WK - Earnings call transcript Q1 2022

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Operator

Good afternoon, ladies and gentlemen. My name is Kelly Ann, I will be your host operator on this call. [Operator Instructions] Please note that this call is being recorded on May 3, 2022 at 5:00 p.m. Eastern Time. I would now like to turn the meeting over to your host for today's call Mike Rost, Senior Vice President of Corporate Development and Investor Relations at Workiva. ahead. go Please

Mike Rost

thank quarter And joining for us Good call. you first conference Workiva's afternoon. for

During will second Officer, Chief call pre-recorded Executive discuss year today's Officer, we Today’s Jill and our results quarter XXXX. followed from guidance Klindt. and will XXXX Marty include for our has Vanderploeg; Financial the call quarter comments full review and been our Chief first our by

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

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

Marty Vanderploeg

team thank revenue delivered results. high and Hello, QX, results in including Workiva our continued and quarter end level, call. GRC, guidance execute operating the above we a solutions. delivering outperformed our beat solid to a QX our again, and of financial once In in multiple today's you for guidance. and We high joining GSR at ESG solutionaries,

customers logos over the quarter XX.X%. in revenue and increase We XXXX XX.X% $XXX,XXX. growth support values strong a QX of XX% logo and grew new new contract revenue grew For and subscription from had with adding XX total delivering number the net

XX.X%. markets. We revenue our macroeconomic did rate also geopolitical in reduction significant of QX. highest retention in in IPOs has the number of We a achieved the volatility to public and The environment see current led global

impacted. of challenges, solutions capital this which new As resiliency were a our SEC we and meet remain sales Jill result, an on and enables XBRL with filers grade about better our mandate audit gas impacts, still of a markets to that review. and strong our and regulations a unaddressed emissions talk investors these regulators global opportunities and governance, investor in proposed accurate, power would the We disclosures footnote external The The the climate-related in and tandem. would the climate subject for financial guidance we solutions The greenhouse TAM. assurance addition confident SEC's the proposed that for want the signal SEC and and Workiva for growth opportunity. believe the accelerated have solution across send track expand for ESG transparent climate-related financial year, growing later team our call. is statement of portfolio. will disclosure to for our are business to of Even proposed large to mission work metrics transparent platform and gas new our inline world, in future statement disclosure to the greenhouse Workiva's reporting requirements relatively and emissions, assurance in we is climate-related These and risks, large requirement. financial require and that our technology The of tagging accelerated following: example be a a disclosures. perfect

R&D So single include At and remain explore ESG and cycle across teams easily disclosure such the use and on TCFD, instance rapidly developing Reporting material and the focused framework metrics. few create quickly GRI, and platform enables file from guidelines and can make directly technology SEC. multi-tenant enhancements capabilities we A continuous SDGs that customers can platform. our recent audit-ready new deeper an customer customer our release management. with and disclosures, internationally deliver This now Explorer Workiva as SASB, a our create decisions value teams informed identify UN for of to recognized frameworks, and disclosures, enhancements an engagement. access to ESG

We adjustments real-time enhancements extend position. data for risk-related data better new multiple to data. made that manage account leadership and and all solutions connectivity to GRC our We GRC to modifications GRC teams Workiva's evaluate released data capabilities management also enable recently with

support a statutory of investments a Our We invested delivers their in their during service big Workiva to Workiva four practices. services partners GSR make wins was reporting clients. partner-related to managed had quarter. that vendor. European the of large their a solution The expand division This the advisory legacy technology continue a to to number of firm replacement

than partners. new partner our ecosystem. European reporting project. a file purchased acquired both more for large delivery ParsePort, and a that XBRL April a a that sizes These reporting. provider reporting software of the decade. four management GSR leading in their provider deals XBRL delivering including has Workiva deal growing Workiva X, multiple big service see organizations ESEF, and is solutions, Their at and reports. we trends selection larger a engaged firm energy two client ESEF of across of support partner On examples solutions with in purchase a The help efficiently our the are quickly multiple services by conversion Europe been and of to we financial solutions, regional transformation example This Another financial

