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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary reflects strong financial performance with robust subscription revenue growth and optimistic guidance. The Q&A section reveals steady capital markets revenue and a positive sentiment towards the solutions-based model. Although sustainability demand has moderated, the overall demand across the portfolio remains strong. Management's focus on execution and productivity is improving margins, and upselling is driving revenue growth. While there are some uncertainties, the positive outlook on financial metrics, retention rates, and strategic initiatives suggests a positive stock price movement over the next two weeks.
Total Revenue $215 million in Q2 2025, up 21% from Q2 2024. The increase was driven by stronger-than-expected top-line results and a 1-point positive impact from foreign currency fluctuations.
Subscription Revenue $198 million in Q2 2025, up 23% from Q2 2024. Growth was attributed to both new customers and account expansions, with new customers added in the last 12 months accounting for 41% of the increase.
Professional Services Revenue $17 million in Q2 2025, flat compared to Q2 2024. A decline in setup and consulting services was offset by higher XBRL services.
Non-GAAP Operating Margin 3.8% in Q2 2025, exceeding guidance by 380 basis points. This was due to stronger-than-expected revenue and efforts to enhance operational leverage.
Customer Growth 6,467 customers at the end of Q2 2025, an increase of 320 customers from Q2 2024. Growth was driven by demand for multiple solutions.
Gross Retention Rate 97% in Q2 2025, exceeding the internal target of 96%.
Net Retention Rate (NRR) 114% in Q2 2025, up from 109% in Q2 2024. There was a 1-point positive impact from foreign currency fluctuations.
Large Contract Growth Contracts valued over $100,000 increased 27%, over $300,000 increased 37%, and over $500,000 increased 35% compared to Q2 2024. Growth was driven by additional solution sales and acquisition of larger new logos.
Cash, Cash Equivalents, and Marketable Securities $814 million as of June 30, 2025, an increase of $47 million from the prior quarter. The increase was partially due to cash generated from operations.
Share Repurchase 132,000 shares of Class A common stock repurchased for $10 million in Q2 2025 under the share repurchase program.
Remaining Performance Obligations $668 million as of June 30, 2025, to be recognized over the next 12 months, up 23% from the prior year. Growth included a 2-point positive impact from foreign currency fluctuations.
Public Fund Reporting Solution: Strong uptake across private, regulated, and public funds since its debut earlier this year. Asset managers are accelerating fund launches, increasing demand for automation.
Workiva Carbon: Adopted by a U.S.-based Fortune 500 bank in a 7-figure expansion deal for bank regulatory reporting, sustainability reporting, and climate risk analytics.
Global Expansion: Continued global expansion with notable deals in South America, the U.K., and Europe. Examples include a South American utility company adopting multiple solutions and a U.K.-based asset management company consolidating its tech stack with Workiva solutions.
Financial Services: Strong demand for tailored solutions for banks, investment firms, and insurers, driving growth in financial reporting and operational disclosures.
Revenue Growth: Achieved $215 million in total revenue for Q2 2025, a 21% increase from Q2 2024, with subscription revenue growing by 23%.
Customer Retention: Gross retention rate of 97% and net retention rate of 114%, reflecting strong customer loyalty and expansion.
Large Contracts: 27% increase in contracts valued over $100,000, 37% increase in contracts over $300,000, and 35% increase in contracts over $500,000 compared to Q2 2024.
Sustainability Reporting: Moderation in demand observed in corporate accounts across the U.S. and Europe, but sustainability remains a strategic focus, contributing less than 15% of total revenue.
Leadership Transition: CFO Jill Klindt to step down by December 2025 after 17 years, with a search underway for her successor.
Macroeconomic Uncertainty: The company acknowledges ongoing economic uncertainties in the macro environment, which could impact customer demand and overall business performance.
Sustainability Demand Moderation: There has been a noted moderation in demand for sustainability solutions, particularly in the corporate account segment across the U.S. and Europe. This could affect revenue growth in this segment.
