Q1 2024 Workiva Inc Earnings Call

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Operator: [music].

Mike Rost: Good afternoon, ladies and gentlemen, and welcome to and to Workiva's first quarter 2024 earnings call. My name is Ellie, and I will be your host operator on this call. After the prepared remarks and prepared comments, we will conduct a question and answer session. Instructions will be provided at that time. If at any time during the conference you need to reach out to an operator, please press the star followed by the number zero.

Operator: Good afternoon, ladies and gentlemen.

Mike Rost: Welcome to <unk>.

Mike Rost: And welcome to breakeven.

Ali: First quarter 'twenty 'twenty four earnings call. My name is Ali and I will be your host operator on this call. After the prepared remarks in prepared comments, we will conduct a question and answer session and instructions will be provided at that time.

Mike Rost: At any time during the conference you need to reach out to an operator. Please press star followed by the numbers here, though please note that this call is being recorded on May six may 2024, it's five o'clock eastern time.

Mike Rost: Please note that this call is being recorded on May 2, 2024 at 5 o'clock 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. Please go ahead.

Mike Rost: I would now like to try at the meeting over to your host for today's call, Mike Ross Senior Vice President of corporate development and Investor relationships with Keybanc. Please go ahead.

Mike Rost: Good afternoon, and thank you for joining us for Workiva's first quarter conference call. During today's call, we will review our first quarter results and discuss our guidance for the second quarter and full year 2024. Today's call has been pre-recorded and will include comments from our Chief Executive Officer, Julie Iskow, followed by our Chief Financial Officer, Jill Klindt. We will then open the call up for a live Q&A session. A replay of this webcast will be available until May 9th, 2024. Information on how to access the replay is listed in today's press release, which is available on our website under the Investor Relations section.

Mike Rost: Good afternoon, and thank you for joining us for <unk> first quarter conference call.

Mike Rost: During today's call, we will review, our first quarter results and discuss our guidance for the second quarter and full year 2024.

Jill E. Klindt: Today's call has been prerecorded and will include comments from our Chief Executive Officer, Julie ESCO, followed by our Chief Financial Officer, Joe <unk>.

Jill E. Klindt: We will then open the call up for a live Q&A session.

Mike Rost: A replay of this webcast will be available until May 19 2024.

Mike Rost: Information to access the replay is listed in today's press release, which is available on our website under the Investor Relations section.

Mike Rost: Before we begin, I would like to remind everyone that during today's call, we will be making forward-looking statements regarding future events and financial performance, including guidance for the second quarter and full fiscal year 2024. These forward-looking statements are subject to known and unknown risks in a certain, Workiva cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statement to reflect events that occur after this call.

Speaker Change: Before we begin I would like to remind everyone that during today's call, we will be making forward looking statements regarding future events and financial performance.

Mike Rost: Including guidance for the second quarter and full fiscal year 2024.

Mike Rost: These forward looking statements are subject to known and unknown risks and uncertainties.

Mike Rost: <unk> cautions that these statements are not guarantees of future performance.

Mike Rost: All forward looking statements made today reflect our current expectations only and we undertake no obligation to update any statement to reflect the events that occur after this call.

Mike Rost: Please refer to the company's annual report on Form 10-K and subsequent filings for factors that could cause our actual results to differ materially from any forward-looking statement. Also, during the course of today's call, we will refer to certain non-GAAP financial measures. Reconciliations of Non-GAAP Measures to GAAP Measures, and certain additional information are also included in today's press release. With that, we'll begin by turning the call

Mike Rost: Please refer to the Companys annual report on Form 10-K, and subsequent filings for factors that could cause our actual results to differ materially.

Mike Rost: Any forward looking statements.

Mike Rost: Also during the course of today's call, we will refer to certain non-GAAP financial measures.

Mike Rost: Reconciliations of non-GAAP to GAAP measures and certain additional information are also included in today's press release.

Mike Rost: With that we'll begin by turning the call over to CEO Julie <unk>.

Julie Iskow: Thank you, Mike, and thank you to everyone on today's call. Jill and I look forward to sharing our Q1 results. We'll also discuss our outlook for Q2 and updated guidance for the full year 2024. Q1 was another solid quarter.

Speaker Change: Thank you, Mike and thank you to everyone on today's call.

Speaker Change: I look forward to sharing our Q1 results were.

Julie Iskow: We will also discuss our outlook for Q2 and updated guidance for the full year 2024.

Julie Iskow: Q1 was another solid quarter.

Julie Iskow: Subscription revenue grew at 20% and total revenue grew at 17%, which drove a beat to the high end of our revenue guidance. An operating margin came in slightly above the top range of our Q1 guide. In Q1, we once again saw broad-based demand across our solution portfolio. ESG was yet again one of our top solutions for new business. It was followed by strong execution in both our financial reporting and GRC solutions.

Julie Iskow: Subscription revenue grew at 20% and total revenue grew at 17%, which drove our beat the high end of our revenue guidance.

Julie Iskow: And operating margin came in slightly above the top range of our Q1 guide.

Julie Iskow: In Q1, we once again saw broad based demand across our solution portfolio.

Julie Iskow: ESG with yet again, one of our top solutions for new bookings.

Julie Iskow: It was followed by strong execution in both our financial reporting and <unk> solutions.

Julie Iskow: Consistent with the past several quarters, we continue to see outpaced growth in our large contract customers. This is driven by additional solution sales into our install base. In Q1, the number of contracts valued over $100,000 increased 24%. Those over $150,000 increased 29%, and contracts valued over $300,000 were up 34% all compared to Q1 of 2023. Despite these positive proof points, we still saw a cautious buying environment.

Julie Iskow: Consistent with the past several quarters, we continue to see outpaced growth in our large contract customers.

Julie Iskow: This is driven by additional solution sales into our installed base.

Julie Iskow: In Q1, the number of contracts valued over $100000 increased 24%.

Julie Iskow: Those over $150000 increased 29%.

Julie Iskow: And contracts valued over $300000 were up 34% all compared to Q1 of 2023.

Julie Iskow: Despite these positive proof points, we still saw cautious buying environment. Nonetheless, I remain confident in our ability to successfully execute our growth strategy and advance our productivity initiatives, we have the strategy.

Julie Iskow: Nonetheless, I remain confident in our ability to successfully execute our growth strategy and advance our productivity initiatives. We have the strategy, the team, and the platform to deliver results. Our platform remains a key differentiator for our new logo wins and account expansion deals. Workiva is the only platform that brings financial reporting, ESG, and GRC together in one secure, controlled, audit-ready environment. We are the platform for assured, integrated reporting. I'd like to highlight three integrated reporting wins that we signed in Q1. First, a top 10 US bank expanded use of the platform with an investment in ESG. This was the 11th solution purchased by this bank.

Julie Iskow: And the platform to deliver our results.

Julie Iskow: Our platform remains a key differentiator for our new logo wins and account expansion deals with Kiva is the only platform that brings financial reporting ESG and Trc together in one secure controlled audit ready environment.

Julie Iskow: We are the platform for assured integrated reporting.

Julie Iskow: This 11-year loyal customer was engaged with two Big Four advisory firms for an ESG transformation project. Workiva was the clear ESG solution of choice based on the connected value of the platform. The Big Four firm that's driving the CSRD transformation engagement at this bank will be delivering the project. Second, we signed a six-figure account expansion deal with the North American Financial Cooperative, which added to their investment in Workiva with GRC. The purchase of the Controlled Management Solution complements their previous investment in ESG, SEC, and financial services solutions.

Julie Iskow: I'd like to highlight three integrated reporting wins that we signed in Q1.

Julie Iskow: First a top 10 U S bank expanded use of the platform with investment in ESG. This was the 11th solutions purchased by this bank is.

Julie Iskow: 11 year loyal customer with engaged with two big four advisory firms for an ESG transformation project for keeper with the clear ESG solution of choice based on the connected value with the platform.

Julie Iskow: The big four firm that's driving the CSR D transformation engagement this bank will be delivering the project.

Julie Iskow: Second we signed a six figure account expansion deal with a north American financial cooperative to added to their investment in Waukesha with Trc.

Julie Iskow: The purchase of the controls management solution.

Julie Iskow: Compliments their previous investment in ESG.

Julie Iskow: SEC and financial services solutions.

Julie Iskow: This company first purchased the Workiva platform for funds reporting in 2019. The opportunity was a co-sell with a Big Four advisory firm that was engaged in a GRC platform replacement at this company; the same Big Four firm will be providing delivery for this project. And third, we signed a four-solution new logo assured integrated reporting deal with a Canadian-based real estate and asset management company. They purchased Workiva's management reporting, controls management, risk management, and ESG solutions. This was a true platform win.

Julie Iskow: This company first purchase that work Iva platform for funds reporting in 2019.

Julie Iskow: The opportunity with wholesale with the Big four advisory firm that was engaged in the GSE platform replacement at this company.

Julie Iskow: The same big four firm, we'll be providing delivery for this project.

Julie Iskow: And third.

Julie Iskow: We signed a four solution new logo assured integrated reporting deal with a Canadian based real estate and asset management company.

Julie Iskow: They purchased <unk> as management reporting controls management risk management and ESG solutions. This was a true platform win.

Julie Iskow: In this opportunity, there were multiple solution alternatives being evaluated for ESG, risk management, and controls management. And it was not just the strength of our individual solutions, but also the connected platform approach that made Workiva the clear winner. This opportunity was a co-sell with a regional advisory firm who will be providing delivery for the project. Now, let's move on now to one of our top booking solutions for seven quarters in a row. And yes, I said seven quarters.

Julie Iskow: And this opportunity there were multiple solution alternatives being evaluated for ESG risk management and controls management.

Julie Iskow: And it was not just the strength of our individual solutions, but it was also the connected platform approach that made work Eva the clear winner.

Julie Iskow: This opportunity was a co sell with a regional advisory firm hopefully providing delivery for the project.

Julie Iskow: Let's move on now to one of our top booking solutions for seven quarters in a row.

Julie Iskow: And yes, I said seven quarters ESG.

Julie Iskow: ERG. Sustainability continues to be front and center in boardrooms and C-suites across the globe, and our sustainability solution is driving pipeline expansion and success in winning both new logos and account expansion deals. We already support sustainability reporting for some of the world's most complex companies, now including over 30% of the Fortune 100. I'd like to highlight three ESG wins from the quarter.

Julie Iskow: Sustainability continues to be front and center in boardrooms and C suites across the globe.

Julie Iskow: And our sustainability solution is driving pipeline expansion and success in winning both new logos and account expansion deals.

Julie Iskow: We already support sustainability reporting for some of the world's most complex companies now including over 30% of the Fortune 100.

Julie Iskow: I'd like to highlight three ESG wins from the quarter.

Julie Iskow: First, a Fortune 50 telecommunications company purchased our ESG solution to support their global ESG reporting initiative. This company has been a loyal SEC customer for four years. At the time of the initial purchase, they chose to continue their manual processes for sustainability reporting using Office productivity tools.

Julie Iskow: First.

Julie Iskow: A fortune 50, telecommunications company purchased our ESG solution to support their global ESG reporting initiatives.

Julie Iskow: This company has been a loyal FCC customer for four years.

Julie Iskow: At the time of the initial purchase they chose to continue their manual processes for sustainability reporting using office productivity tools.

Julie Iskow: But with new regulatory requirements on the horizon, including the CSRG in Europe, the company engaged a specialized ESG regional advisory firm that worked with Workiva on a co-sell for this deal. This partner will be providing delivery for the project. Second, we signed a six-figure new logo deal for ESG with a privately held European-based retailer.

Julie Iskow: But with the new regulatory requirements on the horizon, including the CSR D in Europe.

Julie Iskow: Company engaged a specialized ESG regional advisory firm that works with rocky over on a co sell through this deal.

Julie Iskow: This partner will be providing delivery for the project.

Julie Iskow: Second.

Julie Iskow: We signed a six figure new logo deal for ESG with a privately held European based retailer.

Julie Iskow: This opportunity was a co-sell with their trusted design agency, a Workiva partner that's been working with them on their integrated report for many years. Design agencies are an important stakeholder in the financial and sustainability reporting processes for many firms in Europe. So the design reporting features available in our platform are a significant differentiator for CSRD deals, and they also provide an opportunity for these design firms to drive enhanced value to their clients. Our clients' long-trusted relationships with these design agency partners instill further confidence in the purchase of Workiva.

Julie Iskow: This opportunity was a co sell with their trusted design agency Overachiever partner, that's been working with them on their integrated report for many years.

Julie Iskow: Design agencies are an important stakeholder in the financial and sustainability reporting processes for many firms in Europe.

Julie Iskow: So the design reporting features available in our platform are a significant differentiator for CSR D deals and they also provide an opportunity for these design firms to drive enhanced value to their clients.

Julie Iskow: Our clients long trusted relationships with these design agency partners instill further confidence in the purchase of all Kiva.

Julie Iskow: In addition to the influence of the design agency, this opportunity was a co-sell and will be delivered by the Big Four firm. And third, we signed a multi-six-figure account expansion deal with a U.S.-based Fortune 500 global payments company for ESG. This customer also owns Workiva's SEC, Controls Management, Risk Management, Policy and Procedures, and Management Reporting Solutions. Since this firm has more than 30% of its revenue outside of the U.S., our CSRD-related platform features for double materiality assessments were critical in the decision criteria for this client. This opportunity was a co-sell with a Big Four firm that will be providing delivery for this project. I'll now turn to financial reporting.

