Workiva Q2 2026 Earnings Call Transcript

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Provided by Quartr
August 4, 2026

Key Takeaways

  • Positive Sentiment: Q2 revenue and retention exceeded expectations: Total revenue rose 19% year over year to $255 million, while subscription revenue also grew 19% and beat the high end of guidance. Gross retention reached 97% and net retention was 111%, above the company’s 110% target.
  • Positive Sentiment: Profitability and cash-flow outlook improved significantly: Non-GAAP operating margin was 16.8%, a 1,300-basis-point year-over-year improvement, prompting Workiva to raise its full-year margin outlook to approximately 18% and free cash flow margin outlook to approximately 21%. The company expects to reach its previously stated 2027 margin target one year early.
  • Positive Sentiment: Enterprise expansion remained strong: Contracts above $300,000 and $500,000 annually grew 34% and 33%, respectively, while 76% of subscription revenue came from customers using multiple solutions. Management highlighted wins and expansions across financial reporting, financial services, GRC, sustainability, and capital markets.
  • Positive Sentiment: AI capabilities are being integrated into premium offerings: New agents for sustainability disclosures, financial tie-outs, and peer benchmarking, along with the MCP Gateway and custom knowledge bases, are designed to provide governed and auditable AI workflows. Management said premium-tier adoption has shown “excellent traction,” supporting potential upsell and monetization.
  • Neutral Sentiment: Deal execution remains subject to increased customer scrutiny: Management said sales cycles have recently shortened, but deals face more approvers and greater legal rigor. Full-year guidance assumes largely stable foreign-exchange rates, while some Q2 services outperformance from annual 11-K filings is not expected to repeat in the second half.
AI Generated. May Contain Errors.
Earnings Conference Call
Workiva Q2 2026
00:00 / 00:00

Transcript Sections

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Operator

Good afternoon, ladies and gentlemen. Welcome to Workiva's Q2 2026 earnings call. My name is Harmony, and I will be your host operator on this call. After the prepared comments, we will conduct a question and answer session. Instructions will be provided at this time. Please note this call is being recorded on August 4, 2026, at 5:00 P.M. Eastern Time. I would now like to turn the meeting over to your host for today's call, Katie White, Senior Director of Investor Relations. Please go ahead.

Katie White
Katie White
Senior Director of Investor Relations at Workiva

Good afternoon, and thank you for joining Workiva's Q2 2026 conference call. During today's call, we will review our second quarter results and discuss our guidance for the third quarter and full year 2026. Today's call will include comments from our Chief Executive Officer, Julie Iskow, followed by our Chief Financial Officer, Barbara Larson. We will open up the call for a Q&A session. After market close today, we issued a press release which is available on our investor relations website, along with our quarterly investor presentation. This conference call is being webcast live, and following the call, an audio replay will be available on our website. During today's call, we will be making forward-looking statements regarding future events and financial performance, including guidance for the third quarter and full fiscal year 2026.

Katie White
Katie White
Senior Director of Investor Relations at Workiva

These forward-looking statements are based on our assumptions as to the macroeconomic, political, and regulatory environment as of today, reflect management's current expectations and beliefs based on factors currently known to us, and are subject to significant risks and uncertainties. Workiva cautions that these forward-looking statements are not guarantees of future performance. We undertake no obligation to update or revise these statements. If the call is reviewed after today, the information presented during this call may not contain current or accurate information. Please refer to the company's annual report on Form 10-K and subsequent filings with the SEC for factors that may cause our actual results to differ materially from those contained in our forward-looking statements. During the course of today's call, we will refer to certain non-GAAP financial measures. Reconciliations of GAAP and non-GAAP measures are included in today's press release.

Katie White
Katie White
Senior Director of Investor Relations at Workiva

With that, we'll begin by turning the call over to Workiva's CEO, Julie Iskow.

Julie Iskow
Julie Iskow
CEO at Workiva

Thank you, Katie, and thank you all for joining us today. Q2 2026 delivered another quarter of strong financial performance and continued demand for our trusted platform. We beat the high end of our revenue guidance with 19% growth in both subscription revenue and total revenue. We also continued to execute on our commitment to profitable growth, achieving a Q2 non-GAAP operating margin of 16.8%. This was a 180 basis point beat on the high end of our guide and a 1,300 basis point improvement compared to Q2 of last year. Our Q2 results once again reflect broad-based, durable demand across our entire portfolio of solutions. It also reflects our unwavering commitment to operational efficiency as we scale our business. Because of our strong operating margin performance in the first half of the year, we're raising our full year 2026 non-GAAP operating margin guidance to 18%.

Julie Iskow
Julie Iskow
CEO at Workiva

This 18% operating margin target is an important milestone for Workiva. This was the target communicated in our 2027 operating model. With this updated 2026 guide, we will be delivering on that operating margin target a full year early. This margin milestone reflects disciplined execution across every part of our business. It reflects deliberate changes to how we're organized, to how we deploy resources, and to where we direct those resources. This isn't a one-quarter result. It's a reflection of the operating model that we continue to improve as we grow. Our growth continues to be supported by the opportunities that we're seeing in the market. The office of the CFO is undergoing one of its most significant transformations in decades. Finance leaders are being asked to do far more than close books and report results.

