Q2 2025 Workiva Inc Earnings Call

Gary (Operator): Good afternoon, ladies and gentlemen. My name is Gary, and I will be your host operator on this call. After the prepared comments, we will conduct a question and answer session. Instructions will be provided at that time. Please note that this call is being recorded on July 31st, 2025, at 5:00 PM Eastern Time. I would now like to turn the meeting over to your host for today's call, Katie White, Senior Director of Investor Relations at Workiva. Please go ahead.

Good afternoon, ladies and gentlemen. My name is Gary and I will be your host operator on this call.

After the prepared, comments, we will conduct a question and answer session.

Katie White: Good afternoon, and thank you for joining Workiva's Q2 2025 conference call. During today's call, we will review our second quarter results and discuss our guidance for the third quarter and full year 2025. Today's call 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 Q&A session where we will be joined by Mike Rost, our Chief Strategy Officer. After market close today, we issued a press release, which is available on our Investor Relations website along with supplemental materials. This conference call is being webcast live, and following the call, an audio replay will be available on our website. During today's call, we will be making forward-looking statements regarding future events and financial performance, including guidance for the third quarter and full fiscal year 2025.

Good afternoon and thank you for joining. We're Koz Q2 2025 conference call.

During today's call, we will review our second-quarter results and discuss our guidance for the third quarter and full year 2025.

Today's call will include comments from our chief executive officer, Julie. Isco followed by our Chief Financial Officer. Jill Clint

We will then open the call up for a Q&A session where we will be joined by Mike Rost our chief strategy officer.

After the market closed today, we issued a press release that is available on our investor relations website, along with supplemental materials.

The conference call is being webcast live and following the call. And audio replay will be available on our website.

Katie White: These forward-looking statements are based on our assumptions as to the macroeconomic, political, and regulatory environment as of today, reflect our best judgment based on factors currently known to us, and are subject to significant risks and uncertainties. Workiva cautions that these forward-looking statements are not guarantees of future performance. We undertake no obligation to update or revise these statements. If the call is reviewed after today, the information presented during this call may not contain current or accurate information. Please refer to the company's annual report on Form 10-K and subsequent filings with the SEC for factors that may cause our actual results to differ materially from those contained in our forward-looking statements. Also, during the course of today's call, we will refer to certain non-GAAP financial measures. Reconciliations of GAAP and non-GAAP measures are included in today's press release.

These 4 looking statements are based on our assumptions as to the macroeconomic political and Regulatory environment as of today.

Reflect our best judgment based on factors, currently known to us.

And our subject to significant risks and uncertainties.

Raiva cautions that these forward-looking statements are not guarantees of future performance.

we undertake no obligation to update or revise, these statements

Call is reviewed after today, the information presented during this call, may not contain current or accurate information.

Katie White: With that, we'll begin by turning the call over to Workiva's CEO, Julie Iskow.

Julie Iskow: Thank you, Katie, and thank you all for joining us today. In Q2 of 2025, we delivered another quarter of solid financial performance, powered by the continued demand for our broad portfolio solutions and our unified platform. We beat the high end of our revenue guidance with 23% growth in subscription revenue and 21% growth in total revenue. We also exceeded non-GAAP operating margin guidance by 380 basis points. Our business results reflect continued execution on the four pillars of our growth strategy: our connected platform, our high-value best-of-breed solutions, a high-performing partner ecosystem, and continued global expansion. We continue to see companies standardize on the Workiva platform and expand their solution use across financial reporting, GRC, sustainability, and industry-specific solutions.

Powered by the continued demand for our broad portfolio solutions and our unified platform.

We beat the high end of our Revenue Guidance with 23% growth in subscription revenue and 21% growth in total revenue.

We also exceeded non-GAAP operating margin guidance by 380 basis points.

Our business results reflect continued execution on the four pillars of our growth strategy.

Our connected platform our high-value, best of breed Solutions.

A high-performing partner, ecosystem and continued Global expansion.

Julie Iskow: Workiva continues to be a clear choice for those businesses that are looking to drive innovation across the office of the CFO while reducing total cost of ownership with a unified platform. The success of our strategy is showcased by the continued strength in our large contract cohorts. In Q2, the number of contracts valued over $100,000 increased 27%. Those over $300,000 increased 37%. And contracts valued over $500,000 increased 35%, all compared to Q2 of 2024. This growth was driven by both additional solution sales within our existing customer base and the acquisition of larger new logos. We are not just focused on growth. We are also committed to profitable growth. Entering the second half of 2025, we are raising our operating margin outlook to account for anticipated margin expansion in both Q3 and Q4.

We continue to see companies standardized on the work. Eve of platform and expand their solution. Use across financial reporting, GRC sustainability and Industry specific Solutions.

Or keep it continues to be a clear choice for those businesses that are looking to drive Innovation across the office of the CFO, while reducing total cost of ownership with a unified platform.

The success of our strategy is showcased by the continued strength in our large contract, cohorts.

In Q2 the number of contracts valued over $100,000 increased 27%.

Those over 300,000 dollars, increased 37%.

In contracts valued over dollars increased 35%.

All compared to Q2 of 2024.

This growth was driven by both additional Solutions sales within our existing customer base and the acquisition of larger new logos.

We are not just focused on growth.

We are also committed to profitable growth.

Julie Iskow: We also remain committed to the 2027 and 2030 operating margin targets that we announced a year ago. We believe that our disciplined approach to margin expansion will deliver on these results. While in the macro environment, economic conditions are still somewhat uncertain, we remain confident in our long-term prospects. The breadth of our solution portfolio and the resilience of our customer demand provide us with multiple levers for sustained growth. From my conversations with our customers and our prospects, the top priorities of CFOs and finance leaders remain constant. They want to protect margins while funding growth. They want to better manage risks and controls, and they want to embrace data and AI to transform their legacy processes. The Workiva platform provides the innovation, the productivity gains, and the compelling value that our customers need to enhance their operational productivity and to drive their transformations.

Entering the second half of 2025. We are raising our operating margin Outlook to account for anticipated, margin expansion in both Q3 and Q4.

We also remain committed to the 2027 and 2030 operating margin targets that we announced a year ago.

We believe that our disciplined approach to margin expansion will deliver on these results.

Well, in the macro environment, economic conditions are still somewhat uncertain. We remain confident in our long-term prospects.

The breadth of our solution portfolio and the resilience of our customer demand, provide us with multiple levels for sustained growth.

From my conversations with our customers and our prospects, the top priorities of CFOs and finance leaders remain constant.

They want to protect margins while funding growth.

They want to better manage risks and controls.

And they want to embrace data and AI to transform their legacy processes.

Julie Iskow: That compelling customer value is showcased by some of the large platform deals that we had in Q2. We continue to win with our broad portfolio of solutions. The first example is a US-based Fortune 500 bank that signed a seven-figure expansion deal across financial reporting, GRC, and sustainability. This 12-year loyal SEC and GRC customer significantly increased their use of the platform with the purchase of bank regulatory reporting, sustainability reporting, and Workiva Carbon. The primary purchasing driver for this opportunity was large financial institution readiness, as outlined by the Federal Reserve. This ratings framework requires integrated governance and rigorous risk analytics across all material risk areas, including climate risks. The deal was sourced and will be delivered by a Big Four firm. Second, we signed a mid-six-figure new logo deal with a large UK-based asset management company.

The work Eva platform provides the Innovation, the productivity gains and the compelling value that our customers need to enhance their operational productivity and to drive their transformation.

That compelling customer value is showcased by some of the large platform deals that we had in Q2 we continue to win with our broad portfolio Solutions.

The first example is a us-based Fortune, 500 bank that signed a 7-figure expansion deal across financial reporting, GRC and sustainability.

This 12-year loyal SEC and GRC customer significantly increased their use of the platform with the purchase of Bank regulatory reporting sustainability reporting and work Eva carbon

The primary purchasing driver for this opportunity was large financial institution Readiness as outlined by the Federal Reserve.

This ratings framework requires integrated governance and rigorous risk analytics across all material risk areas including climate risks.

The deal was sourced and will be delivered by a big 4 firm.

Julie Iskow: This firm sought to consolidate its tech stack by eliminating redundant point solutions. This led to the purchase of four Workiva solutions: ESEF, multi-entity reporting, sustainability reporting, and controls management. The differentiators that led to this five-year deal were Workiva's strategic partnerships with Big Four advisory firms, our ability to scale with the customer's requirements, and the option for fee-based premium customer support. And third, we signed a mid-six-figure, five-solution new logo deal with a South American utility company. They purchased SEC reporting, controls management, audit management, risk management, and sustainability, all to support a finance transformation project. The Workiva platform will be a replacement for manual processes used to assemble and file disclosures to the SEC, and it will also replace a legacy ERP-based GRC solution. This deal was sourced and will be delivered by a Big Four firm. It's not just about platform wins.

Second, we signed a mid 6-figure, new logo deal with a large uk-based Asset Management Company.

This firm sought to consolidate, its text stack by eliminating redundant Point Solutions.

Sustainability reporting and controls management.

The differentiators that led to this 5-year. Deal were workiva strategic Partnerships with big for advisory firms. Our ability to scale with the customer's requirements and the option for fee-based premium customer support.

And third, we signed a mid 6-figure 5 solution, new logo deal with the South American utility company.

They purchased SEC reporting controls management, audit management, risk management, and sustainability. All to support a finance transformation project.

The work Eva platform will be a replacement for manual processes used to assemble and file disclosures to the SEC.

