Workiva at Baird Conference: Navigating Market Uncertainty

On Thursday, 05 June 2025, Workiva Inc. (NYSE:WK) participated in the Baird Global Consumer, Technology & Services Conference 2025, where CEO Julie Ascow discussed the company’s strategic direction amid a cautious buying environment. While Workiva remains committed to expanding its platform and enhancing sales efficiency, it faces challenges from market uncertainties affecting software buyers.

Key Takeaways

• Workiva observed a more cautious buying environment towards the end of Q1, primarily in North America.
• Despite market uncertainties, Workiva maintained its financial guidance and exceeded revenue expectations.
• The company plans to improve margins through R&D, automation, and outsourcing low-margin services.
• Workiva’s pricing model is solution-based, accommodating generative AI without impacting revenue.
• ESG regulations in Europe and California continue to influence Workiva’s strategic focus.

Financial Results

• Workiva reported exceeding its revenue guidance but chose to maintain its annual guidance amid macroeconomic uncertainties.
• The cautious buying environment, driven by market instability and a new administration, has been broad-based across Workiva’s portfolio.

Operational Updates

• Workiva’s platform supports integrated reporting, covering financial, governance, risk, compliance, and sustainability reporting.
• The company aims to expand its platform capabilities and leverage partner ecosystems to enhance sales efficiency.
• Account expansion remains a key growth strategy, with a focus on financial and non-financial reporting, audit controls, and risk management.

Future Outlook

• Workiva targets a significant margin improvement, aiming for a 1,000 basis points enhancement after 2025.
• The company plans to utilize R&D investments, automation, AI, and offshoring to achieve cost efficiencies and improve margins by over 400 basis points.
• Workiva’s partner relationships are crucial for increasing deal sizes and broader solution adoption, with 91 customers paying over $500,000 annually.

Q&A Highlights

• CEO Julie Ascow acknowledged the cautious market environment, stating, "We did see that and we were open about that and it’s broad based across our portfolio."
• Ascow highlighted the opportunity to transform financial processes, saying, "Approaching the billion dollars, it’s time and we have line of sight to how we’re gonna meet those targets."
• On ESG, Ascow noted, "Those companies that want to compete in the global ecosystem... will continue to report their non-financial factors."

ESG and Regulatory Environment

• In Europe, corporate sustainability directives mandate clear requirements for large companies, while the US sees varying state-level regulations.
• Despite changes in the regulatory landscape, companies continue sustainability initiatives for risk management and business performance.

Pricing Model

• Workiva’s solution-based pricing model charges based on value metrics, allowing for flexibility in accommodating new technologies like generative AI.
• Pricing for control solutions is based on the number of controls, while sustainability pricing depends on the supported frameworks and complexity.

For a detailed understanding, readers are encouraged to refer to the full transcript.

Full transcript - Baird Global Consumer, Technology & Services Conference 2025:

Rob Oliver, Analyst, Baird: Well, 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 Ascow, CEO of Workiva here.

Julia, good to see you.

Julie Ascow, CEO, Workiva: Pleasure to be here. Thank you all for joining us.

Rob Oliver, Analyst, Baird: Yeah. So it’s been a busy day of meetings for you guys. Appreciate your opportunity to have you here on stage. Your stock’s very inexpensive. So I think there’s lot of good reasons to be looking

Julie Ascow, CEO, Workiva: at it.

Rob Oliver, Analyst, Baird: And 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. But 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 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?

And they said, no. Nobody is. You know? And I was

Julie Ascow, CEO, Workiva: like, okay.

Rob Oliver, Analyst, Baird: That’s interesting. So, you know, there’s a lot of fear about ESG right now in the markets. Let’s start by maybe talking a little bit about what’s going on actually with the demand environment with your business.

Julie Ascow, CEO, Workiva: Yeah. I mean, we’ll start just broadly speaking. Please. You know, in in I’ll start by saying last year we had incredible momentum. We had several strong quarters of growth and then we moved into q one of this year and toward the middle end of q one, we started seeing some signs of a more cautious buying environment which not unlike a number of software companies we’re seeing.

And, sure, 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. And we felt that toward the end of q one and we talked about that in our in our earnings release and said we were seeing signs of a more cautious buying environment and and likely that’ll continue until the certainty uncertainty clears or there is some, you know, indication that it will clear.

So 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.

