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WORKIVA INC (WK)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $199.9M, up 20% YoY, with subscription revenue +22% YoY; Workiva beat the high end of Q4 guidance by $4M and delivered non-GAAP operating margin of 7.4% and non-GAAP diluted EPS of $0.33 .
  • KPIs showed continued mix shift and expansion: net retention improved to 112%, multi‑solution customers drove 70% of subscription revenue, and contracts >$500k rose 32% YoY; total customers reached 6,305 .
  • Management guided Q1 2025 revenue to $203–$205M and FY 2025 revenue to $864–$868M, with FY 2025 non‑GAAP operating margin of 5.0–5.5% and free cash flow margin of ~12% .
  • Strategic themes: sustained demand for integrated reporting (financial + sustainability + GRC), accelerating partner‑led implementations, broadened European momentum, and rising AI adoption within the platform .
  • Street consensus from S&P Global was unavailable; relative comparison anchored on company guidance and reported results. Workiva’s revenue beat and stronger NRR/multi‑solution mix are positive near‑term catalysts .

What Went Well and What Went Wrong

What Went Well

  • Revenue outperformed guidance with broad-based demand; “our Q4 top line results beat the high end of our guidance” and subscription revenue grew 22% YoY; non‑GAAP operating margin reached 7.4% .
  • Mix shift to larger, multi‑solution deals with net retention up to 112% and 70% of subscription revenue from multi‑solution customers, supporting expansion economics .
  • Strategic progress in Europe and sustainability: momentum across geographies and continued top‑booking sustainability solutions, now enhanced by Workiva Carbon; management highlighted CSRD‑driven demand and broader sustainability use cases .

What Went Wrong

  • GAAP profitability remained negative: Q4 GAAP loss from operations was $13.3M and GAAP net loss was $8.8M (−$0.16 EPS), reflecting ongoing investment and stock‑based comp .
  • Seasonality and cost cadence temper near‑term margin: Q1 2025 non‑GAAP operating margin guided to breakeven given front‑loaded expenses (raises, payroll taxes) and services shift to partners .
  • Policy/geopolitical/FX uncertainty informed a balanced 2025 guide (20% subscription growth target), implying conservatism despite strong 2024 execution .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Total Revenue ($USD Millions)$166.7 $177.5 $185.6 $199.9
GAAP EPS ($USD)−$0.08 −$0.32 −$0.31 −$0.16
Non-GAAP Diluted EPS ($USD)$0.32 $0.16 $0.21 $0.33
GAAP Gross Margin %77.3% 76.8% 76.5% 77.2%
Non-GAAP Gross Margin %78.4% 78.3% 78.6% 79.2%
GAAP Loss from Operations ($USD Millions)$9.5 $23.1 $21.8 $13.3
Non-GAAP Operating Margin %7.6% —4.0% 7.4%

Segment revenue breakdown:

Segment Revenue ($USD Millions)Q4 2023Q2 2024Q3 2024Q4 2024
Subscription & Support$148.8 $160.7 $171.0 $180.9
Professional Services$17.9 $16.8 $14.6 $19.0

KPIs and customer metrics:

KPIQ2 2024Q3 2024Q4 2024
Customers (Count)6,147 6,237 6,305
Gross Retention / Revenue Retention ex add-on (%)98% 98% 97% (gross)
Net Retention (%)109% 111% 112%
Multi‑solution share of subscription revenue (%)—68% 70%
Contracts >$100k (Count)1,768 1,926 2,055
Contracts >$300k (Count)356 383 416
Contracts >$500k (Count)—166 181
Cash, Cash Equivalents & Marketable Securities ($USD Millions)$741 $776 $816

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)Q4 2024$194–$196 Reported $199.9 Beat guidance high end by ~$4M
Total Revenue ($USD Millions)FY 2024$727–$729 (8/1/24) $733–$735 (11/6/24) ; Reported $739 Raised, then exceeded
Total Revenue ($USD Millions)Q1 2025N/A$203–$205 New
Total Revenue ($USD Millions)FY 2025N/A$864–$868 New
GAAP Operating Margin (%)Q1 2025N/A~−14.3% New
GAAP Operating Margin (%)FY 2025N/A−9.1% to −8.6% New
Non‑GAAP Operating Margin (%)Q1 2025N/A~Breakeven New
Non‑GAAP Operating Margin (%)FY 2025N/A5.0% to 5.5% New
GAAP EPS ($USD, basic)Q1 2025N/A~−$0.45 (56.4M shares) New
GAAP EPS ($USD, basic)FY 2025N/A−$1.07 to −$1.00 (56.9M shares) New
Non‑GAAP EPS ($USD, diluted)Q1 2025N/A~$0.07 (57.9M shares) New
Non‑GAAP EPS ($USD, diluted)FY 2025N/A$1.02 to $1.09 (60.1M shares) New
Free Cash Flow Margin (%)FY 2025N/A~12% New

