Workiva(US:WK)2020-08-05 01:09Financial Data and Key Metrics Changes - In Q2 2020, total revenue was $83.9 million, a 14.1% increase from Q2 2019 [20] - Subscription and support revenue was $70.7 million, up 16.9% from the same quarter last year [20] - Professional services revenue was $13.2 million, a 1.2% increase from Q2 2019 [21] - Gross profit totaled $62.4 million, up 16.4% year-over-year, with a consolidated gross margin of 74.4% [25] - Operating loss was $1.9 million in Q2 2020, compared to an operating profit of $86,000 in Q2 2019 [27] - Cash, cash equivalents, and marketable securities totaled $509 million at June 30, 2020, an increase of $12.5 million from March 31, 2020 [28] Business Line Data and Key Metrics Changes - Subscription and support revenue retention rate was 94.5% for Q2 2020, down from 95.4% in Q2 2019 [24] - The number of contracts valued at over $100,000 per year increased by 28% year-over-year, totaling 716 contracts [24] - The number of contracts valued at over $150,000 increased by 44% from Q2 2019, totaling 342 customers [24] Market Data and Key Metrics Changes - Demand for the platform improved across all growth vectors, including EMEA and U.S. Government solutions [10] - The company noted that the potential delay of the ESEF reporting deadline by the FCA in the U.K. had no material impact on the outlook for EMEA [17] Company Strategy and Development Direction - The company is focused on leveraging partnerships with technology companies and advisory firms to drive long-term growth [10] - The transition to virtual marketing events has been successful, generating a significant number of sales leads [13] - The company is committed to developing and delivering new solutions on its platform as a key driver of success [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to capitalize on opportunities despite challenges posed by the COVID-19 pandemic [9] - The company reinstated full-year guidance, close to pre-pandemic levels, based on improved visibility into new business [30] - Management noted that the sales team successfully adapted to virtual selling, leading to a normalization of closure rates [36] Other Important Information - The company is seeing strong engagement in the ESEF mandate discussions, using it as an entry point to broader platform sales [52] - The new platform's capabilities have been well-received, allowing for faster market entry and solution development [12] Q&A Session Summary Question: What changes were made to the sales team to close deals? - Management noted that the sales team adapted to virtual selling, which helped normalize closure rates despite challenges in certain industries [36] Question: How are customers in Europe responding to the ESEF mandate? - Management indicated that the potential delay in the ESEF mandate is not slowing down customer engagement or pipeline development [40] Question: What factors contributed to the decline in add-on revenue? - The decline was attributed to a combination of not taking price increases and solution churn, particularly in industries affected by COVID [45] Question: How is the partner channel performing? - Management reported strong partner activity, with partners recognizing the potential to build practices around the company's solutions [47] Question: What is the outlook for the ESEF mandate in EMEA? - Management has not heard of any significant delays in EMEA and remains optimistic about ongoing conversations with customers [66] Question: Can you elaborate on the allowance for receivables? - The allowance for receivables increased to $5.6 million, impacting billings, but adjusted figures would show a year-on-year increase in short-term billings [69] Question: What is the status of the next-generation platform? - The next-generation platform has been well-received, with management noting its stability and performance, and it is expected to enhance sales efficiency [78]