Workiva Inc. Q2 FY2025 earnings call

Growth Strategy Execution

• Delivered solid financial performance with 23% growth in subscription revenue and 21% growth in total revenue, beating revenue guidance high end.
• Exceeded non-GAAP operating margin guidance by 380 basis points.
• Continued execution on 4 growth pillars: connected platform, high-value solutions, partner ecosystem, and global expansion.

Customer Wins

• Secured a 7-figure expansion deal with a U.S.-based Fortune 500 bank across financial reporting, GRC, and sustainability.
• Signed a mid-6-figure new logo deal with a large U.K.-based asset management company for multiple solutions.
• Closed a mid-6-figure 5-solution new logo deal with a South American utility company for various reporting and GRC solutions.
• Strong performance in financial services with broad-based demand for financial reporting solutions.

Sustainability Market

• Observed moderation in demand within corporate account segment in U.S. and Europe, but sustainability continues to drive new logo wins and account expansions.
• Sustainability is less than 15% of total revenue, and demand risks have been factored into guidance.
• Notable sustainability wins include deals with top U.S. banks, global investment firms, and European manufacturing companies.

Leadership Update

• Jill Klindt will step down as CFO but will serve until December 2025 while a search for the next CFO is conducted.

In Q2 2025, Workiva delivered solid financial performance. Subscription revenue was $198 million, representing a 23% growth compared to Q2 2024. Total revenue for the quarter was $215 million, up 21% year-over-year. Professional services revenue was $17 million, flat versus Q2 2024. Sustainability solutions contribute less than 15% of total revenue. The company saw growth in large contract cohorts, with contracts valued over $100,000 increasing 27%, over $300,000 by 37%, and over $500,000 by 35% compared to Q2 2024.

Q3 2025 Guidance

• Total revenue expected to range from $218 million to $220 million.
• Services revenue expected to be down compared to Q3 2024.
• Non-GAAP operating margin expected to be in the range of 7% to 8%.

Full-Year 2025 Guidance

• Increased total revenue guidance to range from $870 million to $873 million, reflecting Q2 revenue beat.
• Subscription revenue growth expected to be approximately 20%.
• Non-GAAP operating margin expected to range from 7% to 7.5%.
• 2025 free cash flow margin expected to be approximately 10.5%.

• Macroeconomic uncertainties pose risks to business performance.
• Moderation in sustainability demand within corporate account segment in U.S. and Europe is a risk factor.
• Forward-looking statements are subject to significant risks and uncertainties related to macroeconomic, political, and regulatory environments.

Q: First, are you seeing any contribution from capital markets picking back up? And anything that you incrementally embedded into the 2025 outlook from that? And then second, did FX impact the guide at all as well?

A: Jill Klindt responded that capital markets have steady revenue in Q2, with potential upside in the second half if activity returns. FX is part of the risk-adjusted model but not expected to significantly impact goals.

Q: Some of the financial reporting success you called out this quarter, can you talk about some of the SEC reporting bundles that you've been working on in market in terms of kind of driving upsell within that base? And did that have any impact on kind of the strong NRR in the quarter?

A: Julie Iskow mentioned moving towards a good, better, best model for SEC reporting to drive upsell, and Jill Klindt noted NRR uptick was due to upsells into existing base near 60% of revenue growth Q: Just on the sustainability portfolio and how it manifests in the numbers, and how are you viewing the pipeline or opportunity from here?

A: Julie Iskow said sustainability demand moderated in Q2 but still drives growth, with less than 15% of revenue from it, and pipeline remains strong for long-term demand Q: On the free cash flow guide, any factors affecting free cash flow vs EBIT margin assumptions?

A: Jill Klindt explained free cash flow is complex with timing factors, and the provided margin is risk-adjusted reflecting business through year end Q: On CFO Act agencies modernizing financial systems, any early RFP activity and long-term opportunity?

A: Julie Iskow said they're in discussions, and their platform is suitable for integrated reporting and GRC needs Q: On M&A, how thinking about product areas like GenAI, ESG, etc.?

A: Julie Iskow said they're continually looking for opportunities to strengthen platform via M&A across various areas Q: On big wins in financial services tied to Federal Reserve, more context?

A: Julie Iskow said financial services regulations are drivers, and they'll continue to expand use cases in financial services Q: On margin and sales marketing investments, any changes?

A: Jill Klindt said they reallocate sales and marketing resources thoughtfully, focusing on profitability and efficiency Q: On sustainability vs broad business acceleration, how marry moderation with acceleration?

A: Julie Iskow said revenue comes from broad-based platform, with sustainability less than 15% of revenue, and they take risk-adjusted approach in guidance Q: On AI moat and reporting product set vs upstart tech?

A: Julie Iskow said they have trusted relationships, innovative tech, focus on customer data, and will invest in AI to add value while keeping data secure Q: On product portfolio strength and competitive landscape?

A: Julie Iskow said broad-based demand across portfolio, competing against point solutions and legacy tech, differentiating with broad platform and ecosystem Q: On retention strength, what drove it and outlook?

A: Jill Klindt said NRR strength was from upsells into existing base, with majority from additional solutions sold, and retention expected to remain strong around 110% plus