Rob Oliver, Analyst, Baird: Got it. But you didn’t change your guidance?

Julie Ascow, CEO, Workiva: 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 this strong bookings in in 2024. But also, you know, again, we’re not we’re not we’re we’re we had a balanced guide. I mean, we exceeded our guide for revenue, but we left it the same for the year. So in that sense, you know, we haven’t changed the way we do guidance, so we carried it carried it forward.

So we didn’t decrease the guide.

Rob Oliver, Analyst, Baird: Got it. And I guess, you know, using the the tools at your disposal, the data available to you, like what you see within your systems, what is it that caused that that that change or that slight change towards, you know, the end of the quarter? Was it was it macro related? Was something specific to the buying environment relative to Workiva and your competitors or anything like that?

Julie Ascow, CEO, Workiva: Yeah. I mean, you can talk to the people here and, you know, when you ask them, you know, what is what is 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 the buyers of software.

They’re looking at what’s going on, they’re looking at uncertainty and particularly in q one we saw that. Again, a lot of turbulence, a lot of things going on with the new administration and that continued. So the uncertainty is really a big piece of it, the macro. Yes.

Rob Oliver, Analyst, Baird: Got it. And is there a geographic element to that? Is it 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?

Julie Ascow, CEO, Workiva: I think I think it primarily we saw it’s our biggest biggest market. So we saw, you know, the more cautious buying environment there. But again, from the momentum we saw in the prior quarters to what we saw in q one, was it was different.

Rob Oliver, Analyst, Baird: Got it. It. Got it. Okay. And then I want to 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?

Julie Ascow, CEO, Workiva: Sure. And I’ll I mean, it’s a it’s a great topic for us to talk about and something, you know, we are we are talking about more and more and Workiva is becoming that expanding margin story. I mean, approaching the billion dollars, it’s 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 and after 2025, we’ve got two years. We’ve got about a thousand basis points to improve, right, on our for to reach those targets and we do have plans and we do have line of sight to that improvement.

And, if you look at what’s comprised, what we, you know, is comprised in in that margin, we’ve got the r and d and our gross margin and that will be the bulk of where we see the the margin improvement. And I look at r and 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 and D, historically we’ve not leveraged lower cost resources or offshoring outsourcing.

We’ve started to do that and we see significant opportunity there. So 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, so that plays a role. But, in addition to just moving those services off, what we’ve been doing over the last few years is helping to ensure that partners are providing the same user experience we provide to our customers.

So, we’ve 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. So over the next one, two years, we will of course see some, you know, shrinking resource on our end devoted to that. So again, from leveraging those, the partners and their services, moving our services to them as well as the resources going into that. And then just customer success, customer support services, there’s room for automation, there’s room for leveraging AI and so forth. So again, in r and d and in with the gross margin, we believe we have line of sight and plans to get to those margins in ’27.

So confirming, yes, we will we will meet those operating targets.

Rob Oliver, Analyst, Baird: Excellent. Great. Thanks. I wanna step back and ask a little bit about the Workiva platform and you can provide an update for us on kind of what that is. 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, a $45,000 ACV, and, you now have a 91 customers paying you over 500,000 a year and that grew 32% year over year last quarter. So, you know, what I have to 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. So we 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.

Julie Ascow, CEO, Workiva: We have a platform for assured integrated reporting. We have the financial reporting capabilities and it’s 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. And then we have the govern the governance risk and compliance suite, which is audit, risk management, controls, policies, procedures. So, there’s that category.

And then, of course, we have the non financial reporting or sustainability reporting, which of course includes carbon if carbon accounting. We also play in some of the verticals, the largest of which for us, and Heilix is successful because there are a lot of regulatory requirements there, is in financial services. So we have a suite of products for financial services to meet regulatory needs. So the product the the platform is broad. I mean, reports of, you know, two dozen solutions across those capabilities.

And 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 and risk management. So we have put emphasis in that. That we do that too with our partners and at the same time we’ve been expanding the capabilities around our platform and and growing those, we’ve also been developing these strong relationships with partners, particularly consulting and advisory partners. So, they’re a big key to our expansion and why we are continuing to be increasingly successful with the platform and expanding in in the accounts that we’re in.

They go in, they build trusted relationships with the companies that we are engaged with and they are in digital and financial transformation. And, 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. So that’s a big part of our our growth and an accelerator, you know, to to going after our our market, our TAM. So success on the Powerpoints 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’ve really evolved and it involves a number of things around the company including how we sell our strategies and so forth.