Julie Iskow: In addition to the influence from the design agency. This opportunity was a crucial and will be delivered by the big four firm.

Julie Iskow: And third we signed a multi six figure account expansion deal with a U S based fortune 500 global payments company for ESG.

Julie Iskow: This customer also owns where Keith as SEC <unk>.

Julie Iskow: <unk> management risk management policy and procedures and management reporting solutions.

Julie Iskow: This firm has more than 30% of its revenue outside of the U S. Our CSR related platform features for double materiality assessment were critical in the decision criteria for this client.

Julie Iskow: This opportunity was a co sell with a big four firm that will be providing delivery for this project.

Julie Iskow: I'll now turn to financial reporting.

Julie Iskow: Our financial reporting solutions go well beyond SEC. They also include multi-entity reporting, private company reporting, management reporting, ESEP, and industry-specific solutions. In Q1, financial reporting continued to contribute significantly to both new logos and account expansion deals. I'd like to highlight three financial reporting wins from the quarter. First, we closed a mid-six-figure new logo deal with a U.S.-based, privately-owned hedge fund

Julie Iskow: Our financial reporting solutions go well beyond SEC.

Julie Iskow: They also include multi entity reporting private company reporting management reporting.

Julie Iskow: And industry specific solutions.

Julie Iskow: In Q1 financial reporting continued to contribute significantly to both new logos and account expansion deals.

Julie Iskow: I'd like to highlight three financial reporting wins from the quarter.

Julie Iskow: First we closed a mid six figure new logo deal with a U S based privately owned hedge fund.

Julie Iskow: This was for our fund reporting solution. This deal was sourced and will be implemented by a regional advisory firm. We have seen an increase in private investment firms purchasing our fund solution now that they're subject to recent SEC regulatory disclosure requirements. Second, we closed a three-solution new logo deal with the South American Bank.

Julie Iskow: This was for our fund reporting solution.

Julie Iskow: This deal was sourced and will be implemented by our regional advisory firm.

Julie Iskow: We have seen an increase in private investment firms purchasing our fund solution now that they're subject to recent SEC regulatory disclosure requirements.

Julie Iskow: Second we closed a three solution new logo deal with the South American Bank.

Julie Iskow: The Bank purchased a multi-six-figure deal for SEC reporting, global statutory reporting, and ESG. This deal was sourced and will be implemented by a Big Four advisory firm. And third, an Australian bank invested in Workiva's platform as a new customer with a multi-solution platform purchase that included private company reporting, global statutory reporting, and ESG. Our financial reporting solution replaced their legacy reporting systems and was a competitive win over multiple ERP vendors. This opportunity was a co-sell with a Big Four advisory firm who will be providing delivery for this project.

Julie Iskow: The bank purchased a multi six figure deal for SEC reporting global statutory reporting and ESG.

Julie Iskow: This deal was sourced and will be implemented by a big four advisory firm.

Julie Iskow: And third.

Julie Iskow: In Australian Bank and that didn't work iOS platform as a new customer with the multi solution platform purchase that included private company reporting global statutory reporting and ESG.

Julie Iskow: Our financial reporting solution replaced their legacy reporting systems and was a competitive win over multiple ERP vendors.

Julie Iskow: This opportunity with a hotel with the Big four advisory firm, who will be providing delivery for this project.

Julie Iskow: With increasing stakeholder scrutiny, establishing an integrated enterprise-wide governance, risk, and compliance program is a strategic priority for many organizations. At their core, GRC programs include processes for controls, risk, and audit management. I'd like to highlight three GRC deals that closed in Q1.

Julie Iskow: With increasing stakeholder scrutiny, establishing an integrated enterprise wide governance risk and compliance program is a strategic priority for many organizations.

Julie Iskow: After core Trc programs include processes for controls risk and audit management.

Julie Iskow: I'd like to highlight three trc deals that closed in Q1.

Julie Iskow: First, an international specialty insurance and reinsurance group became a new platform customer with a multi-six-figure investment in our audit, controls, risk management, and SEC solutions. This opportunity was sourced by a Big Four firm that was actively working with the company on an outsourced GRC project. The company decided to bring the GRC work in-house and will use Workiva's platform to support their SOCs, audit, and risk management processes. This project will be implemented by a Big Four Advisory Firm.

Julie Iskow: First in international specialty insurance and reinsurance group became a new platform customer with a multi six figure investment in our audit controls risk management and SEC solutions.

Julie Iskow: This opportunity was sourced by a big four firm that was actively working with the company on an outsourced ERC project.

Julie Iskow: The company decided to bring the <unk> work in house, and we will use for key this platform to support their sox audit and risk management processes.

Julie Iskow: This project will be implemented by the big four advisory firm.

Julie Iskow: And second, a European-based pharma and medical supplies company purchased our risk management solution to complement their ESG purchase to manage ESG risk. This new logo deal was a co-sell and will be implemented by a Big Four advisory firm. Workiva was selected as the vendor of choice in this competitive deal since we were the only solution to provide capabilities that addressed not only GRC-specific requirements but also supported their future CSRD reporting needs. And third, we signed a new logo deal with a European-based automotive parts manufacturer who purchased our audit, controls, and risk management solutions. This was a competitive deal against a GRC platform provider.

Julie Iskow: And second a European based pharma and medical supplies company purchased our risk management solution to complement our ESG purchase to manage ESG risks.

Julie Iskow: This new logo deal with a co sell and will be implemented by a big four advisory firm.

Julie Iskow: The opportunity was sourced and will be delivered by a global professional services firm. I'll move on now to an update on global regulations. On March 6, the Securities and Exchange Commission announced that it had adopted its long-awaited climate disclosure rule.

Julie Iskow: This new rule is set to enhance and standardize the disclosure of climate-related data and associated financial risks. The goal is to provide investors with consistent, comparable, and reliable data in annual reports and registration statements. Since the announcement, there have been several legal challenges to the rule. Energy companies and business groups contend that the rules amount to environmental regulation and therefore overstep the SEC's legal mandate. On the other hand, environmental groups, including the Sierra Club and Natural Resources Defense Council, have countered that the rules don't go far enough.

Julie Iskow: On April 4th, the SEC announced that it exercised its discretion to stay the final rules pending a review in the Eighth Circuit U.S. Court of Appeals. The SEC is just one of many stakeholders that organizations must factor in as they transform their sustainability data collection and reporting processes. As we've communicated in the past, regardless of regulatory mandates, companies have been purchasing and will continue to purchase software to report their sustainability and financial information. However, the regulatory timing for enforcement in Europe is much clearer.

Julie Iskow: As highlighted in several of our Q1 client wins, we're seeing CSRD requirements driving purchasing decisions in both the U.S. and Europe. Q1 did bring further clarity on the digital disclosure requirements for CSRD. On February 8, the European Financial Reporting Advisory Group, or EFRAG, announced its public consultation on the draft ESRS-XBRL taxonomy. With the CSRD, the EU has stated that it aims to bring sustainability reporting on an equal footing with financial reporting, and this includes requirements around digital disclosure using XBRL.

Julie Iskow: The draft CSRD taxonomy published the first week in February will utilize the European Single Electronic Format, or ESEF, which is already required for EU publicly listed companies when reporting their annual financial statements. The European Single Electronic Format, which is based on InlineX VRL, will be the same standard used for sustainability disclosure.

Julie Iskow: Workiva is a global leader in XBRL and already supports over 1200 organizations in their XBRL reporting using the ESF format for annual financial disclosure. Similar to the process used for financial reporting, companies will have to tag their CSRD disclosures with a digital XBRL taxonomy, having a unique definition for every data element. This draft XBRL taxonomy has more than 1,000 data points with a wide range of types, including GHG emissions, water and energy consumption, headcount, pollution, and the number of narrative disclosures.

Julie Iskow: Workiva stands ready to serve our clients with these new XBRL requirements. In fact, Workiva clients already have the ability to explore and test this new CSRD XBRL taxonomy with their disclosure data. The publication of this new XBRL taxonomy reinforces the requirement that financial and sustainability information will need to follow a consistent disclosure process. This is what Workiva does, and this is what Assured Integrated Reporting is all about. The sustainability regulations in Europe go beyond the CSRD.

Operator: Please wait, the conference will begin shortly Good afternoon ladies and gentlemen and welcome to and welcome to workiva first quarter 2024 earnings call. My name is Ellie and I will be your host operator on this call. After the prepared remarks and prepared comments, we will conduct a question and answer session instructions will be provided at that time. If at any time during the conference you need to reach out to an operator, please press star followed by the number zero. Please note that this call is being recorded on May 2, 2024 at 5 o'clock Eastern time.

Julie Iskow: Just last week, the European Parliament approved the Corporate Sustainability Due Diligence Directive, moving it one step closer to formal adoption by the European Union. Referred to as CS3D, this regulation will require companies to track and report the adverse human rights and environmental impacts of their operations and their value chain. It also requires that they put in place appropriate compliance measures. The directive applies to EU companies with more than 1,000 employees and a global revenue of over 450 million euros, and it also applies to non-EU companies generating that same amount of revenue within the EU.

Julie Iskow: Companies will be required to integrate mandatory human rights and environmental due diligence into their policies and risk management system. Companies that do not comply with CS3D may face sanctions from national administrative authorities, including fines of up to 5% of their global revenue. Let's move on now to Platform Innovation. In Q1, we continued to deliver new capabilities that address our customers' ever-changing requirements. As I speak about often, a significant driver of many of our product requirements are new and changing regulations.

Operator: I would now like to turn the meeting over to your host for today's call.

Mike Rost: Mike Rost, senior vice president of corporate development and investor relations at workiva, please go ahead. Good afternoon and thank you for joining us for workiva's first quarter conference call. During today's call, we will review our first quarter results, discuss our guidance for the second quarter and full year 2024.

Mike Rost: Today's call has been pre-recorded and will include comments from our Chief Executive Officer, Julie Iskow, Fox followed by our Chief Financial Officer, Jill Clint. We will then open the call up for a live Q&A session. A replay this webcast will be available until May 9, 2024. Information to access the replay is listed in today's press release, which is available on our website under the investor relations session. Before we begin, I would like to remind everyone that during today's call, we will be making forward-looking statements regarding future events and financial performance, including guidance for the second quarter and full fiscal year 2024.

Julie Iskow: Delivering features that enable our customers to comply with regulations the day new standards are released, and, of course, well ahead of regulatory deadlines, is a strong differentiator for Workiva. In Q1, we released enhancements to our ESG solution to support the draft ESIF XPRL taxonomy. These capabilities enable customers to explore the CSRD tagging requirements defined in the new ESEF standard that was released in February. We also released new features for financial reporting, and these include support for UK ECEF 2024 and additional country-specific tax disclosure taxonomies. We're a global leader in XBRL tagging. Fast, efficient, and accurate.

Mike Rost: These forward-looking statements are cited to known and unknown risks and uncertainties. We will give a caution that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statement to reflect the events that occur after this call. Please refer to the company's annual report on form 10K and subsequent violence for factors that could cause our actual results to differ materially from any forward-looking statements. Also, during the course of today's call, we will refer to certain non-gap financial measures, reconciliation of non-gap to gap measures, and certain additional information are also included in today's press release.

Julie Iskow: And yes, we've been using AI in our tagging for years. Speaking of AI, Q1 also saw the release of new enhancements to the generative AI capabilities that we launched last year. We've built AI into our platform, and we're delivering capabilities our customers can trust. In Q1, we released a new generative AI information assistant that's available anywhere on the Workiva platform.

Julie Iskow: It provides a conversational prompt to get details about our solutions, best practices, and enablement. And this is just one example of delivering an AI solution that works for our customers, that leverages trusted data sources, and that provides immediate value. For the balance of 2024, we'll continue to focus R&D on the pace of product innovation, consistent execution, and enhancing our high-performing, differentiated platform. You can expect to see continued development in response to the ever-changing requirements of ESG. More comprehensive GRC functionality and enhanced capabilities throughout the platform to support our reporting and disclosure use cases. I'll move on now to say a few words about our guide.

Julie Iskow: With that, we'll begin by turning the call over to CEO Julie Iskow. Thank you, Mike, and thank you to everyone on today's call. Jill and I look forward to sharing our Q1 results. We'll also discuss our outlook for Q2 and updated guidance for the full year 2024. Q1 was another solid quarter. Subscription revenue grew at 20%, and total revenue grew at 17%, which drove a beat to the high end of our revenue guidance.

Julie Iskow: An operating margin came in slightly above the top range of our Q1 guide. In Q1, we once again saw broad based demand across our solution portfolio. ESD was yet again one of our top solutions for new bookings. It was followed by strong execution in both our financial reporting and GRC solutions. Consistent with the past several quarters, we continue to see outpace growth in our large contract customers. This is driven by additional solution sales into our install base.

