Ryan, who is our EVP and Chief Revenue Officer, which is a title that's probably familiar to most of you, but it means that he has both sales and services reporting to him. We've recently combined those two operations. Scott's going to talk about our go-to-market strategy. I'm going to wrap up. We'll also have quite a bit of time for Q&A. Over to you, Scott.
As-
Sorry, one other thing. I'm sorry, one housekeeping thing.
No, go ahead.
At 1:18 P.M. today, our federal government has decided to light up everybody's cell phone with an emergency warning. You might want to turn your phones off or on mute or something. If you hear that go off at 1:18, don't be afraid.
That's awesome. Good for them. As Marty laid out this morning, the intent of the presentation, and please, I know this isn't a shy group, feel free to hit me with questions as we go. There are a handful of points that I hope to make to you. Most of those are going to illustrate the changes that we've made on a year-over-year basis. I'm not going to spend a ton of time. I've got a handful of slides. We covered on a number of topics that we will probably go a little bit deeper on this afternoon as it relates to the go-to-market strategy. My intent is really just to help you understand what changes and improvements that we're making as a company as we come out of this transitional period from a product perspective.
Obviously, the natural transition that we need to make is to start to accelerate the effort that we're making from a marketing and a sales perspective, and I'll talk through that at a fairly high level. As Stuart alluded to, we recently have aligned our sales and our services organization. We have a singular organization now. We did that for a couple of reasons. It's obviously fairly prevalent in the industry. From our perspective, it accomplishes a couple of things. It helps us to continue to drive consistency in our messaging. It helps from a productivity and an efficiency standpoint, obviously, get our teams better aligned. It also helps us think more holistically about the customer experience and the customer journey. Our goal as a revenue organization is to re-accelerate the company's growth rate.
As we do that, we want to think and be mindful of best practices and efficiency and productivity as we go, it's part of the reason that we aligned the organizations. The global revenue organization, and incidentally, we have recently stood up a revenue operations organization. Again, pretty standard in the industry for SaaS companies of our size. New to us. The goal of that organization is really to look holistically at the data and the customer experience, and help us improve the journey for our customers in working with us across all aspects of our processes and our touch points. On the left-hand side, on the sales side, obviously, here's where we're thinking about accelerating growth. At the operational level, we put it into two basic buckets. One is really revenue optimization.
What we want to do is continue to have success in the use cases as a solution and some of the more mature things that we're doing as a company. Meanwhile, we want to be able to incubate growth. That's how we think about it. We have, for our strategic accounts, primarily a direct sales model. When we talk about the improvements that we want to make in the sales organization, we think about things like message, process, skills, structure. The structure remains largely the same as it did this time last year. With direct enterprise account coverage, we continue to invest very heavily in third party and internal training.
A big part of what we are trying to do is help our sellers who have been with us for some time, who are exceptional and hardworking, to help them understand what we're looking for as we evolve into more of an enterprise solutions company. To do that, we know we need to meet our buyers where they are. Studies show that buyers are 60% of the way into their procurement process when they initially engage. We need to be able to meet and pick up the cadence that they have as they're thinking about buying. We've invested pretty heavily in skills and training in that area. Structurally, we cover what we would call our strategic or our enterprise accounts with direct folks. We have seen significant productivity improvement in what we call our corporate or our mid-market accounts, which is our volume business.
We have a hybrid approach there. We start from an inside perspective, and only under certain circumstances do we allow those sellers to travel and participate face-to-face. A little bit of a hybrid model there. As we continue to grow, we grow the number of solutions that we take to markets. We think there's a leverage point that we could have there in having those folks primarily focused on the inside. We are primarily named account and geographic. We have a separate team, as you might expect, that focuses on our SEC land business. We are looking into some more specific coverage model in financial services, where we have things like our regulated risk reporting and our investment reporting portfolio. We're definitely looking at a little bit tighter coverage in an industry model around financial services.
As we explore other industries and other specific use cases, we'll look at potentially adding some other focus teams as we go. On the partner side, just to level set, we signed literally our first business partner first quarter of 2017, so we've been at this about 18 months. We're building foundational skills or muscle memory in this space. We started that journey focused on regional partners, and the intent there was to get lessons learned and expertise in how we as a company would reach out to partners and exactly what investments we would need to make from a skills and experience standpoint. There was an announcement this week about KPMG. We started with regional firms. We're obviously starting to interact with the Big Four around their particular practice areas. To the KPMG announcement this week, talked a little bit about the GRC or the SOX practice.
Obviously, a comprehensive partnership announcement, but we're focused primarily with them from a go-to-market perspective around internal control SOX, GRC-type capabilities. We continue to talk to the Big Four. We're particularly interested to expand into their financial transformation practices. Have a lot of good interaction as the product is maturing with some of the finance transformation folks from both the regional and the Big Four. When we talk about technology partnerships, we spent a little bit of time talking about SAP today. The priority for us is first-party integration with the ERPs. That's pretty straightforward. When you think about the office of the CFO, whether it's the chief accounting officer or the CFO, where we typically have landed and we want to expand, we want to be part of that value chain, part of that message. I have a positioning slide next that'll show you how we talk about that.
