Morgan Stanley Technology, Media & Telecom Conference

All right. I think we can go ahead and get started. So my name is Chris Quintero. I am the Office of the CFO of Software Analyst here at Morgan Stanley, and really excited to be joined here by Julie Isco, CEO and President of Workiva.

Thank you very much. Happy to be here, and thank you all for choosing the session. Appreciate it.

Yeah, so before we get into the interesting stuff, for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morgansanley.com forward slash research disclosures. If you have any questions, please feel free to reach out to your Morgan Stanley sales representative. So, Julie, maybe to kick things off, for investors who maybe are not as familiar with Workiva, give us a quick overview of what you do, what your key products are, who some of your customers are.

Sure. Workiva has become the trusted platform for the office of the CFO. And what I mean by that is we have come to manage the data that matters most in the office of the CFO. We have an AI-powered platform, and the focus areas are on financial reporting, non-financial reporting, regulatory disclosure, data accuracy, and governance. And we have, let's see, over 6,600 customers today. We are a horizontal SaaS platform. Every company in the world is a potential customer. But we've also gone deeper into a number of the verticals. And you can imagine, given what we do, that we go into those verticals where there is, you know, regulatory environment is high and intense and, of course, complex for companies to implement. So that's who we are today and where we go. We manage the data that matters most in the office of CFO.

Got it. Definitely want to dig into some of those verticals a little bit later, but maybe just to kick things off, let's jump right into AI. Clearly, a lot of investors are worried about displacement risks from AI startups, large language models. So from the Workiva perspective, what's your key competitive moat that makes you differentiated in the space?

Thank you for the question, of course, on everyone's mind. So we step back a little bit and look at who our customer is and who we serve, again, CFO, office of the CFO, and nowhere else in the company is it a necessity to have data that is accurate. Marketing and sales, I mean, you can go around every function in the company and where it is an imperative, where it is non-negotiable, where it is table stakes to have accurate data, not just data accuracy, data integrity, data consistency. You need to be able to justify your numbers, defend those numbers. You need data traceability. You need data lineage for any data, any narrative, any change in the system at any point in time. You need to have that defensibility and traceability. And that's really where WorkEva plays. It's not, yes, a system of record, yes, a trusted and essential system of record, But it truly is that the CFO, whether they're doing their quarterly or annual reports at a point in time like that or whether at any point in time they want to even perhaps apply AI onto the data, they can be assured that that data, again, is data accuracy, data integrity, data consistency, and full data lineage and is traceable back to source systems and the moment it entered the system. Full audit trail, auditors, you know your auditors can go in at any time and look into the system as well. So that is very, very different than other buyer persona in the rest of the company. And WorkEva, our platform, ensures that a CFO and a team can have confidence in that data, which is critically important today as we're talking about AI. that you want to know when you apply AI. Again, that data, those results you're going to get from the AI applications are, again, going to give you confidence that they are from a trusted platform. And that's why we talk about it as the platform of trust in the office of the CFO.

Yeah, your buyer needs that absolute certainty about your accuracy, the compliance, the risk mitigation, all those good things.

I will make the comment that we do have all the advantages. We have an incredible customer base, 95% of the Fortune 100, 85% of the Fortune 1000 that trust us already, that have had their financial data with us for the last 10 to 15 years. So we have that. We have a lot of what some people like to think of a moat but really buys you time rather than being the moat like the trusted data. So we have a lot of those advantages still, you know, the system of record and the enviable and trusted customer base. But really what it comes down to when it is that mode is that data, again, data accuracy, data integrity, and data traceability.

Let's talk about the opportunity side of AI. You all shared that 30% of your customers have now enabled AI on the platform. So give us a sneak peek into what are some of those use cases, capabilities that they're using.

Sure. Yes, we have almost 30% of our customers using AI, meaning they've activated it and they've enabled it, and they're using it to some extent. And the thing about WorkEva AI is I can talk to you about use cases all day long. I can tell you for each solution some of the capabilities that customers are using, and we continue to roll the capabilities out as new technology comes, as we think about new use cases. Quarter after quarter, you will see in our roadmaps as well that we have new use cases coming out to streamline work, to improve processes, to actually help customers work differently. But I think the real unique part of the WorkEva AI or the differentiator, if you will, is really that it's built into our platform. It's not bolted on. It's part of the platform, embedded in the core of the platform for all users across every work stream and across every solution in the portfolio. So I think when I think about our differentiation, happy to share roadmaps and show you specifically what customers are using to work faster, better, and in fact differently across the portfolio.