Julie Iskow: Taking into consideration the current demand environment, we were pleased with our subscription revenue growth for Q1. With respect to our future outlook, Jill will provide the numbers for our updated revenue and profit guidance for both Q2 and full year 2024. What you'll see in this guide is that overall, we remain first and foremost focused on growth. Not unlike other SaaS companies, though, we remain cautious on the top line, as the current measured buying environment may persist until we see changes in market conditions.

Julie Iskow: In Q1, the number of contracts valued over 100,000 dollars increased 24 percent. Those over 150,000 dollars increased 29 percent. In contracts valued over 300,000 dollars were up 34 percent, all compared to Q1 of 2023. Despite these positive proofpoints, we still saw a cautious buying environment. Nonetheless, I remain confident in our ability to successfully execute our growth strategy and advance our productivity initiatives. We have our platform remains a key differentiator for our new logo wins and account expansion deals. Workiva is the only platform that brings financial reporting, ESG, and GRC together in one secure controlled audit-ready environment. We are the platform for a short integrated reporting.

Julie Iskow: We are increasing our full-year non-GAAP operating margin guide by over 100 basis points as a result of increasing operating leverage, and we remain committed to improving our productivity and performance. We're confident in the resiliency of our business, the continued demand for our assured integrated reporting platform, and our ability to expand in our large and relatively unaddressed TAM. Regulations around the world are increasing in both scope and complexity. Our customers are faced with greater investor scrutiny, more rigorous audit requirements, and an increased need to manage material risk and disclosure. Companies need transparency. Companies need to comply with regulations, and companies need accuracy in reporting and disclosure.

Julie Iskow: I'd like to highlight three integrated reporting wins that we signed in Q1. First, a top 10 US bank expanded use of the platform with investment in ESG. This was the 11th solution purchased by this bank. This 11-year loyal customer was engaged with two big four advisory firms for an ESG transformation project. Workiva was the clear ESG solution of choice based on the connected value of the platform. The big four firm that's driving the CSRD transformation engagement this bank will be delivering the project.

Jill E. Klindt: We provide solutions that companies need in both good times and in challenging times. In closing, I'd like to thank our talented team of dedicated employees. Their commitment to our values and the way they support our customers, our communities, and each other have yet again earned us a spot on Fortune's 100 Best Companies to Work For list, and it's our sixth consecutive year winning this award. Workiva again ranks in the top 50 on this list.

Jill E. Klindt: This award celebrates the world-class culture we've created and maintained. And thank you to our customers, our partners, and our shareholders for your continued trust in Workiva. We believe we have the right team, and the right technology at the right time to capitalize on the increasing global opportunities to power transparent reporting for a better world. And with that, I'll now turn the call over to you, Jill.

Julie Iskow: Second, we signed a six-figure account expansion deal with the North American financial cooperative who added their investment in Workiva with GRC. The purchase of the controlled management solution complements their previous investment in ESG, SEC, and financial services solutions. This company first purchased the Workiva platform for funds reporting in 2019. The opportunity was a co-cell with the big four advisory firm that was engaged in a GRC platform replacement at this company. The same big four firm will be providing delivery for this project.

Jill E. Klindt: Thank you, Julie. On our call today, I will be discussing the financials and key metric highlights for the first quarter of 2024. Following that, I will provide commentary and guidance for Q2 and full year 2024 before opening the line for questions. As Julie mentioned, we beat the high end of our Q1 revenue guidance due to strong subscription revenue growth. We also delivered operating results at the high end of our guidance, generating $6 million of operating profit and 830 basis point improvement versus Q1 2023.

Julie Iskow: And third, we signed a four-solution new logo assured integrated reporting deal with the Canadian-based real estate and asset management company. They purchased Workiva's management reporting, controlled management, risk management, and ESG solutions. This was a true platform win. In this opportunity, there were multiple solution alternatives being evaluated for ESG, risk management, and controlled management. And it was not just the strength of our individual solutions, but it was also the connected platform approach that made Workiva the clear winner. This opportunity was a co-cell with a regional advisory firm who will be providing delivery for the project.

Jill E. Klindt: We generated $175.7 million of total revenue in the first quarter, delivering growth of 17% from Q1 2023. Subscription revenue was $155 million, up 20% from Q1 2023. A combination of new customers and account expansions continues to contribute to our strong revenue growth. New customers added in the last 12 months accounted for 45% of the increase in subscription revenue. Professional Services revenue was $20.7 million in Q1 2024, remaining flat compared to the same quarter last year.

Julie Iskow: Let's move on now to one of our top booking solutions for seven quarters in a row. And yes, I said seven quarters. ESG. Sustainability continues to be front and center in boardrooms and sea suites across the globe. And our sustainability solution is driving pipeline expansion and success in winning both new logos and account expansion deals. We already support sustainability reporting for some of the world's most complex companies, now including over 30% of the Fortune 100.

Jill E. Klindt: A decline in setup and consulting revenue was offset by growth in XBRL services. We are making progress on our strategic plan to shift lower-margin set-up and consulting services to our advisory and consulting partners. We anticipate that revenue from set-up and consulting services will continue to decrease throughout 2024 compared to 2023.

Julie Iskow: I'd like to highlight three ESG wins from the quarter. First, a Fortune 50 telecommunications company purchased our ESG solution to support their global ESG reporting initiatives. This company has been a loyal SEC customer for four years. At the time of the initial purchase, they chose to continue their manual processes for sustainability reporting using office productivity tools. But with the new regulatory requirements on the horizon, including the CSRD in Europe, the company engaged a specialized ESG regional advisory firm that worked with Workiva on a co-cell for this deal.

Jill E. Klindt: Moving to our performance metrics, we had 6,074 customers at the end of Q1 2024, a growth of 320 customers from Q1 2023. Our gross revenue retention rate of 98% was well ahead of our 96% internal target, and our net revenue retention rate increased to 111% in the first quarter of 2024 compared to 109% in Q1 2023. We expect this rate will have quarter-over-quarter fluctuations due to items such as currency, seasonality, and solution mix of sales.

Jill E. Klindt: For Q1 2024, 66% of our subscription revenue was generated from customers that have multiple solutions, compared to 63% reported in Q1 2023. We are pleased with this trend and the progress it shows as we expand relationships with our largest customers. This account expansion trend is also reflected in our large contract customers. In the first quarter of 2024, we had 1,696 contracts valued at over $100,000 per year, up 24% from Q1 the prior year. The number of contracts valued at over $150,000 totaled 961 customers in the first quarter, up 29% from Q1 2023. And the number of contracts valued over $300,000 totaled 332, up 34% from Q1 2023.

Julie Iskow: This partner will be providing delivery for the project. Second, we signed a six-figure new logo deal for ESG with a privately held European based retailer. This opportunity was a co-cell with their trusted design agency, a Workiva partner that's been working with them on their integrated report for many years. Design agencies are an important stakeholder in the financial and sustainability reporting processes for many firms in Europe. So the design reporting features available in our platform are a significant differentiator for CSRD deals, and they also provide an opportunity for these design firms to drive enhanced value to their clients.

Jill E. Klindt: Moving on to our operating results, gross profit totaled $136.5 million in Q1, up 20% from the prior year. Gross margin improved year-over-year by 220 basis points, increasing to 78% in Q1 2024. This was driven by improved leverage and compensation in cloud computing costs versus the same quarter a year ago. Operating expenses increased 8% from Q1 2023, driving 610 basis points of our margin improvement versus the prior year. Our continued focus on process automation and efficiency helped improve productivity and drove margin improvement compared to Q1 2023. We posted an operating profit of $6 million in Q1 2024 compared to an operating loss of $7.3 million in Q1 2023. We were pleased with the leverage we delivered.

Julie Iskow: Our clients' long-trusted relationships with these design agency partners instilled further confidence in the purchase of Workiva. In addition to the influence from the design agency, this opportunity was a co-cell and will be delivered by the Big Four firm. And third, we signed a multi-six-figure account expansion deal with the US-based Fortune 500 local payments company for ESG. This customer also owns Workiva's SEC, controls management, risk management, policy and procedures, and management reporting solutions.

Julie Iskow: Since this firm has more than 30% of its revenue outside of the US, our CSRD-related platform features for double materiality assessments were critical in the decision criteria for this client. This opportunity was a co-cell with the Big Four firm that will be providing delivery for this project.

Jill E. Klindt: We posted operating profit of $6 million in Q1 2024 compared to the Q1 2023 operating loss of $7 3 million.

Jill E. Klindt: We're pleased with the leverage we delivered operating profit improvement was driven by revenue growth disciplined investments and managing controllable expenses.

Jill E. Klindt: The operating profit improvement was driven by revenue growth, disciplined investment, and managing controllable expenses. At March 31, 2024, cash, cash equivalents, and marketable securities increased $25 million sequentially to a balance of $838 million. Operating activities in Q1 2024 resulted in cash provided of $25 million compared with cash provided of $6 million in the same quarter a year ago.

Julie Iskow: I'll now turn to financial reporting. Our financial reporting solutions go well beyond SEC. They also include multi-entry reporting, private company reporting, management reporting, ESF, and industry-specific solutions.

Jill E. Klindt: At March 31, 2024, cash cash equivalents and marketable securities increased $25 million sequentially to a balance of $838 million.

Jill E. Klindt: Operating activities in Q1 2024 resulted in cash provided of $25 million compared with cash provided of $6 million in the same quarter a year ago.

Julie Iskow: In Q1, financial reporting continued to contribute significantly to both new logos and account expansion deals. It's re-financial reporting wins from the quarter. First, we closed a mid-six figure new logo deal with the US-based privately owned hedge fund. This was for our fund reporting solution. This deal was sourced and will be implemented by a regional advisory firm. We have seen an increase in private investment firms purchasing our fund solution now that they're subject to recent SEC regulatory disclosure requirements.

Jill E. Klindt: In Q1 2024, our free cash flow margin was 14%, an improvement of over 1,000 basis points versus Q1 2023. Turning now to our guidance for Q2 and the full year 2024. As Julie discussed, this remains an uncertain macro in a measured customer buying environment.

Jill E. Klindt: In Q1 2024, our free cash flow margin was 14% an improvement of over 1000 basis points versus Q1 2023.

Jill E. Klindt: Turning now to our guidance for Q2, and the full year 2024, as Julie discussed it remains an uncertain macro in a measured customer buying environment.

Jill E. Klindt: However, we continue to focus on execution and are encouraged by opportunities to drive growth over the longer term. For the second quarter of 2024, we expect total revenue to range from $174 million to $176 million. We expect services revenue to be down compared to Q2 2023. This is a result of the shift I discussed, moving our low margin setup and consulting services to our partners, as well as flat to slightly down XBRL services revenue.

Jill E. Klindt: However, we continue to focus on execution and are encouraged by opportunities to drive growth over the longer term for.

Jill E. Klindt: For the second quarter of 2024, we expect total revenue to range from 174 million to $176 million. We expect services revenue will be down compared to Q2 2023.

Julie Iskow: Second, we closed a three-solution new logo deal with the South American bank. The bank purchased a multi-six figure deal for SEC reporting, global statutory reporting, and ESG. This deal was sourced and will be implemented by a big-for advisory firm. Third, an Australian bank invested in Workiva's platform as a new customer with a multi-solution platform purchase that included private company reporting, global statutory reporting, and ESG. Our financial reporting solution replaced their legacy reporting systems and was a competitive win over multiple ERP vendors. This opportunity was a co-sale with the big-for advisory firm who will be providing delivery for this project.

Jill E. Klindt: This is a result of the shift I discussed moving our low margin set up and consulting services to our partners as well as flat to slightly down ex BRL services revenue.

Jill E. Klindt: We expect non-GAAP operating income to range from $2 million to $4 million, a net income of $0.16 to $0.19 on a per share basis. Our share count will be approximately 55 million weighted average shares. Seasonality in our business can impact quarter-over-quarter revenue and expenses.

Jill E. Klindt: We expect non-GAAP operating income to range from 2 million to $4 million and net.

Jill E. Klindt: Income of 16 to 19 on a per share basis.

Jill E. Klindt: Share count will be approximately 55 million weighted average shares.

Jill E. Klindt: Seasonality in our business can impact quarter over quarter revenue and expenses are.

Jill E. Klindt: Our Q2 2024 Operating Margin Guidance reflects a seasonal, quarter-over-quarter decrease in XBRL services revenue, as well as expense fluctuations. For the full year 2024, we expect total revenue to be between $719 million and $723 million. We expect total services revenue to remain flat.

Jill E. Klindt: Our Q2 2024 operating margin guidance reflects the seasonal quarter over quarter decrease in X BRL services revenue as well as expense fluctuations.

Jill E. Klindt: For the full year 2024, we expect total revenue to be between $719 million and $723 million.

Julie Iskow: With increasing stakeholder scrutiny, establishing an integrated enterprise-wide governance risk and compliance program is a strategic priority for many organizations. After core, GRC programs include processes for controls, risk, and audit management.

Jill E. Klindt: We expect total services revenue to remain flat.

Jill E. Klindt: We expect XBRL services revenue will continue to grow at a low single-digit rate. For setup and consulting revenue, we expect a similar rate of decline from what we saw in 2023. We expect our subscription revenue growth to be slightly over 16% at the midpoint. We are increasing our guidance for non-GAAP operating income to range from $27 million to $31 million, or a net profit of $0.96 to $1.03 on a per share basis. Our share count will be approximately 55 million weighted average shares.