Rob Oliver, Analyst, Baird: But Yeah. No. I wanna touch on that. That’s helpful. So, 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 your people were 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 conference. There’d be no system integrator presence. They were very small and now they’ve all got ice cream machines and basketball hoops and popcorn machines.

They’re trying to drive everybody. And that tells me that you’re more important to them than you used to be. So, where are we in the maturation of the build outs of those practices? Because clearly, these are big organizations and they can be difficult to work with. And so, how set up are you guys with those practices to grow?

Julie Ascow, CEO, Workiva: Sure. I and I 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 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. So, I think together we both see the benefits on both sides and we work together very effectively.

And, the big three of the four, one is our auditor of course, so three of the big four 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 in the offices of some of our our partners. So, we’ve developed a broader ecosystem. Yes, it’s the big three because they’re everywhere around the world and in larger, more strategic customers which is where we play in a big, you know, target market for us. But, we do have, you know, almost 200 partners. We focus on, you know, the larger strategic consulting and regionals So that help us again go to market and bring source deals with us.

Rob Oliver, Analyst, Baird: And this leads me to another part of the partner motion and you you touched on it perhaps a little bit, but it’s around go to market efficiency and you’ve, you know, been very forthright in the past about the fact that your go to market is perhaps more expensive than it should be. And, 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. So basically can you help us reframe 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.

Julie Ascow, CEO, Workiva: Sure. And, yes, we have some we have some leg of that legacy sales model with us and yes, I have been very open about that. It’s sale sales structure. 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 SCC.

So 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. And, going to market with our partners is key as well. Easier source deals, less effort on our part to bring the deals in, so that helps as well. So, absolutely and 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 one or two solutions. We bring in sellers with profile of embracing partners, having had success with partners, those that have scaled with companies over the billion and $2,000,000,000. So, we’re bringing just a different profile of seller into the organization and 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.

So, 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.

Rob Oliver, Analyst, Baird: Got it. Got it. Helpful. And on the another way to kinda generate business for you guys is through ERP relationships. You you called out some wins associated with S4HANA migrations or ERP migrations.

So I guess I 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 schlock. It’s gonna be tough for these companies to do it.

Absolutely. But since there’s a lot of super cycle 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?

Julie Ascow, CEO, Workiva: Sure. We love that opportunity because when a company goes through a transformation or an upgrade, it’s an opportunity from the look at their their suite of capabilities. So 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 four HANA migration. So, it’s a real it’s a good opportunity for companies to really look through that stack and here again come our partners where they are in there with financial and digital transformation. So, they might say, hey, if you want to upgrade to cloud capabilities, if you want the best, pull in Workiva here, here and here and we can become the platform for for their reporting system.

Right? So 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 to bring in our software. But, we do go again with the partners here, a big play for us with the partners and a significant opportunity.

Rob Oliver, Analyst, Baird: Got it. So, it’s 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

Julie Ascow, CEO, Workiva: partners have a lot to say in financial transformation in these significant companies going through transformations like upgrades to S4HANA? Absolutely. So we work with, of course, all the ERP systems. They’re the data coming from general ledger goes right into our platform to do, of course, financial reporting, etcetera. But, we get those opportunities through the, you know, consulting and advisory system integrators, of course.

It’s a tremendous opportunity.

Rob Oliver, Analyst, Baird: Got it. Okay. We’ve gone twenty minutes at a time without really talking about ESG. And so yeah. What’s that?

So I I do wanna to ask about it because I feel like, you know, there was a time when we were talking a lot about ESG and and I and the the certainly, the the winds have changed on ESG. But as I alluded to at the outset, it does sound like some people are still going through with, ESG engagement. And a lot of North American companies were doing it in the absence of a mandate, and there’s still mandates in Europe. So 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.

Julie Ascow, CEO, Workiva: Sure. Thank you for bringing up the topic. It was being talked about and it still is a topic we’re we’re talking about quite a bit. I mean, the way the way we look at the way we look at sustainability, we we look at it, you know, with around geography and we look around it around company size, particularly now. I mean, we can we can start with Europe and think about what’s going on there.

So 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, still need to comply with the EU taxonomy, SRS, still need to do double materiality. And next year, you’ll be doing, you know, assurance. That’ll be part of the the requirements as well.

