Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Workiva Inc (WK, Financial) reported a strong Q3 performance with subscription revenue growing at 19% and total revenue growing at 17%, exceeding the high end of their revenue guidance.
- The company achieved a record bookings quarter, driven by broad-based demand across their solution portfolio and a higher volume of account expansion deals.
- Workiva Inc (WK) delivered a standout performance in sustainability management and reporting, with significant contributions from their ESG and Workiva Carbon solutions.
- The company raised its full-year 2024 revenue guidance by $6 million and improved its operating margin, reflecting confidence in their growth strategy.
- Workiva Inc (WK) continues to see strong customer retention, with a gross revenue retention rate of 97.5% and a net revenue retention rate of 110.5%.
Negative Points
- Despite the positive results, Workiva Inc (WK) faces increasing competition in the ESG space, with new point solutions entering the market.
- The company is still in the process of ramping up newly hired sales representatives, which can take 6 to 12 months, potentially delaying immediate sales impact.
- Workiva Inc (WK) is experiencing a decline in setup and consulting services revenue, partially offset by growth in XBRL services revenue.
- The company has not built any return to capital markets into their models, indicating uncertainty in that area.
- Workiva Inc (WK) is still working through changes in their go-to-market strategy, including shrinking territories and adjusting sales team ratios, which are ongoing processes.
Q & A Highlights
Q: What factors are contributing to the strong bookings and market environment for Workiva?
A: Julie Iskow, CEO, attributes the strong bookings to improved internal execution, the impact of the Corporate Sustainability Reporting Directive (CSRD), and the broad use of Workiva's high-value platform. The strategy is focused on growth and leveraging the platform's capabilities to meet market demands.
Q: How is the hiring of new sales representatives progressing, and what impact is it having on productivity?
A: Julie Iskow, CEO, mentioned that the company is still ramping up new sales representatives, which typically takes 6 to 12 months. The focus is on investing in growth and maintaining leadership in the market, with a continued emphasis on hiring to capture market opportunities.
Q: Can you provide an update on the competitive environment in the ESG space and the impact of the Sustain Life acquisition?
A: Julie Iskow, CEO, noted that while competition is increasing, Workiva's platform remains differentiated. The acquisition of Sustain Life and the rollout of Workiva Carbon have strengthened their ESG offerings, allowing them to capture market opportunities and meet the demand for integrated carbon accounting and ESG solutions.
Q: How is Workiva positioned to handle the upcoming CSRD requirements in Europe, and what investments are being made in the region?
A: Jill Klindt, CFO, stated that Workiva is actively hiring quota-bearing reps in Europe and globally to meet the demand for sustainability reporting. The company is still in the process of hiring and investing in the region to capitalize on the CSRD opportunity.
Q: What is the growth potential for Workiva's financial reporting business outside of SEC reporting?
A: Julie Iskow, CEO, highlighted that Workiva's financial reporting business continues to grow, with strong demand for global statutory reporting, multi-entity reporting, and operational reporting. These areas are fundamental to Workiva's assured integrated reporting platform and are expected to remain strong.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
