Workiva ( WK ) Q4 2025 Earnings Call Transcript

fool.com · Feb 20, 2026 · Collected from GDELT

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Image source: The Motley Fool. DATEThursday, February 19, 2026 at 5 p.m. ETCALL PARTICIPANTSChief Executive Officer — Julie IskowChief Financial Officer — Barbara LarsonSenior Director of Investor Relations — Katie WhiteNeed a quote from a Motley Fool analyst? Email [email protected]TAKEAWAYSTotal Revenue -- $239 million for the quarter, up 20% year over year, exceeding the high end of guidance by $3 million; foreign currency provided approximately a one percentage point positive impact.Subscription Revenue -- $219 million for the quarter, up 21% year over year; new customers in the past 12 months contributed about 40% of this growth.Professional Services Revenue -- $20 million for the quarter, up slightly versus the prior year; reflects a shift from lower-margin services toward partners, offset by higher-margin XBRL services.Non-GAAP Operating Margin -- 19.1% for the quarter, 160 basis points above high-end guidance and improved by 1,170 basis points year over year.Customer Count -- 6,624 customers at quarter end, up by 319 year over year.Gross Retention Rate -- 97%, surpassing the 96% target for the quarter.Net Retention Rate -- 113% for the quarter, versus 112% a year ago; foreign currency positively impacted net retention by about one percentage point.Multiproduct Customer Mix -- 74% of subscription revenue from customers using multiple solutions, up from 70% a year earlier.Large Contract Cohorts -- 2,507 contracts>$100,000 (up 22%), 592 contracts>$300,000 (up 42%), and 248 contracts>$500,000 (up 37%) year over year.Free Cash Flow Margin -- 15.6% for the year, 360 basis points above guidance and up 390 basis points year over year, aided by favorable working capital and operational efficiencies.Cash and Marketable Securities -- $892 million at quarter end, increasing $35 million sequentially.Share Repurchases -- $72 million repurchased in 2025; $28 million remained from the initial $100 million program at year end, with a $250 million increase authorized in February.2026 Guidance: Total Revenue -- $1,036 million to $1,040 million projected; subscription revenue growth of approximately 19% expected; services revenue anticipated to remain flat.2026 Guidance: Non-GAAP Operating Margin -- Projected at 15%-15.5%, a 560 basis point potential increase at the top end year over year.2026 Guidance: Free Cash Flow Margin -- Expected to be around 19% for the full year.Customer AI Adoption -- Nearly 30% of customers have enabled AI features on the platform; management stated ongoing feedback and usage growth.Updated Pricing and Packaging -- The company continues to use a value-based, consumption-driven pricing model and has seen rising interest in its premium-tier "good, better, best" product structure.Leadership Additions -- Three new executive hires (Chief Revenue Officer, Chief Product Officer, CFO) plus two new Board members with experience leading scaled technology firms were announced.International Revenue -- 27% of total revenue attributed to operations outside the U.S, up 300 basis points from the prior year.Current Remaining Performance Obligations (CRPO) -- $757 million at year-end, up 21%; foreign currency contributed about three percentage points to CRPO growth.SUMMARYWorkiva (WK +1.69%) delivered 20% total revenue growth and a Q4 non-GAAP operating margin of 19%, as international expansion, large multi-solution customer contracts, and significant account expansions drove results.Management affirmed the relevance of Workiva's platform in AI-driven workflows, emphasizing that existing and prospective customers increasingly value data traceability, integrity, and defensibility. The quarter saw almost 30% of customers enable AI platform features, fueling feedback-driven product enhancements and tiered packaging adoption. New and expanded relationships in financial services, sustainability, and GRC underscored broad-based demand, with 74% of subscription revenue sourced from multiproduct customers and approximately 40% of growth from new customer additions. Management reiterated medium- and long-term operating targets, announced executive and board strengthening, and projected continued free cash flow and margin expansion into 2026.CEO Iskow stated, "in all the customer conversations I have, AI is a topic, a strong topic of conversation. Even if they have to have it and they are ready to move this moment, but they are buying because they know Workiva focuses on innovation, and we have it, and we are demoing those. So adoption is increasing simply because now there is a recognition that they can use it in an environment that is safe and secure, and it applies to all of the information across the portfolio of solutions."The company achieved a non-GAAP operating margin of 9.9% for the full year, which exceeded the upper range of initial guidance by 440 basis points.Board approval raised the share repurchase authorization by $250 million, reflecting an increased commitment to capital return.CFO Larson said, "for 2026, we are modeling the business at 96% for GRR and 110% for NRR, and we are striving to maintain that going forward."The leadership noted continued momentum in verticals such as financial services and ongoing progress in shifting to higher-margin service offerings.Management projects achieving GAAP profitability in 2026 and reaffirmed multi-year financial targets set at the September investor day.INDUSTRY GLOSSARYXBRL: eXtensible Business Reporting Language; a standardized digital reporting format used for business and financial data exchange and regulatory filings.CSRD: Corporate Sustainability Reporting Directive; a European Union policy requiring comprehensive sustainability disclosures by qualifying organizations.SOX: Refers to Sarbanes-Oxley Act, U.S. legislation mandating internal controls and financial reporting standards for public companies.GRC: Governance, Risk, and Compliance; enterprise software solutions designed to facilitate regulatory compliance, risk management, and corporate governance.S-1 Solution: Workiva's application supporting initial public offering (IPO) regulatory filing requirements under SEC Form S-1.Fund Reporting: Workiva solution tailored to support regulated investment fund financial and regulatory reporting needs.CRPO: Current remaining performance obligations; the revenue Workiva expects to recognize in the next 12 months from contracted customers.Full Conference Call TranscriptOperator: Good afternoon, ladies and gentlemen. Welcome to Workiva Inc.'s Q4 2025 Earnings Call. My name is Bailey, 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 02/19/2026 at 5:00 PM ET. I would now like to turn the meeting over to your host for today's call, Katie White, Senior Director of Investor Relations. Please go ahead. Good afternoon, and thank you for joining Workiva Inc.'s Q4 2025 Conference Call.During today's call, we will review our fourth quarter and full year 2025 results and discuss our guidance for the first quarter and full year 2026. Today's call will include comments from our Chief Executive Officer, Julie Iskow, followed by our Chief Financial Officer, Barbara Larson. We will then open up the call for a Q&A session. After market close today, we issued a press release which is available on our investor relations website along with our quarterly investor presentation. This conference call is being webcast live. 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 first quarter and full fiscal year 2026. 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 Inc. 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-Ks 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. With that, we will begin by turning the call over to Workiva Inc.'s CEO, Julie Iskow. Thank you, Katie, and thank you all for joining us. We closed 2025 with strong momentum. We delivered another guidance beat that reaffirms our position as a trusted platform in the office of the CFO.Our Q4 subscription revenue grew 21%, and total revenue grew 20%, both compared to 2024. For the full year 2025, we achieved 22% subscription revenue growth and 20% total revenue growth, well ahead of the guidance that we had set at the beginning of the fiscal year. We also delivered profitable growth. We had another quarter of accelerating margin improvement with a Q4 non-GAAP operating margin of 19%. This was a 160 basis point beat on the high end of the guide and a 1,170 basis point improvement compared to 2024. For the full year 2025, we delivered meaningful progress towards our 2027 medium-term model targets. Our non-GAAP operating margin was just shy of 10%.This is 440 basis points above the guidance that we had set at the beginning of 2025 and 560 basis points above full year 2024. Our Q4 momentum reflected broad-based, durable demand across our AI-powered platform. It also reflected our customers' deepening commitment to Workiva Inc. a