Workiva (WK) 4 May 212021 Q1 Earnings call transcript

Good afternoon ladies and gentlemen. My name is Kavita and I'll be your host operator on this call. After the prepared comment, we will conduct a question-and-answer session. Instructions will be provided at that time. [Operator Instructions] Please note this call is being recorded on May 4th, 2021 at 5 P.M. Time. Eastern turn Rost to Development Vice Relations Workiva. now today's host and meeting at Mike call President the will your over for Investor I of Corporate Please ahead. go

thank call has Officer, our prerecorded Workiva's and Good Chief us from include Chief Jill been for Vanderploeg; Executive conference Today's XXXX Financial Officer, and for Marty afternoon call. first you comments quarter our will Klindt. joining by followed

Operating until Julie Officer the call up a Investor Iskow, We in call. our is release section. session. replay access will Chief XXXX. today's also will this open then the which listed Relations to available A is live for replay the May on webcast Q&A our is on Information under press the of be XX, available website

everyone differ XX-K to and call, Vanderploeg. on that certain to the included begin results are today's for financial occur could after to second I our during today's measures. statements this forward-looking With XXXX. any from full by regarding future annual these guarantees over our the Reconciliation turning events to and All These will obligation Before would during will making we update statements statements. non-GAAP including remind no performance. performance subsequent in Also quarter subject CEO, statements that, the financial are Workiva reflect to we refer of to our like GAAP guidance release. future also forward-looking of that known non-GAAP be information are begin, for actual forward-looking cautions that Form Marty to filings measures we'll and to undertake events of and the additional call unknown call. statements today we call year today's report we fiscal expectations only not press reflect Please refer to current and certain any that and the course statements cause made company's forward-looking uncertainties. risks factors materially and

later the start Jill Hello and transformation, subscription beating landscape income. our and quarter an changes workplaces Workiva demand improved Macro market for call. fit-for-purpose strong favorable platform. financial are in driven guidance and in XXXX, joining and trends in to call. to adoption to as a XX% for platform business digital operating such will revenue, our future regulatory of support for thank broad-based details first continue by further growth the expanding and create you the for today's remote provide solutions. We about exceeded is we outlook our results off in addressable Due guidance. and raising demand market conditions our and revenue

is Our executing. team

of we to EMEA on with accelerated use logo to focus expansion. drive North expect Starting on globally, based are expanding We expand global continue partner solutions. ramping growth we ecosystem. America. our aggressive to continues new ESEF XXXX maintaining momentum with continues continue show our an our priorities Strong fit-for-purpose year-over-year will launching and cases growth other we platform expansion, outside as include that ecosystem, partner pace which and

market. new and we partners fit-for-purpose new play for adoption. to At our solutions continue to of bringing value are XXXX solutions. They role enhanced the key our strategically and go-to-market our our in platform accelerating Our Investor a the involved and extending identifying approach Day, in also to its discussed

our with platform partners to of process mix incubation validate Our optimum provides ESG innovate This prospects offering. and on us process announcement the and discipline, speed, is our define a our allows to idea that recent and result a of agility. commercial

we Organizations a greater nonfinancial across complex report are believe and deliver their provide the data valuation data well-positioned ecosystem accountability. ESG we Our transparency achieve ESG are enables financial their alongside and motivated to solution. to organizations the global globe solution the to simplify and broader to company

have We compelling and and ESG and making the the organizations. requires the is many investor supports reporting capture world's delivering to us it non-financial reporting the complex, of management for many that market experience sources for collaboration ESG a largest platform platform for data and reporting a our grade enter. cloud a stakeholders. years of for natural internal fit financial

have helping manage customers We for over decade. been complex a reporting

of in to of impact XBRL the software the the frameworks; demand proposed an and data European provider subject potentially can sets to is process, environment; automate full Directive, month, addressable ESG market. end-to-end and and systems; companies the accountability companies sales bring will audit-ready source or marketing. of directly leading together companies a we the Reporting non-financial the requires documents a with drive response, requirements sources the reporting. tag XX,XXX for an are using large digitally The and utilize setting; XX,XXX achieve bring Our also expansion introduced data operations the of ESG and ESG solution globally the where finalization by line Upon groups collection CSRD controlled to work customers Therefore, inline will services. transparency Commission XBRL in reported our and in we global XBRL and connect investments across companies greater standard the data; ESG targeted nearly recognized and legislative teammates, is Sustainability for and our data in and consolidate European platform R&D, improve CSRD mandatory quality and In to capabilities. Currently, directive of making intended within cloud XBRL new approximately reporting are ESG believe and Corporate to scaling EU, more Last proprietary ESEF lead our in EU. mandate. Workiva