and this talented We This team best testament XX moved our leadership. is are up in number spots, at XXX Last coming year. XX. employees’ to the Fortune’s to first the power transparent year, the XBRL at opportunities We Workiva. month, celebrates excited Workiva we and quarter our we time, work we better Workiva I to fourth global with created extend at culture for world. a support team, have consecutive over This believe company for, named world-class each to It and a the award is customers, the the other. capitalize welcome that commitment to on we for the increasing the way right closing, turn global to to to our values right pleased our will performance. technology, our the they Jill. are communities, In call reporting right With have

Jill Klindt

everyone. a Thank talk our results non-GAAP for and refer And good about basis, will a and Marty. press you, reconciliation Today, to and release of guidance afternoon, I on our our results non-GAAP guidance. GAAP

up contributed at XXXX We by million. we loss. million. first S&S TME at on the QX the QX $X.X revenue of As quarter results a with mid-point hiring and guidance. beat delivered Marty operating coupled beat QX services and mid-point Both beat beat to the by revenue guidance The majority slower and solid revenue We guidance exceeded $X.X makes operating beat. the on the lower mentioned,

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

logos from in XX% the base Professional million the to XX.X% last the new $XX.X Higher same the new XBRL in growth an customers added SEC and the QX increase. services drive New driver services XBRL the due XX introduction QX increase months. XXXX, in was up expanding came helped of S&S customer quarter year. FERC revenue strong in revenue of last QX and of services from solutions was primary and revenue revenue XXXX.

XXXX. of customers, performance to with customers slow new finished for logos. a net growth our adding from a of to a XXXX XXX QX, QX with supplemental strong net start seasonal QX Turning metrics. from XXXX our period This and being growth historically XX customers We X,XXX shows QX

subscription rate and for period the XX.X% the for year. support quarter to compared was increase retention XX.X% revenue same an Our first of last XXXX,

to support number While our capital add-ons, we subscription to XXXX, of declined of attribute quarter of markets larger up category this QX QX in rate highest the value in the XXX majority XX% $XXX,XXX continues this of historical $XXX,XXX The from quarter XXX.X% first experience our XXXX. QX we customers over revenue XXXX, valued of The closer with contracts With from In continues XX% XXX.X% customer QX we quarter focus metric XXXX. result retention totaled are X,XXX of from the year. show We valued decline $XXX,XXX the pleased to The over and $XXX,XXX growth. our reflects show for number valued number a on it average. business. compared over totaled to in at and first and prior XXX contracts The contracts had the investment normalize may this subscription our believe of our year-over-year contract up XX% XXXX. continued per contracts first to year, at growth. platform,

same increased increased the XXXX. QX QX QX new XX.X% due in XX.X% totaled margin. a in points increased the that XX.X% million, QX, profit ago. of quarter QX compared quarter points. XXXX, expense margin contraction XXXX XXXX, development Moving gross and expenses XX.X% versus was support quarter And compared XX% XXXX. XXXX. Consolidated XXX to XXXX. in contraction from server usage down and profit QX and The $XXX up to of related QX the gross XX.X% in headcount expense profit, a QX compensation was up on year latest driven expenses $XX.X in Sales Gross out services versus Research million, million. XX increased a margin investment; for R&D XXX XXXX. of by first basis in Breaking QX primarily and equating XX.X% basis from $XX.X percentage SMS a versus subscription from related was gross P&L. totaled totaled XX.X% gross as gross revenue $XX.X to QX to up quarter versus expense $XX.X a a XXXX the million decline marketing gross equating QX to the million XX.X% basis compensation to Professional of to profit revenue, points of declined

compared QX marketing we in $XX.X up As invested increase was $X.X to million million XXXX. million QX, team General operating events. administrative at an continued XXXX, QX loss our of in million XXXX. and and and T&E. to returned profit an driven to by The posted sales compared travel to expenses We expand fees, QX higher compensation, of operating $X.X professional in $X.X totaled

