Workiva Inc. Class A

Good afternoon, ladies and gentlemen. My name is Gary, 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 that time. Please note that this call is being recorded on July 31st, 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 Workiva. Please go ahead.

Good afternoon, and thank you for joining Workiva's Q2 2025 conference call. During today's call, we will review our second quarter results and discuss our guidance for the third 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 the call up for a Q&A session where we will be joined by Mike Roft, 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, an 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 third 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. Workiva cautions of 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 10K and subsequent filings of 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 or 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. In Q2 of 2025, we delivered another quarter of solid financial performance, powered by the continued demand for our broad portfolio solutions and our unified platform. We beat the high end of our revenue guidance with 23% growth in subscription revenue and 21% growth in total revenue. We also exceeded non-GAAP operating margin guidance by 380 basis points. Our business results reflect continued execution on the four pillars of our growth strategy, our connected platform, our high-value -of-breed solutions, a high-performing partner ecosystem, and continued global expansion. We continue to see companies standardize on the Workiva platform and expand their solution use across financial reporting, GRC, sustainability, and industry-specific solutions. Workiva continues to be a clear choice for those businesses that are looking to drive innovation across the office of the CFO while reducing total cost of ownership with a unified platform. The success of our strategy is showcased by the continued strength in our large contract cohorts. In Q2, the number of contracts valued over $100,000 increased 27%. Those over $300,000 increased 37%. And contracts valued over $500,000 increased 35%, all compared to Q2 of 2024. This growth was driven by both additional solution sales within our existing customer base and the acquisition of larger new logos. We are not just focused on growth. We are also committed to profitable growth. Entering the second half of 2025, we are raising our operating margin outlook to account for anticipated margin expansion in both Q3 and Q4. We also remain committed to the 2027 and 2030 operating margin targets that we announced a year ago. We believe that our disciplined approach to margin expansion will deliver on these results. Well, in the macro environment, economic conditions are still somewhat uncertain. We remain confident in our long-term prospects. The breadth of our solution portfolio and the resilience of our customer demand provide us with multiple levers for sustained growth. From my conversations with our customers and our prospects, the top priorities of CFOs and finance leaders remain constant. They want to protect margins while funding growth. They want to better manage risks and controls. And they want to embrace data and AI to transform their legacy processes. The Workiva platform provides the innovation, the productivity gains, and the compelling value that our customers need to enhance their operational productivity and to drive their transformations. That compelling customer value is showcased by some of the large platform deals that we had in Q2. We continue to win with our broad portfolio of solutions. The first example is a US-based Fortune 500 bank that signed a seven-figure expansion deal across financial reporting, GRC, and sustainability. This 12-year loyal SEC and GRC customer significantly increased their use of the platform with the purchase of bank regulatory reporting, sustainability reporting, and Workiva Carbon. The primary purchasing driver for this opportunity was large financial institution readiness as outlined by the Federal Reserve. This ratings framework requires integrated governance and rigorous risk analytics across all material risk areas, including climate risks. The deal was sourced and will be delivered by a Big Four firm. Second, we signed a -six-figure new logo deal with a large UK-based asset management company. This firm sought to consolidate its tech stack by eliminating redundant point solutions. This led to the purchase of four Workiva solutions, ESEF, multi-entity reporting, sustainability reporting, and controls management. The differentiators that led to this five-year deal were Workiva's strategic partnerships with Big Four advisory firms, our ability to scale with the customer's requirements, and the option for fee-based premium customer support. And third, we signed a -six-figure, five-solution new logo deal with the South American utility company. They purchased SEC reporting, controls management, audit management, risk management, and sustainability, all to support a finance transformation project. The Workiva platform will be a replacement for manual processes used to assemble and file disclosures to the SEC. And it will also replace a legacy ERP-based GRC solution. This deal was sourced and will be delivered by a Big Four firm. It's not just about platform wins. Financial reporting, along with our financial services-specific solutions, remains the primary driver of Workiva's revenue. In Q2, we saw broad-based demand for our financial reporting solutions, including SEC reporting, multi-entity reporting, insurance reporting, and fund reporting. A key theme throughout the quarter was the sustained strong performance we achieved in financial services. This was powered by our tailored solutions for banks, investment firms, and insurers. These solutions support customers in their required financial disclosures. And in the case of banks, insurance companies, and investment firms, our solutions also support operational disclosures that are mission-critical to the operations of their businesses. We continue to see strong demand across this broad TAM as our platform has proven to streamline data management and reporting processes, reduce risk, and increase ROI across a wide range of customer requirements. Since debuting our public fund reporting solution earlier this year, we've seen strong uptake across private, regulated, and public funds, which is highlighting the promise of this rapidly expanding market. Asset managers are accelerating fund launches to drive growth, and that surge is heightening their need for automation to keep up. A great example of this is an account expansion deal with a Canadian financing company. This company signed a high six-figure account expansion deal to add bank reporting and multi-entity reporting. They also expanded their use across fund reporting. Over the past six years, this loyal customer has grown with us since first adopting Moorkeva's regulated fund reporting solution in 2019. Last quarter, they