Good afternoon. Great turnout for the final session, at least for me, for the day. I'm Rob Oliver. I follow the software group here at Baird, and it's my pleasure to have Julie Iskow, CEO of Workiva here. Julie, good to see you. Thank you. Pleasure to be here. Thank you all for joining us. Yeah, so it's been a busy day of meetings for you guys. I appreciate your opportunity to have you here on stage. Your stock's very inexpensive, so I think there's a lot of good reasons to be looking at it. I agree. I also know that you're gonna have a breakout afterwards, so we can go to the breakout room afterwards, and you can ask Julie questions there if you'd like to, one-on-one. Let's talk first and foremost about the buying environment for you guys. I had an opportunity yesterday to talk to one of my covered companies that is a Workiva customer, and I asked them, and they do ESG and GRC with you guys in addition to financial filing, and I said, you know, are you guys slowing your ESG stuff right now? They said, no, nobody is, you know. I was like, okay, that's interesting. You know, there's a lot of fear about ESG right now in the market. Let's start by maybe talking a little bit about what's going on actually with the demand environment with your business. Yeah, I mean, we'll start just broadly speaking. Please. You know, I'll start by saying last year we had incredible momentum. We had several strong quarters of growth, and then we moved into Q1 of this year, and toward the middle end of Q1, we started seeing some signs of a more cautious buying environment, which, not unlike a number of software companies, we're seeing. There was turbulence and so forth, but a lot of uncertainty. I think that uncertainty is really impacting buyers of software, right? They're wondering, you know, should they, do they need this, looking at stronger business cases and so forth. We felt that toward the end of Q1, and we talked about that in our earnings release and said we were seeing signs of a more cautious buying environment, and likely that'll continue until the certainty, uncertainty clears or there is some, you know, indication that it will clear. We did see that, and we were open about that, and it's broad-based, across our portfolio, just seeing the reactions of buyers in the market. Got it. You did not change your guidance. We didn't, and those of you who know the SaaS model know a lot of, you know, what happens in 2025 is, also from the strong bookings in, in 2024. But also, you know, again, we're not, we're not, we're, we had a balanced guide. I mean, we exceeded our guide for revenue, but we left it the same for the year. In that sense, you know, we haven't changed the way we do guidance, so we carried it, carried it forward. We didn't decrease the guide. Got it. I guess, you know, using the tools at your disposal, the data available to you, like what you see within your systems, what is it that caused that change or that slight change towards, you know, the end of the quarter? Was it macro-related? Was something specific to the buying environment relative to Workiva and your competitors or anything like that? Yeah, I mean, you can talk to the people here, and you know, when you ask them, you know, what does, what does 2025 look like relative to what you thought it would look like? Is it better or is it worse? I think you're gonna get a similar answer. Things are a little worse than people had predicted, and I think that's just reflected in, you know, the buyers of software. They're looking at what's going on. They're looking at uncertainty, and particularly in Q1, we saw that. Again, a lot of turbulence, a lot of things going on with the new administration, and that continued. The uncertainty is really a big piece of it, the macro, yes. Got it. Is there a geographic element to that? Is it North America, which is your largest market? Is it Europe, which has been more of a growth factor for you guys? What's the right way to think about that? I think it primarily we saw it's our biggest market, so we saw, you know, the more cautious and buying environment there. Again, from the momentum we saw in the prior quarters to what we saw in Q1, it was different. Got it. Got it. Got it. Okay. And then I wanna talk about margins, and we can get some of these things out of the way and move to the, to the product and platform stuff. There's a pretty big ramp in margins in the second half of the year. Also, you know, investors just are like, we don't love that. You know, they don't love that. So I, if you can get us comfortable with how, in a more uncertain macro environment, you feel like that margin trajectory is achievable. Sure. I mean, it's a great topic for us to talk about and something, you know, we are talking about more and more, and Workiva is becoming that expanding margin story. I mean, approaching the billion dollars, it's time, and we have line of sight to how we're gonna meet those targets that we have provided for a mid and long-term operating model. I mean, we look at, you can see that. It's published. It's public. You can see what our targets are. After 2025, we've got 2 years. We've got about 1,000 basis points to improve, right, on our, for our, to reach those targets. We do have plans, and we do have line of sight to that