Group 1 - TimesSquare Capital Management reported a gross return of 11.28% and a net return of 11.02% for its "U.S. Small Cap Growth Strategy" in Q2 2025, compared to the Russell 2000 Growth Index return of 11.97% [1] - The fund's performance was driven by double-digit returns in equities as global economic activity improved [1] - Workiva Inc. (NYSE:WK) was highlighted as a key stock, with a one-month return of 4.94% and a 52-week gain of 4.96%, closing at $78.44 per share with a market capitalization of $4.394 billion on September 11, 2025 [2] Group 2 - Workiva Inc. is recognized for its cloud-based compliance and regulatory reporting solutions, with Q2 2025 revenue reaching $215 million, a 21% increase from Q2 2024 [4] - The company maintained its full-year revenue guidance, indicating ongoing momentum in multi-solution platform deals, although management noted potential impacts on new business bookings due to a less favorable buying environment, which led to a 10% decline in stock price [3] - Workiva Inc. was held by 30 hedge fund portfolios at the end of Q2 2025, down from 35 in the previous quarter, suggesting a decrease in popularity among hedge funds [4]

Group 1 - Workiva's 2025 Analyst and Investor Day is being held with participation from both in-person and online attendees [1] - The agenda includes presentations from Workiva's CEO, Chief Strategy Officer, and CFO, followed by a Q&A session [3]

Core Insights - The company is focused on the development of transcript-related projects, indicating a commitment to enhancing their offerings in this area [1] Group 1 - The company publishes thousands of quarterly earnings calls each quarter, showcasing significant growth and expansion in their coverage [1]

Core Insights - Workiva's platform is increasingly essential for complex organizations managing multiple digital applications, simplifying data collection and compliance reporting [1][4] - The company reported strong Q2 2025 results, with a 21% year-over-year revenue increase, leading to a 32% stock price surge [2][8] - Analysts are overwhelmingly bullish on Workiva, with a high percentage recommending buy ratings and a significant addressable market of $35 billion [13][14] Financial Performance - Workiva generated $215 million in revenue for Q2 2025, exceeding management's forecast of $209 million, marking a 21% increase from the previous year [8] - The net revenue retention rate reached a multiyear high of 114%, indicating existing customers are spending 14% more compared to Q2 2024 [9] - The company had a record 6,467 customers at the end of Q2, with significant growth in high-spending customer cohorts [10] Market Position and Growth Potential - Workiva's expansion into ESG reporting since 2021 positions it well to capture a growing market as compliance requirements increase for small and midsized enterprises [6][7] - The company raised its full-year revenue forecast for 2025 to $871.5 million, reflecting confidence in continued growth [12] - The stock is currently trading at a price-to-sales ratio of 6.1, below its 10-year average of 7.4, suggesting potential for long-term investment [15][17]

Market Overview - The stock market is currently facing challenges, with the S&P 500 retreating from all-time highs despite a strong start to the Q2 earnings season [1] Analyst Background - Gary Alexander has extensive experience in covering technology companies on Wall Street and working in Silicon Valley, providing insights into current industry themes [1]

Core Insights - Workiva's stock surged by over 30% in a single trading session following a strong quarterly earnings report, contrasting with a general market decline where the S&P 500 fell by 1.6% [1] Financial Performance - Workiva reported second-quarter revenue of $215 million, marking a 21% increase compared to the same period in 2024, exceeding analyst expectations of under $209 million [2] - Subscription and support revenue contributed significantly, rising 23% to $198 million [2] - The company reported non-GAAP net income of $11 million ($0.19 per share), a 22% increase year-over-year, surpassing analyst expectations of $0.05 per share [4] Future Guidance - Workiva's revenue guidance for the upcoming period is projected between $870 million and $873 million, exceeding the consensus estimate of slightly over $866 million and representing at least an 18% increase over the actual full-year 2024 results [4] - The forecast for adjusted profitability in 2025 is set at $1.31 to $1.38 per share, which is above the average analyst estimate of $1.04 and significantly higher than the previous year's figure of $0.94 [5]

Group 1 - Workiva reported revenue of $215.19 million for the quarter ended June 2025, reflecting a year-over-year increase of 21.2% [1] - The company's EPS for the quarter was $0.19, up from $0.16 in the same period last year, indicating a significant improvement [1] - Workiva's revenue exceeded the Zacks Consensus Estimate of $208.98 million by 2.97%, and the EPS surpassed the consensus estimate of $0.05 by 280% [1] Group 2 - Subscription and support revenue was $198.22 million, exceeding the average estimate of $192.8 million by analysts, with a year-over-year growth of 23.3% [4] - Professional services revenue reached $16.96 million, slightly above the estimated $16.31 million, marking a 1.2% increase compared to the previous year [4] - Gross profit from subscription and support was $166.4 million, surpassing the average estimate of $161.62 million, while gross profit from professional services was $3.8 million, below the estimated $4.25 million [4] Group 3 - Workiva's stock has returned -2% over the past month, contrasting with the Zacks S&P 500 composite's +2.7% change [3] - The company currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Workiva (WK) reported quarterly earnings of $0.19 per share, significantly exceeding the Zacks Consensus Estimate of $0.05 per share, marking an earnings surprise of +280.00% [1] - The company also posted revenues of $215.19 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.97% and showing a year-over-year increase from $177.5 million [2] Financial Performance - Workiva's earnings of $0.19 per share represent an increase from $0.16 per share a year ago, indicating growth in profitability [1] - The company has surpassed consensus EPS estimates two times over the last four quarters and has topped consensus revenue estimates four times during the same period [2] Stock Performance - Workiva shares have declined approximately 39.3% since the beginning of the year, contrasting with the S&P 500's gain of 8.2% [3] - The current Zacks Rank for Workiva is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.32 on revenues of $218.31 million, while the estimate for the current fiscal year is $1.04 on revenues of $865.7 million [7] - The outlook for the Internet - Software industry, where Workiva operates, is currently in the top 30% of Zacks industries, indicating a favorable environment for potential stock performance [8]