And what patterns are you maybe seeing with that adoption when a customer first adopts, turns on some of those AI features? How does that kind of ramp or look like?

Yeah, interestingly, not all of our customers are able to use AI. Some of their companies are still holding back on that. But what we find when we explain with WorkEva that your data and your AI will remain in our controlled environment, in our platform where you've held all your financial data for years, that they do give in and are able to use it. In particular, of course, their data will not be used to train any of the models. And we offer multiple models. We offer customers choices of the models from three of the large language model providers so they get to choose the model they want, and they can be assured that their data will not be used to train any of those models. And once they're in, we do see the pattern of using it and then increasing usage. So, you know, we're close to 30%, not quite there, 27-plus percent are using it, and we're continuing to see increasing patterns of usage once they get in and feel comfortable. And we love it because we get to see what they're doing. We get to see what's valuable for them, where they spend their time. And it helps us. It helps inform us on where we want to build out more capability and provide more value for the customer.

You've introduced a good, better, best, and a new pricing model with some of the AI capabilities featured in the higher tiers. So could you maybe walk us through how that model is performing and what are you learning from customers' willingness to pay for AI futures?

Sure. And this good, better, best model is just one way that we can kind of go after the opportunity we have for account expansion at WorkEva, which is one of our most significant growth levers. And I will say before we even go into that form of pricing, I want to remind everyone that WorkEva is not seat-based. We are not a seed-based SaaS platform. We do price on usage and value, and we've been doing that for six-plus years now, so we're not a seed-based. So as I mentioned, we can extract value and provide value with this good, better, best model as one way to capture growth and expansion. The other way, of course, is selling more solutions across the portfolio, or a customer can increase the use within one solution. So we rolled this out about a year or so ago, and we are seeing traction. At renewal time, we come to the customers and offer one of our more premium tiers if they're not already using some of that or all of that capability, for that matter. And again, we've been seeing an uptick on it. We've saved, an example is our SEC reporting, which is our flagship product. So we have put in that premium tier some of our advanced features, whether it's advanced AI, which is in there, capabilities that isn't in the core of the platform and offered to every customer. We might put in, we have designed reporting there. We have financial statement automation. So we really pack the tiers with feature and functionality, again, to be able to provide more value to customers and, of course, then extract that value. So, yes, we're seeing an uptick in that in early days, of course, and then we're doing that in other areas of the platform as well. And, again, it's a mechanism for us to be able to provide and extract more value for customers and really get their willingness to pay for the high features. It also allows us to meet a customer where they are. If you have a customer that isn't ready to take on the full expanse of the feature and functionality that we offer, we don't need discount. We offer them a more bare bones model, if you will, an essential capabilities package.

One of the most interesting things you guys have talked about, at least from my perspective, has been AI is now kind of serving as a competitive differentiator for you in some of your RFPs. I think you mentioned there was a defense contractor that you won because of your AI power, like GRC capabilities. So how often is AI now a deciding factor for you all in those competitive situations?

I think it is becoming one of those table stakes items that we're seeing in RFPs, and we get asked, do you have AI? They're mostly interested in do we have it? Are we innovative? When they sign up with us, are we going to be one of those vendors that's going to continue to innovate and ensure that they can be doing their work with the state-of-the-art technology? So it's that. But listen, a lot of our customers come from companies with legacy tech stacks. And one of the reasons they want to move and modernize is because they want to leverage AI. And today their data is siloed in different modules, in point solutions or legacy modules, so they want to move over where their data is unified, and they want to apply AI. And they, too, want to ensure it's done in a controlled environment and be able to be assured of the trust that our platform offers. So it's become, yes, can we use a certain feature functionality, but it's also, does your system have it? can I use it when I get there, and is this the company that's going to be able to unify my data so that I can have it all in one place and get better insights leveraging AI, again, with unified data, which is one of our core differentiators from any of those point solutions and many of our competitors.