Jill E. Klindt: We expect X payroll services revenue will continue to grow at a low single digit rate.

Jill E. Klindt: Setup and consulting revenue, we expect a similar rate of decline from what we saw in 2023.

Julie Iskow: I'd like to highlight three GRC deals that closed in Q1. First, an international specialty insurance and re- insurance group became a new platform customer with a multi-six figure investment in our audit, controls, risk management, and SEC solutions. This opportunity was sourced by a big-for firm that was actively working with the company on an outsourced GRC project. The company decided to bring the GRC work in-house and will use Workiva's platform to support their socks, audit, and risk management processes.

Jill E. Klindt: We expect our subscription revenue growth to be slightly over 16% at the midpoint.

Jill E. Klindt: We are increasing our guidance for non-GAAP operating income to range from 27 million to $31 million or a net profit of 96 to $1 <unk> on a per share basis.

Jill E. Klindt: Our share count will be approximately 55 million weighted average shares.

Jill E. Klindt: We believe we will post a positive free cash flow margin of 11% for the full year 2024. To reiterate Julie's comments, while we are focused on growth, we continue to look for leverage in our business. With calculated investment, we believe we can expect the best returns in the long term. Before we proceed to the Q&A session, I'd like to emphasize three important points. First, ESG reporting is an increasing requirement.

Jill E. Klindt: Believe we will post positive free cash flow margin of 11% for the full year 2024.

Jill E. Klindt: To reiterate julie's comments, while we are focused on growth we continue to look for leverage in our business with.

Julie Iskow: This project will be implemented by the big-for advisory firm. And second, the European-based pharma and medical supplies company purchased our risk management solution to complement their ESG purchase to manage ESG risks. This new logo deal was a co-sale and will be implemented by a big-for advisory firm. Workiva was selected as the vendor of choice in this competitive deal since we were the only solution to provide capabilities that addressed not only GRC-specific requirements, but also supported their future CSRD reporting.

Jill E. Klindt: With calculated investment we believe we can expect the best returns in the long term.

Jill E. Klindt: We believe our platform continues to be valuable to companies as they solve for this need. Second, I want to reiterate how pleased we are with the large account growth we saw during Q1. Expansion into our existing customer base is not only an important factor contributing to our growth but also helps strengthen our customer relationships. And finally, our focus on generating leverage from our existing resources led to our full-year Operating Margin Guidance increase. We look for efficient ways to expand in our large and relatively unaddressed hands.

Jill E. Klindt: Before we proceed to the Q&A session I'd like to emphasize three important points.

Jill E. Klindt: First ESG reporting is an increasing requirement we believe our platform continues to be valuable to companies as they solve for this need.

Jill E. Klindt: Second.

Jill E. Klindt: Want to reiterate how pleased we are with the large account growth we saw during Q1.

Jill E. Klindt: Expansion into our existing customer base is not only an important factor contributing to our growth, but also help strengthen our customer relationships and.

Jill E. Klindt: And finally, our focus on generating leverage from our existing resources led to our full year operating margin guidance increase.

Julie Iskow: And third, we signed a new logo deal with the European-based automotive parts manufacturer who purchased our audit, controls and risk management solutions. This was a competitive deal against a GRC platform provider. The opportunity was sourced and will be delivered by a global professional services firm.

Jill E. Klindt: Look for efficient ways to expand in our large and relatively unaddressed Tam.

Jill E. Klindt: In conclusion, I want to echo Julie's thanks to our employees. Your dedication and enthusiasm led to our placement on Fortune's 100 Best Companies to Work For for the sixth year in a row. It's because of you that we continue to deliver a positive impact, benefiting everyone involved – customers, partners, shareholders, and employees. We're now ready to take your questions. Operator, please begin the Q&A session.

Jill E. Klindt: In conclusion, I want to Echo julie's, thanks to our employees.

Jill E. Klindt: Your dedication and enthusiasm led to our placement on Fortune's 100, best companies to work for for the sixth year in a row.

Jill E. Klindt: It's because of you that we continue to deliver a positive impact benefiting everyone involved customers partners shareholders and employees.

Julie Iskow: I'll move on now to an update on global regulations. On March 6th, the Securities and Exchange Commission announced that it adopted its long awaited climate disclosure rule. This new rule is set to enhance and standardize the disclosure of climate related data and associated financial risks. The goal was to provide investors with consistent, comparable and reliable data in annual reports and registrations. Since the announcement, there have been several legal challenges to the rule.

Jill E. Klindt: We're now ready to take your questions operator.

Jill E. Klindt: Operator, please begin the Q&A session.

Operator: We are now opening the floor to questions and answers. If you'd like to ask a question, please press star and number one on your telephone. Our first question comes from Steve Enders from New York City. Your line is now open.

Speaker Change: We are now opening the floor for a question and answer session. If you'd like to ask a question. Please press star and number one on your telephone keypad. Our first question comes from Steve Enders from Citi. Your line is now open.

Steven Lester Enders: Okay, great. Thanks for taking the questions here. I guess maybe just to start, I guess it would be great to hear kind of what's going on with, you know, ESG conversations post, you know, the SEC clarification and maybe some of the contestation there, along with CSRD. Like, has the tone of those conversations changed, or, you know, the drive to, you know, look for ESG solutions in the market? Just how's that kind of like?

Steven Lester Enders: Okay, great. Thanks for thanks for taking my questions here.

Julie Iskow: Energy companies and business groups contend that the rules amount to environmental regulation and therefore overstep the SEC's legal mandate. On the other side, environmental groups, including the Sierra Club and Natural Resources Defense Council, have countered that the rules don't go far enough. On April 4th, the SEC announced that it exercised in the past year. It's discretion to stay the final rules pending review in the 8th Circuit, US Court of Appeals. The SEC is just one of many stakeholders that organizations must factor in as they transform their sustainability data collection and reporting processes.

Steven Lester Enders: I guess, let me just just to start.

Steven Lester Enders: I guess it would be great to hear.

Steven Lester Enders: Kind of what's going on with the FDA conversations post.

Steven Lester Enders: The FCC clarification and maybe for Mike.

Steven Lester Enders: Contestation, there along with the srd.

Steven Lester Enders: The tone of those conversations changed or the.

Steven Lester Enders: The drive to them too.

Steven Lester Enders: To look for.

Steven Lester Enders: Solutions in the market, just how what kind of evolved over the past few months.

Julie Iskow: Thank you, Steve, for the question. I am sure it's on the minds of many. It's a great question, given the visibility of ESG.

Steven Lester Enders: Sure. This is Julie Thank you Steve for the question I am sure its on lines of many.

Steve: Great question, given the visibility of ESG.

Julie Iskow: The FCC did issue their Climate Disclosure Rule and then put a stay on the rule a month later. We believe the publishing of the rule, in fact, did provide companies with a lot of clarity on what will be required and the details to build a road map and how they'll have to comply. As you know, Workiva has 92% of the RUSLE 1000 clients, so we have a very healthy share of large accelerated and accelerated filers who are going to need to comply.

Julie Iskow: As we've communicated in the past, regardless of regulatory mandates, companies have been purchasing and will continue to purchase software to report their sustainability and financial information. The regulatory timing and the enforcement in Europe is much clearer. As highlighted in several of our Q1 client wins, we're seeing CSRD requirements driving purchasing decisions in both the US and Europe. Q1 did bring further clarity on the digital disclosure requirements for CSRD. On February 8th, the European Financial Reporting Advisory Group, or EFRAG, announced its public consultation on the draft ESRS, XBRL Taxonomy.

Julie Iskow: The SEC did issue their climate disclosure rule, and then put a stay on the rule a month later.

Julie Iskow: We believe the publishing of the rule in shock to provide companies with a lot of clarity on what will be required and the detailed roadmap and they'll have to comply.

Julie Iskow: We'll keep it has 92% of the Russell 1000 as clients. So we have a very healthy share of large accelerated and accelerated file pilots are going to need to comply.

Julie Iskow: Although they put a stay on the rule, the FCC has stated that it intends to vigorously defend the validity of the climate rules. And it's the previous, you know, the previous climate change related disclosure guidance. They've cited a lot; it's still very much in force. But you're right, not nine cases were filed challenging that climate rule, the recent climate change rule, and several cases on the other side too. But we'll see what happens there with the lawsuits, and they're in the Eighth Circuit Court right now.

Julie Iskow: Although they put the stay on the wall. The SEC has stated that it intends to vigorously defend the validity of the climate rules.

Julie Iskow: With the CSRD, the EU has stated that it aims to bring sustainability reporting on equal footing with financial reporting. And this includes requirements around digital disclosure using XBRL. The draft CSRD Taxonomy published the first week in February will utilize the European Single Electronic Format, ESF, which is already required for EU publicly listed companies in reporting their annual financial statements. The European Single Electronic Format, which is based on inline XBRL, will be the same standard used for sustainability disclosures.

Julie Iskow: Excited a lot is still very much enforced.

Julie Iskow: But youre right nine cases were filed challenging that claim.

Julie Iskow: Earl.

Julie Iskow: Well, we'll see what happens there with the lawsuits.

Julie Iskow: Circuit Court right now, but as we've communicated in the past.

Julie Iskow: But as we've communicated in the past, I mean, regardless of the regulations, regardless of the mandates, companies have been and are going to continue to purchase software to report sustainability and financial information. In a category of customers, yes, that we call box checkers or compliers.

Julie Iskow: Regardless of the regulations, regardless of the mandates companies that have been and we're going to continue to purchase software to report sustainability and financial information.

Julie Iskow: Category of customers, yes that we call box checkers or compliance we do believe there may be some delay in purchasing but we believe again the publishing this will provided a lot of clarity and.

Julie Iskow: We do believe there may be some delay in purchasing, but we believe, again, that publishing this rule provided a lot of clarity. And again, we have got 92% of that roughly 1,000 of our clients, and we'll have a healthy share. From our perspective, SEC is just one of the many stakeholders that organizations have to factor in here for sustainability data collection and reporting.

Julie Iskow: Where GIVA is a global leader in XBRL and already supports over 1,200 organizations in their XBRL reporting using the ESF Format for annual financial disclosures. Similar to the process used for financial reporting, companies will have to tag their CSRD disclosures with a digital XBRL Taxonomy having a unique definition for every database. This draft XPRL taxonomy has more than 1000 data points with the wide range of types including GHG emissions, water and energy consumption, headcount, pollution, and the number of narrative disclosures.

Julie Iskow: Again, we've got 92% of that Russell Gunther clients and won't have a healthy share so.

Julie Iskow: From our perspective.

Julie Iskow: <unk> being just one of the many stakeholders that organizations have to factor in here for a sustainability data collection and reporting so we've not yet seen any withdraw from that we see again a lot of conversations around Theres still California coming.

Julie Iskow: So we've not yet seen any withdrawal from that. We see, again, a lot of conversations around there being still California coming, even CSRD in Europe and so forth. So the conversations have not changed given that law. There's just a lot of clarity on what it will be when it comes.

Julie Iskow: You can see srd and in Europe, and so forth. So the conversations have not changed given that law theres just a lot of clarity on it what it will be when it comes.

Jill E. Klindt: Okay, great. That's a helpful context there. And then maybe, well, I guess maybe just on the outlook, especially on the margin side, I mean, pretty healthy, healthy raise there. I guess, how should we be thinking about maybe what has changed? From, you know, prior assumptions and maybe what are the line items we'd be seeing the most leverage, the most leverage here.

Speaker Change: Okay great.

Julie Iskow: Workiva stands ready to serve our clients with these new XPRL requirements. In fact, Workiva clients already have the ability to explore and test this new CSRD XPRL taxonomy with their disclosure data. The publishing of this new XPRL taxonomy reinforces the requirement that financial and sustainability information will need to follow a consistent disclosure process. This is what Workiva does, and this is what assured integrated reporting is all about.

Speaker Change: That's helpful context there.

Jill E. Klindt: And then maybe for well I guess, maybe just on the outlook, especially on the margin side, I mean pretty healthy okay.

Speaker Change: Hey, there.

Jill E. Klindt: I guess, how should we be thinking about maybe what has changed.

Jill E. Klindt: From prior assumptions and maybe whats the line items would be seen the most leverage most leverage here.

Julie Iskow: Jill, you can chime in, but essentially, we're focused on, of course, productivity. As we said, top-line growth is... incredibly important. That's our largest focus. We'll continue to do that. But as we've been talking about on calls prior, we have been pushing hard for being very thoughtful about the roles that we hire, the people that we hire in those roles, and that we have the right activities going on to go after our large, relatively, again, unaddressed ham.

Jill E. Klindt: So.

Speaker Change: And Joe you can chime in but essentially we're focused on of course productivity as we said topline growth is.

Julie Iskow: The sustainability regulations in Europe go beyond the CSRD. Just last week, the European Parliament approved the corporate sustainability due diligence directive, moving it one step closer to formal adoption by the European Union. Referred to as the CS3D, this regulation will require companies to track and report the adverse human rights and environmental impacts of their operations and their value chains. It also requires that they put in place appropriate compliance measures. The directive applies to EU companies with more than 1000 employees and a global revenue of over 450 million euros, and it also applies to non-EU companies generating that same amount of revenue within the EU, 450 million euros.

