here into Q1. What is driving the optimism around this reacceleration of subscription growth? And maybe you could provide a little color around the pipeline visibility this year versus going into last year.

Sure. I'll start and then let Carl give a little more insight into the pipeline. I did point out that subscription revenue growth heading into Q1 does benefit from the additional day tied to the leap year. And as you would expect, heading into the next quarter, we have good visibility into the pipeline. We also have good visibility into the aggregate level of CRPO. So we feel good about what we've presented for not only the quarter but also the subscription revenue guide that we've given for the year, which aligns with our overall midterm outlook. So we believe that between the pipeline and the CRPO, we feel good about that revenue guide.

Yes. And on us being cautiously optimistic on the year and why we provided the type of guidance we did for both Q1 and the full year FY '25, it's because the investments that we put in place last year are really coming to fruition for us, whether it's in the Financials platform that I just articulated. The partners are really starting to bring us new opportunities, and we're leveraging them for co-innovation. Our international focus, we talked about it over the last year and all the new talent we brought. We're seeing consistent and predictable results out of Europe, and we had a great quarter in APAC, and even Japan did a really nice performance for us. And then on AI, we think we got the most compelling AI platform in our market, and we continue to organically innovate there, and we're doing inorganic innovation like we did with HiredScore. So all of that gives us cautious optimism as we think about both Q1 and FY '25.

And ladies and gentlemen, thank you for your participation on today's conference. I'll now turn it over to Mr. Eschenbach for final comments.

Thank you, operator, and thank you to everyone for joining today's call, and a special thanks to our Workmates, customers, and partners around the globe that continue to fuel Workday's success. Q4 was another solid quarter, highlighted by the durable mission-critical nature of our business and reinforcing the exciting growth opportunity we have ahead. We are well positioned and focused on getting off to a good start here in FY '25. With that, I'll hand the call back over to the operator to close today's call. And I hope everyone has a great evening.

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.