[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Workiva Inc. exceeded Q2 2025 revenue and operating margin guidance, demonstrating solid performance from strong demand - Workiva delivered a quarter of solid financial performance, powered by continued demand for its broad portfolio of solutions and unified platform[3](index=3&type=chunk) - The company beat the high end of guidance for both revenue and operating margin, demonstrating business durability[3](index=3&type=chunk) Key Q2 2025 Performance Highlights | Metric | Q2 2025 | YoY Change | | :-------------------------------- | :------ | :--------- | | Total Revenue | $215 million | 21% | | Subscription & Support Revenue | $198 million | 23% | | Customers with ACV > $500,000 | 208 | 35% | | Non-GAAP Operating Margin | 3.8% | 1.8 pp (from 2.0%) | [Second Quarter 2025 Financial and Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Operational%20Highlights) [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) Workiva reported strong Q2 2025 revenue growth, improved GAAP/non-GAAP margins, and increased non-GAAP net income Q2 2025 Revenue Performance | Revenue Type | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Growth | | :--------------------- | :----------------- | :----------------- | :--------- | | Total Revenue | $215 | $178 | 21% | | Subscription and Support | $198 | $161 | 23% | | Professional Services | $17 | $17 | Flat | Q2 2025 Margin Performance | Metric | Q2 2025 | Q2 2024 | Change (pp) | | :-------------------- | :------ | :------ | :---------- | | GAAP Gross Margin | 77.0% | 76.8% | +0.2 | | Non-GAAP Gross Margin | 79.1% | 78.3% | +0.8 | | GAAP Operating Margin | (10.2)% | (13.1)% | +2.9 | | Non-GAAP Operating Margin | 3.8% | 2.0% | +1.8 | Q2 2025 Net Income/Loss and EPS | Metric | Q2 2025 | Q2 2024 | YoY Change | | :-------------------------------- | :-------- | :-------- | :--------- | | GAAP Net Loss | $(19) million | $(18) million | $(1) million | | GAAP Net Loss per Basic/Diluted Share | $(0.35) | $(0.32) | $(0.03) | | Non-GAAP Net Income | $11 million | $9 million | $2 million | | Non-GAAP Net Income per Basic Share | $0.20 | $0.17 | $0.03 | | Non-GAAP Net Income per Diluted Share | $0.19 | $0.16 | $0.03 | [Operational Metrics](index=1&type=section&id=Operational%20Metrics) Workiva demonstrated healthy customer acquisition, strong retention, and significant growth in large contract value customers Customer and Retention Metrics (as of June 30, 2025) | Metric | Value | YoY Change | | :-------------------------------- | :------ | :--------- | | Total Customers | 6,467 | +320 | | Gross Retention Rate | 97% | - | | Net Retention Rate | 114% | - | Large Contract Customer Growth (as of June 30, 2025) | ACV Threshold | Q2 2025 Customers | Q2 2024 Customers | YoY Growth | | :-------------------- | :------------------ | :------------------ | :--------- | | > $100,000 | 2,241 | 1,768 | 27% | | > $300,000 | 488 | 356 | 37% | | > $500,000 | 208 | 154 | 35% | [Liquidity and Share Repurchase Program](index=1&type=section&id=Liquidity%20and%20Share%20Repurchase%20Program) Workiva maintained strong liquidity with over $800 million in cash and marketable securities, actively repurchasing shares Liquidity Position | Metric | As of June 30, 2025 (Millions) | As of Dec 31, 2024 (Millions) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash, Cash Equivalents, Marketable Securities | $814 | $816 | - Workiva repurchased approximately **132,000 shares** for **$10 million** in Q2 2025 under its **$100 million** share repurchase plan authorized on July 30, 2024[8](index=8&type=chunk) - **$49.9 million** remains available under the share repurchase plan as of June 30, 2025[8](index=8&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) [Third Quarter 2025 Guidance](index=2&type=section&id=Third%20Quarter%202025%20Guidance) Workiva projects Q3 2025 total revenue between $218 million and $220 million, with non-GAAP operating margin of 7.0% to 8.0% Q3 2025 Financial Guidance | Metric | Guidance Range | | :-------------------------------- | :------------- | | Total Revenue | $218 million to $220 million | | GAAP Operating Margin | (7.4)% to (6.4)% | | Non-GAAP Operating Margin | 7.0% to 8.0% | | GAAP Net Loss per Basic Share | $(0.18) to $(0.14) | | Non-GAAP Net Income per Diluted Share | $0.37 to $0.41 | [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) Workiva anticipates full year 2025 revenue of $870-873 million, non-GAAP operating margin of 7.0-7.5%, and 10.5% free cash flow margin Full Year 2025 Financial Guidance | Metric | Guidance Range | | :-------------------------------- | :------------- | | Total Revenue | $870 million to $873 million | | GAAP