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WORKIVA INC (WK)·Q2 2025 Earnings Summary

Executive Summary

  • Strong Q2: Revenue $215.2M (+21% YoY) and subscription & support $198.2M (+23% YoY); non-GAAP operating margin 3.8% vs 2.0% LY; both revenue and margin beat the high end of company guidance .
  • Guidance raised: FY25 revenue to $870–$873M (from $864–$868M), non-GAAP operating margin to 7.0%–7.5% (from 5.0%–5.5%), and FCF margin to ~10.5% (from ~10%) .
  • Q2 beat vs S&P Global consensus: Revenue $215.2M vs $208.9M*; non-GAAP EPS $0.19 vs $0.05*; beat driven by broad-based subscription growth and operating leverage . Values retrieved from S&P Global*.
  • Key catalysts: Continued momentum in financial services and fund reporting wins, raised FY margin outlook, and optionality from capital markets recovery not embedded in guidance; watch CFO transition (CFO stepping down by Dec 2025) .

What Went Well and What Went Wrong

  • What Went Well

    • Broad-based growth and large-contract expansion: ACV >$500K customers +35% YoY to 208; ACV >$300K +37% to 488; ACV >$100K +27% to 2,241 .
    • Margin and FCF strength: Non-GAAP operating margin 3.8% (200 bps YoY) and FCF $49.3M (22.9% margin), beating internal margin guidance on top-line strength and leverage .
    • Financial services and platform-led wins: Multiple seven-/six-figure wins across banks, asset managers, and utilities; Big Four partnerships sourced/delivered deals; management cited “clear choice” for CFO offices and platform standardization .

  • What Went Wrong

    • Sustainability demand moderation: Management saw moderation in corporate segment (U.S. and Europe) amid regulatory/political shifts; sustainability <15% of revenue, with risk included in updated guidance .
    • Services revenue flat/down: Q2 professional services $17.0M flat YoY; management expects services down YoY as low-margin work is moved to partners .
    • Cautious macro elongating cycles: Deal cycle elongation and risk-adjusted free cash flow outlook (~10.5%) reflect cautious buying environment despite resilient subscription growth .

Financial Results

Headline financials (GAAP/non-GAAP)

MetricQ4 2024Q1 2025Q2 2025
Total Revenue ($M)$199.9 $206.3 $215.2
Subscription & Support Rev ($M)$180.9 $185.5 $198.2
Professional Services Rev ($M)$19.0 $20.8 $17.0
GAAP Gross Margin %77.2% 76.6% 77.0%
Non-GAAP Gross Margin %79.2% 78.7% 79.1%
GAAP Operating Margin %(6.6%) (12.0%) (10.2%)
Non-GAAP Operating Margin %7.4% 2.4% 3.8%
GAAP Net Loss ($M)$(8.8) $(21.4) $(19.4)
GAAP EPS ($)$(0.16) $(0.38) $(0.35)
Non-GAAP Net Income ($M)$19.3 $8.4 $11.0
Non-GAAP EPS (Diluted) ($)$0.33 $0.14 $0.19

Revenue mix

Revenue ($M)Q4 2024Q1 2025Q2 2025
Subscription & Support$180.9 $185.5 $198.2
Professional Services$19.0 $20.8 $17.0
Total$199.9 $206.3 $215.2

KPIs and balance sheet

KPIQ4 2024Q1 2025Q2 2025
Customers6,305 6,385 6,467
Gross Retention %97% 97% 97%
Net Retention %112% 110% 114%
ACV >$100K (count)2,055 2,079 2,241
ACV >$300K (count)416 439 488
ACV >$500K (count)181 191 208
Cash + Marketable Securities ($M)$816 $767 $814
Remaining Performance Obligations next 12 months ($M)——$668
Share Repurchases ($M)—$40.1 $10.0

Beat/miss vs S&P Global consensus (Q2 2025)

MetricConsensus*ActualSurprise
Revenue ($M)$208.9*$215.2 +$6.3 (+3.0%)
Non-GAAP EPS ($)$0.05*$0.19 +$0.14

Values retrieved from S&P Global*.

Non-GAAP adjustments: Company excludes stock-based compensation and amortization of acquisition-related intangibles from non-GAAP metrics; Q2 SBC was $28.5M and non-GAAP operating income $8.2M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025$864–$868M $870–$873M Raised
GAAP Operating MarginFY 2025(9.1)%–(8.6)% (7.1)%–(6.6)% Raised
Non-GAAP Operating MarginFY 20255.0%–5.5% 7.0%–7.5% Raised
GAAP EPSFY 2025$(1.07)–$(1.00) $(0.79)–$(0.72) Raised
Non-GAAP EPS (Diluted)FY 2025$1.02–$1.09 $1.31–$1.38 Raised
Free Cash Flow MarginFY 2025~10% ~10.5% Raised
Total RevenueQ3 2025N/A$218–$220M —
GAAP Operating MarginQ3 2025N/A(7.4)%–(6.4)% —
Non-GAAP Operating MarginQ3 2025N/A7.0%–8.0% —
GAAP EPS (Basic)Q3 2025N/A$(0.18)–$(0.14) —
Non-GAAP EPS (Diluted)Q3 2025N/A$0.37–$0.41 —