We take a step back. One of the things that I really like about the Rekiva story over the past few years is just your durability of growth, especially in the context of broader software kind of having a more meaningful slowdown, you all have been pretty durable over the past few years. So I think a lot of that has to do with the breadth and the platform that you now have. But curious from your perspective, what do you think has been really driving that durability of growth over the past few years?

Sure. You are spot on. I mean, at this point we have two dozen solutions or so across the portfolio, right, across the platform. Every one of those is built on the platform. Every one of those is at least 80% the platform. So they're all connected. The data is connected. It's a unified platform. And so that in itself, the broad offerings that we have is really where a lot of that growth is coming from. And it's a benefit. It's not just that we solve a lot of problems, but we solve them at the same time together. And, again, the unification of the solutions, the better together of the solutions, the unified data, it's really core. And then when you, of course, put on the fact that all of that data is trusted and are controlled, secure, again, audit-ready environment with traceability, that's really a benefit. But we've also expanded and grown because we've been going out more broadly geographically. We've moved into other geographies outside of the U.S. We're now around 27% of revenue outside of the U.S., so we've been growing there. We've been increasing our TAM and offering more capabilities, so that's another area we have a lot of untapped TAM to go after. So we've got a lot to offer customers. New logos is another area we've been pushing, even though in the U.S., in the market in the top 1,000, we have a lot of that customer. There's still a lot to grow in enterprise, and there's still, again, geographically. So it's geographic. It's more customers. It's expanding our TAM. It's the multiple solutions. We're just going everywhere, pushing, and there's a lot of opportunity. We have a lot to sell, and we have a good value proposition when it comes to, again, unifying that data and offering the office of the CFO the trusted data and becoming, in fact, more relevant in the era of AI, not less.

I think you all have also gotten better at just selling the platform from a go-to-market perspective too, right?

We have our own execution, certainly. As you move towards the billion dollars, and barring anything catastrophic, we will be at a billion dollars of ARR this year. I mean, you just have to execute differently. You've got to be more productive. You've got to be more efficient because you want to use those resources resources in the best way possible for innovation, for speed, for continuing to expand your TAM. But we've been elevating the profile of a person all across the company and probably talk about go-to-market at some point, particularly on the go-to-market side. We're leveraging our partners, of course, a lot more. Another reason why we're able to go expand and get larger deal sizes and so forth. They are a huge growth lever for us. I mean, it's our strategy, right? It's our solutions on our connected, open, intuitive, intelligent platform. It's expanding globally. And of course, it's, you know, that strong, high-performing partner ecosystem. Those are all reasons. And yes, we're just getting better as we grow and scale. We're becoming that company that can execute more effectively in all areas of the company, particularly on the go-to-market

side. I said we would come back to some of those verticals that you mentioned earlier. So let's go into one of them, financial services. You all have been doing really well there. Where are we in terms of like the penetration within that vertical? And how do you think about the opportunity set ahead of you, especially with some of your newer products like fund reporting? Yeah, thank you for calling

out this vertical because it's one we've been incredibly enthusiastic about because we have seen so much traction. And as I mentioned earlier in the verticals that we like to go after, it's those with a lot of regulation where there's complex regulations. And if you think about banking and the regulation around that and insurance and investment, we're in all of those verticals because there's so much complexity. And we shine around regulatory disclosure and helping our customers report when there is that environment of complexity. So we've seen a lot of traction there. It's where most of our multimillion-dollar deals are, large deal sizes. We have a lot of vertical-specific solutions, but, of course, they also buy our horizontal solutions. So it's an area where we continue to put emphasis. There's a lot of room for growth there. And though we have the top banks as our customers, we continue to grow in those accounts, a lot more to offer. globally. A lot of the top banks have entities all over the world, so the multi-entity reporting in addition to financial reporting. We've got fund reporting and non-financial or sustainability reporting. All of those horizontals play really well, but they also are very much interested in having their corporate regulatory reporting across those specific verticals on the WorkEva platform. Again, with unified data, not siloed in different vendors or different systems. And again, here comes AI. When you do all that, you can apply your AI in our controlled environment. The auditors can go in. You know at any point in time, through the quarter, not just at the end, that you can go in and get data that you can feel confident about. And it's kind of a sacred place for the office of the CFO to go think about their data. With all that noise out there with data here, data there, this system, this agent, ah, forgive us, they know what's in that system and that it is, again, trusted data, and they can justify any number coming out of that system all the way to when that data entered the system from a source.

