Workiva Inc. Class A

Ladies and gentlemen, thank you for standing by and welcome to Workiva's fourth quarter fiscal 2021 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. Mike Ross, Senior Vice President, Investor Relations. You may begin your conference.

Good afternoon, and thank you for joining us for Workiva's fourth quarter and full year 2021 earnings conference call. During today's call, we will review our fourth quarter 2021 results and discuss our guidance for the first quarter and full year 2022. Today's call has been pre-recorded 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 March 1st, 2022. 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 first quarter and full fiscal year 2022. 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 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-GAAP-to-GAAP 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 once again delivered strong financial results. In both the fourth quarter and full year, we beat the high end of our guidance in revenue and operating profit. We generated record revenue during Q4, which resulted in growth of over 28% in subscription and support revenue and total revenue. Our results reflect our market leadership in transparent, connected reporting and the significant increases we're seeing in macro trends such as digital transformations, increased compliance and reporting requirements, and stakeholder demand for ESG data. In Q4, we outperformed in multiple solution areas, including ESG. We continue to see substantial upside in this growing and exciting solution area and plan to invest heavily to secure more of the ESG market. I will discuss our ESG strategy later in this call. Workiva continues to perform with our extraordinary talent and our innovative reporting platform. In Q4, we had strong new logo growth, adding 169 net new logos. we delivered a 32% increase in the number of customers with contract values over $100,000. We also achieved our highest revenue retention rate of 97%. In 2021, we continue to expand our partner ecosystem, which now includes over 200 entities. Our partners are an important part of our growth strategy. They extend our geographic reach, accelerate the usage and adoption of our platform, and enable more efficient delivery of professional services. Most recently, we announced new partnership relationships to support our ESG growth. In Q4, we announced that we are expanding our alliance with PWC to bring a people-led and tech-powered approach to ESG strategy and reporting. We are aligned in our belief that the convergence of both regulatory pressure and investor demand will dramatically impact how and the level at which companies disclose their ESG data. Working together, we plan to build purpose-driven ESG strategies for our mutual customers. We also expanded our relationship with the KPMG ESG practice, where Kiva and KPMG are collaborating in the marketplace and have engaged in discussions with executives from leading financial institutions about how their organizations are addressing ESG in light of stakeholder, investor, and government expectations. On the ESG technology side, we announced last week a new partnership with Persephone, a carbon accounting platform that enables users to turn financial, operational, and supply chain data into certified carbon footprint data. The Persephone partnership will enable customers to integrate and transfer data between our respective platforms and will provide access to the carbon benchmarking and a carbon offsets marketplace. We have also been busy on the M&A front. In the fourth quarter, we completed two tuck-in acquisitions that we believe will further support the competitiveness of our platforms. On December 21st, we announced the acquisition of AuditNet. AuditNet's cloud platform serves as a primary communications resource and digital network where over 160,000 audit practitioners access and share content, resources, tools, and templates. This strategic acquisition supports our investment in the future of audit transformation, adds to our customer offering, and helps to grow our marketplace. We also announced the December acquisition of AREL, the Global Standard XBRL Validation Engine. AREL is used by a community of over 50 global regulators, banks, and technology companies, including Workiva, that depend on it for data quality and comparison. We believe transparency will bring about a better world, and AREL helps make that happen. Moving on to 2022, We entered the year with great momentum and are now strategically investing in our ESG offering to accelerate global growth, advance our product roadmap, and increase pipeline. We believe that we have a large TAM and we continue to invest to expand our TAM. At our investor day in November, we discussed that outside of the SEC solution, we believe our penetration is still early in all other solution areas. With new markets and expanded opportunities, we communicated a revised conservative TAM estimate of $25 billion including ESG. ESG reporting is complex, making it a natural fit for our platform and a compelling market for us. We have over a decade of experience and have invested over $600 million to deliver a cloud platform that supports investor-grade reporting for the world's largest organizations. We are highly encouraged by our customers' and partners' initial response to our ESG solution. It is still early, but the global market is moving fast. This year, we are strategically investing in our people, technology, partners, and go-to-market strategy in order to capture this significant ESG market opportunity. The majority of our new investments are being leveraged in support of ESG. We believe the investments we are making in ESG, along with our other solutions, will position us to deliver durable, low to mid 20% revenue growth. To support our growth and scale, I am pleased to share that Julie Isco has been promoted the President and Chief Operating Officer. In her expanded role, Julie will be responsible for Workiva's global growth strategy and commercial operations, including enterprise-wide product development, platform innovation, sales, marketing, service delivery, and customer success. Congratulations to Julie on this well-deserved promotion. I'm looking forward to working closely with her as we advance Workiva's mission of powering transparent reporting for a better world. In closing, we delivered very strong results in 2021, driven by the focused execution of our strategy. We continue to grow the business by attracting and retaining top talent, investing in the development and innovation of our platform and fit-for-purpose solutions, and consistently delivering an outstanding customer experience. It continues to be an exciting time for Workiva. We believe we are well positioned and have the right strategy in place to capitalize on the increasing global opportunities to power transparent reporting for a better world. With that, I will turn the call over to Jill.