Julie Iskow
Julie Iskow
CEO at Workiva

Today, they're also responsible for the data that their businesses rely on and how AI is governed. They're helping their organizations navigate a more complex regulatory and risk environment. That's only part of the story. AI is also changing what's expected of the people that are doing the work. CFOs and their teams are expected to deliver insights in hours instead of days. They're expected to automate more of the work that's still manual, answer more questions with greater confidence, and respond faster as regulations and business conditions continue to change. They're also no longer expected to simply use enterprise software. There's now an expectation that they'll extend it and build upon it. Users are becoming builders. They're creating AI agents. They're automating complex processes. They're connecting trusted business data with the rest of their technology ecosystem. They're extending the platforms they already rely on every day.

Julie Iskow
Julie Iskow
CEO at Workiva

They're expected to do all of this while maintaining the governance, the security, the accuracy, and the auditability that the office of the CFO demands. As AI becomes more embedded in more business processes, trusted, connected, and traceable data matters more than ever. This is exactly where Workiva can make the biggest difference. Our customers shouldn't have to assemble AI models and agents and enterprise systems and governance tools just to meet these new expectations. They shouldn't have to choose between adopting the latest AI capabilities and maintaining the trust that their organizations depend on. They should be able to do both. That's why we're building intelligent capabilities that customers can put to work immediately. Some customers will use these capabilities as they are. Others will want to go further.

Julie Iskow
Julie Iskow
CEO at Workiva

They'll connect Workiva with more of their systems, build their own agents, extend workflows, or use Workiva as part of a broader AI ecosystem. Our approach supports both. We deliver the AI capabilities that our customers need today while giving them the flexibility to build, to connect, and to extend those capabilities inside Workiva and beyond it, all grounded in the trusted data governance and controls that they already manage within the Workiva platform. We believe this combination will help finance organizations meet the rapidly rising expectations of the office of the CFO. It's what our customers are asking for, and it's what we're building. We believe no one is better positioned to deliver it than Workiva. This value proposition is resonating at the highest levels of the enterprise. Our largest customers are standardizing on Workiva, and it shows in our large contract cohorts.

Julie Iskow
Julie Iskow
CEO at Workiva

In Q2, contracts valued over $300,000 annually grew 34%, and contracts above $500,000 annually grew 33%, both compared to Q2 of 2025. This growth reflects both continued expansion within our existing customer base and the landing of larger multi-solution new logos. I'd like to highlight a few of our Q2 deals that demonstrate how our platform is winning in the market to solve our customers' most complex reporting challenges. First, we signed a mid-six-figure account expansion deal with a global digital banking and fintech leader for Private Company Reporting, Multi-Entity Financial Reporting, connected bank reporting, and Sustainability. The bank is on a multi-year private-to-public journey while expanding globally and transitioning to a full-service regulated bank. The investment in Workiva as a core financial and regulatory reporting platform is central to supporting this transformation across Tax Reporting, sustainability disclosures, and Basel Pillar 3 regulatory compliance.

Julie Iskow
Julie Iskow
CEO at Workiva

Second, we signed a multi-six-figure new logo deal with a U.S.-based global material science company. The customer purchased four solutions: SEC reporting, Management Reporting, controls management, and Sustainability. Following a highly competitive process, they chose Workiva over a multiple-point solution vendor approach because of our ability to serve as their definitive system of truth. They recognized that no combination of disparate vendors could replicate our platform without sacrificing data connectivity, collaboration, and trust. Workiva will support this company's rapid expansion through acquisition and their increased focus on global distribution. The deal was a co-sell and will be delivered by a regional advisory firm. I'll turn now to Financial Reporting. Demand continues to build as companies modernize complex global operating models. The bar for what that requires keeps rising.

Julie Iskow
Julie Iskow
CEO at Workiva

Organizations need continuous access to accurate and traceable data to stay report-ready and audit-ready, not just at quarter-end, but continuously throughout the quarter. Here are a few of the many Q2 wins worth highlighting. First, we signed a mid-six-figure new logo deal with a U.S.-based global government and defense technology services company. This customer purchased SEC reporting, Multi-Entity Financial Reporting, Management Reporting, and Sustainability. The primary driver for this opportunity was a global enterprise reporting transformation initiative that spans the company's operations in more than 90 countries. With complex and evolving reporting requirements across numerous jurisdictions, the customer sought a single platform capable of supporting global governance and local compliance. They selected Workiva because our unified platform enables them to meet the unique reporting mandates in the markets in which they operate while empowering distributed teams worldwide to modernize and streamline their critical reporting processes.

Julie Iskow
Julie Iskow
CEO at Workiva

Second, we signed a mid-six-figure expansion deal with a U.S. regional bank. This loyal customer upgraded to our advanced tiers for both SEC reporting and sustainability, and they expanded across three additional solutions: Tax Reporting, Living Will, and stress testing. The primary catalyst for this expansion was the bank's reclassification as a Category 3 institution. This significantly expanded its regulatory reporting obligations. The deal was a co-sell with a regional advisory firm. I'll move on now to one of our key vertical specific solution categories, financial services. We continue to see strong demand as institutions navigate increasingly complex regulatory requirements. Here are a few highlights from the quarter in this vertical. First, we signed a high six-figure account expansion deal with a large global private equity firm for Fund Reporting. This company signed on as a Workiva customer in Q3 of 2024.

