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WORKIVA INC (WK)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $206.3M (+17% YoY) with subscription & support up 20% YoY; non-GAAP diluted EPS was $0.14 and GAAP EPS was $(0.38) . Against Wall Street, revenue beat the $204.0M consensus by ~$2.2M and non-GAAP EPS beat the $0.07 consensus by ~$0.07* .
  • Management reaffirmed FY 2025 revenue guidance at $864–$868M and non-GAAP operating margin at 5.0%–5.5%, while lowering FY free cash flow margin target to ~10% from ~12% previously (cautious buying environment late in Q1) .
  • Q2 2025 guidance: revenue $208–$210M, non-GAAP operating margin ~breakeven, non-GAAP diluted EPS ~$0.05 .
  • Potential catalysts: U.S. federal executive order driving mandated financial system consolidation with Workiva listed on FM QSMO Marketplace (multiyear upside in public sector), and continued CSRD clarity in Europe supporting sustainability demand .

What Went Well and What Went Wrong

What Went Well

  • Broad-based demand and platform wins; contracts ≥$500k ACV rose 32% YoY, with subscription growth +20% YoY; “Workiva delivered better than expected top and bottom line first quarter results,” per CFO Jill Klindt .
  • Non-GAAP gross margin expanded YoY to 78.7% (+100 bps YoY); CEO: “CFOs trust Workiva to be the platform that drives performance and productivity” .
  • Strategic product updates (EDGAR NEXT readiness; launch of Fund Reporting solution) and sustained sustainability demand among large enterprises; CEO highlighted “strong Q1 wins” and partner-led deals .

What Went Wrong

  • GAAP operating margin declined to (12.0)% vs (10.3)% YoY; GAAP net loss widened to $(21.4)M from $(11.7)M YoY .
  • Non-GAAP operating margin compressed to 2.4% vs 3.4% YoY, reflecting investment and event timing; management noted a “more cautious buying environment toward the end of Q1” .
  • Net retention was 110% with ~1.5pt headwind from FX and Leap Year effect; free cash flow swung to $(8.1)M in Q1 (–3.9% margin) vs $24.6M (+14.0% margin) in Q1 2024 .

Financial Results

Income Statement and EPS vs Prior Periods

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$185.6 $199.9 $206.3
GAAP EPS ($)$(0.31) $(0.16) $(0.38)
Non-GAAP EPS – Diluted ($)$0.21 $0.33 $0.14
GAAP Gross Margin (%)76.5% 77.2% 76.6%
Non-GAAP Gross Margin (%)78.6% 79.2% 78.7%
GAAP Operating Margin (%)—(6.6)% (12.0)%
Non-GAAP Operating Margin (%)4.0% 7.4% 2.4%

Segment Revenue

Segment ($USD Millions)Q3 2024Q4 2024Q1 2025
Subscription & Support$171.0 $180.9 $185.5
Professional Services$14.6 $19.0 $20.8
Total Revenue$185.6 $199.9 $206.3

KPIs

KPIQ3 2024Q4 2024Q1 2025
Customers (Period-End)6,237 6,305 6,385
Gross Retention Rate97.5% 97% 97%
Net Retention Rate110.5% 112% 110%
Contracts ≥$100k ACV1,926 2,055 2,079
Contracts ≥$300k ACV383 416 439
Contracts ≥$500k ACV166 181 191
Cash, Cash Equivalents & Marketable Securities$776M (9/30/24) $816M (12/31/24) $767M (3/31/25)

Estimate Comparison

MetricConsensus (Q1 2025)Actual (Q1 2025)Surprise
Revenue ($USD Millions)$204.0*$206.3 +$2.3M (beat)*
Non-GAAP EPS – Diluted ($)$0.07*$0.14 +$0.07 (beat)*

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (Feb 25, 2025)Current Guidance (May 1, 2025)Change
Total Revenue ($USD Millions)FY 2025$864–$868 $864–$868 Maintained
Non-GAAP Operating Margin (%)FY 20255.0–5.5 5.0–5.5 Maintained
Free Cash Flow Margin (%)FY 2025~12 ~10 Lowered
GAAP Operating Margin (%)FY 2025(9.1)–(8.6) (9.1)–(8.6) Maintained
GAAP Net Loss per Basic Share ($)FY 2025$(1.07)–$(1.00) $(1.07)–$(1.00) Maintained
Non-GAAP Diluted EPS ($)FY 2025$1.02–$1.09 $1.02–$1.09 Maintained
Total Revenue ($USD Millions)Q2 2025—$208–$210 New for Q2
Non-GAAP Operating Margin (%)Q2 2025—~Breakeven New for Q2
Non-GAAP Diluted EPS ($)Q2 2025—~$0.05 New for Q2

