Workiva Inc. Class A

Good afternoon, ladies and gentlemen. My name is Nick and I will be your host operator on this call. After the prepared remarks, we will conduct a question and answer session. Instructions will be provided at that time. Please note that this call is being recorded on May 1st, 2025 at 5 p.m. Eastern Time. I would now like to turn the meeting over to your host for today's call, Katie White, Senior Director of Investor Relations at Workivia. Please go ahead.

Good afternoon, and thank you for joining Workiva's Q1 2025 conference call. During today's call, we will review our first quarter results and discuss our guidance for the second quarter and full year 2025. Today's call will include comments from our Chief Executive Officer, Julie Isco, followed by our Chief Financial Officer, Jill Clint. We will then open up the call for a Q and a session where we will be joined by Mike Ross, our chief strategy officer. After market closed today, we issued a press release, which is available on our investor relations website, along with supplemental materials. This conference call is being webcast live and following the call and audio replay will be available on our website. During today's call, we will be making forward-looking statements regarding future events and financial performance, including guidance for the second quarter and full fiscal year 2025. These forward-looking statements are based on our assumptions as to the macroeconomic, political, and regulatory environment as of today, reflect our best judgment based on factors currently known to us, and are subject to significant risks and uncertainties. Rekiva cautions that these forward-looking statements are not guarantees of future performance. We undertake no obligation to update or revise these statements. If the call is reviewed after today, the information presented during this call may not contain current or accurate information. Please refer to the company's annual report on Form 10-K and subsequent filings with the SEC for factors that may cause our actual results to differ materially from those contained in our forward-looking statements. Also, during the course of today's call, we will refer to certain non-GAAP financial measures. Reconciliations of GAAP and non-GAAP measures are included in today's press release. With that, we'll begin by turning the call over to Workiva's CEO, Julie Isco.

Thank you, Katie, and thank you all for joining us today. Jill and I look forward to sharing our Q1 results and our guidance for Q2 and full year 2025. We'll also provide an update on the regulatory environment and our views on the macro. Q1 was another solid quarter. Subscription revenue grew 20% year over year and total revenue grew 17% year over year, beating the high end of our guidance. At the same time, operating margin came in slightly ahead of our first quarter guide. In Q1, we once again saw broad-based demand across our solution portfolio. CFOs trust Workiva to be the platform that drives performance and productivity for their current requirements and prepares them for their next digital, financial, and operational transformations. our portfolio of 20 plus solutions across governance, risk and compliance and financial regulatory and non-financial reporting continues to resonate in the market. Consistent with the past several quarters, we saw outpaced growth in our large contract customers. This is driven by both additional solution sales into our install base and larger new logo lands. In Q1, The number of contracts valued over $100,000 increased 23% those over $300,000 increased 32% and contracts valued over $500,000 were up 32% as well, all compared to Q1 of 2024. Although we remain optimistic on our market opportunity, we did see signs of a more cautious buying environment toward the end of Q1. The uncertainties of regulatory change and the policies of the new US administration have put pressure on the bookings momentum that we saw in the previous three quarters. As we monitor the current macro and the market turbulence, we remain focused on the execution of both our long-term growth strategy and our productivity initiatives. We believe that we have the competitive differentiation and focused execution to continue to deliver on our 2025 and longer-term targets. Our Q1 results highlighted once again that our platform remains a key differentiator for our new logo wins and account expansion deals. We offer our customers a platform for trust, transparency, accountability, and efficiency. Our relentless focus on customer outcomes has continued to resonate with the office of the CFO. I'd like to start off our deal highlights for the quarter with three wins demonstrating the success of our unified platform around the world. First, we signed a seven-figure multi-solution expansion deal with a US regional bank. This 13-year loyal customer purchased two additional solutions and expanded use across other solutions on the platform. This customer added management reporting to support their operational data analysis and financial statement processes and added our policy management solution to manage their credit risk and accounting policies. The deal also included expanded usage across bank-specific reporting, including Basel III, call reports, and liquidity and tax reporting. This deal was a co-sell with a Big Four advisory firm. Second, we signed a mid six-figure new logo deal with a digital and telecommunications company in APAC. This new customer purchased seven solutions across the platform. Management reporting, global statutory reporting, controls management, financial reporting, risk management, and carbon and sustainability reporting. This company has been on a multi-year digital transformation journey, which included a move to S4 HANA back in 2022. Their investment in Workiva supports their vision to achieve greater agility, efficiency, and competitiveness as an organization. The deal was sourced and will be delivered by a Big Four advisory firm. And third, a European