awareness address and aligns working mission is in are customers to our at the with governance ESG of customer our to innovative the transparent our culture. global just their live another corporate and extraordinary fit-for-purpose times, with trust and our have entire we In and elevate to to we us, experiences the trust It superior these solutions, economy to connected ESG and requirements. build solution. For not We global launch the time sound data together believe build the reporting. right our closing, and values our support we right values-based of fairness help to community. global the compassion are team, reflective across part honored to deliver overall QX climate contribute In results platform

Best have once prioritizing We Technology. values, Fortune's we to our our are named about is the intentional again in For honored and been always and why standing behind Best XXX culture Workplaces Work to which Companies be

her success. Jill an as aspects business Before the turn with I of knowledge to reporting I first Klindt our I over of her new leader our With all call call would like strong look to Jill corporate with welcome is and Jill. earnings turn the our call Workiva and accomplished now that in her position I over, financial governance. working CFO. forward to to for capacity future to

role. I the Workiva and by alongside contribute a to Thank company continued everyone. would to years afternoon, XX for team and CFO dedication Marty's this you, excited and express like on my last and echoing the good in positive appreciation sentiment the to you working scaling pleasure I'm Marty execution. results, been to their the amazing start also quarter's It's

GAAP to release, basis. a our reconciliation our and to and guidance results. non-GAAP talk Refer our results non-GAAP on press guidance. a of Turning about I and for results will our

solutions broad-based QX. We in see demand our continued for to

revenue a beat revenue I'll beat. operating will guidance against beat for subscription revenue discuss which compensation-related majority by accounted million. we midpoint We at address raising revenue mentioned guidance performance QX, beat offset for As and the at expenses. income the first. XXXX our guidance million. partially the $X.X income, QX result, The by guidance $X We of was I QX are operating mid-point Higher on increased by XXXX later. the

Breaking XXXX line the in versus Subscription revenue and out showing QX quarter XX.X% generated total from year $XX.X XXXX. of from Turning up of results QX $XXX.X QX QX revenue by reporting to million, XX.X% support We growth the item. was first million, before. revenue XXXX.

helped came services the Professional XX% XBRL same S&S increase last New months. QX, was added last growth XXXX. revenue. revenue of QX higher largely new in XXXX, customers in from revenue due year. drive in This million new solutions services in $XX.X XX.X% the logos from XX QX up the to strong was in revenue quarter and

a As for point quarter. first reminder, XBRL of most the our since quarter revenue, seasonal high in publicly-traded tagging the our a first their XX-Ks is prepare customers

to XXXX our QX We a with metrics. customers, supplemental a and XX from customers QX Turning of net finished XXXX. X,XXX XXX customers growth growth from QX, net of

rates Our revenue remain retention strong.

QX, up first first retention XXXX. was period QX revenue we and XXXX contracts quarter revenue XXX.X% add-ons, for valued up over before. subscription first an totaled of the for from In retention contracts had improvement compared rate XX.X% quarter year. XXX impressive The of larger customers and the $XXX,XXX per year show subscription XXXX, same XXX.X% XXXX, XX.X% to support the to to in XXX subscription growth. XX% the to first over our for the With support compared year, from of of in the number The quarter, of improved last number XX% contracts results. QX at continues valued rate at Our quarter the $XXX,XXX XXXX,