Julie Iskow: Credibly important that's our largest focus will continue to do that but as we've been talking about on calls prior we have been pushing hard on being very thoughtful about.

Julie Iskow: The roles that we hire the people that we hire in those roles and that we have the right activities going on to go after our large relatively again unaddressed town. So we are hiring well, we're being thoughtful about the way we are using.

Julie Iskow: So we are hiring well, we're being thoughtful about the way we're using our teams, and we've also talked about the efficiency and the productivity and the processes and automation that we're adding into the mix because we are moving from a, you know, half a billion to a billion-dollar company. Things need to be done differently, so there's a lot more rigor and discipline in the way we're working. So again, efficiencies, automation, the right people, and being thoughtful about the hiring.

Julie Iskow: Using our teams.

Julie Iskow: We've also talked about the efficiency and the productivity of the processes and automation that we're adding into the mix because we are moving from that.

Julie Iskow: Half of comparability and to $1 billion company things need to be done differently. So there's a lot more rigor and discipline in the way we're working.

Julie Iskow: Again efficiencies automation right people and being thoughtful about the hiring.

Jill E. Klindt: And really, Steve, you're going to see that across the income statement. It's going to be across all teams where we have the same motion in place, exactly what Julie's talking about. So it will be an improvement across the board.

Julie Iskow: Companies will be required to integrate mandatory human rights and environmental due diligence into their policies and risk management systems. Companies that do not comply with the CS3D may face sanctions from national administrative authorities, including fines of up to 5% of their global revenue.

Julie Iskow: And really Steve Youre going to see that across bankers statement, it's going to be a cross sell teams, where we have the same.

Jill E. Klindt: Motion in place.

Jill E. Klindt: Exactly what Julie talking about so.

Jill E. Klindt: It will be improvement across the board.

Steven Lester Enders: Okay, perfect. Great. Great to hear from you. And thanks for taking the question.

Speaker Change: Alright, perfect great good to hear and thanks for taking the questions.

Julie Iskow: Let's move on now to platform innovation. In Q1, we continue to deliver new capabilities that address our customers ever changing requirements. As I speak about often, a significant driver of many of our product requirements are new in changing regulations. Delivering features that enable our customers to comply with regulations that day new standards are released, and of course well ahead of regulatory deadlines, is a strong differentiator for work either. In Q1, we release enhancements to our ESG solution to support the draft ESF-experial taxonomy.

Speaker Change: Thanks, Steve.

Operator: Our next question comes from Alex.

Alex: From Raymond James Your line is now open.

Alex: Great, thank you. I think I'm just going to follow up on Steve's last question there, Jill. In terms of kind of the revenue and profitability seasonality this year, can you just talk about some of the puts and takes on what's driving the second quarter outlook but the higher kind of second half of the year outlook? Any more color you can give either on the subscription versus services split, or is there anything you're seeing in terms of the demand environment in the second quarter that might not impact 2Q but will hit in the back half of the year? Thank you.

Alex: Great. Thank you. Thank you and just a follow up on Steve's last question there Joe in terms of kind of the revenue and profitability seasonality. This year can you just talk about some of the puts and takes on what's driving the second quarter outlook.

Alex: But the higher kind of second half of the year outlook any more color you can give you the on the subscription versus services split.

Alex: Or is there anything that youre seeing in terms of demand environment and second quarter that might not impact Q2, but hit in the back half of the year. Thank you.

Jill E. Klindt: Thanks, Alex, for the question. So, for Q2, we did see, well, there is always seasonality, especially in services revenue at XBRL, so this is revenue from Q1 to Q2. In Q1, we have a lot of work that's done related to the Ks, and that's larger volume and larger dollars than what we see for XBRL tagging services work in Q2. The other piece that we have talked about is that the macro environment does impact, has been impacting our bookings; we have seen those extended deal cycles.

Julie Iskow: These capabilities enable customers to explore the CSRD tagging requirements defined in the new ESF standard that was released in February. We also released new features for financial reporting, and these include support for UK ESF 2024 and additional country-specific tax disclosure taxonomies. We are a global leader in expereal tagging, fast, efficient, and accurate. And yes, we've been using AI in our tagging for years. Speaking of AI, Q1 also saw the release of new enhancements to the generative AI capabilities that we launched last year.

Jill: Sure. Thanks, Alex for the question. So for Q2, we did see.

Jill E. Klindt: Well there is always seasonality, especially in services revenue ex Bureau services revenue from Q1 to Q2 in Q.

Jill E. Klindt: Q1, we have a lot of work that's done related to the case and Thats larger.

Jill E. Klindt: Volume large dollars than than what we see for exterior all tagging services work in Q2.

Jill E. Klindt: The other piece that we that we have talked about is the macro environment does impact.

Jill E. Klindt: And especially Q1 seasonally has lower bookings for us than any other quarter in the year. And so just looking at seasonality and in SMS and in subscription revenue, what we're seeing in Q2, and you saw for the full year and for the second half, we still very strongly believe that for the full year growth, and as you even out over each quarter, we still have very strong expectations for the full year.

Jill E. Klindt: And especially Q1 seasonally has well where bookings for us than any other quarter in the year and so.

Julie Iskow: We've built AI into our platform and we're delivering capabilities our customers can trust. In Q1, we released a new, generative AI information assistant. It's available anywhere in the Workiva platform. It provides a conversational prompt to get details about our solutions, best practices, and enablement. And this is just one example of delivering an AI solution that works for our customers that leverages trusted data sources and that provides immediate value. For the balance of 2024, we'll continue to focus R&D on the pace of product innovation, consistent execution, and enhancing our high performing differentiated platform. You can expect to see continued development in response to the ever changing requirements for ESG, more comprehensive DRC functionality, and enhanced capabilities throughout the platform to support our reporting and disclosure use cases.

Jill E. Klindt: Just looking at seasonality in Fms and in subscription.

Jill E. Klindt: What we're seeing in Q2.

Jill E. Klindt: For the full year growth.

Jill E. Klindt: You have you have you even out over the over the each quarter.

Jill E. Klindt: We'll have very strong expectations for the full year.

Jill E. Klindt: And then related to expense in Q2, we do have some movement between quarters, sometimes due to internal events and that sort of thing, and just seasonal spending that can fluctuate quarter over quarter. But in looking at the full year, you can see exactly what you mentioned in the second half. We do believe that everything evens out as far as the quarter over quarter spend and feel very strongly and pleased with how our forecast is shaping up for the full year.

Jill E. Klindt: And then related to expenses in Q2.

Jill E. Klindt: You have some movement between quarters, sometimes an event internal events and that sort of thing and just.

Jill E. Klindt: Seasonal spending.

Jill E. Klindt: Can fluctuate quarter over quarter and.

Jill E. Klindt: But in looking at the full year you can see exactly what you mentioned in the second half, we do believe that everything evens out as.

Jill E. Klindt: As far as the quarter over quarter spend and feel very strongly.

Jill E. Klindt: I'm pleased with how our forecast is shaping up for the full year.

Julie Iskow: I'll move on now to say a few words about our guide. Taking into consideration the current demand environment, we were pleased with our subscription revenue growth for Q1. With respect to our future outlook, Jill will provide the numbers for our updated revenue and profit guidance for both Q2 and full year 2024. What you'll see in this guide is that overall we remain first and foremost focused on growth. Not unlike other SAS companies though, we remain cautious on the top line as the current measured buying environment may persist until we see changes in market conditions.

Alex: Okay, thank you for that color there. And then Julie, maybe just one for you.

Speaker Change: Okay. Thank you for that color there and then Julian maybe just one for you given some of the prepared remarks commentary around the multi solution customer success and as we think about kind of capital markets activity is starting to come back here a little bit can you just talk about how that benefits some of your non financial reporting solution.

Julie Iskow: Given some of the prepared remarks, commentary around the multi-solution customer success, and as we think about the kind of capital markets activities starting to come back here a little bit, can you just talk about how that benefits some of your non-financial reporting solutions? So how many, how much more solutions per customer does an SEC customer take versus your non-SEC customers, or maybe said another way, how important is new public company growth for your non-financial reporting solutions?

Julie Iskow: So how many how much more solutions per customer doesn't doesn't FCC customer take first or non FCC base or maybe said a different way how important is new public company growth.

Julie Iskow: Are your non financial reporting solutions. Thanks.

Julie Iskow: So we do, of course, want to keep a blend of new logos and new solutions with existing customers. That's what we strive to do. Somewhere between the, you know, 40-60 is about where we have the largest gap we want to have.

Julie Iskow: So we do of course want to keep a blend of new logos and new solutions with existing customers. That's what we strive to do somewhere between the 40 60 is about where we are.

Julie Iskow: We are increasing our full year non-gap operating margin guide by over 100 basis points as a result of increasing operating leverage. And we remain committed to improving our productivity and performance. We're confident in the resiliency of our business that continued demand for our assured integrated reporting platform and our ability to expand in our large and relatively unaddressed hand. Regulations around the world are increasing in both scope and complexity. Our customers are faced with greater investor scrutiny, more rigorous audit requirements and an increased need to manage material risk and disclosures. Companies need transparency. Companies need to comply with regulation. And companies need accuracy in reporting and disclosure. We provide solutions that companies need in both good times and in challenging times.

Julie Iskow: The largest GAAP, we want to have so we are continuing to do both new logos initial issuance.

Julie Iskow: So we are continuing to do both new logos and new solutions. Multi-solution, I'll tell you this. Our current customer base is a tremendous asset for us. We reported in our 10K that we now have 90% of the Fortune 100, 85% of the Fortune 500, and 80% of the Fortune 1000. So going into that installed base, again, is a significant drive for us and a lot of effort.

Julie Iskow: Multi solution I'll tell you. The Smbs are our current customer base is a tremendous asset for us and we've reported in our 10-K, we now have 90% of the fortune, 185% of the fortune, 580%. Unfortunately, 1000, so going into that installed base again is significant drive for.

Julie Iskow: We go in with our partners, and our relationships with the partners are absolutely contributing to strong success there with our expansion. And those multi-solution account expansion deals really do push revenue. We go out, as you know, to market with assured integrated reporting, which means we are working with our customers on financial reporting, which includes, you know, multi-entity reporting and management reporting, and so forth, including cap markets, which you asked about.

Julie Iskow: In closing, I'd like to thank our talented team of dedicated employees. Their commitment to our values and the way they support our customers, our communities and each other have yet again earned us a spot on the list of Fortune's 100 best companies to work for. And it's our sixth consecutive year winning this award. We're given again ranks in the top 50 on this list. This award celebrates the world-class culture we've created and maintained. And thank you to our customers, our partners and our shareholders for your continued trust in work even.

Julie Iskow: Multi entity reporting and management reporting and so forth, including cap markets, which you asked about so a lot of landing with cap markets in private company reporting and then rolling into the other.

Julie Iskow: So a lot of landing with cap markets and private company reporting, and then rolling into the other solutions of financial reporting, non-financial, sustainability, or ESG, along with our GRC solutions. So we are resilient even without the cap markets business right now coming back in any substantive way, but because of our broad portfolio, and we're heavily focused on that, and we haven't baked any cap markets. Bookings coming into the next, you know, next several months for this year's quarters for this year. Yeah, we expect those cap market bookings to remain fairly flat throughout the year, just like we've been seeing over the past few quarters. Okay.

Julie Iskow: The other solutions of financial reporting non financial or sustainability, and ESG, along with our <unk> solutions. So we are resilient, even without the cap markets business right now coming back in any substantive way.

Jill Klindt: We believe we have the right team, the right technology at the right time to capitalize on the increasing global opportunities to power transparent reporting for a better world and with that I'll now turn the call over to you Jill. Thank you Julie. For our call today I will be discussing the financials and key metric highlights for the first quarter of 2024.

Julie Iskow: We have not baked in.

Julie Iskow: Cap markets.

Julie Iskow: Coming into the next.

Julie Iskow: Next several months for this year's quarters for this year, yes, we expect those cat market bookings to remain fairly flat throughout the year, just what we've been seeing over the past few quarters.

Operator: Okay. Great color. Thank you both. The next question comes from Terry Tillman from Tourist Securities. Your line is now open. Hi, this is Dominique Mananchala on behalf of Terry.

Speaker Change: Okay, great color. Thank you both.

Dominique Mananchala: Question comes from Terry Tillman from Jewish Securities. Your line is now open.

Jill Klindt: Following that I will provide commentary and guidance for Q2 and full year 2024 before opening the line for questions. As Julie mentioned we beat the high end of our Q1 revenue guidance due to strong subscription revenue growth. We also delivered operating results at the high end of our guidance generating $6 million of operating profit and 830 basis point improvement versus Q1 2023. We generated $175.7 million of total revenue in the first quarter delivering growth of 17% from Q1 2023.

Dominique Mananchala: Hi, This is Dominic one in Salah on for Terry just wanted to look at some of the newer Ginnie I capabilities like the journey II Infosys and mentioned on the call or the ESG specific one where users can drive disclosures could you share any feedback you've received from customers, thus far and as you speak to customers and gather some Jennie O.

Dominique Mananchala: Leads are there any other specific verticals or sectors, you see holding the greatest potential Virginia this year.