Julie Iskow
Julie Iskow
CEO at Workiva

It first invested in our Fund Reporting solution in Q4 of 2025. Within six months, they have more than tripled the number of funds supported by the platform, and they now spend more than $1 million with Workiva. This deal is a great example of how our metric-based licensing model drives the opportunity for ARR expansion in a single solution. The deal was sourced and will be delivered by a regional advisory firm. Second, a Big Four professional services firm operating in Europe's largest investment fund market, signed a mid-six-figure expansion deal for Fund Reporting. The firm is expanding its use of Workiva across its fund administration business to support financial statement preparation and other Fund Reporting for a growing population of fund entities. This expansion enables the firm to consolidate reporting processes onto Workiva, driving greater standardization and scalability as its business grows.

Julie Iskow
Julie Iskow
CEO at Workiva

Next, I'd like to cover Governance Risk and Compliance. Risk and audit teams are navigating accelerating AI governance, geopolitical uncertainty, and changing regulations, often with leaner teams than ever before. Many are finding that siloed approaches are no longer sustainable. Organizations are choosing Workiva to centralize Enterprise Risk, transform audit and controls, and streamline compliance. With AI embedded across our GRC platform, including our flowchart visualizer and GRC intelligence agents, we help teams identify emerging risks faster, uncover patterns earlier, and respond with greater confidence. Let me share a few Q2 GRC deal highlights. First, we signed a mid-six-figure account expansion with the Fortune 500 specialty insurance holding company. This company added multiple solutions including Enterprise Risk, Compliance Management, and Management Reporting. Three years ago, this customer had just two Workiva solutions totaling just over $100,000.

Julie Iskow
Julie Iskow
CEO at Workiva

Today, they have expanded to nine platform solutions, spending high six figures annually with Workiva. The additional GRC expansion was driven by the need to eliminate significant manual effort, consolidate technology across teams, and establish a unified enterprise data strategy. The opportunity also displaced a standalone GRC point solution, further reinforcing the value of a connected platform. Second, we signed a multi six-figure expansion deal with the U.S. Farm Credit Bank to build and scale its GRC program across Audit Management, controls management, Compliance Management, Enterprise Risk, and Operational Risk Management. This opportunity centered on displacing an incumbent GRC point solution in favor of the more comprehensive Workiva platform. The deal was a co-sell with a regional advisory firm. Another area worth highlighting is sustainability. As sustainability requirements move into implementation, we're seeing an important shift in the market.

Julie Iskow
Julie Iskow
CEO at Workiva

Organizations are moving beyond preparing for compliance to operationalizing trusted audit-ready reporting. As a result, responsibility is increasingly shifting to the office of the CFO. CFOs expect sustainability disclosures to be held to the same standards as financial reporting with the same traceability, governance, internal controls, assurance, and auditability. That's changing buying behavior. Standalone sustainability solutions are no longer enough. Increasingly, customers are choosing Workiva as the unified platform to manage financial and non-financial reporting together using the same trusted data, governance, and reporting processes. Our deal activity reflects this trend. Our largest sustainability wins almost always include one or more financial reporting solutions, whether that's ESEF for integrated reporting, SEC reporting for U.S. filers, or increasingly, multi-entity reporting. The business driver is straightforward. Companies reporting under CSRD, ISSB, California's SB 253, and other sustainability reporting requirements are often large multinational organizations with complex legal entity structures.

Julie Iskow
Julie Iskow
CEO at Workiva

They need trusted data, consistent governance, and reporting processes that span both financial and non-financial information. This is where Workiva is differentiated. We are uniquely positioned to bring these reporting processes together in a single trusted platform. Let me highlight a few sustainability deals from Q2. First, we signed a mid-six-figure new logo deal with one of Europe's largest state-owned energy companies, serving roughly 20 million customers. This company purchased sustainability reporting, ESEF, and controls management. The deal was driven by CSRD compliance requirements and was a competitive win over multiple point solutions. Workiva was the only solution to address the financial reporting, GRC, and sustainability requirements on a single platform. The deal was a co-sell and will be delivered by a Big Four firm. Second, a global healthcare technology company signed a mid-six-figure expansion deal upgrading to Sustainability Advanced.

Julie Iskow
Julie Iskow
CEO at Workiva

This customer also extended sustainability across multiple entities and added Multi-Entity Financial Reporting. The driver for this opportunity was ISSB compliance and the need to connect financial and non-financial data across their global legal entity structure. This was a competitive displacement of a standalone sustainability point solution. This is exactly the consolidation dynamic that we're seeing across our customer base. To conclude our customer highlights, let's turn to capital markets. Following the momentum we saw earlier in the year, the IPO market demonstrated continued strength in Q2. We supported a robust slate of public listings this quarter. Three, in particular, reflect the breadth and the caliber of organizations that are choosing Workiva as they enter the public markets. SpaceX, one of the most complex and closely watched listings in market history. Cerebras, a leader in AI infrastructure. Quantinuum, at the forefront of quantum computing. These aren't just marquee names.

Julie Iskow
Julie Iskow
CEO at Workiva

They represent exactly the kind of organizations that require a trusted, audit-ready platform before they file and throughout their life as a public company. The capital markets opportunity for us extends well beyond the S-1. We often engage with complex private companies years before they go public. We help them build the reporting infrastructure, controls framework, and trusted data foundation that a public company requires. That early engagement matters. When these companies file their S-1, Workiva is already embedded. When they become SEC registrants, they expand our addressable market for additional solutions, including SEC reporting, controls management, and multi-entity reporting, regardless of whether we supported their initial listing. The private to public journey is an entry point. The platform relationship that follows is a long-term durable value driver. I'll turn now to product innovation. Workiva is in the midst of a fundamental transformation with AI.