Regulatory and Compliance Risks: The company operates in a landscape of shifting regulatory frameworks and geopolitical uncertainties, which could pose challenges to compliance and operational stability.
Dependence on Big 4 Partnerships: Many deals are sourced and delivered through Big 4 firms. Over-reliance on these partnerships could pose risks if these relationships weaken or fail to deliver as expected.
Foreign Currency Fluctuations: Revenue and net retention rates have been positively impacted by foreign currency fluctuations, but adverse changes in currency rates could negatively affect financial performance.
Sustainability Revenue Contribution: Sustainability solutions account for less than 15% of total revenue, and demand risks in this area have already been factored into revenue guidance. However, this low contribution could limit growth potential in this segment.
Transition of CFO: The planned departure of the CFO by December 2025 could lead to transitional challenges and potential disruptions in financial leadership.
Q3 2025 Revenue Guidance: Total revenue is expected to range from $218 million to $220 million. Services revenue is anticipated to decline compared to Q3 2024. Non-GAAP operating margin is projected to be in the range of 7% to 8%.
Full Year 2025 Revenue Guidance: Total revenue guidance has been increased to range from $870 million to $873 million, reflecting the Q2 revenue beat. Subscription revenue growth is expected to be approximately 20%. Services revenue is expected to decline year-over-year as low-margin services are moved to partners.
Full Year 2025 Operating Margin Guidance: Non-GAAP operating margin is now expected to range from 7% to 7.5%, representing a 200 basis point improvement. Free cash flow margin is projected to be approximately 10.5%.
Long-Term Margin Targets: The company remains committed to achieving its 2027 and 2030 operating margin targets.
Market and Demand Risks: The updated revenue guidance factors in market and demand risks, including those related to the sustainability solution.
share repurchase program: In Q2, we used a portion of our generated cash to repurchase 132,000 shares of our Class A common stock for $10 million. This was done under the share repurchase program approved by the Board in July 2024. As of the end of the quarter, we had $50 million remaining of the original $100 million authorization, which we will continue to deploy periodically in order to help manage dilution.
The earnings call highlights strong financial performance, with increased cash reserves, a 21% YoY growth in RPO, and improved free cash flow margins. The Q&A session reveals positive momentum in large deal execution and international business, despite some macroeconomic uncertainties. The company’s strategic focus on efficiency, productivity, and expanding its GRC business supports the positive sentiment. Although management was vague on some details, overall guidance and execution indicate a positive outlook. Considering the market cap, a stock price movement of 2% to 8% is expected.
The earnings call summary reflects strong financial performance with robust subscription revenue growth and optimistic guidance. The Q&A section reveals steady capital markets revenue and a positive sentiment towards the solutions-based model. Although sustainability demand has moderated, the overall demand across the portfolio remains strong. Management's focus on execution and productivity is improving margins, and upselling is driving revenue growth. While there are some uncertainties, the positive outlook on financial metrics, retention rates, and strategic initiatives suggests a positive stock price movement over the next two weeks.
Workiva's earnings call indicates strong financial performance, with revenue and subscription growth beating expectations. Despite some concerns about foreign exchange headwinds and a soft buying environment, management remains confident in achieving 20% subscription revenue growth. The share repurchase program and improved margins further support a positive outlook. Although uncertainties exist, such as regulatory changes and cautious customer behavior, the company's strategic focus on sustainability and global expansion should drive positive stock movement over the next two weeks, especially given its small-cap status.
The earnings call revealed strong financial performance with a 20% revenue increase and improved margins. Despite policy uncertainties, the company maintains a positive outlook with a 20% subscription growth target. The Q&A highlighted strong demand and a well-received product, Sustain.Life. No share repurchase was announced, and management avoided specifics on certain risks, but overall, the financial health and optimistic guidance suggest a positive stock movement. Given the market cap, a 2% to 8% increase is anticipated.
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