Dominique Mananchala: So I'll comment on our industry, of course, our sector, and Workiva, but thanks for the question. Another hot topic of 2023, and it has rolled into 2024. We're definitely enthusiastic about the delivery of our generative AI capabilities to power new features on the platform. You mentioned a few.

Dominique Mananchala: Thanks for the question another hot topic of 2023 and it has rolled this was 2024 were definitely enthusiastic about the delivery of our generative AI capabilities to power New features on the platform you mentioned a few working for users get large language models and App now with Google and Microsoft and AWS.

Jill Klindt: Subscription revenue was $155 million up 20% from Q1 2023. A combination of new customers and account expansions continue to contribute to our strong revenue growth. New customers added in the last 12 months accounted for 45% of the increase in subscription revenue. Professional services revenue was $20.7 million in Q1 2024 remaining flat compared to the same quarter last year. A decline in setup and consulting revenue was offset by growth in exprl services.

Julie Iskow: Workiva users get large language models in AppNow from Google and Microsoft and AWS integrated into our platform, a secure platform; their information's not used to train those large language models. Early feedback, as you asked about, from customers is that they're appreciating being able to use those capabilities in-app, both for convenience and, of course, for data security. They can author, edit, and rewrite, leveraging the capabilities, and it's across all workflows in our platform.

Julie Iskow: It into our platform.

Julie Iskow: Sure platform not their information is not used to train those those large language models.

Julie Iskow: Early feedback as you asked about from customers is out there appreciate it appreciate them being able to to use those capabilities in app, both for convenience and of course for data security. They can author edit and rewrite leveraging the capabilities and it's across all workflows in our platform.

Jill Klindt: We are making progress on our strategic plan to shift lower margin setup and consulting services to our advisory and consulting partners. We anticipate that the revenue from setup and consulting services will continue to decrease throughout 2024 compared to 2023.

Julie Iskow: We also, as you mentioned, rolled out the capability for ESG-specific use, and we rolled out the help and training enablement capability within the platform. As far as feedback is concerned, we're watching how our users are using the capabilities. We're learning. We're understanding. We're getting information about how they're valuing those capabilities, and that's really what our initial focus is on, iterating to ensure they are getting value, and we create new features and new capabilities using generative AI. Our team is looking into how it's being leveraged.

Julie Iskow: We also as you mentioned and rolled out the capability for ESG specific use and we rolled out the help and training and enablement capability with it within the platform as far as feedback we're watching how our users are using the capabilities. We're learning we're understanding we're getting.

Jill Klindt: Moving to our performance metrics. We had 674 customers at the end of Q1 2024, a growth of 320 customers from Q1 2023. Our growth revenue retention rate of 98% was well ahead of our 96% internal target and our net revenue retention rate increased to 111% from the first quarter of 2024 compared to 109% for Q1 2023. We expect this rate will have quarter over quarter fluctuations due to items such as currency, seasonality and pollution mix of sales.

Julie Iskow: Information about how they're valuing those capabilities and Thats really what our initial focus is on iterating to ensure they are getting value and we create new features new capabilities using generative AI. Our team is looking into how it's being leveraged.

Jill Klindt: For Q1 2024, 66% of our subscription revenue was generated from customers that have multiple solutions. This compared to 63% reported in Q1 2023. We are pleased with this trend and the progress it shows as we expand relationships with our largest customers. This account expansion trend is also reflected in our large contract customers. In the first quarter of 2024, we had 1696 contracts valued at over $100,000 per year, up 24% from Q1 the prior year. The number of contracts valued at over $150,000 totaled 961 customers in the first quarter, up 29% from Q1 2023, and the number of contracts valued over $300,000 totaled 332, up 34% from Q1 2023.

Operator: Our next question comes from Dan Jester from BMO Capital Markets. Your line is now open.

Julie Iskow: Our next question comes from Dan Jester from BMO capital markets. Your line is now open.

Daniel William Jester: Great. Thanks for taking my question tonight. In the prepared remarks, you mentioned a really interesting European ESG win, which was great to hear. I'd love to just get sort of a European specific update in terms of how you're seeing demand. And I think in the recent past, you've made some changes in how you go to market in your sales organization in Europe. And so I'd love to hear sort of, you know, how you're seeing productivity today. And do you expect some further improvement as the year progresses in Europe?

Daniel William Jester: Great. Thanks for taking my questions Tonight.

Daniel William Jester: In the prepared remarks, you mentioned.

Daniel William Jester: The really interesting European ESG win wishes.

Daniel William Jester: Which is great to here I'd love to just get sort of a European specific update in terms of how you're seeing demand then I think in the recent past you've made some changes in how you go to market and your sales organization in Europe, and so I'd love to sort of how you are seeing productivity today and do you expect.

Daniel William Jester: Further improvement as the year progresses in Europe.

Julie Iskow: Sure, absolutely. Thanks, Dan.

Speaker Change: Sure absolutely thanks, Dan.

Jill Klindt: Moving on to our operating results, Gross Profit, totaled $136.5 million in Q1, up 20% from the prior year. Gross margin improved year over year by 220 basis points, increasing to 78% in Q1, 2024. This was driven by improved leverage in compensation and cloud computing costs versus the same quarter a year ago. Operating expenses increased 8% from Q1, 2023, driving 610 basis points of our margin improvement versus the prior year. Our continued focus on process automation and efficiency helped improve productivity and drove margin improvement compared to Q1, 2023.

Speaker Change: Our momentum in Europe, just continues to build and we're very pleased with it.

Speaker Change: The results, we're seeing there and we mentioned last quarter, we're now up to 15% of revenue outside of North America.

Speaker Change: And that's primarily in Europe, and I also highlighted in my prepared remarks.

Speaker Change: We have some signature wins, there multi solution six figure deals and with our partners. So we're very very bullish on the opportunity there our value prop of assured integrated reporting.

Julie Iskow: Our momentum in Europe just continues to build, and we're very pleased with it and the results we're seeing there. And as we mentioned last quarter, we're now up to 15% of revenue outside of North America, and that's primarily in Europe. And I also highlight in my prepared remarks that we have some signature wins there, multi-solution, six-figure deals, and with our partners. So we're very bullish on the opportunity there. Our value prop of assured integrated reporting is responding, particularly because of the CSRD.

Julie Iskow: Resonating, particularly because of the CSR D. It is in fact, a short integrated reporting the financials with the nonfinancial data with assurance.

Julie Iskow: It is, in fact, assured integrated reporting, the financials with the non-financial data with assurance. And I will also say, however, despite the progress, we're still very open about the need for continued improvement there, and we will continue to do that. So our strategy in Europe is working. It's intact. Messaging and assured integrated reporting, responding. So lots of green sheets there and seeing a lot of early customer wins driven by the requirements in regulation.

Julie Iskow: I will also say however, despite the progress we are still very open about the need for continued improvement there and we will continue to do that so our strategy in Europe is working it's intact.

Jill Klindt: We posted operating profit of $6 million in Q1, 2024, compared to the Q1, 2023 operating loss of $7.3 million. We were pleased with the leverage we delivered. The operating profit improvement was driven by revenue growth, disciplined investments, and managing controllable expenses.

Julie Iskow: <unk> and short integrate reporting resonating so lots of lots of green shoots there.

Julie Iskow: Seeing a lot of early customer customer wins, driven by the requirements and regulation.

Jill Klindt: At March 31, 2024, cash, cash equivalence, and marketable securities increased $25 million sequentially to a balance of $838 million. Operating activities in Q1, 2024 resulted in cash provided of $25 million compared with cash provided of $6 million in the same quarter a year ago. In Q1, 2024, our free cash flow margin was 14%, an improvement of over 1,000 basis points versus Q1, 2023.

Daniel William Jester: Great, thank you. That's really helpful.

Speaker Change: Great. Thank you that's really helpful and then.

Speaker Change: Maybe just a question for Joe.

Daniel William Jester: A follow up on the seasonality comment before.

Jill E. Klindt: And then maybe this is a question for Jill to follow up on the seasonality comment before. You know, it does look like bookings in the first quarter did slow down again sequentially. And so I wonder, can you just help us understand your level of visibility into the back half? And maybe just help us remind ourselves about sort of sales cycles and how you're thinking about visibility in the platform today, relative to a similar period in time in other years? Anything you could compare and contrast would be really helpful. Thank you.

Daniel William Jester: It does look like bookings in the first quarter did did slow down again sequentially.

Jill: So I wonder can you just help us understand your level of visibility into the back half.

Jill E. Klindt: And maybe just help us remind us about sort of sales cycles.

Jill E. Klindt: How youre thinking about the visibility in the platform today.

Jill Klindt: Turning now to our guidance for Q2 and the full year 2024, as Julie discussed, it remains an uncertain macro and a measured customer buying environment. However, we continue to focus on execution and are encouraged by opportunities to drive growth over the longer term. For the second quarter of 2024, we expect total revenue to range from $174 million to $176 million. We expect services revenue will beat down compared to Q2, 2023. This is a result of the shift I discussed, moving our low margin setup and consulting services to our partners, as well as flat to slightly down XBRL services revenue.

Jill E. Klindt: Relative to it too.

Jill E. Klindt: Similar period of time and other years anything you would compare and contrast would be really helpful. Thank you.

Daniel William Jester: So we do have pretty standard seasonality in our bookings year over year, even as we've been talking about when you have a tough macro environment, Q1 is always lower. And it's because we have a lot of our customers that we're working with tend to be heads down for the majority of the quarter doing their annual filings for calendar filing. And so that's pretty standard. And then Q2 and Q3 both pick up. They can be more similar, sometimes a little bit higher in Q2. But then Q4 is always seasonally our largest quarter for bookings, just as an overview of our booking season.

Jill: Sure. So we do have pretty standard seasonality and our bookings year over year.

Daniel William Jester: Even as we've been talking about when you have a tough macro environment Q1 is always lower.

Daniel William Jester: And it's because we have a lot of our customers that we're working with tend to be heads down for the majority of the quarter doing their annual filings for calendar filers.

Daniel William Jester: And and.

Daniel William Jester: So that is that's pretty standard and then Q2 and Q3.

Daniel William Jester: Both pick up they can be more similar.

Jill Klindt: We expect non-gap operating income to range from $2 million to $4 million, and that income of $16 to 19 cents on a per share basis. Our share count will be approximately $55 million weighted average shares. Seasonality in our business can impact quarter over quarter revenue and expenses. Our Q2, 2024 operating margin guidance reflects a seasonal quarter over quarter decrease in XBRL services revenue, as well as expense fluctuations.

Daniel William Jester: Sometimes a little bit higher in Q2.

Daniel William Jester: I think Q4 is always seasonally our largest quarter for bookings just as a.

Daniel William Jester: Overview of our booking seasonality.

Operator: Great, thank you very much.

Speaker Change: Great. Thank you very much.

Ryan Scott Krieger: The next question comes from Ryan Krieger from Wolf Research. Your line is now open.

Operator: The next question comes from Ryan Krueger from Wolfe Research. Your line is now open.

Ryan Scott Krieger: Great, thanks for taking the question. So I just kind of want to add on to the question that was just asked. If we look at RPO grew kind of 20% in the quarter, but that's been steadily declining the last couple quarters, and then sequential customer ads were lower than a typical one queue. So was there anything anomalous to call out there, such as, you know, push deals or sales cycles extending or anything that weighed on those metrics, just because they do look a little bit lower than the typical, typical amount? And then, to the extent you can add some color. How did April trend compared to kind of 1Q? So we're

Ryan Scott Krieger: Great. Thanks for taking the question. So I just kind of want to add on to the question that was just asked if we will look at.

Jill Klindt: For the full year 2024, we expect total revenue to be between $719 million and $723 million. We expect total services revenue to remain flat. We expect XBRL services revenue will continue to grow at a low single-digit rate. For setup and consulting revenue, we expect a similar rate of decline from what we saw in 2023. We expect our subscription revenue growth to be slightly over 16 percent at the midpoint. We are increasing our guidance for non-gap operating income to range from $27 million to $31 million, or a net profit of $96 to $1.3 on a per share basis. Our share count will be approximately 55 million weighted average shares. We believe we will post positive free cash flow margin of 11% for the full year 2024.

Ryan Scott Krieger: <unk> grew kind of 20% in the quarter, but thats been steadily declining in the last couple of quarters, and then sequential customer adds were lower than a typical <unk>. So was there anything anomalous to call out there such as pushed deals are.

Ryan Scott Krieger:

Ryan Scott Krieger: Sales cycles, extending or anything that weighed on those metrics just because they.

Ryan Scott Krieger: They do look a little bit lower than the typical.

Ryan Scott Krieger: Typical amount and then to the extent you can add some color.

Ryan Scott Krieger: How did April trend compared to kind of <unk>.

Jill E. Klindt: So we're, I'll start with the RPO portion of that question. Ryan, thanks for the question. When we look at our RPO, for the past few years, we've been talking about that we've been moving our contracts over to being mostly three-year contracts. The majority of our contracts are now three-year terms, and so we did have some ebbs and flows movements due to that changeover over the last few years, moving from annual contracts to three-year contracts in the RPO metrics. The RPO was a little bit; it took out a lot of that noise, but not all of it.