Julie Iskow
Julie Iskow
CEO at Workiva

Trusted data has always been at the core of what we sell. In an AI-driven world, that foundation becomes a structural advantage. Organizations can deploy AI broadly. What they cannot easily replicate is a platform where every data point is traceable, every output is auditable, and every disclosure can be defended. That is what we are building on, and we are transforming our platform to be agentic-first, where AI doesn't assist at the margins, but executes directly within the high-stakes workflows that define the office of the CFO. Workiva recently announced the release of new AI capabilities to our advanced solution tiers for SEC, for sustainability, and for other solution offerings. These new AI capabilities bring regulatory-grade agents for sustainability disclosure, for financial tie-out, and for disclosure peer benchmarking. These are not general-purpose AI tools.

Julie Iskow
Julie Iskow
CEO at Workiva

They are purpose-built agents designed for environments where accuracy, auditability, and explainability are non-negotiable, and every output produced is built to withstand scrutiny. The new sustainability disclosure agent drafts, checks, and improves disclosures directly against sustainability frameworks, moving teams from requirements interpretation to review-ready drafts without leaving Workiva's governed environment. The result is faster cycle times, fewer interpretation gaps, and disclosures that arrive at the review stage already grounded in the applicable standard. Workiva's newly enhanced tie-out agent performs comprehensive consistency checks across financial reports. It automatically flags discrepancies and surfaces AI-generated explanations for each variance. With this agent, teams can catch errors earlier, close faster, and finish with a fully documented, auditable trail that supports both internal review and external examination.

Julie Iskow
Julie Iskow
CEO at Workiva

The new benchmarking agent brings peer analysis directly into the platform, enabling financial reporting teams to build custom peer groups, identify disclosure gaps, and draft market-aligned disclosures with every insight traceable back to the source filing. Peer intelligence is no longer a separate work stream. It's embedded in the location where the disclosures are built. Alongside these purpose-built agents, we recently introduced the Workiva MCP Gateway, a governed connectivity layer that extends the Workiva platform to the enterprise AI tools that organizations already use. Whether customers work with the leading frontier models or work with other custom-built agents, every AI connection through the Workiva MCP Gateway inherits Workiva's identity, permissions, governance, and data lineage. AI-generated work remains fully traceable back to its underlying source data, regardless of which model produced it. The MCP Gateway creates a universal integration layer between enterprise AI and Workiva.

Julie Iskow
Julie Iskow
CEO at Workiva

Customers' preferred AI tools can securely interact with the live data and workflows in the platform rather than relying on manual exports or static document uploads. Instead of working from stale snapshots, AI can retrieve real-time governed context directly from the Workiva platform. The result is that organizations no longer need to choose between adopting best-of-breed AI and maintaining enterprise-grade governance. With the Workiva MCP Gateway, they can use the AI of their choice while preserving the security, traceability, and control that's required for business-critical reporting. We've also expanded AI capabilities at the platform level. Last week, we introduced persistent custom knowledge bases, allowing organizations to build a centralized repository from their own content and reference it across every AI interaction on the platform. Here are a few representative examples of how customers are using this capability.

Julie Iskow
Julie Iskow
CEO at Workiva

First, a financial reporting team can draft new disclosures grounded in prior filings and earnings documents already living in Workiva, maintaining consistency in language, structure, and disclosure across quarters. Second, a regulatory reporting team at a bank can produce examiner-ready stress testing narratives by drawing on past DFAST and CCAR filings and a continuously updated library of regulatory guidance. Third, an internal controls team can execute audit workflows and reference their own policy and procedure library, so every AI output reflects the organization's standards, not generic assumptions. In each case, the output is grounded in content the organization has already vetted and stands behind. That distinction matters when the work product will be reviewed by auditors, regulators, and investors. This is AI that makes outcomes traceable and defensible, built for the scrutiny that defines this space.

Julie Iskow
Julie Iskow
CEO at Workiva

We look forward to showcasing more product innovations at our upcoming Amplify conference and our 2026 Investor Day in September. I'll close with one final thought. The demands on the office of the CFO will continue to grow in both scope and complexity, we believe Workiva is differentiated by our ability to meet these demands. Our commitment is to keep earning that differentiation through disciplined execution and rapid innovation. I'd like to thank our customers for their trust and our partners for continuing to expand our reach. I'd also like to thank our employees for their dedication, their relentless focus, and everything they do to serve our customers and move Workiva forward. With that, I'll turn the call over to Barbara to take you through our financial results and our outlook for the rest of the year.

Barbara Larson
Barbara Larson
CFO at Workiva

Thanks, Julie. I'll start with an overview of our Q2 financial and key metric highlights, followed by our guidance for the third quarter and the full year 2026. Q2 once again delivered broad-based demand across our portfolio of solutions. Second quarter total revenue was $255 million, up 19% year-over-year, beating the high end of our guidance range by $3 million. In line with expectations, foreign currency fluctuations had a minimal impact on our reported top-line growth rate. This was a departure from the prior four quarters, where reported results included a one- to two-point tailwind from foreign currency fluctuations. Subscription revenue was $236 million, up 19% year-over-year. Both new customers and account expansions continue to contribute to our revenue growth, with new customers added in the last 12 months accounting for approximately 45% of the increase in Q2 subscription revenue, consistent with our expectations.

