Workiva Inc. Q1 FY2026 earnings call

Key Messages - Q1 2026 delivered continued demand for Workiva's trusted platform with 21% growth in subscription revenue and 20% growth in total revenue, and non-GAAP operating margin greater than 18%. - Broad-based durable demand across the platform, with large contract cohorts showing strength, e.g., number of contracts over $300,000 increased 38% and over $500,000 increased 39% compared to Q1 2025. - Specific customer examples: European networking and communications company, large European financial services provider, multinational bank expanded deals for various solutions. - Financial reporting: Demand builds as companies modernize and deal with evolving regulations. - GRC: Strong momentum as companies replace legacy systems, e.g., large US financial services institution expanded controls management, community bank landed new GRC deal. - Sustainability: Market shifts from voluntary to formal business requirement, with companies moving to unified platforms. - Product innovation: Workiva is transforming with AI, launching innovations like Flowchart Visualizer for GRC, AI agent for sustainability, internal tie-outs agents for financial reporting. - Operational rigor: Committed to growth and profitability, with 1600 basis point margin improvement from deliberate operational discipline.

In Q1 2026, subscription revenue grew 21% and total revenue grew 20%, beating the high end of revenue guidance. Non-GAAP operating margin was greater than 18%, a 240 basis point beat on the high end of the guide and a 1600 basis point improvement compared to Q1 of last year. Demand for solutions continued to build across various segments like financial reporting, where companies modernize global operating models; GRC as companies replace legacy systems; sustainability as it shifts from voluntary to formal business requirement; and capital markets with reacceleration of the IPO market. The number of contracts with an annual value of over $300,000 increased 38% and over $500,000 increased 39% compared to Q1 of 2025.

Q2 2026: Total revenue expected to range from $250 to $252 million. Services revenue expected to be relatively flat compared to Q2 2025. Non-GAAP operating margin expected to be in the range of 14.5% to 15.0%. ### Full year 2026: Total revenue expected to range from $1.037 to $1.041 billion. Subscription revenue expected to grow approximately 19% year-over-year. Total services revenue expected to be relatively flat year over year. Non-GAAP operating margin outlook raised to 16.0% to 16.5%. Free cash flow margin outlook raised to approximately 20%.

Forward-looking statements are based on assumptions as to the macroeconomic, political, and regulatory environment as of today, and are subject to significant risks and uncertainties. Actual results may differ materially from those in forward-looking statements. Refer to the company's annual report on Form 10-K and subsequent filings with the SEC for factors that may cause actual results to differ.

Q: Rob Oliver asked about customers' views on AI and sales cycles.

A: Julie mentioned customers are interested in leveraging AI in a secure controlled environment, seeing less length in sales cycles due to strengthened execution.

Q: Adam Hotchkiss asked about capital markets deals and GRC/sustainability in pre-IPO companies.

A: Julie said trend of selling capabilities to pre-IPO companies is similar, with 12-18 months not unusual for purchasing internal controls etc.

Q: Barbara was asked about earnings calendar change impact.

A: Barbara said SEC proposal is an option, not a mandate, and Workiva's value extends beyond filing counts, so not a factor.

Q: Andrew De Gasperi asked about net retention rate and capital markets expectations.

A: Julie said NRR target is north of 110%, expectations for capital markets remain consistent.

Q: Patrick McKinley asked about leadership team meshing and AI leverage for efficiency.

A: Julie said new leadership team is meshing well, leveraging AI for engineering productivity and operating leverage.

Q: Alex Skla asked about linearity and sustainability deal sizing.

A: Julie said no change in deal cycles, sustainability is driven by stakeholder demand and business requirements.

Q: Terry Tillman asked about driving more products and platform spend.

A: Julie said moving toward data centric platform with agentic AI, rolling out capabilities.

Q: Steve Enders asked about pricing and billings.

A: Barbara said Workiva is metric-based, value-driven pricing, billings impacted by payment terms, current RPO is better forward indicator.

Q: Daniel Jester asked about go-to-market efficiency and gross margin with AI.

A: Julie said Michael is working on sales efficiency etc., Barbara said no pressure on gross margin from AI currently and expect progress on margin targets.