And it will also replace a legacy Erp based GRC solution.

This deal with sourced and will be delivered by a big 4 firm.

Julie Iskow: Financial reporting, along with our financial services-specific solutions, remains the primary driver of Workiva's revenue. In Q2, we saw broad-based demand for our financial reporting solutions, including SEC reporting, multi-entity reporting, insurance reporting, and fund reporting. A key theme throughout the quarter was the sustained strong performance we achieved in financial services. This was powered by our tailored solutions for banks, investment firms, and insurers. These solutions support customers in their required financial disclosures. And in the case of banks, insurance companies, and investment firms, our solutions also support operational disclosures that are mission-critical to the operations of their businesses. We continue to see strong demand across this broad TAM as our platform has proven to streamline data management and reporting processes, reduce risk, and increase ROI across a wide range of customer requirements.

It's not just about platform wins.

Financial reporting along with our financial services, specific Solutions Remains the primary driver of work. Give us Revenue.

In Q2, we saw broad-based demand for our financial reporting Solutions.

Including SEC reporting, multi-entity, reporting insurance, reporting and fund reporting.

A key theme throughout the quarter was the sustained, strong performance. We achieved in financial services

This was powered by our tailored solutions for banks, investment firms, and insurers.

these Solutions support customers in their required Financial disclosures and in the case of banks, insurance companies and investment firms are solutions also support, operational disclosures that are mission critical to the operations of their businesses

Julie Iskow: Since debuting our public fund reporting solution earlier this year, we've seen strong uptake across private, regulated, and public funds, which is highlighting the promise of this rapidly expanding market. Asset managers are accelerating fund launches to drive growth, and that surge is heightening their need for automation to keep up. A great example of this is an account expansion deal with a Canadian financing company. This company signed a high six-figure account expansion deal to add bank reporting and multi-entity reporting. They also expanded their use across fund reporting. Over the past six years, this loyal customer has grown with us since first adopting Workiva's regulated fund reporting solution in 2019. Last quarter, they expanded that footprint by onboarding more than 100 public funds through our new public fund solution.

We continue to see strong demand across this broad Tam. As our platform has proven to streamline data management and Reporting processes reduce risk and increase Roi across a wide range of customer requirements.

Since debuting, our public fund reporting solution. Earlier this year, we've seen strong uptake across private regulated and public funds.

Which is highlighted in the promise of this rapidly expanding Market.

Asset managers are accelerating fund launches to drive growth and that surge is heightening their need for automation to keep up.

A great example of this is an account expansion deal with a Canadian financing company.

This company signed a high 6-figure account expansion deal to add Bank reporting and multi- entity reporting. They also expanded their use across fund reporting.

Over the past 6 years. This loyal customer has grown with us since first adopting work Eva's regulated fund reporting solution in 2019.

Julie Iskow: They also added bank reporting capabilities specifically for Basel Pillar 3, which mandates that financial institutions disclose a harmonized set of qualitative and quantitative metrics so investors and counterparties can assess their capital strength and risk profile. Another great Q2 fund reporting win was a mid-six-figure new logo deal with a New York-based investment company. This company purchased fund reporting in a competitive win over a legacy financial printer. This customer was using a manual, labor-intensive process to report on nearly 150 funds. They chose Workiva for our efficiency and platform differentiation over legacy technology and our ability to scale into additional use cases later down the line. This deal was sourced and will be implemented by a regional consulting partner. Another strong example is a mid-six-figure account expansion deal that was signed with a US-based private equity firm.

Last quarter, they expanded that footprint by onboarding more than 100 public funds through our new public fund solution.

They also added Bank reporting capabilities, specifically for Basel, pillar 3, which mandates that financial institutions, disclose a harmonized set of qualitative and quantitative metrics. So investors and counterparties can assess their Capital, strength and risk profile.

Another great Q2 fund reporting, which was a mid six-figure new logo deal with the New York-based investment company.

This company purchased fund reporting in a competitive win over a legacy Financial printer.

This customer was using a manual labor intensive process to report on nearly 150 funds.

They chose work Eva for our efficiency and platform differentiation over Legacy technology and our ability to scale into additional use cases later down the line.

This deal was sourced and will be implemented by a regional Consulting partner.

Julie Iskow: This company was previously using a manual process for over 130 funds globally. They already had experience with the Workiva platform, having used our S1 solution when they went public. Their experience with us gave them the confidence that they could both automate and streamline the reporting process for fund reporting. This deal was a co-sell and will be implemented by a regional consulting partner. I'll now turn to governance, risk, and compliance. Companies operate amid constantly shifting risk and compliance demands and heightened stakeholder scrutiny. And as they navigate new regulatory frameworks, geopolitical uncertainties, and emerging challenges like fast-evolving AI governance, they increasingly turn to our GRC solutions, fueling ongoing demand. Here are a couple of compelling GRC wins in Q2. First, a top 20 US bank signed a mid-six-figure account expansion deal for controls management, compliance management, and policies and procedures.

Another strong example is the mid 6-figure account expansion deal. That was signed with a us-based private Equity Firm.

This company was previously using a manual process for over 130 funds globally.

They already had experience with the work Eve of platform. Having used our S1 solution when they went public their experience with us gave them the confidence that they could both automate and streamline the reporting process for fund reporting.

This deal was a co-sell and will be implemented by a regional consulting partner.

I'll now turn to governance risk and compliance.

Companies, operate amid constantly, shifting risk, and compliance demands and heightened, stakeholder scrutiny.

Fast, evolving, AI governance, the increasingly turned to our GRC Solutions.

Fueling ongoing demand.

Here are a couple of compelling. GRC wins in Q2.

Julie Iskow: This bank started on the Workiva platform 18 months ago with the purchase of sustainability and financial reporting. The value of our platform was clear, and it was a key differentiator in this competitive win. This deal was a co-sell and will be implemented by a regional consulting partner. And second, we signed a multi-six-figure account expansion deal for audit and controls management with the UK member firm of a Big Four partner. This partnership leverages the Workiva platform as a managed service to power the firm's controls as a service offering that provides integrated GRC solutions to its clients. This deal underscores Workiva's strength in providing the platform that drives the service lines of our partners. Delivery through a managed service channel provides Workiva expanded market reach and lower distribution costs.

First a top, 20 US Bank signed a mid 6-figure account expansion deal for controlled management, compliance management, and policies and procedures.

This Bank started on the work Eva platform, 18 months ago with the purchase of sustainability and financial reporting.

The value of our platform was clear and it was a key differentiator in this competitive win.

This deal is a co-sell and will be implemented by a regional Consulting partner.

And second, we signed a multi 6-figure account, expansion deal for audit and controls management. With the UK member firm of a big 4 partner.

This partnership leverages the work Eva platform as a managed service to power, the firm's controls, as a service offering that provides integrated GRC solutions to its clients.

This deal, underscores work, either strength in the platform that drives the service lines of our partners.

Julie Iskow: And it's also a great experience for the end client as Big Four firms convert our platform into a full-service, outcome-based solution. I'll turn now to sustainability, where we saw a dynamic market throughout the quarter, influenced by shifting political policies, proposed regulatory changes, and softer demand in certain segments. At Workiva, we did observe a moderation in demand within our corporate account segment across both the US and Europe. While the strong momentum we saw in the latter half of 2024 has tapered some, sustainability continues to drive both new logo wins and account expansion. In these deals, there continue to be many buying drivers, including business performance, managing stakeholder expectations, and yes, regulations such as the CSRD, IFSB, and the State of California Climate Disclosure Rule.

Delivery through a managed service Channel provides work either expanded Market reach and lower distribution costs.

And it's also a great experience for the end client as Big 4 firms convert our platform into a full-service, outcome-based solution.

I'll turn now to sustainability where we saw Dynamic markets throughout the quarter influenced by shifting political policies, proposed regulatory changes, and softer demand in certain segments.

At work evil. We did observe a moderation in demand within our corporate account segments across both the US and Europe.

While the strong momentum, we saw in the latter, half of 2024 has tapered, some sustainability continues to drive both new logo wins and account expansion.

Julie Iskow: I do want to make it clear that while sustainability remains a strategic part of our business, it is less than 15% of our total revenue. Also of note, the demand risks in this changing market and the weighted contribution of this solution on our bookings have already been factored into the updated revenue guidance we are providing today. We remain confident in the long, durable demand of this market, which is supported by the deals that we continue to win. Here are three notable sustainability wins for the quarter. First, a top five US bank signed a six-figure account expansion deal for sustainability reporting and CSRD. This Fortune 100 customer had been doing voluntary sustainability reporting using Workiva for the past three years. This program, which has transformed into a centralized, enterprise-wide reporting framework, now reports into the office of the CFO.

In these deals, there continue to be many buying drivers, including business performance, managing stakeholder expectations, and yes, regulations such as the CSRD, ISSB, and the state of California's Climate Disclosure Rule.

I do want to make it clear that while sustainability remains a strategic part of our business. It is less than 15% of our total revenue.

Also of note, the demand risks in this changing market, and the weighted contribution of this Solution on our bookings have already been factored into the updated Revenue guidance. We are providing today

We remain confident in the long durable demand of this Market, which is supported by the deals that we can continue to win.

Here are 3 notable sustainability wins for the quarter.

First the top 5 US Bank signed a 6-figure account, expansion deal for sustainability, reporting and csrd.

This Fortune 100 customer had been doing voluntary sustainability reporting using work Eva for the past 3 years.

