Core Insights - Workiva has reported strong quarterly operating results, with a significant increase in demand for its platform from large organizations, leading to an upward revision of its full-year revenue forecast [2][8]. Financial Performance - Workiva generated $224 million in total revenue during Q3 2025, representing a 21% year-over-year increase, surpassing management's forecast of $218 million to $220 million [7]. - The company increased its full-year revenue guidance from $871.5 million to $881 million [8]. - Workiva's net revenue retention rate was 114%, indicating existing customers spent 14% more compared to the same period last year [10]. Customer Growth - A record 2,372 of Workiva's 6,541 customers had contract values of at least $100,000 by the end of Q3, showcasing the platform's importance to large organizations [8]. - The number of customers with annual contract values of at least $300,000 and $500,000 increased by 41% and 42% year-over-year, respectively [10]. Market Position and Valuation - Workiva's stock is currently trading 48% below its 2021 record high, with analysts suggesting it may be a good time to buy [3][13]. - The average price target from analysts is $97.60, with a potential upside of 11%, while the highest target suggests a 25% return [11]. - The company's price-to-sales (P/S) ratio has decreased to 5.6, down from 20 at its peak in 2021, indicating a more attractive valuation [13]. Technology and Innovation - Workiva is enhancing its platform with AI capabilities, including the introduction of Workiva AI, which assists managers in customizing reports and disclosures [4][6]. - The AI assistant is designed to understand the context of documents stored on the platform, streamlining workflows for users [6]. Market Opportunity - Workiva estimates its total addressable market at $35 billion, suggesting significant growth potential as it has only begun to tap into this opportunity [12].

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Core Insights - Workiva reported revenue of $224.17 million for the quarter ended September 2025, marking a year-over-year increase of 20.8% and exceeding the Zacks Consensus Estimate of $219.11 million by 2.31% [1] - The company achieved an EPS of $0.55, significantly higher than the $0.21 reported a year ago, and surpassed the consensus EPS estimate of $0.38 by 44.74% [1] Revenue Breakdown - Subscription and support revenue reached $209.56 million, exceeding the average analyst estimate of $205.19 million, reflecting a year-over-year increase of 22.5% [4] - Professional services revenue was reported at $14.61 million, slightly above the average estimate of $14.02 million, with a minimal year-over-year change of 0.1% [4] Profitability Metrics - Non-GAAP gross profit from professional services was $3.15 million, surpassing the average estimate of $2.77 million [4] - Non-GAAP gross profit from subscription and support was $179.32 million, exceeding the average estimate of $171.89 million [4] Stock Performance - Workiva's shares have returned -4.3% over the past month, contrasting with the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Performance - Workiva reported quarterly earnings of $0.55 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, and up from $0.21 per share a year ago, representing an earnings surprise of +44.74% [1] - The company posted revenues of $224.17 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.31%, compared to year-ago revenues of $185.62 million [2] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.62 on revenues of $230.99 million, and for the current fiscal year, it is $1.34 on revenues of $871.58 million [7] - The estimate revisions trend for Workiva was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which Workiva belongs, is currently in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - In Q3 2025, total revenue reached $224 million, reflecting a 21% increase compared to Q3 2024, exceeding the high end of revenue guidance by $4 million [28] - Subscription revenue was $210 million, up 23% year-over-year, with new customers accounting for 40% of the increase [28] - Non-GAAP operating margin for the quarter was 12.7%, a 470 basis point improvement on the high end of guidance and an 860 basis point increase compared to Q3 2024 [6][29] Business Line Data and Key Metrics Changes - The number of contracts valued over $100,000 increased by 23%, contracts over $300,000 rose by 41%, and those over $500,000 grew by 42% compared to Q3 2024 [6][30] - 73% of subscription revenue came from customers using multiple solutions, up from 68% in Q3 2024 [29] Market Data and Key Metrics Changes - Revenue from international markets represented over 19% of total revenue, up from 17% a year ago, with strong demand across Europe [49] - The company supported several high-profile IPOs in Q3, indicating a positive trend in capital markets activity [17] Company Strategy and Development Direction - The company is focused on durable growth and improved operating leverage, with a commitment to innovation and customer needs [5][21] - Recent product enhancements include AI-powered solutions aimed at increasing customer speed, agility, and confidence [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic uncertainties but emphasized the resilience of the business and the importance of providing transparency and accountability [50] - The company raised its full-year revenue guidance to $880 million-$882 million, reflecting strong performance and a commitment to operational efficiency [32] Other Important Information - A leadership change was announced with Michael Pinto appointed as the new Executive Vice President and Chief Revenue Officer, focusing on scaling and accelerating profitable growth [25][60] - The company is transitioning to a flexible time-off plan in 2026, which is expected to positively impact operating margin [31] Q&A Session Summary Question: Insights on platform sales and consolidation trends - Management confirmed a trend towards consolidation in the Office of the CFO, highlighting the benefits of a unified platform [38][39] Question: Early indicators on new pricing strategy - Management noted that early indicators are positive, contributing to account expansions [40] Question: Operating margin outlook for 2026 - Management expects continued progress towards medium-term targets, with a focus on productivity and operational efficiency [44] Question: Demand environment and capital markets activity - Management reported consistent uncertainty in the market but noted strong revenue and bookings growth, with optimism for continued momentum post-government shutdown [50][48] Question: Update on sustainability demand - Management indicated that while near-term tailwinds have subsided, demand for sustainability solutions remains strong, driven by business performance and risk management [56][54]