improvement. If you look at what's comprised, what we, you know, is comprised in that margin, we've got the R&D and our gross margin, and that will be the bulk of where we see the margin improvement. I look at R&D, we continue to grow. We've put a lot of investment in our platform. We are continuing to see that we can get increasing leverage from that investment. There's a lot of automation we can do. AI is going to play a role. Also in R&D, historically, we've not leveraged lower-cost resources or offshoring, outsourcing. We've started to do that, and we see significant opportunity there. We see line of sight to the 400-plus basis point improvement. On the gross margin side, we see improvement opportunities there as well in line of sight. I think about our partner ecosystem, and you can see us continuing to outsource our low-margin services to our partners. That plays a role. In addition to just moving those services off, what we have been doing over the last few years is helping to ensure that partners are providing the same user experience we provide to our customers. We have been using our internal resources to help those partners develop centers of excellence to enable them to ensure, again, that they are delivering the quality of service that we deliver. Over the next one to two years, we will, of course, see some shrinking resource on our end devoted to that. Again, from leveraging those partners and their services, moving our services to them, as well as the resources going into that. Then just customer success, customer support services. There's room for automation. There's room for leveraging AI and so forth. Again, in R&D and in the gross margin, we believe we have line of sight and plans to get to those margins in 2027. Confirming, yes, we will, we will meet those operating targets. Excellent. Great. Thanks. I wanna step back and ask a little bit about kind of the Workiva platform, and you can provide an update for us on kind of what that is. I often talk to clients who aren't, I guess, fully aware of all that you do. And for context, you know, when I started following you guys, you were essentially a one-product company with like a $45,000 ACV, and you now have 191 customers paying you over $500,000 a year, and that grew 32% year over year last quarter. You know, what I often say is that you guys are one of the companies I follow who's actually made that hard jump from being single product to platform, in my view. Maybe talk about that platform today, where you're landing, where you're expanding, and address some of the areas that are showing growth for you right now. Sure. We have a platform for assured integrated reporting. We have the financial reporting capabilities, and it is far more than just SEC. It was back then. There are a number of financial reporting capabilities, multi-entity reporting, management operational reporting, private company financial reporting, and so forth. We have the governance, risk and compliance suite, which is audit, risk management, controls, policies, procedures. There is that category. Of course, we have the non-financial reporting or sustainability reporting, which of course includes carbon accounting. We also play in some of the verticals, the largest of which for us, and highly successful because there are a lot of regulatory requirements there, is in financial services. We have a suite of products for financial services to meet regulatory needs. The platform is broad. I mean, reports of, you know, two dozen solutions across those capabilities. One, you know, one of our growth strategies and vectors is, of course, account expansion. We go in, we build trusted relationships, and we continue to provide more and more value around financial reporting, non-financial, and audit controls and risk management. We have put emphasis in that. We do that too with our partners. At the same time, we have been expanding the capabilities around our platform and growing those. We have also been developing these strong relationships with partners, particularly consulting and advisory partners. They are a big key to our expansion and why we are continuing to be increasingly successful with the platform and expanding in the accounts that we are in. They go in, they've built trusted relationships with the companies that we are engaged with, and they are in digital and financial transformation. When we work with partners, of course, and we co-sell with them, and they come in and help increase the value of our platform, we sell higher in organizations. We go toward the CFO. We sell more broadly. We sell more solutions across the platform. We get higher deal sizes, as you've described. That's a big part of our growth and an accelerator, you know, to going after our market, our TAM. Success on the platform has been intentional, to do the multi, multi, solution and account expansion and, of course, sell with the platform, which we've done over the last several years. We really evolved, and it involves a number of things around the company, including how we sell, our strategies, and so forth. Yes. Yeah. No, I wanna touch on that. That's helpful. I mean, I feel like partners is something that, you know, you've just kind of had your fingerprints on it at Workiva. I know there were people who were