Turning and securities our $XXX,XXX to Net XXXX, to and compared March sheet from of XX, totaled cash in use ago. $X.X quarter XX, of million, balance with provided statement. totaled activities decrease At million $XXX marketable in XXXX million cash XXXX. $XX.X year a operating cash balance a cash the December at QX compared of the equivalent cash, flow same

that guidance. to Turning want XXXX is April X included updated out impact guide. the financial of not our first acquisition ParsePort in I our our to call

the results ParsePort to accretive our results. we expect will XXXX While be

transition is fully to ongoing. U.S. work the to GAAP ParsePort Our financials

release further include XXXX will We when results. QX we our details

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

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

to net share We to loss million, $X.XX to loss basis. of on expect million from $XX non-GAAP $X.XX per $XX range a operating a

XX.X average will Our weighted shares. share million count approximately be

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

expect million to share range to loss per We to $X.XX $X.XX million non-GAAP a on or operating from $XX of net a $XX loss basis.

be approximately cash sixth in we average XX to consecutive And post shares. will weighted for expect count flow free year. positive million share the Our XXXX,

like company. to to on are placement Our all appropriately work believe great current and that I To XXX XXXX assumptions subject I our Workivians, are closing, achievement day. the of we every echo environment. you. this that companies for a Marty's pleasure what about to In factors prudent this excitement see alongside for. It's a work change would Fortune’s you best to Thank reflects are variety dependent at on

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

Operator

Instructions] Thank first Stotler William today Blair. Matt from hear you. We’ll [Operator with

Matt Stotler

Maybe we'll one questions. Hey, thank you taking for the with on just start guidance.

So quarter bit full for raised the sequential for obviously, in the a revenue. solid QX of year, results little a decline implying

on specific one, of elongating spending would obviously that guidance the in just intentions, then whether cycles, what's cycles, impact in any just capital two, you're specifically embedded helpful. geopolitical implementation component So headcount tough three, terms would touch right, the love Thank on to to in be ESG guidance and that Europe sales given then you. on maybe markets the changes that's or touching and that in component especially versus the February environment,

Jill Klindt

Thanks, Sure. Matt.

I this a team think that question. one, tag we're probably you going lot to got in

does correct. revenue and So through of to start revenue that quarter-over-quarter the guidance, show end off It in decrease indicate you on the year. the are a that

As overachieve this. that. is everybody's we can us. are we stated, that the meet overall to markets to a that But we're guidance sure that that of that of year bit within items the provided going piece to another is the mean sure some we lot doesn't That question. that and offerings through our decreased, in there our that are around companies mentioned sure do went guidance has strongly guidance still with know of on, Obviously, continue ready little for public. to and we we and we a question, for well of that completely the in we've are very that up markets feel it we aware reflecting make given to forward for range prudent way year. has so very we And well appropriately dried just that that. were to make we moving are want going giving of guidance a capital that were capital There the prudent make we've be you secondary lot your working There the was

do around hiring And of difficulty other some guidance. environment? to geopolitical correctly we on do in So headcount, have business within that included is that think our Marty, you of that I some and hit there the want the question

Marty Vanderploeg

Yes.