T&E margin and to QX from of million development expansion increased basis million first quarter points. compared P&L. versus as in General as for travel XXXX, to our a support Sales QX, to QX, Breaking totaled operating expansion to the QX, XXXX. due a QX, $XX.X leverage XXX profit partially profit XX% in million gross was occupancy by quarter margin increased R&D $XX.X to Gross driven costs. up a year partially costs and Research was related XX.X%, from higher QX, in was usage equating XXX points. driven XXXX. net revenue, $XX.X expenses. our expense, million, a increase percentage totaled QX, percentage $X.X Moving in increased and by versus million, expenses. profit compared quarter services and in was in administrative million, in on the basis XX.X% up totaled the expenses, as XXXX, XX.X%. business. lower revenue, offset a QX expense XX% of lower XX.X% the to marketing expenses T&E XXXX. of of due on platform we QX, Consolidated Professional basis of and $XX.X by compensation-related expense lower XX.X% XXX expansion an higher gross new XX.X% growth the improved $X.X in gross to net server compensation, expenses the transition compensation, to XX% This by revenue, gross of ago. offset profit. from to latest in to up continued totaled XXXX, points same Gross QX, QX, G&A the XX.X% margin up XXXX, S&S gross quarter XXXX, Subscription QX, million, versus and out XX.X% down $XX.X invest XXXX, from a of

XXXX, $X.X fundamentals business strong. operating QX, operating profit $XXX,XXX posted are of We million of compared in QX profit an XXXX. to Our an in

$X.X XXXX, vary multi-year of customers. revenue, Remaining Turning in we contracts cash terms totaled to billing million, operating activities March equivalents an increase in provided XX, and XX, QX, cash annual contracts to some and December subscription year for from from $XX.X continue cash our ago. a balance million marketable flow same obligations statement. implement securities cash cash totaled XXXX. the the of at performance provided $XXX to quarter million with $XX.X with on balance and compared At compared deferred sheet as XXXX, Net million

Turning guidance. to our

impact expected the in to business of COVID-XX on results on and information factoring available today. are based the us our of operations, pandemic We

For $XXX expect total $XXX we revenue to million range from the million. quarter of second XXXX, to

revenue continue in revenue at to subscription will than QX. expect services a faster grow We rate

to from We expect income breakeven range $X non-GAAP operating million. to

raising year the For to We total $XXX guidance XXXX, expect million we to from range million. $XXX revenue. now full are revenue for

$X from to range We million. non-GAAP to loss expect operating $X million

fifth to are higher remainder year. through flow and growth in costs modeling positive for investments in travel of XXXX, We consecutive we XXXX. the And the post opportunities expect cash free

we Operator, begin session. to We the now questions. are Q&A take your will ready

Blair. comes [Operator our question Stotler first William Instructions] Matt from with And

for you question. my Thank taking Everybody.

start that follow-up. years, love balancing for statements the compliance terms and to get might just, kind your timing through kind ESEF Would mandate of, one your on I've reporting expectations with following adoption terms mandatory of, in coming adoption financial a in the XXXX year data the obviously a with kind or balancing I then expanding update timing kind Would layering regarding over got of of think of then the like. the customer non-financial of on love with behavior. pace in to first observations adoption sense kind your what realistic of we'll look the of that of and ESEF get to of an

Matt for Hi, the question. Good question. thanks

where now. you state of, sort we're of give to, a Just at

to progressing no a SEC continue seeing tagging like would and here There's close I we're very XBRL there. and We doubt. reporting. days much the early of in ESEF the lot accounts interest did of say it's SEC

so think And similar. I that's very

we that see we're and get I our with competitors of have measure say the that definitely SEC. I really of will in a on overlaying think new the bar the great thing. sort the of just raised trickier on is adoption And how done come non-financial did starting when than think like that we'll I looks. obviously rate it a information higher that which don't it's XXXX to have I a than requirements about that. data

ramp next SEC it'll to four So think we're and two I to years. similar the very over optimistic

it. as broader be that terms kind globally? at early where the might Obviously, opportunity really pace kind developing can, Still on pretty roll numbers which in anything and how one might to looking of Any this of applicable of, the or kind again, in would of it. handle. of ESG very of, kind last be there of well-suited initial helpful. whatnot platform you of, any terms there about then Got And potential see think to out in launched And ESG. But some Got your give follow-up around, terms love the is adoption new would in thoughts landscape helpful exciting solution That's just week. EU. in well? I companies thoughts

in conclusion from Well, there's I the so We're it's leading we I'm lot our on EU from bit every It's out jurisdictions. from from in been excitement large market. sort prepared be requirements of individuals. corner as just in lot coming they're sort our directions governments. obviously that reaching sorry European of, a -- EMEA or a quite We're of Union. the reporting and see talked It's the all coming will coming advisory foregone pressure we'll think about seeing organization. a we're to of ESG. of coming plans a that The is And how firms potentially are discussion partners. It's going about putting investment is, leading seeing in to that us companies from charge. from comments XX,XXX together