expanded that footprint by onboarding more than 100 public funds through our new public fund solution. They also added bank reporting capabilities specifically for Basel Pillar 3, which mandates that financial institutions disclose a harmonized set of qualitative and quantitative metrics so investors and counterparties can assess their capital strength and risk profile. Another great Q2 fund reporting win was a -six-figure new logo deal with a New York-based investment company. This company purchased fund reporting in a competitive win over a legacy financial printer. This customer was using a manual labor-intensive process to report on nearly 150 funds. They chose Moorkeva for our efficiency and platform differentiation over legacy technology and our ability to scale into additional use cases later down the line. This deal was sourced and will be implemented by a regional consulting partner. Another strong example is a -six-figure account expansion deal that was signed with a US-based private equity firm. This company was previously using a manual process for over 130 funds globally. They already had experience with the Moorkeva platform, having used our S1 solution when they went public. Their experience with us gave them the confidence that they could both automate and streamline the reporting process for fund reporting. This deal was a co-sell and will be implemented by a regional consulting partner. I'll now turn to governance, risk, and compliance. Companies operate amid constantly shifting risk and compliance demands and heightened stakeholder scrutiny. And as they navigate new regulatory frameworks, geopolitical uncertainties, and emerging challenges like fast-evolving AI governance, they increasingly turn to our GRC solutions, fueling ongoing demand. Here are a couple of compelling GRC wins in Q2. First, a top 20 US bank signed a -six-figure account expansion deal for controls management, compliance management, and policies and procedures. This bank started on the Moorkeva platform 18 months ago with the purchase of sustainability and financial reporting. The value of our platform was clear, and it was a key differentiator in this competitive win. This deal was a co-sell and will be implemented by a regional consulting partner. And second, we signed a -six-figure account expansion deal for audit and controls management with the UK member firm of a big four partner. This partnership leverages the Moorkeva platform as a managed service to power the firm's controls as a service offering that provides integrated GRC solutions to its clients. This deal underscores Moorkeva's strength in providing the platform that drives the service lines of our partners. Delivery through a managed service channel provides Moorkeva expanded market reach and lower distribution costs. And it's also a great experience for the end client as big four firms convert our platform into a full-service outcome-based solution. I'll turn now to sustainability, where we saw a dynamic market throughout the quarter, influenced by shifting political policies, proposed regulatory changes, and softer demand in certain segments. At Moorkeva, we did observe a moderation in demand within our corporate account segment across both the US and Europe. While the strong momentum we saw in the latter half of 2024 has tapered some, sustainability continues to drive both new logo wins and account expansion. In these deals, there continue to be many buying drivers, including business performance, managing stakeholder expectations, and yes, regulations such as the CSRD, ISSB, and the State of California Climate Disclosure Rule. I do wanna make it clear that while sustainability remains a strategic part of our business, it is less than 15% of our total revenue. Also of note, the demand risks in this changing market and the weighted contribution of the solution on our bookings have already been factored into the updated revenue guidance we are providing today. We remain confident in the long, durable demand of this market, which is supported by the deals that we continue to win. Here are three notable sustainability wins for the quarter. First, a top five US bank signed a six-figure account expansion deal for sustainability reporting and CSRD. This Fortune 100 customer had been doing voluntary sustainability reporting using Workiva for the past three years. This program, which has transformed into a centralized, enterprise-wide reporting framework, now reports into the office of the CFO. Our value-based discussions and strong partner alliances led to their expansion on Workiva's platform for a more mature, connected sustainability reporting program that is prepared for CSRD compliance. This deal was a co-sell and will be delivered by a big four firm. Second, a top five global investment firm signed a -six-figure expansion deal with the addition of sustainability reporting and fund reporting to solve an array of requirements, including fund-level ESG requirements and multiple country ESG disclosures. This deal underscores the importance of combining sustainability and financial information in one reporting platform. This customer was previously outsourcing all of their financial and regulatory reporting requirements for their 300 funds, and they trusted Workiva to bring the reporting process in-house, drive efficiency, and save them money. This deal was a co-sell and will be delivered by a big four firm. And third, a European multinational manufacturing company signed a six-figure sustainability reporting and sustainability assurance deal as part of their CSRD readiness journey. Having previously used Workiva for annual reporting, this customer was looking to replace their manual, inefficient sustainability reporting process with a more automated and integrated platform that allows them to adapt to changing regulations and respond to increased reporting demands from stakeholders. This deal was a co-sell and will be delivered by a big four firm. Finally, I'd like to share an important leadership update. After 17 years with Workiva, Jill Klint will be stepping down from her role as executive vice president and chief financial officer. Throughout her tenure, Jill has played a foundational role in shaping Workiva into the company we are today. From our early days as a startup to our milestone of reaching 800 million in revenue, she has been a steady, trusted leader and partner through every phase of growth. Her impact will be felt well beyond her time here. I'm deeply grateful to Jill for the contribution she has made to Workiva and to our leadership team. She has our full support in this transition and our warmest wishes as she looks ahead to what's next. Jill will continue to serve as CFO through December 2025 as we conduct a comprehensive search for our next CFO. In closing, I'd like to thank all of our dedicated employees for their focused execution this quarter, driving better business outcomes for our customers through transparency and accountability. 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.