Workiva Inc. Class A

good afternoon ladies and gentlemen my name is rachel and i will be your host operator on this call after the prepared comments we will conduct a question and answer session instructions will be provided at the time if at any time during the conference you need to reach an operator please press star followed by zero please note that this call is being recorded on august 3rd 2021 at 5 pm eastern time I would now like to turn the meeting over to your host for today's call, Mr. Mike Ross, Vice President of Corporate Development and Investor Relations at Workiva. Please go ahead.

Good afternoon, and thank you for joining us for Workiva's second quarter 2021 conference call. Today's call has been prerecorded and will include comments from our Chief Executive Officer, Marty Vander Plauw, followed by our Chief Financial Officer, Jill Clint. we will then open the call up for a live Q&A session. Julie Isco, our Chief Operating Officer, is also on the call. A replay of this webcast will be available until August 10th, 2021. Information to access the replay is listed in today's press release, which is available on our website under the Investor Relations section. Before we begin, I would like to remind everyone that during today's call, we will be making forward-looking statements regarding future events and financial performance, including guidance for the third quarter and full fiscal year 2021. These forward-looking statements are subject to known and unknown risks and uncertainties. Workiva cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only, and we will undertake no obligation to update any statement to reflect the events that occur after this call. Please refer to the company's annual report on Form 10-K and subsequent filings for factors that could cause our actual results to differ materially from any forward-looking statements. Also, during the course of today's call, we will refer to certain non-GAAP financial measures Reconciliations of non-gap to gap measures and certain additional information are also included in today's press release. With that, we'll begin by turning the call over to our CEO, Marty Vander Plauw.

Hello, and thank you for joining today's call. The Workiva team delivered another strong quarter, beating second quarter in guidance for revenue and operating income. The past quarter reflected our steady execution with the addition of 149 net new customers, growing our customer base to almost 4,000. Our results continue to build on our market leadership and the increased demand for regulatory reporting and fit-for-purpose solutions to support digital transformations. We are very pleased that nearly all of our solutions exceeded plan and contributed to our broad-based growth. Our strong bookings from existing customers reflect the breadth of our platform and our enhanced ability to cross-sell multiple solutions. This resulted in Q2 year-over-year growth of 29% in subscription and support revenue and almost 26% in total revenue. We target being a low to mid-20% growth company, and for the first half of 2021, we delivered total revenue growth of 23.7%. Other highlights of the quarter included posting strong operating cash flow, our third highest in company history, achieving our highest revenue retention rate in two and a half years, and continuing to grow the percentage of customers with an annual contract value of over $100,000 and $150,000. Due to continued broad-based demand and resulting top-line growth, we are raising full-year guidance. Jill will provide further details about our financial results and outlook. A strong IPO and SPAC market propelled sales of our Capital Markets solution. This solution continued to exceed our revenue contribution plans in the second quarter. Capital Markets is a great source of new logos which fuels our SEC, integrated risk, and management reporting solutions. We will continue to model the incremental contribution of capital markets as an upside to our plan given its limited predictability. The EMEA team continue to build a strong new logo pipeline with a focus on ESEF and other use cases. We are pleased with our incremental performance in the ESEF market. We believe it is still early days and that the market has a long tail. We remain optimistic about the opportunity and are expanding our selling organization to capture the market as it reopens. Our ESG solution pipeline is growing. We are pleased with the customer traction we are achieving and remain optimistic about the market's potential and expanding TAM. We are also accelerating our own corporate-wide ESG efforts as we work towards strengthening our company and ultimately promoting a better world. Two recent corporate ESG highlights include, first, we recently received an MSCI ESG AA rating. We performed at a leader level and marked our debut in the top 23% of 148 SaaS companies. with strong performance in governance, privacy and data security, and human capital management. And second, Workiva has joined the UN Global Compact CFO Task Force. We are the first SaaS company to join, and Jill will participate and work alongside her peers to shape credible goals that are aligned with corporate sustainability strategies. We continue to strengthen our partner ecosystem, In the second quarter, we signed a number of large deals where our partners played a significant role. A few examples include working in partnership with a big four advisory firm, a large global auto manufacturer chose Workiva to manage their global statutory reporting transformation for over 500 legal entities. We worked with our partner on the joint RFP response, and the partner will deliver the services to implement our platform. Another key partner-related win was with a large healthcare company. The customer invested in the Workiva platform purchasing four solutions geared towards privately held companies, including financial reporting, management reporting, internal controls, and policy management. Expanding our partner ecosystem has powered growth in our multi-solution opportunities. We also continue to expand our footprint with partners utilizing Workiva as part of their managed service delivery. We closed four opportunities in the second quarter with new and existing partners. Three of the big four advisory firms have now invested in the Workiva platform to support the delivery of managed services. We are pleased with the investment that our partners are making in growing their Workiva practices and the impact they have had in delivering transformative results for our customers. Last week, we launched our new marketplace, offering over 200 templates, services, and no-code third-party connectors. Customers can now streamline existing processes and reporting and solve new business problems all within our platform's connected and secure ecosystem. Our partners played a crucial role in the launch of the marketplace by contributing content and services that are readily available for customers to add to their workspaces. All four tenets of our company strategy are now fully in motion. We expect fit-for-purpose solutions along with our modern platform, marketplace, and partner ecosystem to drive our growth. Our company's strategy enables us to make thoughtful and deliberate decisions, aligning and focusing the organization, and exposing and mitigating risk through rigor and discipline. Yesterday, we announced the strategic tuck-in acquisition of OneCloud, a pioneer in iPaaS technology. We acquired OneCloud to extend our platform capabilities in data integration and preparation. OneCloud has been an OEM partner of ours since July of 2019. Their technology expanded the Workiva platform, enabling our customers to connect data from third-party sources such as ERP, GRC, HCM, and CRM systems, as well as other third-party cloud and on-premise applications. We believe connecting, harmonizing, and controlling data across multiple disparate source systems further differentiates the Workiva platform from its competition. By acquiring OneCloud, we now fully own the complete end-to-end technology of our platform. We expect a smooth integration given the successful history that our two companies have shared, and we welcome the OneCloud employees to Workiva. We are proud of the extraordinary talent that is driving our outstanding customer experience and values-based culture. Recently, we were honored to be named once again to Fortune Magazine's list of best workplaces for millennials. Approximately 70% of our employees are millennials, making this recognition even more meaningful. We also were renamed as a best workplace in both Chicago and New York. In closing, we delivered strong quarterly results driven by the focused execution of our strategy. We are growing the business through new logos, maintaining high customer retention and account expansion, and investing in our people, tools, and technology. It continues to be an exciting time for Workiva. The world is changing at a rapid pace, and we believe we are well positioned to capitalize on the increasing opportunities to power transparent reporting for a better world. With that, I will now turn the call over to Jill.