is broad execution of seeing We're little some early. there. can in So some just This so fortune. the the our other so we're reporting better It's starting early what's days, approximate in feel get put of couldn't happened we out just time have a expansion billions going companies find. and Certainly, more just for But excitement you estimates to terms TAM blessed out a of and put happening. on until but good having acceleration have it's not numbers that visibility for ESG we us. such

us. very upgrade and finished We just Our fast. for customers learning we platform And so our ESG have have already really we're maturing. we is people calling

increase well-timed where TAM this at. for just very were So we is

very Yeah, exciting. questions. much for taking it. the very Got you Thank

Thank Matt. you

Tom And Stifel. our with Roderick from next question comes

mean go And XXx ESEF standpoint you're tremendous you opportunity, going if do for up also I market. Hi, ESG. hear said Europe, against everybody. Thank is TAM potential out, this question too you topic. going XX,XXX talking after taking from my to And you. how companies begs itself which Great piggyback to and I a a question, from questions. you It's think a laid on that market. the in lay I'm on best big and there I that about you Marty to

that. really front. businesses little and on relation -- of a about that have more perhaps have partnering with to going me Tell invest demand need And particularly the advisory up mentioned Jill you how bit get rollout you this the accelerate in opportunity services regulations for follow-on you I'm tackle then these to to as with Do of and this. ahead to You a to curve? for some

Marty So to Julie. back would go-to-market love a and here get come second. you the just I'll to in But

the say at off several I have for Tom. different -- go-to-market the from go to thanks question that to we're going it's would Well, first approaches.

a We working will direct team that's on have this. sales definitely

We and any very those and right well-positioned take have globally that accounts investing going in in see for really of The scaled now practices attack be relationships to partners we're we those account with owners there and We've has relationships type platform, was encouraging. our specialists lot to around a fortuitous. been of Again accounts. also is which partners beneficial.

when customers be a partners. the customers. that sure segment in then you big size will of through our XX,XXX scale a big those get I'm so And And to of there's go-to-market

to forms from market will get other so we'll smaller down we'll direct we an sales we're definitely So largest that. team distribution. just primarily even to partners, be the where use firms well-positioned bifurcate into either that to the but it's very may to with But market or to take I big, lot of where means imagine of it get us, inside different a going do or

a reputation. have We

We footprint our as dovetail tagging well. have a reporting customer XBRL very going is substantial to this with and just base nicely and existing doing already

to it, we're just extremely and to going watch to this understand take that investment said, develops, blessed. how -- it's it's very I market some excited take So but we're We so. going some like about time we're

Jill is thinking great. question the Yeah. I'd That's you this. the of for follow-on about And impact have

accelerate this back opportunity had can the ramps within much I on the what you into implied five you given cost me the half XX% perhaps think then to How the the timeline to all revenues the year, was. of that? obvious years the building of does if cost structure guidance the remind think It's laid pretty out structure. up I get pretty think just this And about just meaningfully. -- for we as your

costs loaded? into here $X number So Are $X million. be negative a they for should thinking how smooth the pretty to to from income get cost on Just load those that up year about Do profitable back-end we side? what's million get front-end QX? would helpful evenly? the

Okay.

So sure. --

had to in about we XX% fact expect and XX% the have contribute EMEA the long-term, to put to we that out total revenue. So would talked

around a We whether aspiring would additional think the mentioned and not had how And that those solutions globally. the EMEA around that and fit-for-purpose time this there isn't total to line part consider out we're you something ESG is to help to other There's line or that that a put this certainly to would known be have we'll and I so there so that always But a fit-for-purpose solutions not opportunity contribute also will that. this we just time on specific that of us think that, timing that. that we've would that is this continue one plan towards goal. market of execution accelerate the

part continue are we thinking as you to So the are overall -- overall, growth growth and ramping that focus on a our now goals. business. definitely of correct the guidance in as about and on hiring And we'll that investments goal up

hiring focusing the believe We those ramped through growth us year. that growth. The will on bring that will are investments to the of end and be we

mostly That hold. up and continue through ramping has also up of are – the the to year. to on still end ramp continuing We been will travel

with through the being and we'll into haven't We do back per on heaviest. seen not see QX, to head QX QX, We levels largely travel QX expect you'll and that probably that get though. pre-pandemic really that

be levels been not travel, don't of end the the to increase XXXX So while will year. will what we through it have of would believe back we

Congratulations. detail. Thank Wonderful. the Thank you. you for

you, Thank Tom.

