Workiva Conference Call Summary Company Overview - **Company**: Workiva (NYSE: WK) - **Industry**: Application Software - **Core Offerings**: Cloud-native AI-powered platform focusing on financial reporting, governance, risk and compliance (GRC), and sustainability solutions - **Client Base**: Serves 6,500 companies, including 85% of the Fortune 1,000 [2][3] Key Points and Arguments Demand Environment - **Strong Year-to-Date Bookings**: Despite a challenging software market, Workiva has experienced strong demand across its diverse solutions [3][4] - **Sustainability Solutions**: While there has been moderation in demand for sustainability solutions, they remain a strategic part of the business with a long-term positive outlook [5][6] - **Financial Services Growth**: Specific solutions for investment firms, insurance companies, and banks have driven significant sales growth [7] - **Multi-Entity Reporting**: Increased demand from multinational companies needing to report to various tax authorities [7] - **Private Companies**: Growth in sales to private companies, expanding beyond just public company solutions [8] Go-to-Market Strategy - **Leadership Changes**: Introduction of a new Chief Revenue Officer and ongoing adjustments to the sales and marketing strategy to improve efficiency [9][10] - **Sales Efficiency Metrics**: Focus on increasing the number of quota-carrying sellers while improving overall sales efficiency [12][14] - **Customer Expansion**: 55% of customers currently use only one solution, indicating significant potential for account expansion [14] Financial Performance - **Revenue Targets**: Workiva is tracking above its medium-term revenue targets of $1.1 billion to $1.2 billion by year-end 2027 [16] - **Operating Margin Improvement**: Increased operating margin target by 400 basis points, reflecting a deliberate focus on efficiency across all departments [17][18] AI Integration - **AI as a Disruption**: Workiva views AI as a significant market disruptor, focusing on delivering practical AI capabilities that enhance customer productivity [22][23] - **New AI Features**: Introduction of SEC Intelligence to provide curated data sets for SEC filings, enhancing customer workflows [24][25] Product Development - **SEC Solutions**: Over 40% of revenue comes from SEC solutions, with a new "good, better, best" packaging strategy driving higher-tier adoption [29][30] - **GRC Growth**: GRC solutions have seen a 30% annual recurring revenue (ARR) growth, driven by market demand for modernized software [34] Sustainability Focus - **Sustainability Revenue**: Contributes 10%-15% of total revenue, with continued growth driven by regulatory demands and corporate risk management [39][40] - **Regulatory Developments**: Recent proposals in Europe regarding sustainability reporting may provide clarity and drive demand [41][42] International Expansion - **Focus on Europe**: Workiva has been building out teams and improving execution in European markets, leading to increased multi-solution sales [45] Capital Allocation - **Cash Generation**: As profitability increases, Workiva is considering M&A opportunities and share repurchase strategies [46][47] Underappreciated Aspects - **Diverse Solution Portfolio**: The broad range of solutions offered by Workiva is a key driver of resilience and growth, which may not be fully appreciated by new investors [48][49] Conclusion - Workiva is positioned for durable growth with a strong focus on efficiency, AI integration, and expanding its diverse solution offerings. The company is optimistic about its future performance, particularly in the context of evolving market demands and regulatory landscapes.

Group 1 - The 13D Activist Fund reported a Q3 2025 return of 8.88%, underperforming the Russell 2000 Index which returned 12.39% [1] - The Russell 2000 outperformed the S&P 500 by the largest margin in three years, with returns of 12.39% compared to the S&P 500's 8.12% [1] - The fund expressed satisfaction with its performance but acknowledged the need for improvement relative to the market [1] Group 2 - Workiva Inc. (NYSE:WK) was highlighted as a key investment, with a one-month return of 5.95% and a 52-week loss of 8.65% [2] - As of December 03, 2025, Workiva Inc. had a stock price of $92.08 and a market capitalization of $5.168 billion [2] - The fund noted that Irenic Capital, an activist investor, has been involved with Workiva Inc. and focuses on strategic activism, including recommendations for spinoffs and sales of businesses [3]