Operating Margin | (7.1)% to (6.6)% | | Non-GAAP Operating Margin | 7.0% to 7.5% | | GAAP Net Loss per Basic Share | $(0.79) to $(0.72) | | Non-GAAP Net Income per Diluted Share | $1.31 to $1.38 | | Free Cash Flow Margin | Approximately 10.5% | [Corporate Information](index=2&type=section&id=Corporate%20Information) [CFO Transition](index=2&type=section&id=CFO%20Transition) Jill Klindt, Workiva's CFO and Treasurer, is stepping down, with departure by December 2025 or upon successor appointment - Jill Klindt is stepping down as Executive Vice President, Chief Financial Officer and Treasurer[9](index=9&type=chunk) - She is expected to remain as CFO through **December 2025** or until a successor is appointed[9](index=9&type=chunk) [Quarterly Conference Call](index=2&type=section&id=Quarterly%20Conference%20Call) Workiva hosted a webcast on July 31, 2025, to discuss Q2 2025 financial results and the Q3 and full year 2025 outlook - Workiva hosted a webcast on **July 31, 2025**, at **5:00 p.m. Eastern Time** to review Q2 2025 financial results and discuss the Q3 and full year 2025 outlook[10](index=10&type=chunk) - Access to the call was available via dialing **1-833-630-1956** (U.S. domestic) or **1-412-317-1837** (international), with a live webcast and replay at **https://investor.workiva.com/news-events/events**[10](index=10&type=chunk) [About Workiva](index=2&type=section&id=About%20Workiva) Workiva Inc. provides a platform for finance, accounting, sustainability, risk, and audit teams, serving over 6,400 organizations globally - Workiva Inc. (NYSE: WK) powers transparency, accountability, and trust[11](index=11&type=chunk) - Over **6,400 organizations** worldwide, including over **80% of FORTUNE® 1,000 companies**, rely on Workiva for mission-critical work[11](index=11&type=chunk) - The platform transforms how customers connect data, unify processes, and empower teams in a secure, audit-ready, AI-powered, collaborative environment[11](index=11&type=chunk) [Non-GAAP Financial Measures Explanation and Reconciliation](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation%20and%20Reconciliation) [Definition and Rationale](index=2&type=section&id=Definition%20and%20Rationale) Workiva uses non-GAAP measures, excluding stock-based compensation and acquisition intangibles, for clearer core operating results and comparisons, acknowledging GAAP limitations - Non-GAAP adjustments exclude **stock-based compensation** and **amortization of acquisition-related intangible assets**[12](index=12&type=chunk) - Workiva's management uses non-GAAP measures for financial and operational decision-making and evaluating operating results over time, believing they are helpful to investors for more meaningful comparisons[13](index=13&type=chunk)[16](index=16&type=chunk) - Non-GAAP financial measures are not prepared in accordance with GAAP, may differ from those used by other companies, and exclude significant recurring expenses like stock-based compensation[18](index=18&type=chunk) [Historical Non-GAAP Reconciliation (Table I)](index=8&type=section&id=Historical%20Non-GAAP%20Reconciliation%20(Table%20I)) Table I reconciles Workiva's GAAP to non-GAAP results for Q2 and H1 2025/2024, highlighting the impact of stock-based compensation and acquisition intangibles Non-GAAP Gross Profit Reconciliation (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gross profit, GAAP | $165,644 | $136,331 | $323,582 | $270,475 | | Add back: Stock-based compensation | $3,617 | $2,706 | $7,046 | $5,034 | | Add back: Amortization of acquisition-related intangibles | $939 | — | $1,849 | — | | Gross profit, non-GAAP | $170,200 | $139,037 | $332,477 | $275,509 | Non-GAAP Operating Income and Margin Reconciliation (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Loss from operations, GAAP | $(22,146) | $(23,149) | $(46,896) | $(41,432) | | Add back: Stock-based compensation | $28,467 | $25,402 | $56,355 | $48,409 | | Add back: Amortization of acquisition-related intangibles | $1,912 | $1,375 | $3,764 | $2,677 | | Income from operations, non-GAAP | $8,233 | $3,628 | $13,223 | $9,654 | | GAAP operating margin | (10.2)% | (13.1)% | (11.2)% | (11.7)% | | Non-GAAP operating margin | 3.8% | 2.0% | 3.1% | 2.7% | Non-GAAP Net Income and Free Cash Flow Reconciliation (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss, GAAP | $(19,400) | $(17,548) | $(40,771) | $(29,235) | | Net income, non-GAAP | $10,979 | $9,229 | $19,348 | $21,851 | | Net loss per basic and diluted share, GAAP | $(0.35) | $(0.32) | $(0.73) | $(0.53) | | Net income per basic share, non-GAAP | $0.20 | $0.17 | $0.34 | $0.40 | | Net income per diluted share, non-GAAP | $0.19 | $0.16 | $0.33 | $0.38 | | Net