Julie Iskow: Our value-based discussions and strong partner alliances led to their expansion on Workiva's platform for a more mature, connected sustainability reporting program that is prepared for CSRD compliance. This deal was a co-sell and will be delivered by a Big Four firm. Second, a top five global investment firm signed a mid-six-figure expansion deal with the addition of sustainability reporting and fund reporting to solve an array of requirements, including fund-level ESG requirements and multiple country ESG disclosures. This deal underscores the importance of combining sustainability and financial information in one reporting platform. This customer was previously outsourcing all of their financial and regulatory reporting requirements for their 300 funds, and they trusted Workiva to bring the reporting process in-house, drive efficiency, and save them money. This deal was a co-sell and will be delivered by a Big Four firm.

This program, which is transformed into a centralized enterprise-wide reporting framework now reports into the office of the CFO.

Our value-based discussions and strong partner alliances led to their expansion of work. Eva's platform for more mature, connected sustainability reporting programs that is prepared for CSRD compliance.

This deal was a co-sell and will be delivered by a Big 4 firm.

Second, a top 5 global investment firm signed a mid-six-figure expansion deal with the addition of sustainability reporting and fund reporting to solve an array of requirements, including fund-level ESG requirements and multiple country ESG disclosures.

This deal, underscores the importance of combining sustainability and financial information in 1 reporting platform.

This customer was previously, Outsourcing all of their financial and Regulatory reporting requirements for their 300 funds.

And they trusted work, either to bring the reporting process, in-house Drive efficiency, and save them money.

Julie Iskow: And third, a European multinational manufacturing company signed a six-figure sustainability reporting and sustainability assurance deal as part of their CSRD readiness journey. Having previously used Workiva for annual reporting, this customer was looking to replace their manual, inefficient sustainability reporting process with a more automated and integrated platform that allows them to adapt to changing regulations and respond to increased reporting demands from stakeholders. This deal was a co-sell and will be delivered by a Big Four firm. Finally, I'd like to share an important leadership update. After 17 years with Workiva, Jill Klindt will be stepping down from her role as Executive Vice President and Chief Financial Officer. Throughout her tenure, Jill has played a foundational role in shaping Workiva into the company we are today.

This deal was a co-sell and will be delivered by a big 4 firm.

Was looking to replace their manual. Inefficient sustainability reporting process with a more automated and integrated platform that allows them to adapt to changing regulations and respond to increased reporting demands from stakeholders.

This deal was a co-sell and will be delivered by a big 4 firm.

Finally, I'd like to share an important leadership update.

After 17 years with work, Eva Jill Clinton will be stepping down from her role as Executive, Vice, President, and Chief Financial Officer.

Julie Iskow: From our early days as a startup to our milestone of reaching $800 million in revenue, she has been a steady, trusted leader and partner through every phase of growth. Her impact will be felt well beyond her time here. I'm deeply grateful to Jill for the contribution she has made to Workiva and to our leadership team. She has our full support in this transition and our warmest wishes as she looks ahead to what's next. Jill will continue to serve as CFO through December 2025 as we conduct a comprehensive search for our next CFO. In closing, I'd like to thank all of our dedicated employees for their focused execution this quarter, driving better business outcomes for our customers through transparency and accountability. And with that, I'll now turn the call over to Jill to walk you through our financial results and 2025 guidance in more detail.

Throughout her tenure. Jill has played a foundational role in shaping work. Eva into the company. We are today.

From our early days as a startup to our Milestone of reaching 800 million in Revenue, she has been a steady trusted leader and partner through every phase of growth.

Her impact will be felt, well beyond her time here.

I'm deeply grateful to Jill Klindt for the contribution she has made to Workiva and to our leadership team.

She has our full support in this transition and our warmest wishes as she looks ahead to what's next?

Jill will continue to serve as CFO through December 2025 as we conduct a comprehensive search for our next CFO.

In closing, I'd like to thank all of our dedicated employees for their focused execution, this quarter.

Driving Better Business outcomes for our customers, through transparency and accountability.

Julie Iskow: Over to you, Jill.

And with that I'll now turn the call over to Jill to walk. You through our financial results and 2025 guidance in more detail.

Over to you Jill.

Jill Klindt: Thank you, Julie. I appreciate the kind words. My journey at Workiva has simply been extraordinary. From joining this company as one of the first 10 employees of a startup to crossing any number of growth milestones over the past 17 years, I am thankful for the experience, and I am incredibly proud of what we have built. It has been such a privilege to work with the entire team of passionate, hardworking, and dedicated employees at Workiva. I also want to thank all of you, our investment community, and in particular, our shareholders, for your continued support of Workiva. Moving on to our results, I will begin by providing an overview of the financials and key metric highlights for the second quarter of 2025. I will then provide guidance for Q3 and the full year 2025.

Thank you, Julie. I appreciate the kind words.

My journey at workiva has simply been extraordinary.

From joining this company, as 1 of the first 10 employees of a startup.

to crossing any number of growth Milestones over the past 17 years,

I am thankful for the experience, and I am incredibly proud of what we have built.

Has been such a privilege to work with the entire team of passionate, hardworking and dedicated employees at Riva.

I also want to thank all of you, our investment community. And in particular, our shareholders for your continued support of workiva.

Moving on to our results.

I'll begin by providing an overview of the financials and key metric highlights for the second quarter of 2025.

Jill Klindt: As Julie discussed, we had a strong Q2, generating $215 million of total revenue in the second quarter, up 21% over Q2 2024, and beating the high end of our revenue guidance by $5 million. There was an approximately one-point positive impact due to foreign currency fluctuations on revenue growth. Q2 subscription revenue was $198 million, up 23% from Q2 2024. Both new customers and account expansions continue to contribute to our solid revenue growth, with new customers added in the last 12 months accounting for 41% of the increase in Q2 subscription revenue. Q2 professional services revenue was $17 million, flat versus Q2 2024, with the decline in setup and consulting services offset by higher XBRL services. Our non-GAAP operating margin for the quarter was 3.8%.

I will then provide guidance for Q3 and the full year 2025.

As Julie discussed. We had a strong Q2 generating 215 million of total revenue in the second quarter up 21%. Over a Q2 2024 and beating the high end of our Revenue, guidance by 5 million.

There was an approximately, 1 Point, positive impact due to foreign currency fluctuations on Revenue growth.

Q2 subscription Revenue was 198 million.

23% from Q2 2024.

Both new customers and account, expansions continued to contribute to our solid Revenue growth.

With new customers added in the last 12 months accounting for 41% of the increase in Q2 subscription Revenue.

Q2 Professional Services revenue was $17 million, flat versus Q2 2024, with the decline in setups and consulting services offset by higher XBRL services.

Jill Klindt: This outperformance relative to our guidance was driven by stronger than expected top-line results and our ongoing efforts to enhance operational leverage across the business. I'll now move on to our performance metrics for the quarter. We had 6,467 customers at the end of Q2 2025, a growth of 320 customers from Q2 2024. Our gross retention rate was 97%, exceeding our 96% internal target. And our net retention rate was 114% for the quarter versus 109% in Q2 2024. Similar to revenue growth, there was an approximately one-point positive impact on NRR due to foreign currency fluctuations. During the quarter, 71% of our subscription revenue was generated from customers with multiple solutions. This is up from the 67% we achieved in Q2 2024. Growth in our large contract customer metrics also reflected strong momentum.

Our non-gaap operating margin for the quarter was 3.8%.

this outperformance relative to our guidance was driven by stronger than expected Topline results and our ongoing efforts to enhance operational leverage across the business

I'll now move on to our performance metrics for the quarter.

We had 6,467 customers at the end of Q2 2025.

A growth of 320 customers from Q2 2024.

Our gross retention rate was 97% exceeding, our 96% internal Target.

and,

Our net retention rate was 114% for the quarter, versus 109% in Q2 2024.

Similar to revenue growth. There was an approximately 1 Point, positive impact on nrr due to foreign currency fluctuations.

During the quarter 71% of our subscription Revenue was generated from customers with multiple Solutions.

This is up from the 67%, we achieved in Q2 2024.

Jill Klindt: As of the end of the quarter, we had 2,241 contracts valued at over $100,000 per year, up 27% from Q2 the prior year. The number of contracts valued at over $300,000 totaled $488, up 37% from Q2 2024. And the number of contracts valued over $500,000 totaled $208, up 35% from Q2 2024. Moving on to the balance sheet. As of June 30th, 2025, cash, cash equivalents, and marketable securities were $814 million, an increase of $47 million over the prior quarter end. In Q2, we used a portion of our generated cash to repurchase 132,000 shares of our Class A common stock for $10 million. This was done under the share repurchase program approved by the board in July 2024.

Growth in our large contract, customer metrics. Also, reflected strong momentum.

141 contracts valued over $100,000 per year.

Up 27% from Q2, the prior year.

The number of contracts valued over dollars total of 488 up 37% from Q2 2024. And the number of contracts valued over 500,000 total 208 up 35% from Q2 2024.

Moving on, to the balance sheet.

As of June 30, 2025, cash, cash equivalents, and marketable securities were $814 million.

An increase of 47 million over the prior quarter end.

In Q2, we used a portion of our generated cash to repurchase 132,000, shares of our class a common stock for $10 million.