Jill? QX, the too. Is there QX of between that do there that, decline terms In we right, and seasonality some before is

Jill Klindt

revenue We a Correct. also do high piece that’s have services QX, so of it. in seasonally

Marty Vanderploeg

services we But obviously. quarter-over-quarter, revenue recurring and increase expect to

seasonality a mostly quarter there quarter two that’s of – seeing thing So the you’re in terms decline.

out of a tough yes, terms really it’s mean, I right hiring, now. there In market

We quarter about XX% I last that our everybody’s consistent tough. hit on just think it’s message. of and hiring really goal

I think than better doing most. we’re

T&E we We’re has as And well. we’re come high but people, getting really running just up slower behind. than quality a little anticipated then

decline that being to conservative We are contributes so spending. the at estimate, the most of in

Matt Stotler

in That’s maybe there. just helpful. And more one have

early over interest terms essentially there platform of the the using or ParsePort around very that to In upgrading that and conversion to very, or the with interesting that initial full capability time? acquisition, you’re customers adding as for ESEF platform introduce thoughts retraction conversion. strategy Workiva driving Any a

Marty Vanderploeg

different. we Yes. Likewise, goals Obviously, they were but very achieved our ESEF. much are successful goals, our in

over successful large takes logos end XXX We’re just been ESEF document. care selling a those a the are solution is and higher that reporting of companies. large well percentage They’ve logos conversion whole end of very XBRL the a to Their of process solution does process tagging. and

in a and GDPR have customers to with very it the the hurdles other of new to have way Europe lot all logos. access attractive So a get was to you

And primary so that one for was reasons it. of doing the

a was part announced they going or I going of ESG XX,XXX XBRL the require was Second say stuff. Union to just that should the on they reporting companies recommended, be to And that of European that. were

in XX,XXX. talked of there’s be going so, that end the like that to just do be about. a at a beginning, quickly low large component there’ll companies lot that And And we’ve

different being applications entry solution low a talented access guys. And a and are team, an as customers really really quickly. match. well. point good good was a the end to access culture for other it’s to see as And Very lot really to we introduced get So of that very really, way leadership

So a frankly. it was really easy decision,

Matt Stotler

helpful. Very Thanks Got it. again.

Operator

We’ll with Sklar today Alex hear Raymond next from James.

Alex Sklar

affect done. give Maybe what just to the the in at that accounting had ParsePort you the profitability But Matt’s or terms your following-up starting waiting of And us can European that any of on you full off the you appreciate start on for year? planned might are be Thanks. investments contribute bounds any does can for question. Thanks. I revenue year? of But that

Jill Klindt

that So we it be accretive. mention will did

Marty. Sorry,

Marty Vanderploeg

Go go No, ahead. ahead.

Jill Klindt

We results provide overall to and will it work the to you the mention chime accretive call. that? our with to going results our did I that ParsePort of And guidance second of be we will part inclusive on QX were Marty, think in

Marty Vanderploeg

part second the was What Alex?

Jill Klindt

forward in I change Question how believe. to move around we if going Europe, it’s

Marty Vanderploeg

Yes, yes. investment market lot we’re staying for stages a of is big the It’s exploiting very just and with No, early don’t We of market. have any our at plans same. our the opportunity very of platform profile change there. Europe a in that

in change no plans. So those

Alex Sklar

sticking I’m you’re the first And Europe with the does what in Okay. ESEF of the maybe kind retargeting curious, kind phase get getting about more How of your question. of thinking we’re two, it to little to difficult. end those But of deadline for the prospects are? plans second where a for and be Europe, kind bit

Marty Vanderploeg

of yes, be there’s there. number, significant fronts. after quite on ParsePort The a will a continue attacking to to team still few customers. course Well, out going They but have we’re two go

and of ESEF tagging go financial talking then to it terms reporting comprehensive us, customers, ESEF doing report, tag platform, we a annual In with integrate requirement. at being – about to able with continue data the

a customer risks reporting control. So ESEF for your you when this that’s already eliminate platform more of tagging, streamlines we we and comprehensive approach a doing approach process, sort reporting is gives and

U.S. took the it time had did the it’s in over we And way America, And solution bolt-on market. just the mentioned, of I’ve all. same. same we percentage a the – as that’s North in so exactly And type it a large

bolt-on a there’s from solution. the have understand a complete who companies we companies solution lot reporting to reporting a And But change of with small value platform. lot don’t and there’s So add to a of very a want are going that, process.