cash provided by (used in) operating activities | $50,311 | $(14) | $42,953 | $24,830 | | Free cash flow | $49,316 | $(122) | $41,195 | $24,519 | | Free cash flow margin | 22.9% | (0.1)% | 9.8% | 6.9% | [Non-GAAP Guidance Reconciliation (Table II)](index=10&type=section&id=Non-GAAP%20Guidance%20Reconciliation%20(Table%20II)) Table II reconciles Workiva's GAAP to non-GAAP guidance for Q3 and full year 2025, focusing on operating margin and net income per diluted share Non-GAAP Guidance Reconciliation | Metric | Three months ending Sep 30, 2025 | Year ending Dec 31, 2025 | | :--------------------------------------- | :------------------------------- | :----------------------------- | | GAAP operating margin | (7.4)% - (6.4)% | (7.1)% - (6.6)% | | Add back: Stock-based compensation | 13.6% | 13.3% | | Add back: Amortization of acquisition-related intangibles | 0.8% | 0.8% | | Non-GAAP operating margin | 7.0% - 8.0% | 7.0% - 7.5% | | Net loss per basic share, GAAP range | $(0.18) - $(0.14) | $(0.79) - $(0.72) | | Net income per diluted share, non-GAAP range | $0.37 to $0.41 | $1.31 to $1.38 | [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) [Disclaimer and Risk Factors](index=3&type=section&id=Disclaimer%20and%20Risk%20Factors) This disclaimer identifies 'forward-looking statements' subject to risks and uncertainties, with no obligation to update unless required by law - Certain statements in the press release are 'forward-looking statements' subject to risks, uncertainties, and other factors that may cause actual results to differ materially[19](index=19&type=chunk) - Forward-looking statements are identified by terminology such as 'may,' 'will,' 'expect,' 'plan,' 'anticipate,' 'believe,' 'estimate,' 'guidance,' or similar terms[19](index=19&type=chunk) - The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by applicable securities laws[20](index=20&type=chunk) [Consolidated Financial Statements (GAAP)](index=4&type=section&id=Consolidated%20Financial%20Statements%20(GAAP)) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations present Workiva's GAAP financial performance for Q2 and H1 2025/2024, detailing revenue, costs, expenses, and net loss Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $215,187 | $177,503 | $421,467 | $353,170 | | Gross profit | $165,644 | $136,331 | $323,582 | $270,475 | | Total operating expenses | $187,790 | $159,480 | $370,478 | $311,907 | | Loss from operations | $(22,146) | $(23,149) | $(46,896) | $(41,432) | | Net loss | $(19,400) | $(17,548) | $(40,771) | $(29,235) | | Net loss per common share: Basic and diluted | $(0.35) | $(0.32) | $(0.73) | $(0.53) | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets provide Workiva's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' deficit Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Total current assets | $1,023,148 | $1,048,242 | | Total assets | $1,345,742 | $1,368,469 | | Total current liabilities | $662,275 | $592,425 | | Total liabilities | $1,412,270 | $1,410,153 | | Total stockholders' deficit | $(66,528) | $(41,684) | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Consolidated Statements of Cash Flows outline Workiva's cash generation and usage from operating, investing, and financing activities for Q2 and H1 2025/2024 Consolidated Statements of Cash Flows (in thousands) | Activity | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $50,311 | $(14) | $42,953 | $24,830 | | Net cash used in investing activities | $(4,283) | $(26,315) | $(13,416) | $(8,867) | | Net cash used in financing activities | $(8,907) | $(1,482) | $(53,919) | $(2,807) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $42,229 | $(28,169) | $(17,385) | $11,691 | | Cash, cash equivalents, and restricted cash at end of period | $284,965 | $268,412 | $284,965 | $268,412 |

Group 1 - Workiva Inc. is a SaaS company that provides a cloud platform for financial reporting, sustainability management, and governance, risk, compliance (GRC) solutions [1] - The company has seen strong growth in large contract customers in recent quarters [1]