travel company became a new customer, signing a six-figure multi-solution deal that included financial reporting, global statutory reporting, management reporting, controls management, policies and procedures, and sustainability reporting. This venture-backed organization has raised over $1 billion and has the long-term goal of a public company IPO. This was a competitive win, which included multiple partners co-selling the deal. Let's move on now to financial reporting, which continues to be the primary revenue driver for our business. We saw broad-based demand in our financial reporting solution set. It includes SEC reporting, multi-entity reporting, private company reporting, and management reporting. I'd like to highlight three financial reporting specific deals from the quarter. First, we signed a mid-six-figure new logo deal with a top-five US-based insurance company. This customer invested in the Workiva platform to replace a legacy solution and manual processes. They purchased Workiva for insurance reporting, investment reporting, and management reporting. There were multiple partners involved in the co-selling and the delivery of this deal. We signed a mid six figure new logo deal with a top 10 global oil and gas company for global statutory reporting. This company invested in Workiva as part of a broader financial transformation initiative. They'll be using the Workiva platform to manage their data and statutory reporting across 250 entities. The opportunity was sourced and will be implemented by a big four firm. And third, we signed a mid-six-figure new logo deal with a privately held U.S. spacecraft manufacturer for private company and multi-entity reporting. This company purchased the Workiva platform to replace manual processes and work done by service providers in support of financial statements, data management, and the reporting for 140 legal entities. The deal was a co-sell and will be delivered by a regional consulting firm. I'll turn now to governance risk and compliance. Companies today are faced with an environment of changing risks, new compliance requirements, and stakeholder oversight, all of which require a mature GRC program. In addition to existing macroeconomic and geopolitical risks, the policy uncertainty of the new U.S. administration, as well as other emerging risks, are on the rise. We believe that this ever-changing business environment will continue to create demand for our GRC solutions. Looking back at Q1, here are three signature GRC wins. First, a European-based environmental services provider signed a six-figure new logo deal that included controls management and sustainability reporting. This company is working with multiple Big Four firms as a key part of a future of reporting and assurance strategy project. This was a competitive deal to replace a legacy GRC platform and was a co-sell with multiple Big Four firms. Second, a UK-based oil and gas company signed a mid-six-figure new logo deal that included controls management, audit management, operational risk management, ESF, and sustainability reporting. This was a competitive deal with multiple GRC vendors being evaluated. The expanded value of the Workiva platform for the reporting use cases was a competitive differentiator for this GRC opportunity. This deal was sourced and will be delivered by a Big Four firm. Third, we closed a two-solution, six-figure account expansion deal with a U.S.-based utility company. This company purchased controls management and audit management. The customer first signed with WorkEva in August of 2024 for SEC reporting and then quickly followed on with this GRC solution expansion. The opportunity was a co-sell and will be implemented by a regional advisory firm. Let's move on now to sustainability management. There's been a lot of activity on the regulatory front in Q1. As discussed on our Q4 call, the European Union has proposed changes to the CSRD regulation through the EU omnibus package. On February 26 of 2025, the European Commission published its proposed omnibus legislation, which introduces changes to the CSRD. These changes include a limit to the scope of the CSRD to EU organizations that have more than 1,000 employees, and an increase to the threshold for U.S. and other non-EU companies, those in Wave 4, from €150 million in revenue to €450 million in revenue generated within the EU. More recently, the EU Parliament brought the first step of clarity to the Omnibus proposal with a vote on April 3 that confirmed that Wave 2 and Wave 3 companies will now be required to report on their 2027 data in 2028. This vote also signaled overwhelming EU support for the passing of the full Omnibus package. Omnibus outlines that large Wave 1 companies, which is Workiva's primary target market, will still be subject to reporting in 2025 on 2024 results, with no change in timeline. What also remains unchanged is that all companies subject to the CSRD must report using double materiality and in accordance with the EU taxonomy. They also need to comply with the ESRS standards and these reports will be subject to limited assurance. With the publishing of the EU Omnibus, companies now have much better clarity on who will be subject to the CSRD, what will need to be disclosed, and when they will need to disclose it. But sustainability reporting is not just about complying with regulation. Corporations have recognized that sustainability data is not merely a reporting obligation, but a valuable asset that can be leveraged to enhance business performance and drive efficiency. A great example of a Workiva customer that's built stakeholder trust in their sustainability reporting is a European utility company with 36 million customers that focuses on renewable energy. This company is one of the largest global investors in wind and solar power projects. With the Workiva platform, they have oversight of all financial and non-financial information, and they've created greater efficiencies and increased data confidence. The entire end-to-end