Jill Klindt: As of the end of the quarter, we had $50 million remaining of the original $100 million authorization, which we will continue to deploy periodically in order to help manage dilution. As of June 30th, 2025, we expect $668 million in remaining performance obligations to be recognized over the next 12 months. This is an increase of 23% versus the prior year. This growth includes approximately two points positive improvement due to foreign currency fluctuations. Turning to our outlook for Q3 and full year 2025. As Julie noted, we remain firmly committed to driving profitable growth. The increase in our full-year revenue guidance reflects our Q2 revenue beat and carefully factors in our assessment of market and demand risks, including that of our sustainability solution.

This was done under the share repurchase program approved by the board in July 2024.

As of the end of the quarter, we had 50 million dollars remaining of the original $100 million authorization, which we will continue to deploy periodically in order to help manage dilution.

As of June 30, 2025, we expect $668 million.

And remaining performance obligations to be recognized over the next 12 months.

This is an increase of 23% versus the prior year.

This growth includes approximately 2 points positive Improvement, due to foreign currency fluctuations.

Turning to our outlook for Q3 and full year 2025.

As Julie noted, we remain firmly committed to driving profitable growth.

The increase in our full year Revenue guidance, reflects our Q2 Revenue, beat and carefully factors in our assessment of market and demand risks.

Including that of our sustainability solution.

Jill Klindt: The upward revision to our Q3 and full year 2025 operating margin guide reflects a continued focus on driving leverage at scale across the business and our planned progress towards achieving our 2027 margin targets. For the third quarter of 2025, we expect total revenue to range from $218 million to $220 million. We expect services revenue will be down compared to Q3 2024. We expect non-GAAP operating margin to be in the range of 7% to 8%. For the full year 2025, we are increasing total revenue guidance to range from $870 million to $873 million. This increase takes into account the Q2 revenue beat. Similar to 2024, we expect total services revenue will be down year over year as we move low-margin services to our partners. We continue to expect subscription revenue growth will be approximately 20%.

The upward revision to our Q3 and full year. 2025 operating margin guide. Reflects a continued focus on driving leveraged at scale across the business and our planned progress towards achieving, our 2027 margin targets.

For the third quarter of 2025,

we expect total revenue to range from 218 million to 220 million.

We expect Services Revenue will be down compared to Q3 2024.

We expect non-GAAP operating margin to be in the range of 7% to 8%.

For the full year 2025.

We are increasing total revenue guidance to range from 870 million to 873 million.

This increase takes into account the Q2 Revenue beat.

Similar to 2024, we expect total Services Revenue will be down year-over-year. As we move low margin services to our partners.

Jill Klindt: We now expect our non-GAAP operating margin will range from 7% to 7.5%. This 200 basis point improvement reflects our ongoing commitment to drive operating leverage in the business. We now expect 2025 free cash flow margin to be approximately 10.5%. We continue to operate our business with our 2027 and 2030 targets in mind, improving productivity and operating leverage as we execute on our long-term profitable growth strategy. Thank you all for joining the call today. We are now ready to take your questions. Operator, please open the line for Q&A.

We can continue to expect subscription. Revenue growth will be approximately 20%.

We now expect our non-GAAP operating margin to range from 7% to 7.5%.

This 200 basis point Improvement. Reflects our ongoing commitment to drive operating leverage in the business.

We now expect 2025, free, cash, flow margin to be approximately 10 and a half percent.

We continue to operate our business with our 2027 and 2030 Targets in mind.

Improving productivity and operating leverage as we execute on our long-term profitable growth strategy.

Thank you all for joining the call today.

We are now ready to take your questions.

Gary (Operator): We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. Our first question today is from Alex Sklar with Raymond James. Please go ahead.

Operator. Please open the line for Q&A.

We will now begin the question and answer session.

to ask a question, you may press star then 1 on your telephone keypad,

If you're using a speaker-phone, please pick up your handset before pressing the keys.

To withdraw your question. Please. Press star. Then 2

Our first question today is from Alex, squar with Raymond James, please go ahead.

Alex Sklar: Great. Thank you. First question may be for you, Jill. I've set a two-part question on the revenue outlook. First, are you seeing any contribution from capital markets picking back up and anything that you incrementally embedded into the 2025 outlook from that? And then second, I appreciate all the callouts on FX. Did FX impact the guide at all as well?

Great, thank you. Um, first question, maybe for you Jill. Um, I've just had a 2-part question on the revenue Outlook first, are you seeing any contribution from Capital markets picking back up and and anything that you incrementally embedded into the 2025 Outlook from that? And then second, I appreciate all the call outs on FX, um, did FX impact the guide at all, as well.

Jill Klindt: Hey, Alex. Thanks for the question. So for capital markets, we continue to see steady revenue from capital markets in Q2, similar to in the past. It's one that we're watching really closely given the activity that we've seen. And Julie, if you want to dive in after I answer the second part of Alex's question, we'd love to hear from you too. But we have continued to include capital markets at a steady rate in the future, and so it could be potential upside if there's a heavier return to activity in the second half. Related to FX, we took a look at FX, and it is a part of our risk-adjusted model. We took into consideration potential changes through the rest of the year.

Jill Klindt: But I would say that we aren't expecting large changes, and we don't expect it to impact our ability to reach those goals, considering that we have risk-adjusted the guide. Julie, was there anything else you wanted to reply related to capital markets?

Would love to hear from you too, but um, we have continued to include Capital markets as a steady rate in the future and so it could be potential upside. If there's a heavier return to activity in the, um, in the second half, um, related to FX, we took a look at FX and, um, and it is a part of our risk adjusted model. Um, we took into consideration potential changes in the through the rest of the year.

Julie Iskow: Sure. I mean, you covered the important element, which is that we've not baked anything to come back into the guide for capital markets, but we have seen some increased activity in the past few months and supported by some of the recent and upcoming well-publicized IPOs. In fact, a great story for Workiva. We had the IPO for Figma and also Shoulder Innovations, both of which went public today. But that detectable increase in the market activity admittedly comes off a very low comparable. So we are seeing some growth here, but nothing like we saw in the other more active periods. But continue, as Jill says, to think about cap markets as upside and not considered any cap markets return yet in the guide.

But um, I would say that we aren't expecting large changes and we don't expect it to, um, impact our ability to to reach those goals. Considering that we have risk adjusted the guide, um, Julie, was there, anything else you wanted to see, um, reply related to Capital markets?

Sure. I mean you you covered the important element which is that our uh We've not baked anything. Any, come back into the guide for Capital markets but we have seen some increased activity in the past few months and supported by some of the recent and upcoming. Well, publicized IPOs. In fact uh, great story for work Eva, we had the IPO for figma and uh, also shoulder Innovations, both of which went public today.

Um, but that detect will increase in the market activity. The middle League comes off of a very low comparable. So we are seeing some growth here, but uh, nothing like we saw in the other more active periods. But continuous, Jill says to think about cap markets as upside and uh, not considered any cap markets or turn yet in the guide.

Alex Sklar: Thanks, Julie. Congrats on those cap markets wins. Maybe, Julie, one for you, and maybe it's a two-parter with Jill too, but some of the financial reporting success you called out this quarter, can you talk about some of the SEC reporting bundles that you've been working on in market in terms of kind of driving upsell within that base? And did that have any impact on kind of the strong NRR in the quarter? Thanks.

Julie Iskow: Sure. I'll let you know about the way we've been approaching the market. We're moving towards that good, better, best model. So we bring in some additional capabilities onto our cornerstone SEC reporting or financial reporting, and we add additional capabilities and features and enhancements. And that's how we're approaching the market to get additional revenue from the customer and get additional value to the customer as well. So, Jill, if you want to comment on the NRR, please do.

Congrats on those, congrats on those cap markets went um, maybe Julie 1 for you and and, and maybe it's a 2-part with with Jill too, but some of the um, financial reporting success. You called out this quarter. Can you talk about some of the the SEC reporting bundles that you've been working on in market, in terms of kind of driving upsell within that base? And and did that have any impact on kind of the strong nrr in the quarter? Thanks.

Sure. I'll I'll let you know about our the way we've been approaching the market, we're moving towards that good better, best model so we bring in some uh

Additional capabilities onto our, you know, our Cornerstone, uh, SEC reporting or financial reporting and we add additional capabilities and features and enhancements. And, uh, that's how we're approaching the market, uh, to get additional, uh, revenue from the customer and get additional. Uh,

Jill Klindt: Sure. So we did see a nice uptick in NRR during the quarter. We had a few of our metrics reflected the nice upside that we had related to upsells into our existing base, with nearing 60% of our revenue growth. S&S revenue growth from the quarter came from existing customers. And we continue to expand on the number of customers with multiple solutions. And so that participation in that movement will continue to be an important one for us. And SEC is a great way for us to a great place for us to start with those upsells because those are some of our oldest customers, and we have a great opportunity to go in and talk to them about what else the platform can do for them.

You know, value to the customer as well. So Jill, if you want to comment on the NR, please do.

Sure. So, we did see a nice uptick in our R during the quarter, we had, um, a few of our metrics reflected the, the nice upside that we had related to upsells into our existing base, um, with um nearing 60% of our Revenue growth, SMS Revenue growth from the quarter came from existing customers and we continue to expand on the number of customers with multiple Solutions. Um, and and so that,

That participation in that movement will continue to be an important one for us. And, um, SEC is a great way for us to, uh, a great place for us to start with those upsells because those are some of our, um, oldest customers, and we have a great opportunity to go in and talk to them about what else the platform can do for them.

Alex Sklar: All right. Great. Thank you both.