Raymond comes our from James. from question And Sklar Alex next

Marty, more for you. Thank ESG Okay. on me. one

finding customer's all platform for customers to for curious, if even needed in of an order about pull is Workiva to customer existing already your talked the and greater? data the general if is You ESG different the you're prop the need your from early reporting in data do sources customer in value in so I'm reporting. lands,

reporting some existed customers with the a some Well, years. doing customers, group are off start We've and platform for we is just in it and case. that a lot as who seen of had go doing sustainability the instances of reporting ESG

is of of is that use non-financial So widespread. there. yes, But and not thing not data financial other in data already is to say our some it's the of customers the Collection how substantially collection would platform know I different. already.

to make investments. We will have

sorts Our a like suited framework. in said take lot where platform to of I all more fit-for-purpose, but investments it will the place just the we're to That's going then more systems. have of and some making of putting is ideally integrate different with

lot think those are to fact in I base. all adoption So the be that and investing just is but things are use it types of that with we'll going of it they our drive customer in familiar a

then is representative Okay. Got of services of XBRL business there stronger the seasonally read Jill European is in And some really anything helpful. the the a terms impressive always a the think in desk success? or into on growth Thanks. it. that can what you're FERC is ESEF services of Very we – the I But quarter.

the that SEC just question, so – to high be and We point be customers up QX really a to that is mentioned in SEC for up – continue that revenue. and related do market continues the It for a as Alex. growth you expand Thanks continued is to year-over-year. seasonal will

you. Thank Great. Okay.

And question our Andrew Berenberg. with comes DeGasperi next from

for I module. in for pricing question. thanks this Yes, of one ESG my ask terms to just the wanted taking on more

this in then is us your give generally. And how you secondly, much wondering directionally be you to products? in just how line terms your can If they with other long-term Just of going targets. price can be

that delay would margins? your as wondering could solutions, roll achieving these out fit-for-purpose what Just you long-term –

of of question. can organization One size we're to still touch for that the think figure amount I I pricing Thanks the wide and it's thing for see days early based just usage. on and of is to first very we'll pricing. the out that, trying range pricing say In a on the us

the I structure to bigger be right we're pricing. the range still going figure much that trying as is to a think on now companies is. than smaller out to a it metrics we're this but we're now so But have figure problem pretty large for companies, obviously, we going is don't we So price out. going different price the how it for from have to radically it's large range And

So it's be always – to same it's I but going growth we And then terms if to said we going we're the better opportunities financial to we've all obviously, ballpark the early the structure. scale have, make is even too invest long-term comments. us and that, see way the in targets, the the but growth. we it market rewards definitive And for think, more of the bigger get in cost

-- this that -- just we're takes more grow rewards So, investors The even growing. markets, long The agree as opportunity grow, it I'm we most on with faster that I that. think market to I to going is I'm to if better. so better. how growth, And a that's I the just But more get And that. on get guess, how would the think not we we can't focused again, more just efficiency we an the these ponder grab really extend know scale, of do our from there. I and do

for -- ESG, the have competitive reporting -- one significantly in what than that the landscape tools? on potential different Just is other you on financial

excitement of that stage. are the some integrated all comprehensive all and that. of start-up there's sort both start-ups lot built financial a of can with Well, lot platform, that terms not ESG like reporting data, has XBRL different around a the past types and platform there's we've even I that there's the But obviously and no a dealing say the of in with company handle non-financial that and would of

lot signals investment So, and different and see we a That's all it's a we TAM see That that big of startups coming. over. in definitely competition up okay.

tools built here, So, head such we're just having some terms already all I in have a just already. big anticipate, of start and in and competition having but the our a we'll those very positioned well accounts have -- foot

So, we're just optimistic. very

Marty. Thanks,

and participation. questions at that today's you And there are your for no time Thank conclude call. further this conference does

disconnect. may now You