We need to be audited. Right? Limited assurance. So, very clear for the large wave one companies. So, that’s that.

In the in the mid range and smaller, there’s a change. Right? The wave two and three filers have been given two more years until they need to comply, but that’s been defined. And then, of course, there’s the bottom part of the the grouping, the smaller companies, 1,000 or less, you do not need to comply to with with CSRD. So those wave two and three, some continue to continue on with their momentum, but others, yes.

The box checkers and the compliers, they will pause, wait, you know, likely until it’s closer to the time that they need to comply. But again, upmarket in Europe, alive and well and reporting and we’ve been seeing the reports come in. So that market is our target market and we’ll continue there. On The US front, I mean, yes, the market has changed. Right?

No longer will we be seeing the the US 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 are there is still California and as as recently as last week, State of California confirmed that 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 your carbon emissions, your scope one, two, ultimately three. So that is still there.

Now, who knows with, you know, we’ll see where that goes with the current administration if that

Rob Oliver, Analyst, Baird: states governor of California wants to run for president, so maybe

Julie Ascow, CEO, Workiva: That too. Yes. So, you know, that’s still there and we’ve got bills in the state of New York and New Jersey and Illinois that are very similar to California. But, know, to say that there’s been no change, you know, we we want to be forthright about that. Certainly, is.

But those companies that want to compete in the global ecosystem that are suppliers into those companies in Europe, they’re gonna, you know, continue to to report their their non financial factors. And then, of course, there’s the rest of the world which is, you know, there are 20 companies that are 20 countries that are aligning with ISSB, you know, standards and we’ve got 8,000 companies worldwide that have committed to science based targets through the science based target initiative. So, that’s increased from 4,200 just last year. So, 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 is a little different right now and and we see it, you know.

Rob Oliver, Analyst, Baird: And I guess, you know, this is one of the the primary investor concerns we hear is around that, you know, you guys have this platform of products and we don’t have a lot of way to measure the individual growth rates within those products, which, you know, I get. And you guys have been calling out ESG as a pretty strong contributor to growth over the last few years. So, in that context, how should we feel comfortable that there’s sufficient opportunity within the breadth of the Integrated reporting platform Yep. That those targets that are that are out there which, know, you recently reiterated stuff, we should feel comfortable about.

Julie Ascow, CEO, Workiva: Sure. We 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. So we still have our, you know, elements of of GRC and financial reporting that are very strong.

I think it’s the strength of the platform is where, you know, we 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 financial reporting and have multiple multiple solutions there. And, of course, GRC and those are strong.

Our 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. And keep in mind, our TAM that we disclose, 50% financial reporting, 20% GRC, and 20% is sustainability. So it’s it’s a portion of the TAM, but we’ve got significant TAM and, you know, relatively untapped market for most of that TAM.

Rob Oliver, Analyst, Baird: Got it. Got it. Thanks. Just a couple minutes left. So you know, you 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, can contribute to that ESG report even though I don’t work in the financial suite. That’s a person who’s at an operational line. So 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 come come at it from more of a IT and operational side around risk, vendor risk, audit risk, other kinds of risk. And you guys from a financial suite side and, you know, and you bring a lot of core companies as a strength here strengths here.

But just wanted to get your sense of, you know, kind of the operational versus financial or non financial.

Julie Ascow, CEO, Workiva: You know, interestingly enough oh no, they’re 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 and audit. 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.

Rob Oliver, Analyst, Baird: 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 a better 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?

Julie Ascow, CEO, Workiva: It’s a hot topic conversation for those on with a seat based model. Right? Right. Because you you you decrease the number of of people that are needing the solution if you have digital humans or automation or AI. So we don’t have that challenge.

We we license our solutions per solution and then we charge based on value metrics. So for our control solution, we 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 when we have when we have ESG, or excuse me, sustainability, it’s it’s really based on the frameworks that you support and the complexity. 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.

So, it’s not user based or seat based And we’ve transitioned to that around five, six years ago.

Rob Oliver, Analyst, Baird: 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 Julius Scott from Quirkeba.

Julie Ascow, CEO, Workiva: Thank you very much.

Rob Oliver, Analyst, Baird: Thanks, Julie. Appreciate

Julie Ascow, CEO, Workiva: it. Being here. Thanks, Rob.

Rob Oliver, Analyst, Baird: Thank you.

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