All right, great. Thank you, both.

Gary (Operator): The next question is from Rob Oliver with Baird. Please go ahead.

Alex Sklar: Great. Good afternoon. Thanks for taking my questions. First, Jill, I just wanted to say it's been a pleasure working with you, and I wish you all the best. And you're not done with me yet because one of my questions is for you. But I'll start with Julie. Julie, there's a lot of concern in the market among companies in our coverage list and the broader software universe about the potential erosion from generative AI on seat-based models. And you guys do not have a seat-based model. You have a solutions-based model. And I'm wondering, particularly as you're showing really nice go-to-market motion and success, say, for example, in the financial services vertical, I'm wondering if that solutions-based model is being viewed as attractive by your customers and a potential asset for you guys in your go-to-market motion at this time. And then I had a quick follow-up.

The next question is from Rob Oliver with beard. Please go ahead.

Julie Iskow: Sure. Thank you, Rob, for highlighting our pricing mechanisms and models. And it certainly is we put it in place because we wanted to let customers use the platform and not feel constrained by a number of seats. So we did go to that solution-based licensing model several years ago, and it has served us well for that reason, unconstrained use of the platform. However, we do have value metrics for each of the solutions. Again, broad-based demand across the portfolio in each area has different value metrics that customers leverage and pay accordingly. So it has served us well, and it certainly will serve us well in the AI category as well. Certainly not seat-based, and we continue to leverage that. And with AI, we'll be adding that in at some point, only in premium pricing today, but yes, serving us well with customers. Thank you for highlighting it.

Great, good afternoon. Thanks for taking my questions first Joe, I just wanted to say it's been a pleasure working with you, and um, I wish you all the best. Um and uh, you're not done with me yet because 1 of my questions is for you, but I'll start, uh, with uh, with Julie, um, Julie. There's a lot of concern in the market among, uh, companies in our coverage list of the broader software Universe about, um, uh, the potential erosion from generative AI on seat, based models. And you guys do not have a seat based model. You have a Solutions based model and I'm wondering particularly as, uh, you're showing really nice. Um, uh, go to market motion and success say, for example, in the financial services, vertical, I'm wondering if that solutions-based model, um, is, um, is being viewed as a attractive by your customers and, uh, a potential, um, asset for you guys in your go to market motion at this time and then I had a quick follow-up.

Area has different uh value value, metrics that customers uh leverage and pay accordingly. So it has served us well and it certainly will serve us well in the AI category as well. Certainly not seat based and uh, we continue to um, leverage that

In with AI will be adding that in.

At some point, it's only in premium pricing today, but yes, serving us well with customers. Thank you for highlighting it.

Alex Sklar: Great. Okay. Thanks. Good to hear. And then, Jill, just one for you on the improved operating margin outlook for the remainder of the year and the improved free cash flow margin. I know you touched on it in your prepared remarks, but we'd love to hear from you where you have been able to find additional margin and opportunities for additional margin as investors look towards your reiteration of the long-term targets and the kind of margin ramp that's implicit within that. Thank you very much.

Jill Klindt: Yeah. Thanks, Rob, and thanks for the kind words. I appreciate it. I have enjoyed working with you as well. As far as our improved margin, we're very pleased with the result that we had for Q2 and for the guidance that we're providing. It's a result of continued focus on execution across the business and focusing on productivity and ways that we can work smarter. And it really is not one thing and not one part of the business, but an overall focus by the team to be better and execute at a higher level. And we're starting to see the results of some of the things that we've been doing, and you'll see us continue to focus on that as a movement as we continue to show the results and execute on our strategy.

Great. Okay. Thanks. Good to hear and then Jill just 1 for you. Um, on the um, improved, um, operating margin outlook for the remainder of the year and the improved free cash flow margin. I know you touched on it in your prepared remarks but would love to hear from you where um you uh have been able to find additional margin and opportunities for additional margin as investors look towards. Um, you know, your reiteration of the long term targets and the kind of margin ramp that's implicit within that. Thank you very much.

Yeah, thanks Rob and thanks for the kind words. I appreciate it.

Um, have enjoyed working.

Uh, as far as our improved margin, we're very pleased with the the result that we have for Q2 and for the the guidance that we're providing, um, it's uh, as a result of continued, focus on execution um across the business and and focusing on productivity and ways that we can um work much uh, work smarter. And, and it really is um, not 1 thing and and not 1 part of the business.

Business. But an overall focused by the team to, to be better and executed a higher level. And, and we're starting to see the results of some of the things that we've been doing. Uh, and you'll see us continue to to focus on that as, as a movement as we, um, as we continue to, um, show the results, um, and, and execute on our strategy.

Alex Sklar: Great. Thank you both very much.

Great. Thank you both very much.

Gary (Operator): The next question is from Steve Enders with CITI. Please go ahead.

The next question is from Steve Anders with City. Please go ahead.

Alex Sklar: Okay. Great. Thanks, Rob. Thanks for taking the questions this afternoon. And, Jill, congrats again on working with you, and I'm looking forward to seeing where things go from here. I guess I want to start on the sustainability portfolio and, I guess, get a little more detail on what it is that you are seeing in the marketplace. I guess, for one, it sounds like it's being accounted for in the guide or some of the weaknesses, but maybe just how does that manifest or what is that or how is that kind of playing out in the numbers? And then, I guess, secondarily, just how are you kind of viewing the pipeline or the opportunity from here and maybe what that looks like over the next few years?

Okay, great. Thanks for, um, thanks for taking the questions, uh, this afternoon and

uh,

you know, congrats again, on on, on, on working with you and um, looking forward to seeing what, uh, what things go from here. Um, I guess I want to start on the sustainability portfolio and I guess get a little more detail on on what it is that you are seeing in the marketplace, I guess for 1. It, it sounds like it's being accounted for and the guide or some of the weaknesses, but maybe just, how does that, uh, how does that manifest? Or what is that? Uh, or or how is that kind of plan out of the numbers? And then I guess, secondarily just how are you kind of viewing the the pipeline or or the opportunity from here and and maybe what that looks like over the next, uh, next few years

Julie Iskow: Sure. Thank you. Thank you for the question. Not unexpected given the political and regulatory landscape, and nor was it unexpected for us in terms of what we saw. As I highlighted in the prepared remarks, we did observe a moderation in demand in Q2 within our corporate account segment across both the US and Europe. But while the strong momentum we saw really in the latter half of the year, you know that's what we tapered off from. And I think that's really important to recognize. And while it has tapered off from those prior strong quarters, you know it still continues to drive growth for us, both in new logo wins and account expansions. And I do think you asked about some numbers and impacts. Probably worth reminding again, sustainability is only 20% of our TAM, and it's less than 15% of our revenue.

Sure, thank you. Thank you for your question, not an expected, uh, given the political and Regulatory landscape, uh, and nor was it, uh, you know, unexpected for us, in terms of what we saw, and as I highlighted, in the prepared remarks, we did observe, a, a moderation demand in Q2 within our, our corporate account segments across both us and Europe. Um, but while the strong momentum, we saw really um, in the latter half of the year,

Julie Iskow: So you know current demand, yes, we're seeing that slowing primarily in the corporate segment, but it's been factored, as you said, into updated revenue guidance that we're providing today. So that's really the gist of it. But we remain optimistic on the long, durable demand of the market. We're seeing deals come in with, well, I should say associated with, yes, regulation, but beyond that too, science-based targets have been set. There are now up to 8,500 companies, excuse me, setting science-based target initiatives. Organizations are just looking to better manage risk and address their stakeholder expectations. So we are seeing market demand beyond the regulation. We just wanted to highlight that given the strong quarters that we had, and we had multiple strong quarters last year. Yes, the growth, you know it's moderated. So that's essentially what it is.

You know, that, that's what we tapered off from. And I think that's really important to recognize. And while it has tapered off, uh, from those, uh, prior quarters, strong quarters, you know, it's still continues to drive growth for us, both the new logo wins and account expansions. And I do think you asked about some numbers and impact probably worth reminding. Again, uh, sustainability is only 20% of our Tam and it's less than 15% of our Revenue. So, you know, current current demand. Uh yes, we're seeing that that flowing in the primarily in the corporate segment but it's been factored as you said into uh, updated Revenue guidance, uh, that we're providing today. So that's that's really the the gist of it. But we remain optimistic on the the long durable demand of the market. Uh, we're seeing you know, deals come in with

You know, well I should say associated with yes, regulation, but beyond that too, science-based targets have been set. There are now up to 85 companies, 85 thou 8,500 companies, excuse me. Setting science-based Target initiatives organizations are just looking to better manage risk and address their stakeholder expectations. So we are, we are seeing

Julie Iskow: We still, of course, believe this is a long, durable demand market.

Alex Sklar: Okay. That makes sense. That's good to hear. And then just on the free cash flow guide, I guess good to see the EBITDA margin raise, but I guess I would have expected maybe free cash flow to show maybe a similar pace of expansion in the updated guide for this year. So I guess any factors that we should be taking into account there or maybe what's different in the assumptions on the free cash flow side versus the EBITDA margin side?

Jill Klindt: Sure. Free cash flow is a really complex metric for us because it does have a lot of factors related to the timing of cash inflows and cash outflows in addition to just the impacts from the margin guide that we provided. And so it can have some amount of fluctuations aside from that. But I think that similar to what we talked about in our last earnings call, when we talk about a risk-adjusted guide, this is one of the areas where it shows up. There is more risk and more uncertainty the further out from today that we get. And the free cash flow margin that we provided is really that risk-adjusted metric that we believe properly reflects our business through the end of the year. And with the timing differences and some of that complexity rolled into it, we feel very good about that number.