Speaker Change: So we're oh.

Jill E. Klindt: I'll start with the RVO a portion of that question Ryan Thanks for the question.

Jill E. Klindt: When we look at our IPO for the past few years, we've been talking about that we've been moving our contracts over to being mostly three year contracts. The majority of our contracts are now three year terms and so we did have some.

Jill Klindt: To reiterate Julie's comments, while we are focused on growth, we continue to look for leverage in our business. With calculated investment, we believe we can expect the best returns in the long term.

Jill E. Klindt: Ebbs and flows movements due to that changeover over the last few years moving from annual contracts are three year contracts and the RPM metrics.

Jill Klindt: Before we proceed to the Q&A session, I'd like to emphasize three important points. First, ESG reporting is an increasing requirement. We believe our platform continues to be valuable to companies as they solve for this need. Second, I want to reiterate how pleased we are with the large account growth we saw during Q1. Expansion into our existing customer base is not only an important factor contributing to our growth, but also help strengthen our customer relationships. And finally, our focus on generating leverage from our existing resources led to our full year operating margin guidance increase. We look for efficient ways to expand in our large and relatively unaddressed hand.

Jill E. Klindt: <unk> was a little bit.

Jill E. Klindt: Took out a lot of that noise, but not all of it and so we do think that over the course of 2024 that will settle into a more regular seasonal cadence of our apio and and so that's part of what we're seeing.

Jill E. Klindt: And so we do think that over the course of 2024, we'll settle into a more regular seasonal cadence of RPO. And so that's part of what we're seeing. But what we're also seeing in the RPO number in Q1 is the result of the slowing, the macro factor slowing bookings that we saw throughout 2023 that we've talked about. And so it is down.

Jill E. Klindt: But what we're also seeing in the European number in Q1 is that the.

Jill E. Klindt: As a result of the slowing.

Jill E. Klindt: The macro factors slowing bookings that we saw throughout 2023, we've talked about and so so it is down it's something that we're watching really closely.

Jill E. Klindt: It's something that we're watching really closely. But we feel very strongly that our revenue model is solid, and we expect to be able to deliver on the revenue guide that we gave for the full year. In the second part of your question, logo growth, you heard in the prepared remarks. 45% of our revenue in Q1 came from new customers added in the last 12 months, and that is down from where it was in Q4.

Jill E. Klindt: But you know.

Jill E. Klindt: We feel very strongly that the our model on revenue is is solid and we expect to be able to deliver on the guide for revenue that we gave for the full year.

Jill Klindt: In conclusion, I want to echo Julie's thanks to our employees. Your dedication and enthusiasm led to our placement on Fortune's 100 best companies to work for for the 6th year in a row. It's because of you that we continue to deliver a positive impact, benefiting everyone involved, customers, partners, shareholders, and employees.

Jill E. Klindt: And in the second part of your question the logo growth.

Jill E. Klindt: We did you heard the.

Jill E. Klindt: In the prepared remarks, 45% of our revenue in Q1 came from new customers added in the last 12 months.

Jill E. Klindt: We have seen some slowing in new logos, and a lot of that is because of US markets, slowing in capital markets, fewer new customers, or new public companies in the US. When we see new logo growth, it does more heavily skew towards EMEA, where customers are or skews towards some of our other newer areas and geographies. But we still are focusing really heavily on that mix. It's very important for us as a company, as Julie was just talking about a moment ago, that we need to expand within our existing base, but we also need those new customers in order to continue to build the business. We still find both very important.

Jill E. Klindt: And that is down from where it was in Q4, we have seen some slowing in the new logos a lot of that is because of U.

Operator: We're now ready to take your questions.

Operator: Operator, please begin the Q&A session. We are now opening the floor for question and answer session. If you'd like to ask a question, please press for and number 1 on your telephone keypad.

Jill E. Klindt: U S markets slowing in cap markets fewer new customers or new new public companies in the U S.

Jill E. Klindt: We see new logo growth it does have more heavily skewed towards EMEA were.

Steve Anders: Our first question comes from Steve Anders from City. Your line is now open. Okay, great. Thanks for thanks for taking the questions here. I guess maybe just a start. I guess it'd be great to hear kind of what's going on with ESG conversation post, you know, the SEC clarification and maybe some of the contestation there and along with the uncertainty. Like as the tone of those conversations changed or the drive to look for ESG solutions in the market, just how does that kind of evolve in the past few months?

Jill E. Klindt: Customers.

Jill E. Klindt: Or skews towards some of our other newer areas geographies.

Jill E. Klindt: But we still are focusing really heavily on that makes it very important for us as a company as Julie was just talking about.

Speaker Change: I'm going to go.

Jill E. Klindt: That we need.

Jill E. Klindt: We need to expand within our existing base, but we also need those new customers in order to continue to build the business. So both we still find both very important.

Speaker Change: Great. Thank you.

Jill E. Klindt: Thanks.

Operator: Our next question comes from Adam Hotchkiss from Goldman Sachs. Your line is now open.

Jill E. Klindt: Our next question comes from Adam Hotchkiss from Goldman Sachs. Your line is now open.

Adam R. Hotchkiss: Great, thanks for taking the questions. I guess to start, I'd just be curious how you're seeing the non-EU-based global multinationals approach ESG, given they're a bit later in the CSRD regulatory requirement cycle but still have California and potentially SEC to grapple with. Is there more of a willingness to take a global approach to ESG here, or are companies taking this more on a piecemeal basis, depending on which geographies have impending regulations? Just curious if you're seeing anything interesting there.

Adam R. Hotchkiss: Great. Thanks for taking the questions I guess to start I would just be curious how youre seeing the non EU based global multinationals approach ESG given they're a bit later in the CSR D regulatory requirement cycle, but still have California, and potentially sell to grapple with is there more of a willingness to take it.

Steve Anders: Sure, this is Julie. Thank you, Steve, for the question. I am sure it's on minds of many. It's a great question given the visibility of ESG. The SEC did issue their climate disclosure rule and then put a stay on the rule a month later. We believe the publishing of the rule in fact did provide companies with a lot of clarity on what will be required and the detail to build, you know, road map and how they'll have to comply.

Adam R. Hotchkiss: Global approach to ESG here of companies taking.

Adam R. Hotchkiss: Taking this more on a piecemeal basis, depending on which geographies.

Adam R. Hotchkiss: And pending regulation, just curious if you're seeing anything interesting there.

Steve Anders: As you know, working with has 92% of the Russell 1000s clients. So we have a very healthy share of large accelerated and accelerated filers who are going to need to comply. Now, although they put the stay on the rule, the SEC has stated that it intends to vigorously defend the validity of the climate rules and it's the previous, you know, the previous climate change related disclosure guidance. They've cited a lot. It's still very much enforced.

Julie Iskow: Yeah, I mean, a great question. And you're seeing ESG worldwide in various regions. But I will start out just by saying ESG remained one of our top solutions in booking performance in Q1. And as I mentioned on the call, in the prepared remarks, it's been in the top three bookings for the last seven quarters. And we continue to add Fortune 500 clients to our already elite roster of ESG account expansions. We're now over 30% of the Fortune 100.

Speaker Change: I mean, that's a great question Youre seeing ESG worldwide in various regions, but I will start off just by saying ESG remains one of our top solutions in booking performance in Q1, and as I mentioned on the call.

Julie Iskow: The prepared remarks, it's been it's been in the top three bookings for the last seven quarters and we continue to add fortune 500 clients. Two are already sort of elite roster of ESG account expansions, we're now over 30% of the fortune 100.

Steve Anders: Rost, but you're right, not nine cases were filed, challenging that climate rule, the recent climate rule, and several cases on the other side too, but we'll see what happens there with the lawsuits, and they're in the eight-circuit court right now. But as we've communicated in the past, I mean regardless of the regulations, regardless of the mandates, companies have been and they're going to continue to purchase software to report sustainability and financial information.

Julie Iskow: So we continue to see strong demand curve work egos ESG solution, even without the regulation in the U S and yes, even with the political debate around ESG grams and.

Julie Iskow: So we continue to see strong demand for Workiva's ESG solution even without regulation in the US. And yes, even with the political debate around ESG acronyms and stakeholder demand for transparency in non-financial data is continuing to increase. And a lot of US companies know they will need to comply with the state of California and other regulations, including the CSRD, though it was, you know, had a change in its reporting date for the non-EU.

Julie Iskow: Stakeholder demand for the transparency and the non financial data is continuing to increase and a lot of the U S. Companies know they will need to comply with state of California, and other regulations, including the CSR D. Though it was.

Steve Anders: In category of customers, yes, that we call box checkers or compliers. We do believe there may be some delay in purchasing, but we believe, again, the publishing this rule provided a lot of clarity. And again, we have got 92% of that Russell 1000 clients and we'll have to help you share. So from our perspective, SEC being just one of the many stakeholders that organizations have to factor in here for sustainability day collection and reporting.

Julie Iskow: You haven't had a change in its reporting date for the non EU, but we are absolutely seeing global approach.

Julie Iskow: But we are absolutely seeing a global approach and striving to meet those requirements. And again, it's not just around the regulation, the mandatory nature of things. It's companies doing that. They've made science-based targets and they need to maintain, you know, progress towards those. So they need that visibility. There are a number of stakeholders beyond the regulatory bodies that they're working towards satisfying. So we're absolutely seeing strong demand for ESG.

Julie Iskow: Striving to meet those requirements and again, it's not just around the regulation and the mandatory nature of things companies are doing that they made science based targets that they need to maintain.

Steve Anders: So we've not yet seen any withdrawal from that. We see again, a lot of conversations around there's still California coming even CSRD in Europe and so forth. So the conversations have not changed given that law. There's just a lot of clarity on what it will be when it comes.

Julie Iskow: Working towards the.

Speaker Change: Yeah, that's great. Thanks, Julia and then just on that point I saw the ESG practitioner survey.

Adam R. Hotchkiss: practitioner survey you released. And I think one of the stats that were pretty interesting was that 81% of companies not subject to CSRB intend to still partially and fully align with sustainability disclosures. You know, curious, you know, given how stringent some of those things are around scope emissions and things like that, what do you think is driving the willingness to do that? And then, you know, how do you think about getting from 81% of companies wanting to partially or fully align to actually starting to move on this?

Adam R. Hotchkiss: Release, then I think one of the stats that was pretty interesting was 81% of company is not subject to see TSV intending to still partially in fully align with sustainability disclosures curious given how.

Julie Iskow: Okay, great. That's the helpful context there. And then maybe for, well, I guess maybe just on the outlook, especially on the margins that I mean, pretty healthy, healthy ways there. I guess, how should we be thinking about maybe what has changed from prior assumptions and maybe what's the line items would be seeing the most leverage here. So Evan, Jill, you can chime in, but essentially we're focused on, of course, productivity, as we said, top line growth is incredibly important.

Adam R. Hotchkiss: Yeah, how stringent some of those things are around scope emissions and things like that what you think is.

Adam R. Hotchkiss: Driving the willingness to do that and then how you think about getting from 81% of companies.

Adam R. Hotchkiss: Wanting to partially or fully aligning to actually starting to move on this.

Julie Iskow: I mean, we're seeing, we were not surprised by that statistic because, as I just described a moment ago, that's what we're seeing in our client base, and the drivers are, as I described, stakeholder demand, right, it isn't just the regulation. They know it's coming, and it's not a matter of if, it's a matter of when, and they're getting ahead of it. It is, the larger the company and the more complex the company, the harder it is to comply. But they're getting ahead of it, they're purchasing software, they're getting third parties and partners to help with this, doing their materiality assessments, and getting their data in shape. I mean, the same, the same.

Adam R. Hotchkiss: I mean, we're seeing where we were not surprised by that statistic because as I. Just described a moment ago. That's what we're seeing in our client base and the drivers are as I described it's stakeholder demand underwrite it isn't just the regulation they know what's coming and it's not a matter of if it's a matter of when and they're getting ahead of it it is.

Julie Iskow: That's our largest focus. We'll continue to do that. But as we've been talking about on calls prior, we have been pushing hard on being very thoughtful about the roles that we hire, the people that we hire in those roles and that we have the right activities going on to go after our large. Relatively again, I'm dressed ham. So we are hiring well. We're being thoughtful about the way we're using using our teams.

Julie Iskow: We've also talked about the efficiency and the productivity and the processes and automation that we're adding into the mix because we are moving from a, you know, half a billion to a billion dollar company things need to be done differently. So there's a lot more rigor and discipline and the way we're working. So again, efficiency is automation, right people and being thoughtful about the hiring. And really Steve, you're going to see that across the income statement.

Julie Iskow: The survey also showed they're beginning to trust their data more, they're getting their data in order, and software is, of course, helping with that. So I'm not surprised at that statistic at all given what we're seeing in the market. Okay, really helpful.

Julie Iskow: The survey also showed theyre beginning to trust their data more theyre getting their data in an order and software is of course, helping without so not surprise it up statistic at all given what we're seeing in the market today.

Adam R. Hotchkiss: Okay, really helpful. Thanks, Julie.

Julie Iskow: Okay really helpful. Thanks Julien.

Operator: We don't have any pending questions at the moment. I'd now like to hand over to the management for the final remarks.