that, I don't know. I feel like you really had a hand in ramping a lot of the SI relationships since your arrival. At least it felt to me like I used to go to the Workiva user conferences. There'd be no system integrator presence there. Very small. Now they've all got ice cream machines and basketball hoops and popcorn machines, and they're trying to drive everybody. That tells me that you're more important to them than you used to be. Where are we in the maturation of the buildouts of those practices? Because clearly these are big organizations, and they can be difficult to work with. How set up are you guys with those practices to grow? Sure. I will give credit to Workiva prior to my arrival. We did have a number of partners. I think where the pivot was is we began thinking about their success and making them commercially and financially successful when they work with us so that they bring deals to us, they co-sell with us, and they know when we sell a dollar of our software, they'll sell many dollars of services and not just implementation, but ongoing recurring high-value, high-margin services. I think together we both see the benefits on both sides, and we work together very effectively. The big three of the four, one is our auditor, of course. 3 of the big 4 have dedicated alliances set up now with us. We work very well with them. We work together. We go to accounts together. We account plan together. We do QBRs in the offices of some of our partners. So we have developed a broader ecosystem. Yes, it is the big three because they are everywhere around the world and in larger, more strategic customers, which is where we play in a big, you know, target market for us. We do have, you know, almost 200 partners. We focus on, you know, the larger strategic consulting and regionals that help us, again, go to market and bring source deals with us. This leads me to another part of the partner motion, and you touched on it perhaps a little bit, but is around go-to-market efficiency. You know, you've been very forthright in the past about the fact that your go-to-market is perhaps more expensive than it should be. I would think that the partners would be one of the ways to drive sales efficiency going forward if they're handling a lot more of that go-to-market implementation. Basically, can you help us understand or frame how to think about that as a contributor to sales efficiency and then also perhaps internal things you guys are doing to drive more sales efficiency? Sure. Yes, we have some leg of that legacy sales model with us. Yes, I have been very open about that. It's sale structure. We have account executives or account owners, and then we have some overlays for several of our solutions, whether it's sustainability, whether it's GRC or multi-entity reporting or SEC. Over time, we want to change the ratio of those solution sellers to account executives so that we are paying less on the sales. That's one thing, one area of improvement. Yes, going to market with our partners is key as well. Easier source deals, less effort on our part to bring the deals in. That helps as well. Absolutely. We're, you know, just overall elevating the profile of seller that we bring in, one that understands and has experience selling a platform rather than a transaction sale of 1 or 2 solutions. We bring in pro sellers with a profile of embracing partners, having had success with partners, those that have scaled with companies over the $1 billion and $2 billion. We're bringing in just a different profile of seller into the organization. We've also brought in, as we've talked about prior, sales leadership with experience, bringing in some sales leadership from companies like ServiceNow that know the motion, again, partner, platform, scale, and they know how to organize, know efficiency, know what plays work, particularly in Europe, various regions. We've been, you know, working on refining and defining the strategy. We're in the midst of it, not there yet. Plenty of opportunity for improved productivity and efficiency on the sales and marketing side as well. Got it. Got it. Helpful. And on the, another way to kind of generate business for you guys is through ERP relationships. You, you've called out some wins associated with S/4HANA migrations or ERP migrations. So I guess wanna get a sense from you of how meaningful a potential driver those are. There's a lot of companies that still need to migrate their ERPs. I, I think it's, you know, I was at SAP Sapphire. I think it's gonna be a slog. It's gonna be tough for these companies to do it. Absolutely. Since there's a lot of supercycle hype out there, which probably doesn't help anybody in the financial suite, to boil it down, like, how do you think about that opportunity as a potential catalyst for you? Sure. We love that opportunity because when a company goes through a transformation or an upgrade, it's an opportunity for them to look at their suite of capabilities. When you're going through financial transformation, you have a choice to bring all your legacy capabilities—many are point solutions or legacy software, not necessarily SaaS—if you're going to an S/4HANA migration. It's a real, good opportunity for companies to really look through that stack. Here again come our partners, where