Financial Performance & Growth - Workiva's Q3 2025 subscription revenue reached $210 million, representing a 23% year-over-year growth[71,72] - The company's remaining performance obligation (RPO) grew by 21% year-over-year, reaching $1305 million in Q3 2025[74] - Workiva's Q3 2025 gross retention rate was 97%, and the net retention rate was 114%[72] - The company projects total revenue for Q4 2025 to be between $234 million and $236 million, representing a 172% to 182% year-over-year growth[84] - Workiva anticipates full-year 2025 total revenue to be between $880 million and $882 million, a 191% to 194% increase year-over-year[84] Customer Base & Expansion - Workiva has over 6,500 organizations using its platform globally[8,43,52,64] - The number of large annual contract value (ACV) customers is growing, with 2,372 customers having >$100k ACV, 541 customers having >$300k ACV and 236 customers having >$500k ACV in Q3 2025[79] - Subscription revenue from multi-solution customers is increasing, reaching 73% in Q3 2025[82] Strategic Focus & Market Opportunity - Workiva estimates its total addressable market (TAM) to be $35 billion[14,16] - Sustainability management represents 20% of Workiva's total TAM[18,19] - The company's strategy focuses on a connected AI platform, fit-for-purpose solutions, a partner ecosystem, and global expansion[11]

Revenue Performance - Revenue for the three months ended September 30, 2025, was $224.166 million, a 20.7% increase from $185.621 million in the same period of 2024[71]. - The company recognized $186.2 million of revenue from deferred revenue during the three months ended September 30, 2025[72]. - Subscription and support revenue from the Americas for the three months ended September 30, 2025, was $164,847,000, compared to $138,833,000 in 2024, indicating a growth of about 18.7%[81]. - Approximately 91% of total Americas revenue attributed to the U.S. during the three months ended September 30, 2025[81]. Financial Position - As of September 30, 2025, total accrued expenses and other current liabilities amounted to $120.159 million, compared to $126.508 million as of December 31, 2024, reflecting a decrease of approximately 5.3%[42]. - Cash equivalents and marketable securities totaled $732.987 million as of September 30, 2025, with $192.110 million included in cash and cash equivalents and $540.877 million in marketable securities[43]. - The fair value of convertible senior notes due in 2026 and 2028 was $85.1 million and $689.4 million, respectively, as of September 30, 2025[52]. - As of September 30, 2025, the total net carrying amount of intangible assets was $23,533,000, an increase from $27,389,000 as of December 31, 2024[74]. - The balance of goodwill increased from $196,844,000 at December 31, 2024, to $205,955,000 as of September 30, 2025, reflecting a foreign currency translation adjustment of $9,111,000[76]. Expenses and Losses - Stock-based compensation expense for the three months ended September 30, 2025, totaled $30.246 million, compared to $27.470 million for the same period in 2024[66]. - The net loss for the nine months ended September 30, 2025, was $(35,419,000), compared to a net loss of $(43,008,000) for the same period in 2024[78]. - The diluted net income per share for the three months ended September 30, 2025, was $0.05 for both Class A and Class B shares, compared to a loss of $(0.31) per share in 2024[78]. Accounting and Regulatory Impact - The enactment of the One Big Beautiful Bill Act of 2025 had an immaterial favorable impact on the company's income tax expense and tax receivable[38]. - The company anticipates no material impact on its financial statements from the new accounting standards issued by the FASB, effective after December 15, 2024, and December 15, 2026[39][40]. - The company is assessing the impact of new accounting pronouncements on its consolidated financial statements and related disclosures[40]. Cash Flow and Financing Activities - The company’s operating cash flow may be affected by the timing of employee cash bonus payments and commission payouts, particularly in the first and fourth quarters[33]. - The company issued $345.0 million of 1.125% convertible senior notes due 2026, with proceeds totaling $335.9 million after discounts and costs[53]. - In August 2023, the company issued $702.0 million of 1.250% convertible senior notes due 2028, with proceeds totaling $691.1 million after discounts and costs[54]. - For the three months ended September 30, 2025, total interest expense related to the Notes was $3.005 million, compared to $3.003 million for the same period in 2024[63]. Employee Compensation - Accrued bonuses increased significantly from $7.891 million as of December 31, 2024, to $26.834 million as of September 30, 2025[42]. - During the nine months ended September 30, 2025, 227,124 shares were purchased under the Employee Stock Purchase Plan (ESPP), generating cash proceeds of $13.7 million[69]. Amortization and Intangible Assets - Amortization expense for intangible assets was $1.7 million for the three months ended September 30, 2025, compared to $2.0 million for the same period in 2024[75]. - The expected total amortization expense for intangible assets is projected to be $23,533,000 over the remaining fiscal years[76].