process for connected results is now much quicker, with higher quality data being presented during both internal and external reviews. By measuring, monitoring, and tracking their investment projects through the Workiva platform, this customer has the information it needs to unlock new markets, reduce risks, and support long-term resilience and profitability. Another Workiva customer, a global food manufacturer, hit their 2025 emissions targets three years early and now sources over 80% of their product volume sustainably. They've reported that achieving lower emissions and pursuing sustainable packaging creates efficiencies and ultimately drives profitability. At the same time, the company's focus on sustainability transparency aligns with consumer demand and helps distinguish their brand in a competitive market. That's not just about reporting or compliance. It's about business performance. Across industries, companies are using sustainability data to drive operational efficiency, mitigate risks, increase customer loyalty, and ultimately create value. The need for organizations to measure, monitor, and track non-financial information continues to drive market demand for our sustainability reporting solutions. Here are two notable wins from the quarter. First, a Fortune 500 global food and beverage company signed a six-figure sustainability reporting contract. This longtime SEC and global statutory reporting customer has set ambitious goals related to sustainable sourcing and packaging and environmental impact, and they chose Workiva to streamline and improve what had previously been a fully manual reporting process. For a consumer products company, sustainability reporting is central to managing energy, waste reduction, and the cost of goods for their products. By capturing and reporting on this data, this company is not only working to improve cost savings and increase operational efficiency, but it is also fostering brand loyalty and creating product differentiation that can open up new market segments, and ultimately drive long-term value creation and a stronger, more resilient company. Second, a Fortune 500 global investment management company purchased sustainability reporting with assurance to meet their needs for voluntary reporting. This existing customer was already using Workiva for financial reporting and internal controls, and after engaging in a competitive RFP led by their sustainability officer, they chose Workiva because of the connectivity to their existing financial reporting and GRC solutions. The firm has set ambitious environmental targets, such as achieving net zero Scope 1 and Scope 2 greenhouse gas emissions by 2040. This increased focus on sustainability reporting is not only about managing risk and increasing operational efficiency. It's about addressing stakeholder demand, enhancing trust and loyalty in the market, and attracting new clients. We believe that sustainability reporting is a market with a long, durable demand and that many corporations will embrace sustainability tracking and disclosure to address multiple stakeholder requirements. By bringing both financial and non-financial data together, Workiva's platform enables our customers to gain insights that drive competitive advantage and informed business decisions. I'd like to take a moment to thank the Workiva team, as well as our partners, for all of our strong Q1 wins. They are the result of focusing on customer outcomes and demonstrating the value of our platform. Moving on to product innovation, in Q1 we delivered a number of advancements to the Workiva platform, including new capabilities for SEC reporting and the launch of a fund reporting solution for public funds. For SEC reporting, all filers are required to go through a mandatory process change driven by an overhaul to the EDGAR system. On March 24th, the SEC launched enrollment for new security requirements for the EDGAR system called EDGAR Next. This update impacts every SEC filer, including public companies, foreign private issuers, investment companies, directors, and officers filing with the SEC. Our platform is ready to support filings the day the EDGAR Next system went live. Our ability to quickly adapt to regulatory changes is one of the reasons Workiva is the market leader for regulatory and financial reporting. In Q1, we also launched a new solution for public funds. This is a new investment reporting solution on the Workiva platform that supports the rapidly growing public funds market. This includes those firms that manage ETFs. This new solution expands our investment reporting market opportunity and supports the unique requirements of public funds, including the ability to create fund summary prospectuses and review and submit hundreds of regulatory filings at once. We will continue to focus R&D on the pace of product innovation, consistent execution, and enhancing our high-performing, differentiated platforms. I'll move on now to say a few words about our guide. Jill will provide the numbers for our revenue and our profit guidance for Q2 and full year 2025. What you'll see is that while we're pleased with our Q1 growth, we're not raising our full year 2025 expectations. We reaffirm our top line outlook for the rest of this year as the current cautious buying environment may persist until customers see clarity in market conditions. We are confident in the resiliency of our business and the durable demand for our platform and our solutions. And we'll continue to invest in the long-term growth opportunity in line with our strategy. In closing, I'd like to thank all of our employees and our customers for another great quarter. We're focused on driving better business outcomes through transparency and accountability, and we look forward to meeting the demands of organizations around the world with our best-in-class platform and solutions. And with that, I'll now turn the call over to Jill to walk you through our financial results and 2025 guidance in more detail. Over to you, Jill.