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
AI/Technology initiativesAI adoption accelerating; platform AI used for SEC/GRC documents Continued platform innovation; EDGAR NEXT readiness; Fund Reporting launch Increasing adoption/use cases
Macro/cautious buyingHealthy buying environment; record bookings More cautious buying late in Q1; measured guidance stance Moderation vs 2H24
Regulatory (CSRD/Omnibus)CSRD deadlines driving demand; Omnibus pending Omnibus proposal clarified timing; Wave 1 unchanged; sustained sustainability demand Clearer European outlook; durable demand
Partners/Go-to-marketHeavy partner involvement; ramping quota reps; Europe expansion Continued partner-led co-sell; shrinking territories; experienced sellers Execution improvements ongoing
Product performance/platformMulti-solution platform wins across geos Strong platform differentiation cited; large ACV growth Sustained
Capital marketsModeled as consistent contributor; upside if market improves Outlook unchanged; remains potential upside Stable
Public sector opportunity—EO mandates consolidation; Workiva on FM QSMO Marketplace New multiyear vector

Management Commentary

  • CEO Julie Iskow: “We kicked off the year with solid revenue growth as we continue to see broad-based demand across our solution portfolio. CFOs trust Workiva to be the platform that drives performance and productivity” .
  • CFO Jill Klindt: “We beat the high end of our Q1 revenue guidance by $1 million… Operating margin for the quarter was 2.4%… We remain confident in our long-term market opportunity” .
  • On macro: “We did see signs of a more cautious buying environment toward the end of Q1… we reaffirm our top line outlook for the rest of this year” .
  • On CSRD: “Wave 1 companies… still be subject to reporting in 2025 on 2024 results with no change in timeline… clarity on who will be subject… what… and when” .
  • On public sector: “All 24 CFO Act agencies need to modernize… must use standard Financial Management Systems… we are on that marketplace” .

Q&A Highlights

  • Guidance stance: Management kept FY revenue guide flat despite late-quarter caution; “measured approach” and confidence in large, relatively unaddressed TAM .
  • Net retention and FX: NRR was 110%; FX and Leap Year impacted by ~1.5pts (would be ~111.5% excluding) .
  • Free cash flow: FY FCF margin target revised to ~10% given potential bookings pressure; previously ~12% .
  • Sustainability and Carbon: Sustainability remained a top booking solution; Workiva Carbon opens doors and supports carbon-first buying motions .
  • Fund Reporting: New solution targets >12,000 public funds globally and ~9,000 ETFs; expanding investment reporting TAM .

Estimates Context

  • Q1 2025 results beat consensus on both top- and bottom-line: revenue $206.3M vs $204.0M consensus (+$2.3M), non-GAAP diluted EPS $0.14 vs $0.07 consensus (+$0.07)* .
  • Q2 2025 setup: guidance implies $208–$210M revenue and ~$0.05 non-GAAP diluted EPS; consensus heading into Q2 was ~$208.9M revenue and ~$0.05 EPS (directionally aligned)* .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Q1 delivered solid growth and a clean beat versus consensus, anchored by 20% subscription growth and expanding non-GAAP gross margin; platform-led demand and large ACV cohort continue to scale .
  • Mix shift to subscription and partner-led services continues; services flat YoY in Q1 as low-margin setup/consulting transitions to partners, supporting margin leverage over time .
  • FY 2025 top-line and operating margin guide held; watch lowered FCF margin (~10%) and commentary on cautious buying as near-term guardrails on multiple expansion .
  • European CSRD Wave 1 timelines unchanged and Omnibus clarity should sustain sustainability demand; Workiva’s platform breadth and Carbon capability differentiate in complex, assured reporting .
  • Public sector executive order and FM QSMO approval represent a new, multiyear vector; momentum likely gradual but strategically important .
  • Near-term trading: Beat-and-reaffirm print with lowered FCF margin can temper enthusiasm; catalysts include continued large-deal momentum, partner velocity, and Q2 execution vs breakeven margin guide .
  • Medium-term thesis: Durable 20% subscription growth, platform consolidation tailwinds, and improving productivity underpin FY margin targets; monitor FX, macro caution, and sustainability regulatory cadence .