Revenue Growth - Subscription and support revenue increased by 23% year-over-year in Q3 2025, contributing to total revenue of $224 million, which represents a 21% growth compared to $186 million in Q3 2024[6] - Total revenue for the three months ended September 30, 2025, was $224.166 million, a 20.7% increase from $185.621 million in the same period of 2024[24] - Subscription and support revenue increased to $209.560 million, up 22.5% from $171.035 million year-over-year[24] Profitability - GAAP net income for Q3 2025 was $3 million, a significant improvement from a net loss of $(17) million in Q3 2024, resulting in a GAAP net income per share of $0.05 compared to a net loss per share of $(0.31) in the prior year[7] - Workiva's non-GAAP net income for Q3 2025 was $35 million, compared to $12 million in Q3 2024, with non-GAAP net income per diluted share of $0.55[7] - The net loss for the three months ended September 30, 2025, was $2.786 million, a significant improvement compared to a net loss of $16.992 million in the same quarter of 2024[24] Operating Margin - Non-GAAP operating margin for Q3 2025 was 12.7%, up from 4.1% in Q3 2024, reflecting a 400 basis point increase in the operating margin target for FY 2025[3] - Non-GAAP operating margin improved to 12.7% in Q3 2025, up from 4.1% in Q3 2024[35] - The company expects a GAAP operating margin range of 0.0% to 0.8% for Q4 2025[36] Customer Metrics - Workiva had 6,541 customers as of September 30, 2025, with a net increase of 304 customers from the previous year, and a gross retention rate of 97%[7] - Customers with an annual contract value (ACV) over $500,000 grew by 42% year-over-year, reaching 236 customers[8] Cash and Investments - Workiva's cash, cash equivalents, and marketable securities totaled $857 million as of September 30, 2025, an increase from $816 million at the end of 2024[7] - Cash and cash equivalents as of September 30, 2025, were $315.914 million, an increase from $301.835 million at the end of 2024[26] - The total cash, cash equivalents, and restricted cash at the end of the period was $316.626 million, compared to $248.754 million at the end of Q3 2024, an increase of 27%[30] Expenses - Operating expenses for the three months ended September 30, 2025, totaled $181.193 million, a 10.6% increase from $163.732 million in the prior year[24] - Research and development expenses for Q3 2025 were $51.403 million, up from $48.425 million in Q3 2024, reflecting a growth of 4%[33] - The company reported stock-based compensation expense of $30.246 million for the three months ended September 30, 2025, compared to $27.470 million in the prior year[28] Future Outlook - For Q4 2025, total revenue is expected to be in the range of $234 million to $236 million, with a GAAP operating margin forecasted between 0.0% and 0.8%[15] - Non-GAAP net income per diluted share is projected to be between $0.67 and $0.70 for the year ending December 31, 2025[36] Share Repurchase - The company repurchased $10 million of Class A common stock during Q3 2025, with approximately $40 million remaining under the share repurchase plan[6] Deferred Revenue - Deferred revenue increased to $489.694 million as of September 30, 2025, up from $457.608 million at the end of 2024, indicating strong future revenue recognition[26] Cash Flow - Net cash provided by operating activities for the three months ended September 30, 2025, was $46.155 million, compared to $18.906 million in the same period of 2024[28] - Free cash flow for Q3 2025 was $46.064 million, compared to $18.663 million in Q3 2024, indicating a growth of 147%[35]

Core Viewpoint - The investment outlook for Workiva (NYSE: WK) is positive, with expectations of continued revenue growth driven by demand tailwinds, focusing on medium to long-term investments while also exploring short-term opportunities for alpha generation [1] Company Analysis - The investment strategy emphasizes bottom-up analysis, assessing the fundamental strengths and weaknesses of individual companies [1] - The goal is to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Viewpoint - The investment outlook for Workiva (NYSE: WK) is positive, driven by expected demand tailwinds that will support revenue growth in the foreseeable future [1] Company Analysis - The investment strategy focuses on long-term investments while also considering short-term opportunities to uncover alpha [1] - The analysis is based on a bottom-up approach, examining the fundamental strengths and weaknesses of individual companies [1] - The target investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]