they are in there with financial and digital transformation. They might say, "Hey, if you want to upgrade, you know, to cloud capabilities, if you want the best, pulling Workiva here, here, and here, and we can become the platform for their reporting system," right? That's an excellent opportunity for us. In the best of cases, we're brought in early, and we've highlighted some of these wins in our earnings call, quarterly. Other times we might come in more in the middle or even at the end when the migration is complete. They're looking for transforming, right, their financial systems, and it's a good opportunity. It's a trigger for us to be able to bring in our software. We do go again with the partners here, a big play for us with the partners and a significant opportunity. Got it. So you don't necessarily need to have partnerships with, say, Oracle or SAP directly in order for this to be effective. Going through the SI partners is sufficient to trigger that. Yeah. The SI partners have a lot to say in financial transformation in these significant companies going through transformations like upgrades to S/4HANA. Absolutely. We work with, of course, all the ERP systems. The data coming from General Ledger goes right into our platform to do, of course, financial reporting, et cetera. We get those opportunities through the, you know, consulting and advisory system integrators, of course. It is a tremendous opportunity. Got it. Okay. We've gone 20 minutes of the time without really talking about ESG. Yes. And so, you know, it's that. I do wanna ask about it because I feel like, you know, there was a time when we were talking a lot about ESG and I, and certainly the wins have changed on ESG. As I alluded to at the outset, it does sound like some people are still going through with ESG engagement. A lot of North American companies were doing it in the absence of a mandate, and there are still mandates in Europe. Maybe if you can just help us understand what the current mandates are that you guys are responding to, you know, either in the EU or wherever, and how that environment is behaving today for you. Sure. Thank you for bringing up the topic. It was being talked about, and it still is a topic we're talking about quite a bit. I mean, the way we look at sustainability, we look at it, you know, with around geography, and we look at it around company size, particularly now. I mean, we can start with Europe and think about what's going on there. We've had the Corporate Sustainability Directive, and they've come out with very clear requirements. If you are a large wave one company, not much has changed. You still need to report this year. You still need to comply with the EU taxonomy, SRS, still need to do double materiality. Next year you'll be doing, you know, assurance will, that'll be part of the requirements as well. We need to be audited, right? Limited assurance. Very clear for the large wave one companies. That is that. In the mid-range and smaller, there is a change, right? The wave two and three filers have been given two more years until they need to comply, but that has been defined. Of course, there is the bottom part of the grouping, the smaller companies, 1,000 or less, you do not need to comply with CSRD. Those wave 2 and 3, some continue on with their momentum, but others, yes, the box checkers and the compliers, they will pause, wait, you know, likely until it is closer to the time that they need to comply. Again, up market in Europe, alive and well and reporting, and we have been seeing the reports come in. That market is our target market and we'll continue there. On the U.S. front, I mean, yes, the market has changed, right? No longer will we be seeing the U.S. SEC climate disclosure rule. It's been a while there. And again, box checkers and compliers, we are likely not going to see them, you know, purchasing our sustainability technology. But there is still California, and as recently as last week, state of California confirmed that if you're a company selling in the state of California any amount and you're a billion dollars or more in revenue, you'll be reporting your carbon emissions, your scope 1, 2, ultimately 3. That is still there. Now, who knows with, you know, we'll see where that goes with the current administration, if that stays the same. What effect that the governor of California wants to run for president, somebody needed to know. That too. Yes. You know, that's still there. We've got bills in the state of New York and New Jersey and Illinois that are very similar to California. You know, to say that there's been no change, we wanna be forthright about that. Certainly there is, but those companies that wanna compete in the global ecosystem that are suppliers into those companies in Europe, they're gonna, you know, continue to report their non-financial factors. Of course there's the rest of the world, which is, you know, there are 20 countries that are aligning with ISSB standards. We've got 8,000 companies worldwide that have committed to science-based targets through the Science Based Targets Initiative. That's increased from 4,200 just last year. As you say, companies are still doing sustainability initiatives because it's good for, it's risk management, it's business performance, it's