Core Insights - The S&P 500 has nearly recovered from a 19% drop due to tariffs, but many enterprise software stocks, including Datadog and Workiva, have not returned to their 2021 highs [1][2] Datadog - Datadog offers an observability platform that monitors cloud infrastructure, with over 30,500 businesses using its services across various industries [4] - The company has expanded into AI observability, with customer usage of its new AI tool more than doubling in the first quarter of 2025 compared to six months prior [5] - Datadog reported that 4,000 customers were using at least one of its AI products in Q1 2025, also doubling year over year [6] - Following strong Q1 results, Datadog raised its full-year revenue forecast for 2025 to $3.235 billion, representing a 21% growth from 2024 [7] - The price-to-sales (P/S) ratio for Datadog has decreased from around 70 in 2021 to 15.5, making it more attractive compared to its historical valuation [8] - Analysts are optimistic, with 31 out of 46 assigning a buy rating, and an average price target of $140.72 indicating a potential upside of 15% over the next 12 to 18 months [10] Workiva - Workiva provides a platform that integrates various digital applications, allowing managers to streamline workflows and reduce human error [11][12] - The company is becoming significant in the ESG reporting space, helping businesses track their impact on stakeholders [13] - Workiva had 6,385 customers at the end of Q1 2025, a 5% increase year-over-year, with higher-spending customer segments growing even faster [14] - The company expects to generate up to $868 million in revenue for 2025, a 17.5% increase compared to 2024 [15] - Workiva's P/S ratio is currently at 4.8, near its lowest level since going public [15] - Analysts are bullish on Workiva, with 11 out of 13 giving it a buy rating and an average price target of $97.64, suggesting a potential upside of 44% over the next 12 to 18 months [17][18]

Summary of Workiva (WK) 2025 Conference Call Company Overview - **Company**: Workiva (WK) - **Industry**: Software, specifically focusing on integrated reporting, financial reporting, governance, risk, and compliance (GRC), and sustainability reporting Key Points and Arguments Demand Environment - Workiva experienced strong growth momentum in the previous year but noted a shift to a more cautious buying environment in Q1 2025 due to market uncertainty [7][8][12] - The cautious environment is broad-based across the software portfolio, with buyers reassessing their needs and business cases [8][9] - Despite the cautious environment, Workiva did not change its revenue guidance for the year, indicating confidence in its bookings from 2024 [11] Margin Improvement - Workiva aims to improve its margins significantly, targeting a thousand basis points increase by 2027 [16][20] - The improvement will primarily come from R&D and gross margin enhancements, leveraging automation and AI [17][18] - The company is also focusing on outsourcing low-margin services to partners to improve overall margins [18][19] Platform Expansion - Workiva has transitioned from a single product to a platform with multiple solutions, now serving 91 customers paying over $500,000 annually, a 32% year-over-year growth [22] - The platform includes financial reporting, GRC, and sustainability reporting, with a strong emphasis on account expansion and building trusted relationships with partners [25][26] Partner Ecosystem - Workiva has developed a robust partner ecosystem, including collaborations with major consulting firms, which enhances its market reach and sales efficiency [30][31] - The company is focused on ensuring partner success, which in turn drives sales of Workiva's software [29] ERP Relationships - Workiva sees significant opportunities in ERP migrations, particularly with S4HANA, as companies look to upgrade their financial systems [37][39] - The company collaborates with system integrators to facilitate these migrations, enhancing its market presence [41] ESG and Sustainability Reporting - The demand for ESG reporting remains, particularly in Europe, where regulatory requirements are stringent [46][48] - In the U.S., while the regulatory environment has changed, there are still state-level mandates, such as California's carbon emissions reporting for large companies [49][50] - Workiva's revenue is primarily driven by financial reporting, followed by GRC, with sustainability reporting being a smaller but growing segment [55] Pricing Strategy - Workiva employs a value-based pricing model rather than a seat-based model, allowing flexibility in how solutions are consumed [64][65] - This model positions Workiva advantageously as it integrates generative AI into its offerings, avoiding the pitfalls of user-based pricing [63] Additional Important Insights - The company acknowledges the current challenges in the ESG landscape but emphasizes ongoing sustainability initiatives as essential for risk management and business performance [50][51] - Workiva's platform resilience is attributed to its diverse capabilities, which provide a buffer against market fluctuations [55] This summary encapsulates the critical insights from the Workiva conference call, highlighting the company's strategic direction, market challenges, and growth opportunities.