Barbara Larson
Barbara Larson
CFO at Workiva

As of quarter end, our current remaining performance obligations were $789 million, up 18% over the prior year. This growth, which reflects the revenue we expect to recognize in the next 12 months, includes an approximately one percentage point negative impact due to foreign currency. Professional services revenue was $19 million, up 12% over the prior year, due to an outperformance in XBRL services. On to productivity. As Julie mentioned, our non-GAAP operating margin for the quarter was 16.8%. This beats the high end of our guidance by 180 basis points and was a 1,300 basis point improvement over Q2 of last year. This was driven by the revenue outperformance and our continued focus on operational rigor and productivity as we scale the business. I'll talk more about the significance of this in just a moment. Moving on to our performance metrics for the quarter.

Barbara Larson
Barbara Larson
CFO at Workiva

We had 6,750 customers at the end of Q2 2026, an increase of 283 customers year-over-year. Our gross retention rate was 97%, exceeding our 96% target. Our net retention rate was 111% for the quarter. Consistent with our reported revenue growth, the impact from foreign currency was minimal. In line with our expectations, both our reported and constant currency NRR exceeded our target of 110%. In Q2 2026, 76% of our subscription revenue was generated from customers with multiple solutions, up from 71% in Q2 2025. Growth in our large contract customer cohorts also reflected strong momentum. As of the end of the first quarter, we had 2,690 contracts valued at over $100,000 per year, up 20% from the prior year. The number of contracts valued at over $300,000 totaled 656, up 34% year-over-year.

Barbara Larson
Barbara Larson
CFO at Workiva

The number of contracts valued at over $500,000 totaled 276, up 33% from Q2 2025. Turning now to the balance sheet and cash flows. As of June 30, 2026, cash equivalents, and marketable securities were $815 million, a decrease of $48 million from the prior quarter. This was primarily driven by our opportunistic repurchase of 2,492,000 shares of our Class A common stock for $123 million. As of quarter end, we have repurchased a total of $244 million under our $350 million share repurchase program, with $106 million remaining as of quarter end. Moving on to guidance. For the third quarter of 2026, we expect total revenue to range from $260 million-$262 million. We expect services revenue to be up slightly compared to Q3 2025, and we expect non-GAAP operating margin to be in the range of 17%-17.5%.

Barbara Larson
Barbara Larson
CFO at Workiva

For the full year 2026, we expect total revenue to range from $1.040 billion-$1.044 billion. For the back half of the year, our guidance assumes foreign currency rates remain roughly in line with June 2026 levels, which would result in a minimal year-over-year FX impact to projected revenue growth for both Q3 and Q4. We continue to expect subscription revenue to grow approximately 19% year-over-year, and we expect total services revenue to be up slightly year-over-year. We are raising our non-GAAP operating margin outlook by 150 basis points versus the high end of our prior guidance, and now expect it to be approximately 18%. This over 800 basis point year-over-year improvement reflects our ongoing commitment to drive operating leverage as we scale the business. This is a significant milestone that reflects operational rigor across the company to become more productive faster.

Barbara Larson
Barbara Larson
CFO at Workiva

There are many examples, including in sales, where we are refining our go-to-market around higher value platform opportunities. In R&D, where we have embedded AI across our teams and accelerated our speed of innovation. Company-wide, where we have improved productivity and embedded AI into workflows that previously required significant manual effort. The resulting outperformance means we now expect to achieve our 2027 medium-term operating margin target a full year early. Our improved productivity extends to cash flow as well. We are raising our 2026 free cash flow margin outlook by 100 basis points to approximately 21% for the year. To wrap up, Q2 was a strong proof point that growth and profitability are not a trade-off at Workiva. Our results reflect an operating model that is working and a platform that continues to earn the trust of the most sophisticated finance organizations in the world.

Barbara Larson
Barbara Larson
CFO at Workiva

We're entering the second half of 2026 from a position of strength with the financial flexibility to keep investing in growth and innovation. We look forward to sharing more at our Investor Day in September. With that, I'll turn the call over to the operator for Q&A.

Operator

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up the handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Your first question comes from Alex Sklar from Raymond James. Please go ahead.

Alex Sklar
Alex Sklar
Analyst at Raymond James

Great. Thank you. Julie, maybe first one for you, just on the overall demand environment and budgets broadly, can you talk about what you saw in the second quarter from a sales cycle and customer budget or deal size perspective relative from the prior quarters? Also, as you spoke about the growing complexities your customer base and prospects are facing, any change to how you're setting up the go-to-market organization to kind of meet that value prop? Thanks.

Julie Iskow
Julie Iskow
CEO at Workiva

Sure. Thank you for the question. Appreciate it. I think it's top of mind, of course, what's going on in the demand environment. I will say overall, the demand environment really has remained relatively consistent throughout the year. It's still a dynamic environment. We're still seeing changing complex regulatory requirements. We're seeing, yeah, the evolving expectations around AI and AI governance. For us, these trends really reinforce the need for what we do. In fact, we've continued to perform well across the portfolio in Q2 and second half, and it's actually, for us, a really good proof point for our relevance in the market. I will say, though, maybe worth mentioning, that our field team has highlighted a trend that deals do have more scrutiny, and there are maybe more approvers and more rigor at the legal level.

Julie Iskow
Julie Iskow
CEO at Workiva

We're very much aware of this, prepared, and being aware and being prepared makes a real difference in our execution. It's not just in the field, but in operations, including our legal team, who is very sales-focused and commercially and customer-focused. We are prepared for that next level of rigor. I do want to mention that our team is seeing that out in the field. Overall, demand environment, very consistent over the prior quarters. You also asked about our go-to-market motion. Look, that's very consistent with prior quarters. For us, it's all about the Workiva platform. It is multi-solution, it's multi-category, leveraging our partners for influenced and sourced deals, pushing on those larger accounts expansions and so forth. Those motions for us are how we've been or executing on our strategy. Not a whole lot different there.