Okay, that makes sense. That makes sense, that's good to hear. Um, and then just on the the free cash flow guide, I guess, good to see, you know, it or the the even margin raise but um I guess I would have expected maybe free cash flow to show, maybe a similar uh pace of expansion. Um, and the updated guy for this year. So I guess any factors that we should be taking into account, their or maybe. What's different in the assumptions on the Free Cash Flow side versus the uh, even margin side.

Perfect cash flow is a really complex um complex metric for us because it does have a lot of factors related to the timing of um cash inflows and cash outflows. Uh in addition to just the the impacts from the margin guide that we provided. Uh and so it it can have some amount of fluctuations aside from from that. But I think that um, similar to what we talked about in in our last earnings call, um when we talk about a risk adjusted guide, this is 1 of the areas where it shows up there is, um, more risk and more uncertainty the further out from today that we get and the pre- cash flow margins. That we provided is really that risk, adjusted metric that we believe, um, you know, properly reflects our business through the end of the year. Uh, and and, and with the timing differences and some of that complexity rolled into it. Um, we we we feel very good about

that um, that number

Alex Sklar: Okay. Perfect. Thanks for taking the questions.

Okay perfect. Uh, thanks for taking the questions.

Gary (Operator): The next question is from Terry Tillman with Truist Securities. Please go ahead.

The next question is from Terry Tillman with Truist Securities. Please go ahead.

Dominique Monticello: Hi. This is Dominique Monticello on for Terry. Thanks for taking my questions. So just looking at the mandate for CFO Act agencies to modernize their financial system using approved marketplace vendors, have you seen any early RFP activity from these agencies? And how significant could that opportunity become over the back half of the year or in the long term?

Hi, this is Dominique Manala. Terry, thanks for taking my questions.

So just looking at the Mandate for CFO act agencies, to modernize their financial system, using approved, Marketplace vendors. Um, have you seen any early RFP activity from these agencies and how significant could that opportunity become over the back after the year or in the long term?

Jill Klindt: Hey, Dominique. Can you actually repeat the question? Sorry, it cut out a little bit for us.

Hey Dominique. Can you actually repeat the question? Sorry, it cut out a little bit for us.

Dominique Monticello: Yeah. Sure. No problem. So just referring back to that CFO Act where agencies have to modernize their financial systems using the approved marketplace vendors, I'm just wondering if you're seeing any early RFP activity from these agencies and how that opportunity can look in the back half or in the long term?

Yeah, sure, no problem. So um, just referring back to that CFO act, where agency have to agencies have to modernize the financial systems, um, using the approved Marketplace vendors. Um, just wondering if you're seeing any early RFP activity, from these agencies, and how that opportunity can look in the back half or in the long term.

Julie Iskow: Sure. We have been able to get into conversations, and we are the only SaaS platform in the marketplace that has a platform to cover the integrated reporting and assurance and DRC as we do. So we're seeing early signs of, I'll say, we're having good discussions. So no comments on the actual uptick at this point. But our platform does provide an opportunity to go in and provide services to the government who's looking primarily to transform and automate, become efficient, accountable, and so forth. So it's a good opportunity for Workiva.

Sure. We have uh we have been able to get into conversations and we are the only uh SAS platform in the marketplace. That has a platform to cover the the uh the integrated reporting and assurance and GRC as we do. So we're seeing early signs of uh I'll I'll say we're having good discussions so uh no comments on the the actual uptick at this point

but our platform does provide, uh,

Provided an opportunity as for to go in and provide.

Services to the government. He's looking primarily to um transform and automate become efficient accountable and so forth. So it's a good opportunity for work as a

Dominique Monticello: Got it. Thanks. And then just as you evaluate growth opportunities in the current environment, how are you thinking about M&A? Just wanted to know if there are any specific product areas like GenAI used to your vertical solutions where you may be more inclined to buy versus build.

Got it. Thanks. And then, just as you evaluate growth opportunities in the current environment, how are you thinking about M&A? Um, just wanted to know if there are any specific product areas, like Jenny, I used your vertical solutions, where you may be more inclined to build, um, to buy versus build.

Julie Iskow: Sure. As I always say, we scour the earth essentially to look for all opportunities, whether it's a gap to close on the platform, whether it's technology to level up all solutions, adjacencies, etc. So no preconceived notions, but we're continually looking to find potential partners in M&A that can really strengthen the platform and either go after our large unaddressed TAM in a faster way or potentially expand that TAM.

Sure. We, as I always say, we uh, we scour the Earth, essentially, to look for, uh, all opportunities, uh, whether it's uh, a a gap to close on the platform where whether it's uh technology to to level up all solutions. Adjacencies Etc, so no preconceived notions but we're continually looking to, you know find find the potential partners and and m&a that can really uh

Strengthen the platform and either go after our large and addressable TAM in a faster way or, you know, potentially expand that TAM.

Dominique Monticello: Great. Thank you.

Great. Thank you.

Gary (Operator): The next question is from Andrew Degasperry with BNP Paribas. Please go ahead.

The next question is from Andrew De Gasperi with BNP Paribas. Please go ahead.

Alex Sklar: Thanks for taking my question. Julie, maybe earlier in the prepared remarks, you mentioned some big wins, and I think financial services or a large bank was one you mentioned tied to the Federal Reserve. Can you maybe provide a little more context on that? Like, is this something that potentially could be a driver in the near term for that cohort of customers?Financial

Thanks, uh, for taking my question. Um,

Julie maybe um um earlier in the prepared remarks, you mentioned some big wins and I think Financial Services or a large Bank was was 1 to mention tied, to the Federal Reserve, can you maybe provide a little more context on that like, is this something that potentially could be a driver in the near term, uh, for that cohort of customers?

Gary (Operator): services, regulations have been drivers for years, and we're we are going deeper into the market. While our focus has been there, we're going to continue to to go in even, more extensively. So, yes, absolutely. We're continuing to increase the, use cases that we have under the financial services area, regulatory certainly, and we're going to continue to focus on banks and the risk regulations and investments and fund reporting. So you will see more of that. I also have an insurance market with 20 or so regulations that we sell to as well.

Financial Services. Uh regulations have been drivers for years and work. We are going deeper into the market, while our Focus has been there, we're going to continue to to go in even uh, more extensively. So uh, yes, absolutely. We're continue to increase the, uh, use cases that we have under the financial services area regulatory. Certainly, and we're going to continue to focus on Banks and the risk regulations and Investments, and and funds reporting. So you will see more of that also have uh, Insurance Market with uh, 20 or so regulations that we sell to as well.

Jamie (CORUS Call Operator): That's helpful. And then, Jill, by the way, also a pleasure to work with you and wish you all the best going forward. I just had a question in terms of what you said earlier, in terms of the margin. And then what I'm trying to understand is, are you making any changes to the sales and marketing investments assumptions that you had for the back half? Is that some some of the driver behind the outperformance?

That's helpful. And then, um, Jill, by the way, it was also a pleasure to work with you, and I wish you all the best.

Going forward. I I just had a question in terms of what you said earlier. Um, in terms of the margin and then what I'm trying to understand is are you making any changes to the sales and marketing Investments assumptions that you had for the back hats?

Um, is that some of the driver behind the outperformance?

Jill Klindt: So I would say that we're constantly looking at our sales and marketing resources and reallocating based on current business. But there wasn't any large-scale change to that investment. And what you'll see from us is a lot of what you've seen in the past, which is being thoughtful around how we built the business, thoughtful around how we approach our markets. And sometimes that does include adjustments in territories and adjustments in teams. And you've seen us do that across the sales team as it is. And one of those examples would be moving towards a hunter-farmer model in certain areas this year. And so we will continue to make those kinds of changes in order to focus on profitability and efficiency throughout the business. And so within sales and marketing, those aren't held aside.

So, uh, I would say that we're constantly looking at our sales and marketing resources and reallocating based on current business. But um, I there wasn't any large-scale change to that investment. Um, and, and what you'll see from us is a lot of what you've, uh, seen in the past which is being thoughtful around how we, um, how we

How we built the business thoughtful around, how we approach our markets.

And, and sometimes that does, um, include adjustments in in territories and, um, adjustments in teams and you've seen us do that, um, across the sales team as it is and, and, um, 1 of those examples would be moving towards a, a Hunter Farmer model. Um, in certain areas this year,

Jill Klindt: We'll also be trying to make those improvements and find efficiencies and better leverage for the resources within our sales and marketing teams. And that's definitely a part of the improvement. But something you can always look towards is our 2027 targets, which we reiterated on the call, prepared remarks. And we are still focused on executing and progressing on our goals with those 2027 margin targets in mind, inclusive of the split between the different areas of the business.

And so you, we will continue to make those kind of changes in order to focus on profitability and efficiency, uh, throughout the business. And, and so within sales and marketing, um, those are those aren't. Um, it's called aside. We'll also be trying to make those improvements and if and find efficiencies, and, and better leverage for the resources within our sales and marketing teams. Um, and and that's a, that's definitely a part of the, the improvements. Um, but something you can always look towards is our 2027 targets, which we reiterated on the call, um, prepared remarks and, and we are still focused on executing um, and um, progressing on our goals with those 2027 margin Targets in mind inclusive,

Of the split between the different areas of the business.