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
AI/product + pricing modelPlatform adaptability (EDGAR NEXT readiness), innovation cadence; pricing lever secondary to cross-sell Solution-based licensing (not seat-based) seen as advantageous vs gen-AI erosion; AI features in premium pricing today Stable positive
Partner ecosystem (Big 4)Co-sell/implementation central to wins across solutions and geos Multiple Q2 wins sourced/delivered by Big 4 and regional partners, including managed services Strengthening
Financial services + fund reportingNew public fund reporting solution launched; strong traction Multiple large wins (bank regulatory reporting, fund reporting, Basel Pillar 3) with strong vertical momentum Improving
Sustainability/regulatoryClarity from EU CSRD Omnibus; Wave 1 still on timeline; demand beyond regulation Moderation in corporate-segment demand; sustainability <15% of revenue; risks embedded in guide Moderating
Capital marketsModeled steady; any recovery upside Increased activity (e.g., Figma, Shoulder IPO) but not baked into guidance; upside if acceleration persists Potential upside
Margin expansion and FCFFY25 non-GAAP OM 5–5.5% and FCF ~10% (Q1 guide) Raise to 7–7.5% OM and FCF ~10.5%; leverage across business Improving
Public sector (CFO Act/EO)Marketplace listing and EO seen as multi-year opportunity Early discussions progressing; unique SaaS platform coverage across reporting and GRC Early positive

Management Commentary

  • “We delivered another quarter of solid financial performance… Our business results and guidance raise reflects continued execution on our strategy and a more disciplined approach to margin expansion.” — Julie Iskow, CEO .
  • “We beat the high end of guidance for both revenue and operating margin… Subscription revenue grew by 23%, and contracts valued over $500 thousand dollars were up 35% year-over-year.” — Jill Klindt, CFO .
  • On sustainability: “Sustainability… is less than 15% of our total revenue… demand risks… have already been factored into the updated revenue guidance” — Julie Iskow .
  • On capital markets: “We have not baked any comeback into the guide… we are seeing some increased activity… potential upside” — Julie Iskow .
  • On pricing/AI: “We do not have a seat-based model… solution-based licensing… will serve us well in the AI category as well. It is certainly not seat-based, and we continue to leverage that. With AI, we'll be adding that in at some point. Only in premium pricing today” — Julie Iskow .
  • CFO transition: “Jill Klindt is stepping down… expected to remain as CFO through December 2025 or until a successor is appointed” .

Q&A Highlights

  • Capital markets and guidance: Management sees increased activity but kept no recovery embedded in outlook; any acceleration is upside .
  • Sustainability demand: Moderation in corporate segment; sustainability <15% of revenue; FY guide risk-adjusted to reflect market/regulatory dynamics .
  • Retention drivers: NRR uplift primarily from additional solutions into existing base; 110%+ remains a “good result” target; Q2 NRR 114% (≈1 pt FX tailwind) .
  • Margin/FCF outlook: Margin improvement from productivity and leverage across functions; FCF guidance reflects timing risks/uncertainty and risk-adjusted modeling .
  • Public sector opportunity: Early RFP discussions; Workiva positioned as only SaaS covering integrated reporting/assurance/GRC on the FM QSMO Marketplace .

Estimates Context

  • Q2 2025 vs S&P Global consensus: Revenue $215.2M vs $208.9M*; non-GAAP EPS $0.19 vs $0.05* — both significant beats . Values retrieved from S&P Global*.
  • Forward context: FY 2025 Street revenue $880.8M* sits above company guidance $870–$873M; Street FY EPS $1.64* sits above company non-GAAP EPS guide $1.31–$1.38, suggesting potential consensus recalibration following company’s updated margin/FCF trajectory . Values retrieved from S&P Global*.
  • Q3 2025: Company guides revenue $218–$220M and non-GAAP EPS $0.37–$0.41; Street heading into the period was at ~$219.0M* and $0.39* . Values retrieved from S&P Global*.

Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Core engine healthy: Subscription growth (+23% YoY) and large-contract expansion underpin durable ARR and multi-solution attach; NRR at 114% signals strong expansion motion .
  • Quality of beat: Q2 beat both revenue and margin guidance highs; free cash flow robust (22.9% margin), demonstrating improving operating leverage .
  • Guidance reset higher: FY25 revenue, margin, and FCF guidance raised; margin ramp targeted in H2’25 and into 2026 toward 2027 goals .
  • Sustainability normalization: Near-term moderation is contained (<15% revenue) and risk-adjusted; longer-term demand remains supported by regulation, stakeholder requirements, and performance use cases .
  • Vertical/product catalysts: Financial services and fund reporting momentum plus public sector optionality (FM QSMO) create diversified growth vectors .
  • Optionality not in the model: Any capital markets recovery and continued enterprise AI monetization (premium features) represent upside not embedded in guidance .
  • Watch items: CFO transition through year-end; professional services mix shift to partners; FX can modestly sway growth and NRR (±~1 pt impact noted this quarter) .

Appendix: Additional Data Points

  • Liquidity & debt: Cash, cash equivalents, and marketable securities $814M; convertible notes $71M due 2026 and $702M due 2028; repurchased $10M stock in Q2 (total $50.1M YTD) .
  • Non-GAAP reconciliation context: Exclusions include SBC and amortization of acquired intangibles; Q2 non-GAAP op income $8.2M; reconciliations provided in filings .