Core Insights - Workiva Inc. has demonstrated strong revenue growth, with a reported 21% increase in revenue to $224 million in the most recent quarter, alongside a GAAP profit of $3 million, a significant improvement from a $17 million loss a year prior [6] - Praesidium Investment Management Company has initiated a new position in Workiva, acquiring 87,921 shares valued at approximately $7.6 million, representing about 1.5% of the fund's total U.S. equity assets [2][8] - Despite a 7.5% decline in share price over the past year, Workiva's improving subscription revenue, which rose by 23%, and expanding non-GAAP operating margin to 12.7% from 4.1% indicate a positive trend towards sustainable profitability [6][7] Company Overview - Workiva Inc. specializes in cloud-based software for enterprise compliance and regulatory reporting, providing scalable solutions that support digital transformation in financial and operational processes [5] - The company's market capitalization stands at $5.1 billion, with a trailing twelve months (TTM) revenue of $845.5 million and a net income loss of $46.8 million [4] Investment Context - The recent filing by Praesidium suggests a growing conviction in Workiva's potential, particularly in light of the company's valuation reset and shift towards higher-value enterprise contracts [8] - Workiva's stock remains over 40% below its 2021 highs, indicating a potential opportunity for long-term investors despite its recent underperformance compared to the S&P 500, which has increased by 13% in the same period [3][7]

Core Insights - Workiva Inc. has appointed Deepak Bharadwaj as EVP & Chief Product Officer to enhance its AI-powered platform innovation [1][2] - Bharadwaj brings over 25 years of experience in product leadership, having previously worked at Adobe and ServiceNow [2][3] - The company aims to leverage Bharadwaj's expertise to drive product growth and customer value [2][3] Company Overview - Workiva Inc. is a leading AI-powered platform focused on transparency, accountability, and trust, serving over 6,500 organizations, including more than 85% of Fortune 1,000 companies [4] - The platform transforms how customers connect data, unify processes, and empower teams in a secure, audit-ready environment [4] Leadership Background - Deepak Bharadwaj has held significant roles in product management at major technology firms, including Adobe, where he led the launch of Acrobat Studio, and ServiceNow, where he contributed to high-growth Employee Experience products [2][3] - His educational background includes a bachelor's degree in computer engineering, a master's in computer science, and an MBA from The Wharton School [3]

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Core Insights - Workiva has reported strong quarterly operating results, with a significant increase in demand for its platform from large organizations, leading to an upward revision of its full-year revenue forecast [2][8]. Financial Performance - Workiva generated $224 million in total revenue during Q3 2025, representing a 21% year-over-year increase, surpassing management's forecast of $218 million to $220 million [7]. - The company increased its full-year revenue guidance from $871.5 million to $881 million [8]. - Workiva's net revenue retention rate was 114%, indicating existing customers spent 14% more compared to the same period last year [10]. Customer Growth - A record 2,372 of Workiva's 6,541 customers had contract values of at least $100,000 by the end of Q3, showcasing the platform's importance to large organizations [8]. - The number of customers with annual contract values of at least $300,000 and $500,000 increased by 41% and 42% year-over-year, respectively [10]. Market Position and Valuation - Workiva's stock is currently trading 48% below its 2021 record high, with analysts suggesting it may be a good time to buy [3][13]. - The average price target from analysts is $97.60, with a potential upside of 11%, while the highest target suggests a 25% return [11]. - The company's price-to-sales (P/S) ratio has decreased to 5.6, down from 20 at its peak in 2021, indicating a more attractive valuation [13]. Technology and Innovation - Workiva is enhancing its platform with AI capabilities, including the introduction of Workiva AI, which assists managers in customizing reports and disclosures [4][6]. - The AI assistant is designed to understand the context of documents stored on the platform, streamlining workflows for users [6]. Market Opportunity - Workiva estimates its total addressable market at $35 billion, suggesting significant growth potential as it has only begun to tap into this opportunity [12].