Jamie (CORUS Call Operator): Understood. Thank you.

Jill Klindt: Yeah. Thanks, Andrew. Thank you.

Understood, thank you.

Katie White: The next question is from Jake Robers with William Blair. Please go ahead.

Yeah, thanks Andrew. Thank you.

The next question is from Jake Rogers. With William Blair, please go ahead.

Julie Iskow: Yeah. Thanks for taking the questions. And Jill, wish you all the best moving forward. It's been great working with you. Julie, just on the macro, I know you referenced some pressure on demand for your sustainability suite, but just given the solid results here, did you see any other changes or improvements across the broader base over the last few months, or was it fairly consistent with the trends that you called out last quarter?

Yeah, thanks for taking the questions in in jail. Wish you all the best moving forward, it it's been great working with you, um, Julie, just on the macro, I know you referenced some pressure on demand for your sustainability Suite, but just given the solid results here. Did you see any other changes or improvements of the broader base over the last few months, or or was it fairly consistent, uh, with the trends that you called out last quarter?

Gary (Operator): Well, I appreciate the question. The macro is on the top of the minds of most of us running SaaS companies these days. And the reality is we didn't really see much change from Q1 to Q2. Overall market conditions remain fairly constant. And we saw some uncertainty maybe across all sectors, and very similar to what we saw in Q1. Now, the deal cycle elongation, which is expected in the uncertain market, some cases, you know, we saw, even when we were selected as a vendor, I would say we saw it's taking more time to get some deals over the line. And you see some companies just being more thoughtful in the timing of their spend for some of these transformational purchases.

I appreciate the question, the macros on the top of uh, minds of most of us running South companies, these days. And the reality is we we didn't really see much change from q1 to Q2 uh overall market conditions remain fairly constant and we uh,

Gary (Operator): But, you know, we still continue to see some signature deals come in and have some great wins, some of which I did share in the prepared remarks. But I think overall demand is moderated for us compared to the momentum that we saw in those stellar bookings quarters we had in 2024. But all of that's been factored into our latest guide, as Jill has mentioned. And, you know, we've raised the guide in our subscription revenue for 2025 to reflect the beat. But really, you know, in direct answer to the question, very consistent from this quarter, you know, from last.

We saw some uncertainty maybe across all sectors and very similar to what we what we saw in in q1, you know, the the deal cycle elongation uh which is expected in the uncertain Market. Um, some cases, you know, we saw even when we were selected as a vendor, I would say we saw it's taking more time to get some deals over the line. And you see some companies just being more thoughtful in the timing of their spend for some of these transformational purchases. But uh, you know, we still continue to see some signature deals come in.

And have some great wins. Some of which I did share on the prepared remarks but uh, I think overall demand is moderated for us compared to the momentum that we saw in those uh Stellar bookings quarters. We had in 2024. But all of that's been factored into you know into our our latest guy as Jill has uh has mentioned. And you know we've raised the guide in our subscription revenue for 2025 to reflect the beat uh but really you know in in direct answer to the question very consistent from this quarter.

you know, from last

Julie Iskow: OK. That's helpful. And then just to double-click on the sustainability front, you referenced the tampered demand in the corporate segment. But can you talk about what you're hearing from some of the larger enterprise in wave one CSRD reporters and if that kind of is different versus the corporate segment, and if there's been any change on that front over the last few months?

Gary (Operator): Sure. We talk about our corporate segment, I mean the mid-market primarily. We have our sales categorized into corporate, strategic, and major accounts. And, you know, we did see the softening there. I mean, around regulation, some delays, and so forth. But that's really where it is. Our market is primarily up market. That's where our strong market is. And the regulation with CSRD, for the most part, remains in place there for the large companies in the wave one in Europe. And those that want to play in a global ecosystem and supply chain continue on with their demand and so forth. So, and as I said, it's beyond regulation. It's stakeholders and risk management and so forth. So yes, we did call out primarily where we saw the tapering and off a bit and a softening, I'd say, for that corporate market or mid-market.

Uh, but can you talk about what you're hearing from some of the larger enterprises in Wave 1 CSRD, reporters, and if that kind of is different versus the corporate segment? And if there's been any change on that front over the last few months?

Sure. We talk about our, our corporate Sego, I mean, the, the mid-market primarily, uh, we have our, our sales, uh, categorized into corporate strategic and major accounts. And, you know, we, we did see the softening there, I mean around uh, regulation some delays and so forth, but that's really where it is. Our our Market is primarily up Market, that's where our our strong Market is and the regulation with csrd for the most part remains in place there for the large companies in the wave 1 in Europe and those that want to play in a, a global ecosystem and supply chain, continue on with their demand and so forth. So, and as I said, it's beyond regulation its stakeholders and risk management and so forth. So yes, we did call out primarily, uh, where we saw the tapering and off a bit in a softening, I'd say for um, for that that poorer Market, or mid-market

Julie Iskow: That's helpful. Thanks for taking the questions.

That's helpful. Thanks for taking the questions.

Katie White: The next question is from Adam Hotchkiss with Goldman Sachs. Please go ahead.

The next question is from Adam Hotkiss with Goldman Sachs. Please go ahead.

Julie Iskow: Great. Thanks so much for taking the questions. You know, I would like to ask an earlier question a different way, Julie. I think you mentioned how sustainability, you know, was a bit stronger in 2024 and that things have moderated. But, you know, subscription revenue here has accelerated. I think it's your highest growth quarter in the last number of quarters. You know, forward-looking metrics like billings have accelerated, and CRPO continues to be strong. And so could you maybe marry some of those, you know, moderation comments in particular around sustainability and the broader market with, you know, the acceleration or broad-based acceleration we're seeing in the business X sustainability? And, you know, what do you think is driving that and how sustainable do you think that is?

Gary (Operator): Our guide, of course, just took into account the comments I already made just a moment ago, which is just overall the risks. And that's from the uncertain macro and what we're seeing overall and broad-based across, you know, the portfolio. But we also adjusted for risk there on the sustainability because, again, of the regulatory and political environment. But we had strong revenue this quarter, and that comes from a lot of our subscription revenue that's generated from customers with multiple solutions. The platform is resonating. You know, our partner ecosystem and so forth is just performing there. So we do have a very resilient platform. And we're selling, it's again, broad-based. We have a large portfolio of solutions that we offer in the market. So that's really kind of where the revenue comes from. And then, of course, you know, we're a subscription SaaS company.

Great. Thanks so much for taking the questions. Um, you know, I I would like to ask an earlier question, a different way, Julie. I think you mentioned how sustainability, um, you know, was a bit stronger in 2024 and that things have moderated. But, you know, subscription Revenue here, has accelerated. I think it's your highest growth quarter in the last number of quarters. Um, you know, Ford looking metrics, like Billings have accelerated and crpo continues to be strong and so could you maybe marry some of those, you know, moderation comments in in particular around sustainability and um, the broader Market with, you know, the acceleration, we're broad-based acceleration. We're seeing in the business X sustainability. And, um, you know, what do you think's driving that and, and how sustainable you think that is?

Now ARA our guide of course just took into account the comments. I already made just a moment ago which is just overall, uh, the risks and that's from the uncertain macro and what we're seeing overall and broad-based across, you know, the portfolio. Uh, but we also adjusted for risk there on the sustainability because again of the Regulatory and political environment, but we had strong, strong Revenue, uh, this quarter and that come

comes from a lot of our subscription revenues generated from, uh,

Gary (Operator): And inherent in that business model is, you know, that in any given quarter, we've got deals booked from prior quarters as well. So that's where, you know, subscription revenue comes from as well. But it really, again, I'll highlight again, less than 15% of our revenue is from sustainability. We have a broad-based platform, and it's resonating in the market. And again, strong growth. But we, of course, are going to take a risk-adjusted approach as we look at the guide.

Customers with multiple Solutions the platform is resonating uh you know large our partner ecosystem and so forth Just performing there so we do have we do have a very resilient platform uh, and we're selling its again, broad base. We have a a large portfolio solutions that we offer in the market. Um, so that's, that's really kind of where the revenue comes from. And then, of course, you know, we are subscriptions House Company and inherent in that business model is, you know, that in any given quarter we've got deals booked from prior quarters as well. So, that's where, you know, subscription, uh, Revenue comes from as well. But it really, again,

I’ll highlight again, less than 15% of our revenue is from sustainability. We have a broad-based platform, and it’s resonating in the market. Again, strong growth, but we...

Of course, we are going to, um, take a risk-adjusted approach as we look at the guide.

Julie Iskow: OK. That's really helpful. Thank you. And then just on the, you know, asking the AI question another way, you know, how do you think about, and especially given how things have evolved recently, how Workiva's moat against generative AI technologies writ large in some of these agents that, you know, allow companies to utilize their operational data in different ways? Could you just maybe speak to the moat that Workiva has built around AI and, you know, you think how you think about the installation of your reporting product set and workload product versus some of these newer upstart technologies?

Gary (Operator): Sure. We've spent a decade and a half building trusted relationships with our customers. And we have, you know, the most innovative technology. And we really focus on the customer data. That's very important to customers that we care for, and it's important to us. But of course, we are bringing in the latest technology and data. When it comes to AI, data is a differentiator. And we happen to have data that we can leverage in these AI capabilities. But we're bringing the capabilities and the technologies onto the platform to ensure that we bring additional value to the customers and differentiate. So we are going to continue to invest in AI across the platform.