Let's talk a little bit about GRC. The growth there accelerated meaningfully, 19% to 30% ARR growth this past year. What's going on there? What have been some of the unlocks to drive that kind of growth inflection?

Sure, and I'll go back to your comment. You're getting better, right? Yes, we are getting better at execution. Again, get towards the billion dollars. You have to be good. You have to be productive. You have to have those sellers that can sell your capabilities, but also sell a platform. Also embrace partners, because partners help us go up higher in the organization, sell more broadly, higher win rate, et cetera. So we've got better execution. We're also seeing trends in the market that lead us to have better outcomes when we talk with our customers about GRC. And one I mentioned a little earlier, which is we've got this trend in the market around legacy systems. And, again, AI is kind of spurring this on. You don't want to have your legacy systems and apply AI when your data isn't in the format and the shape that it should be to go action those insights. And you've got siloed systems besides which. So if you're going to modernize, WorkEva is an incredible platform to modernize on because you're not just getting modern technology, but you're also getting that data again in one unified platform. And this is why, again, I go back to when we talk about our moat. We're getting more relevant, not less, in the era of AI because they want to have their data in one place and modernize their technology. So we're seeing that. And, again, just better execution, good market trends for us. And governance is becoming even more important to companies. And our audit and controls and risk management solutions just absolutely play into that trend. And, again, not being a point solution. and it's working in our favor for sure.

Let's hit on sustainability. It gets a lot of investor attention. Remind us again how much of that is actually part of your business, how much of it is part of your TAM, and how do you think about the evolving regulatory landscape that we're seeing and how you think about that business going forward?

I think it's important to recognize that sustainability, even with the changing regulatory landscape, it is alive and well, and it's a good growth vector for WorkEva, right? Our tailwind has dissipated some, and we've talked about that. You know, we've had a moderation in the surge that we saw in 2024. But 2025, much more steady state for the market. There is still regulation out there, and you look at CSRD. Sure, the regulatory landscape changed a bit, and there was a de-scoping in that regulation. But alive and well for the Wave 1 customers who had to report in 2025, this is the second year we're going around having conversations with those that did not leverage WorkEva, that had muscled through and or used some inferior technology platform. So that's a good area of growth for us. The Wave 2, nothing's changed substantially. Sure, it's out a year or two, but that's alive and well. There are other areas across the world. and think of Australia, they still talk about ESG. They haven't even changed the name to non-financial reporting or sustainability yet. So there's a lot of areas. But a lot of companies are doing this for business reasons still. It is risk management. It's surfacing those risks, identifying those risks, managing and tracking those risks. That's what non-financial data is all about and those non-financial risks. And you've got to track them and you've got to be transparent about them. And so companies are doing that. They also know when they put their financial data and their non-financial sustainability data together in one system, and they look at those and apply AI, get insights from them, they get much more holistic view of their business than not looking at those capabilities and that data. So we're seeing a myriad of reasons why, but we are seeing customers understanding that it's an important component of their business. And even if it's just the box checkers and the compliers, we still get a large portion of that market because there is still regulation alive and well in the market.

SEC, what are you seeing capital markets right now? How are you evolving that product? I think you launched SEC Intelligence. Tell us a little bit about that as well.

Sure. On the capital market side, I think everyone in this room probably understands that capital markets had a few years of, you know, I'll say lackluster performance. IPOs weren't booming, and we saw that post-pandemic. We did see more activity over 2025, particularly toward in Q3. It was probably our strongest quarter, which we talked about. Q4 saw some improved activity as well, but, of course, we had a shutdown. So there's a lot of macro factors that are affecting IPOs in our capital markets business. We always have the secondary markets, and we are getting our fair share and have over the last several years our fair share of IPOs. So we're optimistic about the IPO market and our capital markets business rolling into 2026. We're not overshooting there. We're not over our skis with it. But we have baked in some growth over 2026. But we're waiting to see, again, new Fed chair economy is what it is. And, of course, we're looking at tech valuation, so that will probably be moderated, too, in terms of IPO activity. So we're being very thoughtful about how we've put it into our guide, but we're optimistic about it. On the SEC intelligence, again, just more offerings for our flagship product to bring more capabilities to those who are wanting to have advanced capability, who are more enthusiastic about using our AI, and we've put that in the top premium tier of our Good Better Best model. Again, we're seeing uptick on it. Today it's around at renewal time. We'll come and see if you're interested in leveraging more capability.