Summary of Workiva (WK) FY Conference Call - June 04, 2025 Company Overview - **Company**: Workiva (WK) - **Industry**: Integrated reporting and compliance solutions - **Market Focus**: Financial reporting, sustainability management, governance, risk, and compliance (GRC) Key Points Company and Platform Description - Workiva provides a platform for assured integrated reporting, enabling customers to manage both financial and non-financial reporting with audit capabilities [4][5] - The platform allows for consistent data reporting across various work products, enhancing efficiency and auditability [5][12] Total Addressable Market (TAM) - Workiva's TAM is estimated at **$35 billion**, with a breakdown as follows: - 50% from financial reporting - 20% from sustainability management - 20% from GRC - 10% from industry verticals [5][6] Growth Strategy - The company aims to increase revenue from Europe to **25-30%** of total revenues over time [6] - Workiva is focused on expanding its customer base and increasing the number of customers spending over **$300,000** and **$500,000** annually, both of which grew by **32%** in Q1 [19] Financial Guidance - Workiva expects a **20%** growth in subscription revenue for 2025 and aims for an operating margin of **16%** by 2027 [7][8][25] Macro Environment Impact - The company noted macroeconomic uncertainties affecting deal cycles, leading to cautious spending by customers [21][22] - Despite these challenges, Workiva maintained its revenue and operating margin guidance for the year [22][23] Sustainability Reporting Demand - Demand for sustainability reporting is driven by regulatory requirements and self-regulation initiatives, such as the Science Based Targets Initiative (SPTI) [30][31] - The Corporate Sustainability Reporting Directive (CSRD) in Europe is a significant regulatory driver, with large companies required to report by 2025 [33][36] ERP Migration Opportunities - Workiva is increasingly involved in ERP migrations, providing solutions during transitions from on-premise to cloud systems [43][44] - The company collaborates with partners to integrate its platform into larger ERP transformation projects [47] Capital Markets Activity - Workiva has shifted focus to serve large private companies, providing them with reporting solutions regardless of IPO plans [50] Go-to-Market Strategy - The company is evolving its sales strategy to enhance efficiency and effectiveness in selling its full platform [51][52] - Workiva is focusing on hiring sales representatives capable of closing larger deals, which require different skill sets compared to smaller contracts [55] Additional Insights - The company has seen strong growth in its sustainability management solutions, aligning them with financial reporting standards [17][18] - Workiva's platform is designed to streamline reporting processes, making it easier for auditors to verify data integrity [12][13] This summary encapsulates the key insights and strategic directions discussed during the Workiva FY Conference Call, highlighting the company's growth potential and market dynamics.

Core Viewpoint - Workiva has developed a software platform that integrates data for organizations, enabling efficient reporting for executives, investors, and regulators, and has reported strong financial results for Q1 2025, exceeding expectations on both revenue and earnings [1][8][11]. Financial Performance - Workiva generated $206 million in revenue for Q1 2025, marking a 17% increase year-over-year and surpassing management's guidance of $205 million [8]. - The company reported a GAAP loss of $0.38 per share, which was better than the forecasted loss of $0.45 per share, while achieving a non-GAAP profit of $0.14 per share, exceeding the expected $0.07 [11][12]. - Workiva's net revenue retention rate decreased to 110% from 111% year-over-year, indicating slower spending growth from existing customers [13]. Customer Growth and Market Position - Workiva had 6,385 customers at the end of Q1 2025, reflecting a modest 5% year-over-year increase, with significant growth in high-spending customer cohorts [9]. - The company’s addressable market is valued at $35 billion, suggesting substantial growth potential based on its current revenue of $206 million [19]. Analyst Sentiment and Stock Valuation - Analysts are overwhelmingly bullish on Workiva, with an average price target of $102, indicating a potential upside of 54% over the next 12 to 18 months [16]. - The stock is currently 55% below its 2021 high, with a price-to-sales (P/S) ratio of 4.9, close to its lowest level in five years and a 49% discount to its average P/S ratio of 9.6 during that period [2][17]. Strategic Outlook - Workiva's management plans to continue investing in growth, supported by a solid balance sheet with $767 million in cash and equivalents [14][15]. - Despite a forecast of steady revenue growth at 17% for Q2, there are concerns regarding worsening bottom-line results [14].