Julie Iskow
Julie Iskow
CEO at Workiva

We have a broad portfolio of solutions that we continue to work with our customers to bring value. On the deal cycles, you asked about that too, and it ebbs and flows up and down. Actually last quarter, this quarter, we saw shortened deal cycles. That's very encouraging for us. Thanks for highlighting that.

Alex Sklar
Alex Sklar
Analyst at Raymond James

Okay. Great color there, Julie. Maybe just a follow-up for you or for Barbara. Just in terms of the packaging and the advanced bundle opportunity you've spoken to in the past, any change in adoption of those advanced packages on renewal through the second quarter or where you stand on penetration of those advanced packages across the base? Thanks.

Julie Iskow
Julie Iskow
CEO at Workiva

Yeah, we are very encouraged with the traction of the premium tiers and our good, better, best pricing. Still early days. We just began rolling those out over the past year or so. Still watching the uptick, but as I'd mentioned, we're getting a decent price premium on those, and we've talked about that being north of 20%. We're encouraged and watching more and more of our base move into those and selling them as we land as well. Very encouraged by that monetization framework. Thanks for highlighting that too.

Alex Sklar
Alex Sklar
Analyst at Raymond James

All right, great. Thank you.

Operator

Thank you. Your next question comes from Allen Berkowitz from BTIG. Please go ahead.

Nick Dannewitz
Nick Dannewitz
Analyst at BTIG

Hey, thanks for taking the question. This is Nick Dannewitz on for Allen Berkowitz. Just one on our end here. We thought the subscription revenue at 19% was pretty strong for a company of your size. What's giving you guys the confidence in your growth durability, given you need about a 17% subscription revenue CAGR to reach the midpoint of your 2030 total revenue target? Thank you.

Julie Iskow
Julie Iskow
CEO at Workiva

I can start the ball here and just say, as I mentioned, we have a very broad portfolio of solutions, Nick. I like that you asked the question because it's a chance to talk about that. Again, every quarter, maybe a few of them are stronger than others and dominate, but for the most part, it is very broad-based across the portfolio of solutions that we offer. We're seeing a lot of traction. Our partner ecosystem is continuing to get stronger. Our expansion motion is very healthy and continues to get stronger. Multi-solution, multi-category. We're executing, and it's moving in the right direction for us, and we feel very strong in terms of our execution. Our go-to-market machine is getting stronger. The broad-based platform, the customer need in the market, as I highlighted in my prepared remarks, and of course, just our own execution getting stronger.

Julie Iskow
Julie Iskow
CEO at Workiva

Barbara, do you want to comment?

Barbara Larson
Barbara Larson
CFO at Workiva

Yeah, I'll just add one more thing in there. International is additional growth lever for us. Like Julie said, very broad-based. We're not dependent on any single lever. Deep portfolio, new logos, expansion, and then international as well. Thanks for the question.

Nick Dannewitz
Nick Dannewitz
Analyst at BTIG

Got it. Thank you.

Operator

Thank you. Your next question comes from Andrew DeGasperi from BNP Paribas. Please go ahead.

Andrew DeGasperi
Andrew DeGasperi
Analyst at BNP Paribas

Thanks. Wanted to ask a question, Julie, on the financial services opportunity, and specifically the Fund Reporting product you've highlighted for two large deals. I'm just wondering, can you elaborate a little more in terms of how that's progressing? Are you seeing ramp-up adoption? Is there anything that's accelerating that? I also noticed that you mentioned North America and Europe as driving that demand, so would love to have additional color on that.

Julie Iskow
Julie Iskow
CEO at Workiva

Sure. Another area we're very encouraged in is our financial services vertical. We have a strong sales organization there. We've been increasing in our footprint there, both in U.S. but also in Europe, as you mentioned. The Fund Reporting, we had private funds, and we rolled out a public Fund Reporting capability over the past year, and we've been out in the market selling, and we're encouraged by the traction. A lot of large deal sizes around it. I will say that particular one, the public funds, still early, but again, very encouraged. It does play into the area that we play best in, which is, of course, large enterprise.

Andrew DeGasperi
Andrew DeGasperi
Analyst at BNP Paribas

That's helpful. Just wanted to ask a question on net retention rate. If my math is right, it did improve versus last quarter, modestly. Just wondering, was there anything in particular that helped drive that? Obviously, if we exclude foreign FX in that number. Was it something specific, any product, or was it broad-based? Thanks.

Barbara Larson
Barbara Larson
CFO at Workiva

NRR was 111% for the quarter. Just one thing to keep in mind is we did have a two-point tailwind to NRR in Q1 from FX. In Q2, this quarter, that tailwind went away. If you look at NRR on a constant currency basis, it was relatively steady on a quarter-over-quarter basis and was, again, above our 110% target.

Operator

Thank you. Your next question comes from Brett Huff from Stephens Inc. Please go ahead.

Brett Huff
Brett Huff
Analyst at Stephens Inc

Good evening. Hope you all are well. Thanks for the time tonight. Two questions. One, just a derivative of the NRR. Can you talk a little bit about, I think you said there were some XBRL benefits, and I wanted to also understand what kind of the SEC reporting IPO benefits you might have seen in the quarter. If the expectations for the annual growth guide now include some more that weren't in there before. My second question is more of a leading question, which is congrats on the 18%. I think your long term is 24%. Any thoughts on maybe raising the ceiling on that 24% or even just some qualitative thoughts? Thanks.