stakeholder requirements and demands and so forth. However, yes, the climate, no pun intended, or maybe it was, that, you know, the climate for sustainability is a little different right now. And we see it, you know. I guess, you know, this is one of the primary investor concerns we hear is around that, you know, you guys have this platform of products and we do not have a lot of way to measure the individual growth rates within those products, which, you know, I get. You guys have been calling out ESG as a pretty strong contributor to growth over the last few years. In that context, how should we feel comfortable that there is sufficient opportunity within the breadth of the assured integrated reporting platform? Yep. That those targets that are out there, which, you know, you recently reiterated, we should feel comfortable about. Sure. We talk about our top booking solutions and there's a number of solutions up at the top. It isn't only ESG. We don't say the top, we say it's around the top. We still have our, you know, elements of GRC and financial reporting that are very strong. I think it's the strength of the platform is where, you know, we look at our resilience, right? As I mentioned, we have a dozen, two dozen capabilities across the platform. We're strong in financial services, strong in financial reporting, and have multiple, multiple solutions there. Of course, GRC, and those are strong. The bulk of our revenue comes from financial reporting. Next is GRC. We've been selling sustainability for a couple of years now, and while it was fast growing, it still comprises a smaller portion of our revenue. Keep in mind our TAM that we disclose, 50% financial reporting, 20% GRC, and 20% is sustainability. It is a portion of the TAM, but we have significant TAM, and, you know, relatively untapped market for most of that TAM. Got it. Got it. Thanks. Just a couple minutes left. You know, you guys are mostly financial suite, but what I've noticed is that in, around CSR and ESG, you start to touch areas outside of the financial suite. I'm probably gonna get the nomenclature wrong, but you introduced some ways for non-financial suite participants to interact with your software in ways where they can say, "Hey, if I'm, you know, managing, you know, a warehouse or something, I can contribute to that ESG report even though I don't work in the financial suite. Sure. That's a person who's in an operational line. I just wanted to get an idea from you of how you think about, you know, the financial risk data that you guys have always been very strong on and the operational side, because you have a competitor who's coming at it from more of an IT and operational side around risk, vendor risk, audit risk, other kinds of risk, and you guys from a financial suite side. You bring a lot of core companies as strengths here, but just wanted to get your sense of, you know, kind of the operational versus financial or non-financial. You know, interestingly enough, oh no, there, I mean, GRC and controls and risk management and so forth, it's pretty broad, right? There's IT, there's IT and vendor risk management and so forth. Interestingly enough, it's not been a challenge for us in terms of deals, not having that full suite of solutions. We have focused in the area of financial. It complements our financial reporting and sustainability solutions, both of which require controls and, and audits. So we've not moved into that space at this time, and it hasn't been a limiting factor for us in going after our, our large TAM. Got it. Awesome. And then, last question in the time we have remaining, Julie, just to ask about, you know, pricing and how to think about pricing in this environment. You know, you guys, I think have like a bit of an advantage here as we move towards a Gen AI world. You guys were one of the first companies that I followed to like wholesale change the way people consumed your products back in 2018, and, and so it's not really a seat-based model per se. So can you talk a little bit about that and, and what that means for your pricing and what it means for how you might introduce generative AI into your solution? Sure. It's a hot topic conversation for those on with a seat-based model, right? Because you decrease the number of people that are needing the solution if you have digital humans or automation or AI. We don't have that challenge. We license our solutions per solution, and then we charge based on value metrics. For our control solution, it would be based on number of controls. There's a core pricing and then number of controls, whether you have three people or 300 people using it. When we have ESG, or excuse me, sustainability, it's really based on the frameworks that you support and the complexity. You know, we have every solution is sold with a price of that solution, and then it might be company size or complexity or some measure of value around the pricing. It's not user-based or seat-based. And we've transitioned to that, around five, six years ago. Yeah. Yeah. Great. We are gonna have a breakout in the Rockefeller Foyer, so please come and join us afterwards. And please join me in thanking Julie Iskow from Workiva. Thank you very much. Thanks, Julie. Appreciate it. Appreciate you being here. Thanks, Rob. Thank you.