to strategy maybe able of in having risk GRC stay we But the solution combined or help two we’re So the I who us knows. in really things or sell besides, Europe. account can solutions to move sell other and integrated is going think

Alex Sklar

Great. you. right. All Thank

Operator

with next from Meares here Truist. Joe We’ll

Joe Meares

question my for Thanks taking guys.

right of pace Regarding acknowledging with talked and share single in size you’ve the about there a of now, team. you’re capital market the believe slower that on initial even coming just to may new tripled make conversations work is markets, customers growing with this share, those sales a And potentially the time digit right that where market be able recently now? kind not you’ve market revenue though I the in

Marty Vanderploeg

Absolutely.

the mentioned, talk you the getting to we’re investment in Jill thing. public. You business markets. to of There’s tell And number they’ll cap a as companies large waiting same bankers; go still

to is just still the it number of still large customers that want markets. access We’re talking a public and to companies

second didn’t as perform And this we well quarter and in So, come quarter. and annual markets is, our All reporting those as GRC as growth back our and to well GSR those a a long-term strategy reporting. factors in strategy like soon quarterly focused we – our of quarter. off, as But us as on up. lot growth both will that I ESG open markets mentioned, SEC and solutions did subsequent more is management cap two and One planned there. this

TAM market a sooner with lot of us very SEC the macro at dip out that sense the dip did smooth for really the of thing still when the that a runway And have this cap or look more and pleased was in picture, big will that I is And so, well. quarter I and this, later. solutions

with fairly outperformed to looking issues, and at inflationary that just continuing solutions of with how uncertainty, pleased of with So GSR in it. situation, are in we’re I was all all the some environment ESG and that’s And well, the Ukraine the outperformed all really very our grow. GRC and

off that up very over So market. performances had those are the drop in half we seen and in fact the cap we and of difference long-term, over in made a terms SEC positive

macroeconomic the with I overall, light was. So what quarter in was of situation pleased a

Operator

And [Berenberg], Mr. line your is DeGasperi open.

question. a you If still have

Andrew DeGasperi

hear you Can me?

Operator

we can now. Yes,

Andrew DeGasperi

Okay, thanks.

companies on quarter, you impacted given would product think guess went Just the solutions, think some quarter. next I in had specifically just potentially see SEC mentioned of was conversion I some it that a if upside and the that could question financial still you just I reporting wondering that few was wondering I elaborate this went public. over will that if accelerate those QX, how you assume

Marty Vanderploeg

you I to mean guess when or pick continue up? you say accelerate, you – decline mean

Andrew DeGasperi

Yes, exactly.

up. Sorry, pick

Marty Vanderploeg

lack recently. on Well existing Yes. the filers. decline in had SEC a logo a off that base basis from from was the a first new did gone just We new of result well the of public and customers

like for we well you saw. one don't but So capital reduction typically activity did plan we there, markets a in XX% quarter, in

So SEC a all, environment was and got there, the logos. activity The significant in. in new we did terms all I we well, saw team were of in with pleased good number of

of continuing? back So, made out – solutions. it, I of forecasting. we'll other And, a are anywhere up companies it terms have Well, to pivot for that our ground We the segment when won't reduction any pleased continue completely want half up. markets two doesn't to in we in where until again even mean, back the take every We but new well was. comes new to really to in SEC. to see come but it perform that make I it's take the back to solutions. point we certain in near where plan We cap those number some, with perform my of you hard Do out

in solutions from to well those early such so do really, point really TAM for view, environment a bad So my of us. was positive see

Andrew DeGasperi

QX quarter, you even when in lower was know wondering product financial it activity and solution, this about underway you how probably we core seen reporting, – just potentially then you the was just you SEC And maybe this say that, have had should period, in now ESG a QX, that comments package fast forward how comment think on four let's I you alongside the how wondering as, comes top said more when on Thanks. to to think demand, with particularly probably not this the about – ruling out. do topic,