Okay. That's, that's really helpful. Thank you. And then just on the, you know, asking the AI question, another way, um, you know, how do you think about and especially given how things have evolved recently? How were kiva's moat against generative, AI Technologies at large and some of these agents that, you know, allow companies to utilize their operational data in different ways. Could you just maybe speak to the moat that were Kiva has built around Ai and, you know, you think how you think about the insulation of your reporting product set and workflow product versus um some of these newer upstart Technologies

Gary (Operator): We bring it into our platform and our controlled, secure, auditable environment to give customers the comfort and the knowledge that their data remains within the platform, not used to train models and so forth. But we're helping them, you know, with, of course, speed and efficiency, helping them to respond quickly to risk and volatility with greater focus. We're seeing some ROIs from our customer that show measurable impact. And they're leveraging those capabilities on the platform. So I do want to emphasize we take it very seriously that we have trusted relationships with our customers. But we will be committed to bringing value to the customers using AI.

And data when it comes to AI data is a differentiator and we happen to have uh data that we can leverage in these AI capabilities, but we're bringing them, bringing the capabilities and the Technologies onto the platform, uh, to ensure that we bring additional value to the customers and differentiate. So we are going to continue to invest in AI across the platform. Uh, we bring it into our platform and our controlled, secure auditable, environment. Give customers, uh, the the comfort and the the knowledge that their data remains within the platform. Not used to train models and so forth. But we're helping them you know with of course speed and efficiency. Um helping them to respond quickly to risk and volatility with greater Focus. Uh we're get, we're we're seeing some rois from our customer that uh show measurable impact and they're leveraging those capabilities on the platform. So I uh I do want to emphasize we take it very seriously that we have trusted relationships with our customers.

But we will be committed to Bringing value to the customers using AI.

Julie Iskow: OK. Thank you very much, Julie and Jill. All the best wishes for you. Great working with you.

Okay, thank you very much, Julie, and Jill, all the best, wishes for you, great working with you.

Jill Klindt: Thank you. Thanks so much.

Katie White: The next question is from Daniel Jester with BMO Capital Markets. Please go ahead.

Thank you. Thanks so much.

The next question is from, Daniel gesture. With BMO Capital markets, please go ahead.

Jill Klindt: Hi. Good afternoon. This is Kyle Abarastrion. I'm from Dan Jester. Thanks for taking the questions. It looks like a strong quarter for customer growth, especially the larger businesses. Could you help us unpack where in the product portfolio the strength is coming from and then more generally what you're seeing in the competitive landscape?

Hi, good afternoon. This is Kyle. Abras, turn off, and Dan gesture. Thanks for taking the questions. It looks like a strong quarter for customer growth, especially among the larger businesses. Could you help us unpack where in the product portfolio the strength is coming from? And then, more generally, what you're seeing in the competitive landscape?

Gary (Operator): I caught the part of the you want to talk about the product portfolio. Can you repeat the initial part of the question prior to the competitive landscape?

Jill Klindt: Yeah, sure. So it looks like a strong quarter for customer growth, especially for larger businesses. Could you help us unpack where in the product portfolio the strength is coming from and then more generally what you're seeing in the competitive landscape?

I caught the part of the... Do you want to talk about the product portfolio? Can you repeat the initial part of the question prior to the competitive landscape?

Gary (Operator): Sure. We continue to see broad-based demand across the portfolio. That's something that's been consistent quarter after quarter. Our platform, one of the strengths of the platform, very resilient. And for the most part, the demand continues across all solutions. So it really depends on where the customer is, if they're doing transformation, if they're in financial services, where they are, whether they're focused on sustainability. It's not one area or another that we're seeing trends, deep trends on. It really is broad-based across the portfolio. In terms of the competition, we continue to have competition, but it is point solution primarily, not a platform as we have for all the capabilities that we have on one platform. But also, there's a lot of legacy technology there that we are competing against. So status quo, legacy, and point solutions are primarily the competitors that we face.

Yes, sure. So it looks like a strong quarter for customer growth, especially for larger businesses. Could you help us unpack, we're in the product portfolio? The strength is coming from and then more generally what you're seeing in the competitive landscape.

Sure. We continue to see broad-based demand across the portfolio. That's something that's been consistent quarter after quarter.

Uh, our our platform 1 of the strengths of the platform very resilient. And for you know, for the most part, the the demand uh continues across all solutions. So it really depends on where the customer is if they're doing transformation if they're in financial services, uh, where they are whether they're focused on sustainability. Uh, it's it's not 1 area or another. That is we're seeing, uh, Trends deep Trends on, it really is, uh, broad-based across the portfolio.

Gary (Operator): But our differentiation comes in very strong with a broad-based platform, also connection to all the partners in our ecosystem. So that's really how we win, high-value, fit-for-purpose solutions, but it's on the platform connected, you know, ever becoming more open and intelligent platform.

Uh on in terms of the competition, we we continue to have uh competition. But it is point solution. Primarily not a platform as we have for all the capabilities that we have on 1 platform. But also uh there's a lot of Legacy Legacy technology there that we are competing against so status quo, Legacy and point Solutions are primarily the the competitors that we Face. Uh but our differentiation comes in very strong with a broad-based platform. Uh, also connection to all the partners and our ecosystem. Uh, so that's really how we win. High value fit for purpose Solutions, but it's on the platform connected. You know, ever ever becoming more open and intelligent platform.

Jill Klindt: Got it. And then can you just discuss how you're thinking about investment plans in the businesses headcount expectations for the remainder of 2025 and into 2026? Thank you.

Got it.

And then, can you just discuss how you're thinking about investment plans in the business's headcount expectations for the remainder of 2025 and into 2026? Thank you.

Jill Klindt: Thanks, Kai. So we will continue to focus on productivity and leverage with our existing resources. We, of course, will continue to make investment decisions based on the potential outcomes from those investments. And that will, in some cases, lead to hiring in certain areas. But really, the focus that we have as we execute on our mid-term, long-term margin goal is just ensuring that we have profitable growth and that we're executing on our strategy in a way that makes sense with our margin goals in mind.

Um, thanks Ty. We so we will continue to focus on productivity and leverage with our existing resources. We, of course, will continue to um, make investment decisions based on the potential outcomes from those Investments. Um, and that will in some cases, um, lead to hiring in certain areas but really the focus that, that we have. As we execute on our midterm, long term margin goals is just um ensuring that we are. We have profitable growth, uh and

And that we're executing on our strategy in a way that makes sense with our margin goals in mind.

Katie White: The next question is from Ryan Krieger with Wolf Research. Please go ahead.

The next question is from Ryan Kerr with Wolf Research. Please go ahead.

Jill Klindt: Hey, guys. Thanks for squeezing me in here. And congrats on a solid quarter. I just want to touch on retention quickly. It was incredibly strong this quarter, even excluding FX. So could you provide some additional color on maybe what drove that strength and help us think about the mix of pricing versus pure expansion contribution there? And then how should we think about retention the rest of this year? I know you've historically talked about over 110% being positive. But you know, is this potentially an inflection point just given the momentum that you're seeing?

Hey guys, thanks for squeezing me in here and congrats on a solid quarter. Um, I just want to touch on the retention quickly. Uh, it was incredibly strong this quarter even excluding FX. So

You know, is this potentially an inflection point? Just given the momentum that you're seeing?

Jill Klindt: Yeah. So exactly right, Ryan. And thanks for the kind words on the quarter. So when we think about NRR, this was a high point for us, certainly. And there was the impact from currency. But overall, what we were seeing here was really about the upside of selling into our existing base. At any point in time, we have been focusing more on price increase. But that's not a large part of our NRR in any quarter generally. The majority of our uplift on NRR tends to be from the additional solutions sold into our base. And that's really where we focus when we think about NRR. And of course, we get the benefit of amazing gross retention as well and retaining our existing customers and contracts.

Yeah, so exactly right. Ryan, and thanks for the for the, um, kind words on the quarter. So when we think about nrr, this was a, a high point for us certainly. And um, there was the impact from currency. But overall, um, what, what we were seeing here was really about the, um, the upside of selling into our existing base. Um, it at any point in time, we have been focusing more on price increase, but that's not a large part of our, in our, in, in any quarter, generally, um, the majority of our uplift on nrr tends to be from the additional Solutions sold into our base. Uh, and, and that's really where we focus when we when we think about it in our our um and of course we get the benefit of um of amazing grocery tension as well and and retaining our existing customers and contracts.

Julie Iskow: And then any way to maybe think about it for the rest of the year?

Jill Klindt: For the rest of the year, I would still say that that 110 plus is what we think of as a good result there. It can fluctuate because of currency. It can fluctuate, of course, because of the mix between sales into new customers versus the existing customer base. But 110 plus is a good result for us.

And then any any way that maybe think about it for the rest of the year?

Julie Iskow: Perfect. Thank you, guys. Appreciate it.

Um, for the rest of the year, I would still say that, um, 110 plus is what we think of as a good result there. It can fluctuate because of currency; it can fluctuate, of course, because of the mix between sales into, um, new customers versus, um, the existing customer base. But um, 110 plus is, uh, a good result for us.

Perfect. Thank you guys. Appreciate it.

Jill Klindt: Thanks.

Katie White: This concludes our question and answer session. And the conference has also now concluded. Thank you for attending today's presentation. You may now disconnect.

Thanks.

This concludes our question-and-answer session, and the conference is also now concluded. Thank you for attending today's presentation. You may now disconnect.