Core Insights - The article discusses the importance of enabling Javascript and cookies in browsers to ensure proper functionality and access to content [1] Group 1 - The article emphasizes that users may be blocked from proceeding if an ad-blocker is enabled [1]

Core Insights - Workiva reported revenue of $224.17 million for the quarter ended September 2025, marking a year-over-year increase of 20.8% and exceeding the Zacks Consensus Estimate of $219.11 million by 2.31% [1] - The company achieved an EPS of $0.55, significantly higher than the $0.21 reported a year ago, and surpassed the consensus EPS estimate of $0.38 by 44.74% [1] Revenue Breakdown - Subscription and support revenue reached $209.56 million, exceeding the average analyst estimate of $205.19 million, reflecting a year-over-year increase of 22.5% [4] - Professional services revenue was reported at $14.61 million, slightly above the average estimate of $14.02 million, with a minimal year-over-year change of 0.1% [4] Profitability Metrics - Non-GAAP gross profit from professional services was $3.15 million, surpassing the average estimate of $2.77 million [4] - Non-GAAP gross profit from subscription and support was $179.32 million, exceeding the average estimate of $171.89 million [4] Stock Performance - Workiva's shares have returned -4.3% over the past month, contrasting with the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Performance - Workiva reported quarterly earnings of $0.55 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, and up from $0.21 per share a year ago, representing an earnings surprise of +44.74% [1] - The company posted revenues of $224.17 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.31%, compared to year-ago revenues of $185.62 million [2] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.62 on revenues of $230.99 million, and for the current fiscal year, it is $1.34 on revenues of $871.58 million [7] - The estimate revisions trend for Workiva was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which Workiva belongs, is currently in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - In Q3 2025, total revenue reached $224 million, reflecting a 21% increase compared to Q3 2024, exceeding the high end of revenue guidance by $4 million [28] - Subscription revenue was $210 million, up 23% year-over-year, with new customers accounting for 40% of the increase [28] - Non-GAAP operating margin for the quarter was 12.7%, a 470 basis point improvement on the high end of guidance and an 860 basis point increase compared to Q3 2024 [6][29] Business Line Data and Key Metrics Changes - The number of contracts valued over $100,000 increased by 23%, contracts over $300,000 rose by 41%, and those over $500,000 grew by 42% compared to Q3 2024 [6][30] - 73% of subscription revenue came from customers using multiple solutions, up from 68% in Q3 2024 [29] Market Data and Key Metrics Changes - Revenue from international markets represented over 19% of total revenue, up from 17% a year ago, with strong demand across Europe [49] - The company supported several high-profile IPOs in Q3, indicating a positive trend in capital markets activity [17] Company Strategy and Development Direction - The company is focused on durable growth and improved operating leverage, with a commitment to innovation and customer needs [5][21] - Recent product enhancements include AI-powered solutions aimed at increasing customer speed, agility, and confidence [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic uncertainties but emphasized the resilience of the business and the importance of providing transparency and accountability [50] - The company raised its full-year revenue guidance to $880 million-$882 million, reflecting strong performance and a commitment to operational efficiency [32] Other Important Information - A leadership change was announced with Michael Pinto appointed as the new Executive Vice President and Chief Revenue Officer, focusing on scaling and accelerating profitable growth [25][60] - The company is transitioning to a flexible time-off plan in 2026, which is expected to positively impact operating margin [31] Q&A Session Summary Question: Insights on platform sales and consolidation trends - Management confirmed a trend towards consolidation in the Office of the CFO, highlighting the benefits of a unified platform [38][39] Question: Early indicators on new pricing strategy - Management noted that early indicators are positive, contributing to account expansions [40] Question: Operating margin outlook for 2026 - Management expects continued progress towards medium-term targets, with a focus on productivity and operational efficiency [44] Question: Demand environment and capital markets activity - Management reported consistent uncertainty in the market but noted strong revenue and bookings growth, with optimism for continued momentum post-government shutdown [50][48] Question: Update on sustainability demand - Management indicated that while near-term tailwinds have subsided, demand for sustainability solutions remains strong, driven by business performance and risk management [56][54]