Barbara Larson
Barbara Larson
CFO at Workiva

I'll take the question on services or XBRL. In Q2, we did see services revenue come in a bit higher than expected, and some of that was one time. It was specifically around 11-K filings that happen annually, so we're not expecting it or planning on it repeating in the back half.

Julie Iskow
Julie Iskow
CEO at Workiva

Thanks, Barbara. I will just talk about cap markets for a moment. It was actually a very fun quarter for us market-wise. We were encouraged to see continued strength in the IPO market. As I mentioned in my prepared remarks, we supported a very robust slate of public listings this quarter. I mentioned SpaceX and Cerebras and Quantinuum. These companies really represent exactly the kind of organizations that require a trusted audit-ready platform. You asked about the revenue and the guidance. Revenue perspective, it was very much in line with our expectations. Back in February, we said we were optimistic about the IPO momentum going into 2026, and we did incorporate that into our guide. I would say that H1 of this year was better than H1 of last year, but very much in line with our expectations.

Julie Iskow
Julie Iskow
CEO at Workiva

We are taking it into account as part of the guide and very consistent with what we said in both February and May, in fact.

Barbara Larson
Barbara Larson
CFO at Workiva

Thanks for highlighting that we now expect to achieve our medium-term operating margin target of 18% in 2026. That's a full year ahead of schedule. Naturally, that shifts our focus to our 2030 framework, which we've outlined in our investor deck. We're not planning to update that at this time. Our 2030 targets remain unchanged, but we continue to remain focused on staying disciplined, scaling efficiently, and executing against this plan that we've laid out. We feel really good about the progress we've made.

Brett Huff
Brett Huff
Analyst at Stephens Inc

Well, congrats on being able to grow and expand margins. Appreciate it.

Operator

Thank you. Your next question comes from Steve Enders from Citi. Please go ahead.

Steve Enders
Steve Enders
Analyst at Citi

Okay, great. Thanks for taking the questions here. Maybe just to start, just would like to ask a little bit about some of the newer agent products that you've been rolling out and wondering what the early feedback has been from customers and how you're viewing the monetization potential for those solutions, now that they're just starting to get out into the marketplace.

Julie Iskow
Julie Iskow
CEO at Workiva

Sure. Thanks for highlighting our newly released product capabilities around AI. We did one very recently, as recent as last week, focused on both solutions and our Platform. I'll highlight for everyone, there's really a common thread around all of these announcements and prior releases as well, is that we're helping our customers just complete work faster with greater confidence by enabling the Platform to do more of the work on their behalf. Of course, which is our great differentiator, maintaining the governance and controls and traceability that our customers really need and expect. We did introduce a number of agents, purpose-built agents, the tie-out agent, benchmarking agent, sustainability disclosure agent, so forth, along with Workiva Knowledge, which is core now into the Platform. We put those into our premium tiers and our good, better, best model.

Julie Iskow
Julie Iskow
CEO at Workiva

We have seen excellent traction on those premium tiers since we began doing that over the year and a half that they've been out. We continue to see that traction, whether we're going back to customers at renewal or even mid-cycle because they would like to adopt some of that AI capability and other premium features that we have available. Again, we're very pleased with the initial traction in the market, and our expectation is that we continue to bring our base up to the higher tiers within that monetization framework. We will continue to roll out the capabilities to, again, help our customers do more of the work using our Platform.

Steve Enders
Steve Enders
Analyst at Citi

Okay. That's helpful context there. Then maybe just on some of the moving pieces with FX rates, and appreciate you calling those things out, but I guess anything that we should be keeping in mind for what that means for either the rest of the year or anything to keep in mind for billings or free cash flow dynamics as well?

Barbara Larson
Barbara Larson
CFO at Workiva

Yeah. We have assumed for the back half of the year on our top-line metrics and our numbers that our currency remains relatively flat with the rates that we saw at the end of June. So the end of the quarter.

Steve Enders
Steve Enders
Analyst at Citi

Sorry, just on, I guess, seasonality, anything we should keep in mind for billing or free cash flow timing for the rest of the year?

Barbara Larson
Barbara Larson
CFO at Workiva

Pretty in line with historical trends.

Steve Enders
Steve Enders
Analyst at Citi

Okay, perfect. Thanks for taking the questions.

Barbara Larson
Barbara Larson
CFO at Workiva

Thank you.

Operator

Thank you. Your next question comes from Pat McIlwee from William Blair. Please go ahead.

Pat McIlwee
Pat McIlwee
Analyst at William Blair

Hi, team. Thank you for taking my questions, and nice quarter. My first question, I understand that your new CRO has been driving a variety of sales and restructuring efforts since he joined, kind of moving towards some best practices that he sees within the sales force and notably some deeper account engagement with your sales reps. My question is, now that he's had a few quarters to establish some of those efforts, are you seeing any notable pickup or changes in your sales force execution? Is there anything worth calling out in terms of execution between new logos and then existing customer expansion?

Julie Iskow
Julie Iskow
CEO at Workiva

Yes, I think Michael Pinto, we welcomed him very early in the year. He is doing exactly what we have asked him to do and what we expect him to do. Clearly, we are holding him accountable for delivering bookings. We're also very focused on the metrics that will lead to long-term durable growth. He is very well aware of that. That improving sales efficiency, increasing pipeline quality, growing our large enterprise accounts, accelerating rep productivity, expanding the contribution from our partner ecosystem. I would say ultimately, he's very busy building a high-performing go-to-market organization that's, for us, repeatable and scalable and just executing at a high level. He has made progress on that absolutely. That's how we think about his success.