Marty Vanderploeg

Well this is good is solution. good pipeline had our a as always we a going year – to, solution when had in We very how positive. And the ESG we're in mean, shape terms some of in very slower have to that Obviously seeing quarter yes, activity everybody's is although very to exciting to because proposal quarter, some going you SEC have or grow but to I will we're ESG us at very the form fast. in QX grow. way know, that's finalized everyone's comply.

packaging we'll it company, we're package size the people more the three where in ways. journey to, of on ESG – looking depending now, So and potentially than what's different other their their configurations are industries. material at journey Clearly right in different and

would So, do of have yes every us, for level. activity to customer a because some seeing at the would lot we're and it something SEC is obviously mean exciting proposal

out, So something see plays very but optimistic. now right we're how that's that it we'll

Andrew DeGasperi

Great. Thank you.

Operator

We’ll hear Mike Grondahl with now Northland Securities. from

Mike Grondahl

Yes. Hey guys.

as it Just really...

Marty Vanderploeg

Mike. Hey,

Mike Grondahl

that many Hi, of clients, what is XXX target revenues fast Workiva was you XXXX kind sell think and XXX you? of for percentage plus good Solution roughly can forward, those how a into, what you do of

Marty Vanderploeg

basis on to a I'm and reluctant still, were revenue The cash on they U.S. we're because GAAP. converting accounting to still comment we're

of terms would a in we'll between those to we're eventually at somewhere that, Solution. third looking the list. the that the and that So based larger that's Workiva that all primarily convert assuming we years. you but percentage the several have the size some QX, of at at many is of And of give a how QX, over of then a next companies number just of the their on they would convert, customer half, companies obviously And buy but looking we end in

yes, really opportunities there. very already way to direct we're for a and a platform into get we that source optimistic good We're our have a it'll be customer. So of

a and high team ParsePort customer So, the satisfaction. very is

the one I reasons the like have very, all did we're primary yes, was that was we those of access So customer. deal to said

Mike Grondahl

on have that start? does And of started calling when Sure. you or them kind

Marty Vanderploeg

touch a then you to them start make to means acclimated there's communicate lot started of them. customers but to you quarter. That'll start this points, stuff land a get them some when with We've go to company and through initial what and that acquire

they're logo so And acclimating a heavy doing and they acquisition system themselves and we'll the now. now, also, just mode right in we're start, are so lot right

So end we'll of those this customers. aggressively how the next we'll toward after that and start we go quarter looking quarter, doing start at

Mike Grondahl

Got it.

Okay. Thank you.

Operator

Reback [Operator Instructions] now with move to Stifel. We'll Brad

Brad Reback

Great. Thanks much. very

So XX at the capital what us expect is this a point? as range level back half XXX the it give growth a of of of return can some guide, occurrence here the you if expectation at to I on do look midpoint you the of in sense in market's the is so much to year? Or that more

Marty Vanderploeg

on of don't it it of coming at quarter year. in the the it year. where moderating planning even a to third I last back was we think last anticipate are some the end I of

conservative. we've worked into that's what Pretty So now. the forecast

Brad Reback

moderating, Just increase so we're when decline? clear to continuing or moderating you say

Marty Vanderploeg

I I to that that's investment how now, the right sense lot can't a just lot do, they're Moderated we the in start but what companies that way – will modelled bankers, on a we of talk going public see seeing again to predict issues a increase, mean there's that I the depends September. and We'll it.

Brad Reback

you Great. very Thank much.

Operator

questions with our turn presenters for remarks. to no closing time, I'd back this at like any things other to And

Marty Vanderploeg

joining. for all you Thank

Operator

you joining And conference. all Thank for today's that us. will conclude

disconnect. now may You

Workiva (WK) 4 May 222022 Q1 Earnings call transcript