Let's shift over to go to market. You talked a little bit about this earlier, but you all have been really focused on making some changes there. So can you remind us again, what are some of those key changes and how have you progressed against your initial expectations there?

We are working to improve our productivity on our sales and marketing. It's one of the areas where we believe we can improve the most. And I've been pretty open about some of the activities that we're doing in sales and marketing and the actions we're taking. We have a very expensive sales model, or we have had this historically. So we're moving away from that towards a more efficient, more productive, more effective sales model. And what we're doing is we're becoming less reliant on sales specialists for some of our solutions. And we're leaning more on solution engineers. And we're improving the capabilities of our account execs. So we're doing that. And that's sort of on the structure side. We also rolled out new logo teams that are more hunters and dedicated to hunting for those new logos. goes. So we're doing a lot on structure. We're also doing staffing, as I meant, making some changes in staff. And that might be elevating profiles of sellers, those that can embrace and understand the value of partners that will bring partners earlier in when we identify deals and when we want to expand accounts. They understand how to sell a platform and what that means and the value of the platform. So they understand it's different than a transaction sell, just selling a solution or two solutions, right? So we're just getting more mature across both the structure and the staffing in the organization, but we're also leaning into our strategy, whether it is the new logo play, whether account expansion enable, we're just getting better. Again, when you start crossing that line of a billion dollars, your productivity is important, your efficiency and your effectiveness is important. It's getting better at execution, We're growing up, and we're scaling, and that applies heavily into the sales and marketing area.

Yeah, so clearly a big focus on efficiency, and you've seen that on the margin front, too, going from, I think, 4% to 10% in a year. Your guidance for 26%, 15% plus, 27% target of 18%. So what gives you the confidence to be able to continue to drive this continued margin expansion here?

I mean, nothing better than looking at numbers, right? And you can see the expanding margins and the work we've been doing. We exited last year at 10%, as you say, at 560 basis points, greater than the prior year, 2024. So we feel very confident on the trajectory. We have plans in place. This is not we're trying to do things ad hoc. We have plans in place. We feel very confident. We put those medium and long-term targets out there, and we are making very reasonable progress towards those that you should all be able to see as you look at our numbers. So, again, on the sales and marketing side, as you can see, we hired someone who's been there and done that, knows how to build a marketing machine, brought a new CRO in, Michael Pinto, who spent the last couple of years at Databricks. Prior to that, he spent six, seven years at AWS, growing and scaling from a few hundred million to multi-billion in both of those companies for the areas that he's had responsibility for. So transforming and scaling our go-to-market organization is really why he's here and just building that machine. So we feel very confident in those numbers and the guide. We've reiterated our guide and reiterated those targets.

Let's talk about delivering shareholder value. How do you guys think about the balance between organic investments, M&A, capital returns?

We are here. I know my job is here for shareholder value. That is what it's all about. And we do it with, of course, a number of different vehicles. But the thing we focus on the most, of course, is growth. And today I am happy to say profitable growth. That is what we're focusing on. So it really is about ensuring we are productive, part of that productivity drive for us. Yes, it's about expanding margin and make sure we are being thoughtful for shareholders, but also to make sure we are being productive to invest in the right places. So we're going to be investing in innovation, going to be investing in that marketing and sales machine that I just talked about. We want the resources going to the right places where we believe we can win, where it's proven we can win. So we're going to continue to invest, but we're also going to do it in a productive way. We're going to be efficient where we add. Of course, we're going to be leveraging AI where we can. We are going around the company to ensure that we are working productively. We still have room for improvement. I will be the first to say there's room for operating efficiency and effectiveness, and we're going after it. And I said we have a plan. We will continue, of course, to be thoughtful about stock-based comp and dilution. You saw that we increased our ability to buy back our stock, got authorized for another $250 million on top of the $100 million that we already were authorized to spend. And we'll continue to, again, be thoughtful about that. We want to make sure that we are actively thinking about dilution and taking action toward.