Julie Iskow
Julie Iskow
CEO at Workiva

In terms of new logos, I will tell you that it was our strongest quarter for net new customer additions in the past seven quarters. It's a metric that we look at and we disclose consistently, so you can see that. I will also say that our focus is more on just adding those new customers, though you asked about that. We're increasingly winning larger, higher value customers when we land that are ultimately adopting more of the Workiva platform, but they do so too from the outset, which is important for us. Those lands are often multi-solution, six-figure relationships with significant long-term expansion opportunities. I will say those new customers in absolute number are larger, but also the customers themselves are buying more at the outset.

Julie Iskow
Julie Iskow
CEO at Workiva

We're also seeing average deal size for those customers increase year-over-year as well, which we think is another good indicator of the quality of the business that we're bringing in. We continue to.

Pat McIlwee
Pat McIlwee
Analyst at William Blair

Okay. That's all really encouraging. Thanks. Just to follow up while we're on the topic, I wanted to ask if there's anything you can share in terms of your overall go-to-market staffing, if that's growing or relatively steady. I understand in the past, you've moved some reps around to kind of the best available opportunity set. I'm just wondering if at this point you feel you're structured appropriately across your main product suites?

Julie Iskow
Julie Iskow
CEO at Workiva

We are moving toward that structure. We've been very clear about not wanting to disrupt our go-to-market execution and results. We want to keep the growth going so that isn't a one-time Michael coming in for a couple quarters and being done. That continues to evolve, and as the market changes and grows, and we get better as a company too in our execution. You mentioned the hiring. We have been hiring, and we're going to continue to see that hiring in strategic areas that support our growth and innovation priorities as well. We will be adding more of the customer-facing roles where we see opportunities to expand. I would expect our hiring to remain very disciplined, with the mix of talent continuing to evolve as the strategy evolves. I do want to make clear we are bringing in new talent.

Julie Iskow
Julie Iskow
CEO at Workiva

We are putting them in strategic areas in go-to-market. Even though you see our new hire numbers are relatively flat, we are managing talent and ensuring we have the right people in the right roles, and I think that's very important to be blending that with our new hires. Should give you a feel for how we're moving forward with people and talent.

Pat McIlwee
Pat McIlwee
Analyst at William Blair

Okay. Yep. Thank you, Julie.

Operator

Thank you. Your next question comes from Rob Oliver from Baird. Please go ahead.

Rob Oliver
Rob Oliver
Analyst at Baird

Great. Good afternoon. Thank you. Julie, for you. I guess not having a seat-based model kind of frees you guys up from the kind of pain here of having to convert customers to a new model, which we're seeing across many players in the financial suite. It really allows you to focus on this kind of good, better, best opportunity with value you're already delivering. I'd love to get a better sense from you. I know that some of the agentic offerings which you've announced are going to be in the upper tiers, rightfully so. How did you think about stratifying those in a way where customers get a taste for the value and where you can drive greater usage and ultimately higher contract value when you come up to these renewal periods? Thanks.

Julie Iskow
Julie Iskow
CEO at Workiva

I mean, you nailed it. Thank you. Thanks for highlighting that we are not seat-based. We've been using a value-based pricing model for years, and I say that again because it does play into the tiering. If we have a customer in an advanced tier, they have been paying that even before AI. They have been paying based on value, whether it's number of controls, number of entities, size of company and so forth. They would have a different price in that higher, more premium tier. That is how we are capturing that value. Our approach, you got it there, too. I mean, really, our aim on this digitization isn't changing as we roll out these capabilities right now, and it's quite straightforward using that good, better, best methodology or framework. That is how we are capturing the benefit.

Julie Iskow
Julie Iskow
CEO at Workiva

It's not everyone pays the same price in the premium tier. It is all about value and usage on the platform, and that is how we're charging those, even within the same tier.

Rob Oliver
Rob Oliver
Analyst at Baird

Great, thanks. Barbara, just quickly for you, just on the sales efficiency side, where you guys have been making a lot of progress, just wondering if there's any additional things you could point to in terms of whether it be AI tools or sales efficiency initiatives that you've done in conjunction with your new CRO, where sort of gives you confidence on the continued trajectory to contribute to that margin improvement. Thank you.

Barbara Larson
Barbara Larson
CFO at Workiva

Yeah, Rob, thanks for the question. It continues to be a work in progress as we move to platform sellers. That's one of the things that we are working through. Absolutely, AI is part of the efficiency story there. The one thing I don't want to get lost is we do continue to invest in sales and marketing and a lot of those efficiencies that we also will continue to drive. We will invest back into the business with more feet on the street to really go after that opportunity that we see in front of us.

Rob Oliver
Rob Oliver
Analyst at Baird

Awesome. Great. Thank you both.

Julie Iskow
Julie Iskow
CEO at Workiva

Thank you, Rob.

Barbara Larson
Barbara Larson
CFO at Workiva

Thank you.

Operator

Thank you. That does conclude our question and answer session. That does conclude our conference for today. Thank you for attending today's presentation. You may now disconnect.

Executives
    • Katie White
      Katie White
      Senior Director of Investor Relations
    • Julie Iskow
      Julie Iskow
      CEO
    • Barbara Larson
      Barbara Larson
      CFO
Analysts
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