Financial Data and Key Metrics Changes - In Q2 2025, the company generated total revenue of $215 million, representing a 21% increase compared to Q2 2024, exceeding the high end of revenue guidance by $5 million [34] - Subscription revenue reached $198 million, up 23% year-over-year, with new customers accounting for 41% of the increase [34] - Non-GAAP operating margin for the quarter was 38%, outperforming guidance by 380 basis points [6][34] - The company had 6,467 customers at the end of Q2 2025, an increase of 320 customers from the previous year [35] - Gross retention rate was 97%, exceeding the internal target of 96%, while net retention rate improved to 114% from 109% in Q2 2024 [35] Business Line Data and Key Metrics Changes - Financial reporting solutions remained the primary revenue driver, with strong demand across SEC reporting, multi-entity reporting, and fund reporting [15] - The number of contracts valued over $100,000 increased by 27%, contracts over $300,000 rose by 37%, and contracts over $500,000 grew by 35% compared to Q2 2024 [8][36] - Professional services revenue was flat at $17 million, with a decline in setup and consulting services offset by higher XBRL services [34] Market Data and Key Metrics Changes - Demand for sustainability solutions moderated in the corporate account segment in both the U.S. and Europe, although it still contributed to new logo wins and account expansions [23][66] - Sustainability solutions accounted for less than 15% of total revenue, indicating a limited impact on overall financial performance [24][66] Company Strategy and Development Direction - The company is focused on profitable growth, raising its operating margin outlook for Q3 and Q4 2025 [8][40] - The strategy includes expanding the partner ecosystem and enhancing the breadth of the solution portfolio to drive innovation and reduce total cost of ownership [7][10] - The company aims to achieve its 2027 and 2030 operating margin targets, emphasizing disciplined margin expansion [9][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term prospects despite macroeconomic uncertainties, citing strong customer demand and a resilient solution portfolio [9][10] - CFO Jill Clint noted that the company is closely monitoring capital markets activity, which could provide upside potential in the second half of the year [45][46] - The management acknowledged the elongation of deal cycles due to market uncertainty but highlighted continued strong performance in signature deals [86] Other Important Information - CFO Jill Clint announced her departure after 17 years with the company, with plans to remain until December 2025 to ensure a smooth transition [29][30] - The company repurchased 132,000 shares for $10 million under its share repurchase program, with $50 million remaining from the original authorization [37][38] Q&A Session Summary Question: Revenue outlook and capital markets contribution - Management indicated steady revenue from capital markets in Q2 and noted potential upside if activity increases in the second half [45][46] Question: Financial reporting success and SEC reporting bundles - The company is adopting a "good, better, best" model to drive upsell within existing customers, contributing to strong net retention rates [48][50] Question: Concerns about generative AI and solutions-based model - Management emphasized the attractiveness of their solutions-based model, which allows customers to use the platform without seat constraints, positioning them well against generative AI technologies [55][58] Question: Sustainability portfolio and market demand - Management acknowledged a moderation in demand for sustainability solutions but remains optimistic about long-term market demand, particularly driven by regulatory requirements [66][68] Question: Free cash flow guidance and margin improvements - The company explained that free cash flow is influenced by various factors, including timing of cash inflows and outflows, and reiterated its commitment to improving margins [68][69] Question: RFP activity from CFO Act agencies - Management reported good discussions with agencies looking to modernize financial systems, indicating potential opportunities in the government sector [72][73] Question: Investment plans and headcount expectations - The company will focus on productivity and leverage existing resources while making investment decisions based on potential outcomes [107][108]

Market Opportunity & Solutions - Workiva estimates a total addressable market (TAM) of $35 billion[7,9] - Sustainability Management represents 20% of Workiva's total TAM[11,12] - Financial Reporting also represents 50% of Workiva's total TAM[11] - Industry Vertical represents 20% of Workiva's total TAM[11] - Governance, Risk, and Compliance (GRC) represents 10% of Workiva's total TAM[11] Financial Performance & Growth - Q2 2025 subscription revenue grew by 23% year-over-year[57] - Q2 2025 gross retention rate was 97%[57] - Q2 2025 net retention rate was 114%, with a 1% positive impact from foreign exchange rate fluctuations[59,64] - Remaining Performance Obligation (RPO) grew by 24% to $1.237 billion in Q2 2025[61] - Customer logos increased by 5% to 6,467 in Q2 2025[61] Customer Base & Adoption - The number of customers with ACV (Annual Contract Value) greater than $100k grew by 27%[66] - The number of customers with ACV greater than $300k grew by 35%[66] - The number of customers with ACV greater than $500k grew by 37%[66] - Subscription revenue from multi-solution customers increased to 71%[69] Financial Guidance - Q3 2025 total revenue is projected to be between $218 million and $220 million, representing a 174%-185% year-over-year growth[71] - Full-year 2025 total revenue is projected to be between $870 million and $873 million, representing a 178%-182% year-over-year growth[71]