I wanted to go a little bit deeper on stock-based compensation. It's not just you all, but the entire software industry. Stocks are down a bunch over the past year or six months. How does that kind of inform what you're doing in terms of issuing units? Are you going to be issuing more units? Are you shifting more of your compensation to cash? How do you think about that?

We are acutely aware that this is a conversation going on these days, given valuations and so forth. So, of course, again, we're being pretty thoughtful about it. You can see in our mid- and long-term models that we're looking at the 12% and feel very confident we can stay within that range. and we have been on the below average side on the stock-based comp. Look, we're a tech company. We retain talent and strive for that in this market like everyone else. But we understand what's important. We understand the visibility and we understand retention. But again, we just authorized the $250 million and we will be taking action on that as appropriate and taking a very thoughtful approach. So we're well aware of that and we'll act accordingly and responsibly.

So before I open it up to the audience here, we've coined this term the ERP super cycle to kind of talk about that large upcoming deadline of companies moving off of on-premise ERP systems to the cloud. I think 2024 was really strong for those migrations, 25 bits lower. I'm curious if that's also kind of your takeaway and how do you think about those deals over the next 12, 24 months?

Yeah, thank you for bringing that up. We love the ERP system upgrades or transitions. It's a great trigger for a buying moment for WorkEva. I mean, usually when you move off of an ERP system, you evaluate. If I was a CIO, when I did something big like that, I'd be looking at the full stack. You want to modernize your stack. You don't want to bring your new ERP system to a legacy stack. So it's a great opportunity to think through your disclosure system, your reporting system. But also a lot of these companies that are moving on to a new ERP or upgrading, they've got all these large companies. They've got ERP systems in-country that they've developed a whole stack of them. So they want to get away from those. And we have something called multi-entity reporting, global statutory reporting, that allows them to do in-country reporting and align with their larger new ERP systems. So it's a great opportunity for WorkEva. and more and more we're working to get in with our consulting and advisory partners, get into their playbooks for when they go in and help. And, you know, in these enterprise customers, they've got, you know, the big four in there continually in these consulting advisories. So we love to align with our big four in consulting advisory partners to help go in as early as possible in the ERP transition cycle so that we can provide disclosure management, You know, transparent reporting, but also things like multi-entity reporting, too. So we fit very nicely into the ERP super cycle. So thank you for highlighting that.

And when you work with partners, it's higher win rates. The deal sizes are larger, too.

You said it, higher win rates. We sell higher. We sell broader. We sell more, higher prices. Yes, twice the win rate. I mean, it is a beautiful match. They sell everything that we do. But they sell the services around it. We sell the tech. So it's a beautiful relationship, and we have dedicated alliances that continue to get even more high-performing across all of the big four, consulting and advisory, and then, of course, the next tier with regional partners as well.

Any questions from the audience here?

Talked a lot and covered a lot.

Maybe last one, Julie. As we reflect back on 2025, what are some of the key lessons you can draw from that in terms of what worked really well and what are some areas you're still looking to improve upon?

You know, I look back on 2025, and it was so different from where we are today. I'm not sure any of those lessons apply other than just resilience, speed, innovation, lean into your relevancy. I think those are the things that I think about as a CEO is continue to build a resilient organization. Leadership has got to be resilient. We need to be ready for anything. We need to respond in the market. We've got to remain innovative for ourselves, for our customers, and this relevancy of becoming even more important in the era of AI, not less. We've got to lean into this, and we've got to lean into what we do for our customers. We serve the office of the CFO. We manage the data that matters for them, and we will ensure that we keep true to our mission, which is ensuring they have a trusted platform to leverage in all of this noise, in all of the agents floating around, in all of the data floating around. We are that place where a CFO knows they can go and their data is, again, accurate, has data integrity and data consistency, and is traceable and justifiable.

Awesome. I think we can end it there. Thank you so much, Julie.

Thank you. Appreciate all the questions. And thank you all for attending.