Workiva(WK) - 2025 Q2 - Quarterly Results

Executive Summary Q2 2025 Performance Overview 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] - The company beat the high end of guidance for both revenue and operating margin, demonstrating business durability[3] 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 Key Financial Metrics 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 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 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] - $49.9 million remains available under the share repurchase plan as of June 30, 2025[8] Financial Outlook Third Quarter 2025 Guidance 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 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 CFO Transition 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] - She is expected to remain as CFO through December 2025 or until a successor is appointed[9] Quarterly Conference Call 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] - 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 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] - Over 6,400 organizations worldwide, including over 80% of FORTUNE® 1,000 companies, rely on Workiva for mission-critical work[11] - The platform transforms how customers connect data, unify processes, and empower teams in a secure, audit-ready, AI-powered, collaborative environment[11] Non-GAAP Financial Measures Explanation and Reconciliation Definition and Rationale 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] - 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][16] - 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] Historical Non-GAAP Reconciliation (Table I) 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) 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 Disclaimer and Risk Factors 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] - Forward-looking statements are identified by terminology such as 'may,' 'will,' 'expect,' 'plan,' 'anticipate,' 'believe,' 'estimate,' 'guidance,' or similar terms[19] - 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] Consolidated Financial Statements (GAAP) Consolidated Statements of Operations 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 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 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 |