Earnings Call Themes & Trends

TopicQ2 2024 (Q-2)Q3 2024 (Q-1)Q4 2024 (Current)Trend
Sustainability/CSRD demandBroad-based demand; raised FY guide; not solution split; early Carbon launch (post‑Q2) Sustainability top-booking 9 quarters; CSRD deadlines driving demand; Carbon launched, pipeline building Sustainability remains top-booking; CSRD Omnibus context; non‑CSRD demand (science‑based targets, CA rules); strong market momentum Strengthening
Europe momentumNot detailed; customers grew; early signals Broad-based demand across geos; Europe highlighted; revenue outside Americas rising Continued momentum and execution improvements across Europe; significant greenfield Improving
Partner ecosystemMoving low‑margin services to partners; outlook for services down YoY Co‑sell motions across deals; partner certifications; pipeline building Majority of upmarket deals involve partners; speed/accelerators improving deployment Expanding
AI initiativesNot highlightedNot highlightedAI adoption accelerating; SEC/GRC content creation use cases; secure LLM integration Emerging growth vector
ERP/transformation triggersNot specifiedERP upgrades (S/4HANA, Oracle) as triggers; partners embed Workiva in playbooks Continued ERP/IPO triggers; integrated platform wins Consistent
Margin trajectoryNon‑GAAP OM improved YoY; investment continues OM improved; raised FY OM guide; back‑half stronger Q4 OM 7.4%; Q1 seasonality breakeven; FY25 OM 5–5.5% Steady with seasonality
Macro/policy/FXHealthy buying environment Positive macro; election commentary; CSRD/CA rules Balanced guide amid policy/geopolitical/FX uncertainty Cautious stance

Management Commentary

  • “Our Q4 top line results beat the high end of our guidance… subscription revenue growth of 22%… delivering a non‑GAAP operating margin of 4.3% for the full year” .
  • “We had 6,305 customers… gross retention rate was 97%… net retention rate was 112%… 70% of subscription revenue from customers with multiple solutions” .
  • “AI has shifted from interest to a requirement… drafting/editing SEC disclosures, policies/controls, boosting productivity across the platform” .
  • “We are optimistic… but mindful of policy uncertainty… potential regulatory changes in Europe and currency impacts” .

Q&A Highlights

  • Policy/geopolitical/FX uncertainty: Guide reflects broad uncertainty rather than any single regulatory item; targeting upmarket mitigates CSRD changes risk .
  • Subscription growth outlook: 20% subscription revenue growth guide framed as balanced; approach unchanged from prior years .
  • Partner-led delivery: Majority of upmarket deals now involve partners; accelerators improving deployment speed and scalability .
  • Margin cadence: Q1 margin seasonality (raises, payroll taxes) and full-year investments; mid/long-term margin targets intact (2027/2030) .
  • Europe and platform land/expand: Broad-based European demand across portfolio; multi-solution lands increasing; greenfield opportunity supports platform sales .

Estimates Context

  • S&P Global consensus estimates for WK (EPS and revenue) were unavailable due to access errors during retrieval; as a result, comparisons anchor to company guidance and reported results rather than third‑party consensus [GetEstimates error].
  • Relative performance: Q4 revenue beat the high end of guidance by ~$4M, with non‑GAAP EPS of $0.33 and non‑GAAP operating margin of 7.4% indicating stronger operational leverage vs prior quarters .

Key Takeaways for Investors

  • The beat vs guidance and improving mix (112% NRR, 70% multi‑solution) point to durable expansion economics; focus on platform deals and partner co‑sell should continue to underpin bookings momentum .
  • Near-term margin caution is appropriate given Q1 seasonality and policy/FX risks; FY 2025 guide still targets productivity gains (5–5.5% non‑GAAP OM) and ~12% FCF margin .
  • Sustainability demand is multi‑year and broader than CSRD; Workiva Carbon strengthens wedge into ESG programs and opens platform upsell paths, including GRC and financial reporting .
  • European execution/greenfield opportunity is a growth lever; partners and ERP transformation triggers (S/4HANA/Oracle) remain reliable catalysts for platform adoption .
  • With Street consensus unavailable, trade the company’s demonstrated momentum against a conservative FY25 guide; watch for updates on CSRD Omnibus, FX, and partner-driven services shift impacting services revenue mix .
  • Monitor KPIs: large‑contract growth (> $300k and > $500k) and multi‑solution penetration are key leading indicators for ARR durability and margin leverage .
  • AI adoption within the platform could be a medium‑term differentiator, enhancing customer productivity and deepening stickiness across SEC, GRC, and sustainability workflows .