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.

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 guidance, with gross margin improving by 100 basis points to 79% [7][38] - The number of customers reached 6,385, an increase of 311 from the previous year, with a gross retention rate of 97% and a net retention rate of 110% [39] 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, 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][18] - Demand for sustainability solutions remained strong, with significant multi-six figure deals in Europe, indicating continued growth in this market despite regulatory changes [50][51] Company Strategy and Development Direction - The company remains focused on executing its long-term growth strategy and productivity initiatives, believing it has a competitive differentiation to meet its targets for 2025 and beyond [9][33] - The introduction of new capabilities for SEC reporting and a fund reporting solution for public funds reflects the company's commitment to product innovation and market expansion [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 European Union's proposed changes to the CSRD regulation are expected to create demand for the company's GRC solutions [22][23] 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 - Sustainability remained a top booking solution, with clarity from the CSRD bringing opportunities for large companies to report [48][50] Question: Impact of market volatility on capital markets - The outlook for capital markets remains consistent, with no changes expected in contributions for the year [85] Question: Pricing philosophy - The company focuses on providing value and expanding accounts rather than squeezing additional dollars from renewals [80][81] Question: Opportunities in fund reporting - The market for public funds is significant, with over 12,000 public funds globally, presenting a strong opportunity for the company [92]

Financial Data and Key Metrics Changes - In Q4 2024, total revenue reached $200 million, representing a 20% increase compared to Q4 2023, while subscription revenue grew by 22% to $181 million [10][64] - For the full year 2024, total revenue was $739 million, up 17% from 2023, with subscription revenue at $668 million, a 20% increase [70] - Non-GAAP operating margin improved to 4.3% for the full year, up from 1.6% in 2023, and Q4 operating margin was 7.4% [11][72] - Free cash flow margin for 2024 was 11.7%, exceeding guidance by 170 basis points [11][73] Business Line Data and Key Metrics Changes - Subscription revenue growth was driven by both new customers and account expansions, with new customers contributing 42% to the Q4 subscription revenue increase [65] - The number of contracts valued over $100,000 increased by 26% year-over-year, with contracts over $300,000 and $500,000 growing by 34% and 32%, respectively [69] - Professional services revenue for Q4 was $19 million, slightly up from Q4 2023, driven by higher XBRL services [65] Market Data and Key Metrics Changes - 17.5% of total worldwide revenue in 2024 came from outside the Americas, an increase of 280 basis points from 2023 [15] - The sustainability market is expected to grow, with companies increasingly investing in sustainability reporting to meet regulatory demands [22][41] Company Strategy and Development Direction - The company is focused on broad-based demand across its platform, emphasizing multi-solution deals and vendor consolidation [14][88] - Workiva aims to leverage its Assured Integrated Reporting platform, which integrates financial reporting, sustainability, and governance risk and compliance [16][62] - The company is prioritizing AI capabilities to enhance customer workflows and streamline processes [55][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite macroeconomic uncertainties, including policy and geopolitical risks [61][84] - The guidance for 2025 includes a 20% growth in subscription revenue, reflecting a balanced approach to market conditions [61][92] Other Important Information - The company has seen a significant increase in demand for its sustainability solutions, with a notable rise in companies committing to science-based targets [33][41] - Workiva's platform is recognized for its ability to address both financial and non-financial reporting needs, which is becoming increasingly important in the current regulatory environment [30][41] Q&A Session Summary Question: What are the main policy uncertainties affecting guidance? - Management indicated that general uncertainty, including tariffs and exchange rates, is influencing the guidance, rather than any single factor [82][84] Question: How does the multiproduct strategy impact the pipeline? - The multiproduct strategy is seen as a significant differentiator, with broad-based demand across the platform and opportunities for cross-selling and upselling [86][88] Question: What is the outlook for sustainability revenue? - Sustainability revenue continues to be a top booking solution, expected to play a balanced role in 2025, although specific revenue splits are not provided [94][95] Question: How is the shift to partner-led services impacting deployment speed? - The company is seeing improved deployment speed and customer satisfaction as partners develop tools and capabilities around the platform [101][102] Question: Is there a risk of deferring sustainability projects? - Management has not observed any trends indicating that customers are deferring sustainability-related projects [108][109] Question: How is back-office digitization impacting demand? - There is strong demand for the platform driven by new ERP systems and upgrades, with significant opportunities arising from finance transformations [118][120] Question: What is the contribution of CSRD to growth in Europe? - Growth in Europe is attributed to broad-based demand across the portfolio, not solely driven by CSRD-related activities [123][124]

Financial Data and Key Metrics Changes - In Q4 2024, total revenue reached $200 million, reflecting a 20% increase compared to Q4 2023, while subscription revenue grew by 22% to $181 million [10][64] - For the full year 2024, total revenue was $739 million, up 17% from 2023, with subscription revenue at $668 million, a 20% increase [70] - Non-GAAP operating margin improved to 4.3% for the full year 2024, up from 1.6% in 2023, with a free cash flow margin of 11.7% [11][72] Business Line Data and Key Metrics Changes - Subscription revenue growth was driven by both new customers and account expansions, with new customers contributing 42% to the Q4 subscription revenue increase [65] - The number of contracts valued over $100,000 increased by 26% year-over-year, with contracts over $300,000 and $500,000 rising by 34% and 32%, respectively [69] Market Data and Key Metrics Changes - 17.5% of total worldwide revenue in 2024 came from outside the Americas, an increase of 280 basis points from 2023 [15] - The sustainability market is expected to grow, with companies increasingly investing in sustainability reporting to meet regulatory demands [22][41] Company Strategy and Development Direction - The company is focused on broad-based demand across its platform, emphasizing multi-solution deals and vendor consolidation [14][87] - Workiva aims to leverage its Assured Integrated Reporting platform to integrate financial reporting, sustainability, and governance risk and compliance [16][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite macroeconomic uncertainties, including policy and geopolitical risks [61][84] - The guidance for 2025 includes a 20% growth in subscription revenue, reflecting a balanced approach to market conditions [61][76] Other Important Information - The company has seen a significant increase in demand for its sustainability solutions, with a notable rise in companies committing to science-based targets [33][41] - AI has been prioritized as a key innovation area, with customers increasingly adopting AI capabilities to enhance productivity [55][56] Q&A Session Summary Question: What are the main policy uncertainties affecting the company? - Management indicated that general uncertainty, including tariffs and exchange rates, is impacting guidance, but not any specific policy [82][84] Question: How does the multiproduct strategy affect the pipeline? - The multiproduct strategy is seen as a significant differentiator, with broad-based demand across the platform and opportunities for cross-selling [86][87] Question: What is the outlook for sustainability revenue? - Sustainability revenue continues to be a top booking solution, expected to play a balanced role in 2025, although specific revenue splits are not provided [94][95] Question: How is the transition to partner-led services impacting deployment? - The transition to partners has improved deployment speed and customer satisfaction, with partners developing tools to enhance value [101][102] Question: Is there a risk of deferring sustainability projects? - Management has not observed any trends indicating deferrals in sustainability projects, despite the typical Q1 filing season [108][109] Question: How is the company addressing back-office digitization? - New ERP systems and upgrades are driving demand for the platform, with strong partnerships facilitating these opportunities [118][120] Question: What is the impact of CSRD on European revenue? - The company has seen broad-based demand in Europe, with significant growth not solely attributed to CSRD but also to overall platform execution [123][125]