Speaker Change: We don't have any pending questions has at the moment I would now like to hand back over to management for final remarks.

Julie Iskow: It's going to be across all teams where we have the same motion in place. It's actually what Julie's talking about. So it will be improvement across the board. Okay. Perfect. Great to hear and thanks for taking the question.

Unknown Executive: Yeah, well, thank you, everybody, for joining the call. And this concludes today's call. And please go to the investor relations site for Workiva and download our investor presentation for more information. Thank you. Thank you so much.

Unknown Executive: Thank you.

Speaker Change: Yes, well, thank you everyone for joining the call.

Speaker Change: This concludes today's call.

Unknown Executive: Please go on the Investor Relations site for Cuba, and download our investor presentation for more information.

Speaker Change: Thank you.

Alex Clark: Our next question comes from Alex. Clark from Raymond James. Your line is now open. Great. Thank you. I think I'm just going to follow up on Steve's last question there. Jill, in terms of kind of the revenue and profitability seasonality this year. Can you just talk about some of the puts and takes on what's driving the second quarter outlook, but the higher kind of second half of the year outlook. Any more color you can give you on the subscription versus services split.

Operator: Thank you so much for attending today's call. We hope you have a wonderful day. Stay safe.

Speaker Change: Thank you so much for attending today's call. We hope you have a wonderful day. Thank you.

Operator: Sure.

Operator: Please wait; the conference will begin shortly.

Operator: Please wait the conference will be.

Alex Clark: Or is there anything you're seeing in terms of demand environment, second quarter that might not impact to you, but hit in the back half of the year. Thank you. Thanks, Alex for the question. So, for Q2, we did see, well, there is always seasonality, especially in services revenue, X-VRL, so this is revenue from Q1 to Q2. In Q1, we have a lot of work that's done related to the case and that's larger volume, large dollars than what we see for X-VRL, tagging services work in Q2.

Alex Clark: The other piece that we have talked about is that the macro environment does impact, has been impacting our bookings, we have seen those extended deal cycles, and especially Q1 seasonally has lower bookings for us than any other quarter in the year, and so just looking at seasonality in SNS and in subscription revenue is what we're seeing in Q2.

Julie Iskow: And you saw for the full year, and for the second half, we're still very strongly believe that for the full year growth, and as you even out over the each quarter, we're still have very strong expectations for the full year, and then related to expense in Q2, we do have some movement between quarters, sometimes in event internal events and that sort of thing and just seasonal spending that can fluctuate quarter over quarter, but in looking at the full year, you can see exactly what you mentioned in the second half, we do believe that everything evens out as far as the quarter over quarter spend and feel very strongly in pleased with how our forecast is shaping up for the full year. Okay, thank you for that color there, and then Julie, maybe just one for you.

Julie Iskow: Given some of the prepared remarks commentary around the multi-solution customer success, and as we think about town of capital markets activity starting to come back here a little bit, can you just talk about how that benefits some of your non-financial reporting solutions, so how much more solutions per customer doesn't SEC customer take for a strenon SEC base, or maybe set a different way. How important is new public company growth for your non-financial reporting solutions?

Julie Iskow: Thanks. So we do, of course, want to keep a blend of new logos and new solutions with existing customers. That's what we strive to do somewhere between the 4060s about where we, you know, the largest gap we want to have, so we are continuing to do both new logos and new solutions. Multi-solution, I'll tell you this, I mean, our current customer base is a tremendous asset for us. I mean, we've reported in our 10K, we now have 90% of the Fortune 100, 85% of the Fortune 500, and 80% of the Fortune 1000.

Julie Iskow: So going into that install base, again, is significant drive for us and a lot of effort. We go in with our partners, and our relationships with the partners are absolutely contributing to strong success there with our expansion. And those multi-solution account expansion deals really do push the revenue. We go out, as you know, to mark with a short integrated reporting, which means we are working with our customers on financial reporting, which includes multi-entry reporting and management reporting, and so much including cap markets, which you asked about.

Julie Iskow: So a lot of landing with cap markets and private company reporting, and then rolling into the other solutions of financial reporting, non-financial or sustainability or DSG, along with our GRC solutions. So we are resilient even without the cap markets, business right now coming back in any substantive way, but because of our briquette portfolio, and we'll heavily focus on that, and we've not baked any cat markets looking coming into the next several months for this year's quarters for this year. Yeah, we expect those cat market bookings to remain fairly flat throughout the year, just what we've been seeing over the past few quarters. Okay, great color.

Unknown Executive: Thank you both.

Dominique Manansala: Question comes from Terri Tillman from Tourist Securities. Your line is now open. Hi, this is Dominique Manansala, on for Terri. Just wanted to look at some of the newer Genai capabilities like the Genai Infosys and mentioned on the call or the ESD-specific one where users can drop closures. Could you share any feedback you may receive from customers as far and as you speak to customers and gather some Genai leads. Are there any other specific verticals or sectors you see holding the greatest potential with Genai this year?

Julie Iskow: So I'll comment on our industry, of course, our sector and workiva, but thanks for the question. And another topic of 2023 and it has rolled into 2024. We're definitely enthusiastic about the delivery of our generative AI capabilities to power new features on the platform. You mentioned a few workiva users get large language models in app now from Google and Microsoft and NAWF integrated into our platform, secure platform, not their information is not used to train those large language models.

Julie Iskow: Early feedback as you asked about from customers is that they're appreciating being able to use those capabilities in app both for convenience and of course for data security. They can author and edit and rewrite leveraging the capabilities and it's across all workflows in our platform. We also, as you mentioned, rolled out the capability for ESG specific use and we rolled out the the help and training and enablement capability within within the platform.

Julie Iskow: As far as feedback, we're watching how our users are using the capabilities, we're learning, we're understanding, we're getting information about how they're valuing those capabilities and that's really what our initial focus is on iterating to ensure they are getting value. And we create new features and capabilities in generative AI. Our team is looking into how it's being leveraged. Great. Thank you.

Dan Jester: Our next question comes from Dan Jester from DMO Capital Markets. Your line is now open. Great. Thanks for taking my question tonight. In the prepared remarks you mentioned, a really interesting European ESG win, which was great to hear. I'd love to just get a sort of European specific update in terms of how you're seeing demand and I think in the recent past you've made some changes and how you go to market and your sales organization in Europe.

Dan Jester: And so I'd love sort of how you're seeing productivity today and do expect kind of further improvement as the Europe progresses in Europe. Sure. Absolutely. Thanks, Dan. Our momentum in Europe just continues to build and we're very pleased with it and the results we're seeing there. And we mentioned last quarter, we're now up to 15% of revenue outside in North America and that's primarily in Europe. And I also highlighted in my prepared remarks, we have some signature wins there, multi-solution six-figure deals and with our partners.

Dan Jester: So we're very bullish on the opportunity there. Our value prop of a short integrated reporting is resonating particularly because of the CSRD. It is in fact a short integrated reporting, the financials with the non-financial data with assurance. And I will also say, however, despite the progress, we're still very open about the needs for continued improvement there. And we will continue to do that. So our strategy in Europe is working. It's intact, messaging and short integrated reporting, resonating. So lots of green sheep there and seeing a lot of early customer wins driven by the requirements and regulations. Great. Thank you. That's really helpful.

Jill Klindt: And then maybe it's the question for Jill to follow up on the seasonality comment before, you know, it does look like bookings in the first quarter did slow down again sequentially. And so I wonder, can you just help us understand your level of visibility into the back half and maybe just help us remind us about sort of sales cycles and how you're thinking about the visibility and the platform today, you know, relative to a similar period in time in other years, anything you would compare and contrast would be really helpful.

Jill Klindt: Thank you. All right. So we do have pretty standard seasonality in our bookings year over year. Even as we've been talking about, when you have a tough macro environment, Q1 is always lower. And it's because we have a lot of our customers that we're working with tend to be heads down for the majority of the quarter doing their annual filings for talent or filers. And so that's pretty standard. And then Q2 and Q3 both pick up.

Jill Klindt: They can be more similar, you know, sometimes a little bit higher Q2. But thank you for as always seasonally our largest quarter for bookings just as an overview of our booking seasonality. Great. Thank you very much.

Ryan Krieger: The next question comes from Ryan Krieger from Wolf Research. Your line is now open. Great. Thanks for taking the question. So I just kind of want to add on to the question that was just asked if we look at RPO group kind of 20% in the quarter, but that's been steadily declining the last couple quarters. And then sequential customer ads were lower than a typical one Q. So was there anything anomalous to call out there such as you know push deals or sales cycles extending or anything that weighed on those metrics just because they do look a little bit lower than the typical amount. And then to the extent you can add some color how did April trend compared to kind of one Q.

Jill Klindt: So we're it's all start with the RPO question that question Ryan thanks for the question. When we look at our RPO for the past few years we've been talking about that we've been moving our contracts over to being mostly three year contracts some majority of our contracts are now three year terms. And so we did have some as inflows movements due to that change over the last few years moving from annual contracts to three year contracts in the RPO metrics.

Jill Klindt: PRPO was a little bit it took out a lot of that noise but not all of it. And so we do think that over the course of 2024 that will settle into a more regular seasonal cadence of RPO. And so that's part of what we're seeing. But what we're also seeing in the RPO number in Q1 is the result of the slowing the macro factors slowing the bookings that we saw throughout 2023 what we've talked about.

Jill Klindt: And so it is down it's something that we're watching really closely. But you know we we feel very strongly that the our model on revenue is is solid and we expect to be able to deliver on the guide per revenue that we gave for the full year.

Ryan Krieger: And in the second part of your questions a logo growth. We did you know you heard the in the prepared remarks 45% of our revenue in Q1 came from new customers at the last 12 months. And that is down from where it wasn't Q4. We have seen some slowing in new logos a lot of that is because of US markets the slowing and cap markets fewer new customers are new new public companies in the US.

Ryan Krieger: And when we see new local growth it does have more heavily skewed towards a maya where customers or skewed towards some of our other newer areas geographies. But we still are focusing really heavily on that mix. It's very important for us as a company as Julie was just talking about a moment ago that we need to get families in our existing base. But we also need those new customers in order to continue to build the business. So we still find both very important. Great, thank you. Thank you.

Adam Hotchkiss: Our next question comes from Adam Hotchkiss, from Goldman Sachs, your line is now open. Great, thanks for taking a question. I guess the start, I'm just curious how you're seeing the non-EU-based global multinationals approach ESG, given there are a bit later in the CSRD regulatory requirements like, oh, but still have California and potentially SEC to grapple with. Is there more of a willingness to take a global approach to ESG here or companies taking this more on a piecemeal basis, depending on which geographies have impending regulation, just curious if you're seeing anything interesting there?

Julie Iskow: Yeah, I mean, a great question and you'll be seeing ESG worldwide in various regions, but I will start out just by saying ESG remains one of our top solutions in booking performance in Q1 and as I mentioned on the call, it's prepared remarks. It's been in the top three bookings for the last seven quarters. We continue to add Fortune 500 clients to our already elite roster of ESG account expansions. We're now over 30% of the Fortune 100.

Julie Iskow: So we continue to see strong demand for Workiva's ESG solution even without the regulation in the US. And yes, even with the political debate around ESG accrams and stakeholder demand for the transparency and the non-cranial data is continuing to increase and a lot of the US companies know they will need to comply with state of California and other regulations, including the CSRD, though it had a change in its reporting date for the non-EU.

Julie Iskow: But we are absolutely seeing global approach and striving to meet those requirements. And again, it's not just around the regulation and the mandatory nature of things. It's companies are doing that. They've made science-based targets and they need to maintain progress towards those so they need that visibility. There are a number of stakeholders beyond regulatory bodies that they're working towards satisfying. So we're also seeing strong demand for ESG. Yeah, that's great. Thanks, Julie.

Julie Iskow: And then just on that point, I saw the ESG practitioner survey you released. And I think one of the stats that was pretty interesting was the 81% of companies not subject to CSRD intending to still partially and fully align with sustainability disclosure. As curious, given how stringent some of those things are around scope emissions and things like that, what you think is driving the willingness to do that. And then how do you think about getting from 81% of companies wanting to partially or fully align to actually starting to move on this?

Julie Iskow: We were not surprised by that statistic because as I just described a moment ago, that's what we're seeing in our client base. And the drivers are, as I described, it's stakeholder demand, right? It isn't just the regulation. They know it's coming and it's not a matter of if it's a matter of when and they're getting ahead of it. The larger the company and the more complex the company, the harder it is to comply, they're getting ahead of it, they're purchasing software, they're getting third parties and partners to help with this, doing their materiality assessments and getting their data in shape.

Julie Iskow: I mean the same, the same... Survey also showed they're beginning to trust their data more, they're getting their data in order and software is of course helping with that. So, not surprised at that statistic at all given what we're seeing in the market today. Okay, really helpful. Thanks, Julie.

Operator: We don't have any pending questions as of the moment.

Unknown Executive: I'd now like to hand back over to the management for the final remarks. Yeah, well, thank you, everybody for joining the call and just concludes today's call and please go on the investor relations site for Workiva and download our investor presentation for more information. Thank you.

Operator: Thank you so much for attending today's call. We hope you have a wonderful day. Stay safe. Please wait, the conference will begin.