Group 1 - The stock market is experiencing a shift from value stocks to growth stocks, driven by a strong Q1 earnings season and recovery from tariff-related lows [1] - Investors are advised to exercise caution during this rotation in the market [1] Group 2 - Gary Alexander has extensive experience in covering technology companies and has been involved with several seed-round startups, providing insights into current industry trends [1]

Group 1 - Workiva reported $206.28 million in revenue for the quarter ended March 2025, a year-over-year increase of 17.4% [1] - The EPS for the same period was $0.14, down from $0.22 a year ago, with a surprise of +100.00% compared to the consensus estimate of $0.07 [1] - The reported revenue exceeded the Zacks Consensus Estimate of $203.87 million by +1.18% [1] Group 2 - Subscription and support revenue was $185.51 million, surpassing the average estimate of $184.23 million, reflecting a year-over-year change of +19.7% [4] - Professional services revenue reached $20.77 million, exceeding the average estimate of $19.60 million, with a year-over-year change of +0.4% [4] - Gross profit for professional services (non-GAAP) was $7.48 million, above the average estimate of $6.69 million, while subscription and support gross profit (non-GAAP) was $154.79 million, slightly above the average estimate of $153.98 million [4] Group 3 - Workiva's shares have returned -2.4% over the past month, compared to the Zacks S&P 500 composite's -0.7% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Group 1: Earnings Performance - Workiva reported quarterly earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.07 per share, but down from $0.22 per share a year ago, representing an earnings surprise of 100% [1] - The company posted revenues of $206.28 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.18%, compared to year-ago revenues of $175.67 million [2] - Over the last four quarters, Workiva has surpassed consensus revenue estimates four times, but has only beaten consensus EPS estimates once [2] Group 2: Stock Performance and Outlook - Workiva shares have declined approximately 31.3% since the beginning of the year, while the S&P 500 has decreased by 5.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $208.88 million, and for the current fiscal year, it is $1.05 on revenues of $865.12 million [7] Group 3: Industry Context - The Internet - Software industry, to which Workiva belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5] - The estimate revisions trend for Workiva is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6]

Financial Data and Key Metrics Changes - Subscription revenue grew 20% year over year, while total revenue increased by 17% year over year, exceeding the high end of guidance [6][37] - Operating margin for Q1 was 2.4%, slightly ahead of the first quarter guidance [7][38] - Gross margin improved by 100 basis points year over year, reaching 79% [38] Business Line Data and Key Metrics Changes - The number of contracts valued over $100,000 increased by 23%, contracts over $300,000 rose by 32%, and those over $500,000 also increased by 32% compared to Q1 2024 [8][40] - Professional services revenue remained flat at $21 million compared to Q1 2024, with higher XBRL services offset by a decline in setup and consulting services [37] Market Data and Key Metrics Changes - The company noted a more cautious buying environment towards the end of Q1, influenced by uncertainties in regulatory changes and the new U.S. Administration's policies [9][8] - Despite the cautious environment, the demand for sustainability solutions remained strong, with sustainability being a top booking solution in Q1 [49][55] Company Strategy and Development Direction - The company continues to focus on long-term growth strategies and productivity initiatives, believing in its competitive differentiation to meet 2025 and longer-term targets [9][33] - The company is committed to product innovation, having launched new capabilities for SEC reporting and a fund reporting solution for public funds [30][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term market opportunity and growth strategy, despite the cautious buying environment [33][42] - The company reaffirmed its full-year revenue guidance, expecting subscription revenue growth of approximately 20% at the midpoint [42][43] Other Important Information - The company repurchased approximately 462,000 shares for $40 million as part of its share repurchase program [41] - The company highlighted the importance of sustainability reporting as a valuable asset for enhancing business performance and driving efficiency [24][27] Q&A Session Summary Question: Guidance and cautious buying environment - Management maintained the full-year revenue guidance despite a cautious buying environment, citing strong Q1 performance and confidence in long-term market opportunities [46][47] Question: Demand for ESG and sustainability solutions - Demand for sustainability solutions remains strong, with clarity brought by recent regulatory changes, particularly in Europe [48][50] Question: Broader market conditions and deal timelines - The cautious buying environment is broad-based, affecting various sectors without specific regional or vertical weaknesses [78] Question: Pricing philosophy and strategy - The company focuses on providing value and expanding accounts rather than solely increasing prices, maintaining a customer-centric approach [81] Question: Capital markets contribution outlook - The outlook for capital markets remains consistent, with no changes expected in pipeline or deal timing [85] Question: Opportunities in fund reporting - The market for public funds presents a significant opportunity, with over 12,000 public funds globally [93]