Managed services, BPO, primarily, in the SOX space. About 40% of the SOX business is co-source outsource. We've got a nice run rate business that we've established with about a dozen or so SOX partners. Great from our perspective, not only for that revenue lift, but it also gives us skills and experience to think about growing that business in the future. We've got folks that are ready to deliver. Not an area where we're looking to scale up the services part of our business. Then OEM and reseller. We've got a couple of these. Got a new one in Asia. I'll show you a chart in a couple of minutes. We have one that we use in the Federal government. Here, again, going back to the point about building the foundational skills.
We know that as we start to explore new solutions and new markets, specifically things like the Federal government as well as Asia Pac, we know we're going to need the expertise internally and the knowledge and the understanding of how we want to interact with resellers as we think about scaling. Services side, pretty recent for me over the course of the last month that I have the privilege of leading our world-class services organization, as we talked about this morning. With due respect to our R&D folks, this is the secret sauce for Workiva. We are a customer-centric company. Customer service is an important part of our brand. These are the folks that make it happen. Pretty standard in the industry in terms of onboarding. We could get a little better at best practices. We get a lot of feedback.
I was sitting with our customer advisory board a couple of days ago, a big part of what they were telling us is, "Tell us where to go. We want the best practices. We want the roadmap. We want to know where to go with your technology." We've got some work in that area to be a little bit more proactive, and that's some of what we're going to be focused on over the course of the next 18 months, getting those folks less reactive, less focused on, to Marty's point, getting that last 5% customer satisfaction and more focused on opportunity identification. Starting to do that. We're seeing some good results, but we are at the early stages. Add support retention on here. I would add to that transition. We talked quite a bit this morning about our next-generation technology.
As we complete the work that we need to do foundationally to get to that quote, unquote, "parity," a big part of what our customer success teams are going to be doing over the course of the next 6 to 12 months is helping our customers discover the new technology through that transition. Okay, here's your classic marketing chevron slide. We use this slide in a couple of ways, and I wanted to show this to this group. It's not uncommon for customers to ask where we really fit. You go in and you talk to a chief accounting officer, you talk to a chief financial officer. There's a lot of companies, a lot of technologies in this space. Many of them up on this slide are partners. This helps to position really where we fit and where we see ourselves.
The punchline here is, if you look at the left-hand side, the plan, record, close, and consolidate, companies are spending, and I alluded to this this morning, more than $220 billion annually on ERPs and business intelligence. Yet, at the end of the day, taking the output of that information, they're dumping it into a spreadsheet. They're putting it on a shared drive. They're passing files around via email. From a data assurance perspective, it's an absolute catastrophe. We believe where we primarily add value is that last mile of reporting, the right-hand side, where you see the ability to leverage Wdesk. We don't have Wdata on this particular slide, but Wdata is that analyze piece. We think about prep from the standpoint of validating this message in the market. We've been telling this story.
Obviously, marketing and sales, you would expect for us to be a little bit ahead of the product. We've been telling this story and preparing our customers for this over the course of the last 18 to 24 months. Now, from my perspective, the question was asked by somebody about Data Prep. Data Prep is what makes this happen. It's what gives you that end-to-end data assurance. It allows us to engage from a persona perspective with the finance folks. We've got great presence in the accounting community. This gives us the ability, particularly with our enterprise customers, to be able to go have that credible conversation with finance, have a credible conversation with IT. It really is, from a sales and marketing perspective, a game changer for us.
The first way that we use this is with customers where we've landed as an CC, and we want to talk about expansion. The second thing that this is really helping us with is our business partner relationship. When our customers want to understand expertise and where we fit, obviously, we want to be part of that CFO value chain. We believe reporting is an essential part of that value chain. This does help the position with partners. In addition, with some of the industry analysts and some of the other material that's out there, it helps them understand really where we position. Both Stuart and I are going to talk about growth drivers from a slightly different perspective, feel free to ask questions as we go.
I talked a little bit about the notion of, from an operational perspective, the way that our team thinks about the business is to optimize the near-term revenue, go after some of our more mature offerings while we incubate growth. That's what we've been thinking about as we've been transitioning as a company, while we've been building the next-generation platform. On the left-hand side, upper left, these are our current use cases. It's where we expect the revenue to come from for the remainder of the year and into next year and beyond. SEC and investor relations, we're obviously well-known in this space. As Marty, I think, alluded to this morning, or maybe it was in his opening comments yesterday, continues to grow at a double-digit clip for us. We've got tremendous share there.
We have some discussions internally about how big the market share is there, but it is significant. It's obviously a very healthy IPO market. We're also seeing a tremendous amount of business from referral customers who have churned employees. An employee leaves the company, goes to a new place, they don't have Wdesk, they call us, and we get some short cycles. Continues to be a very strong business for us. SOX, we talked a little bit this morning. SOX is interesting, right? Our customers drove us to the SOX space with first generation Wdesk, they started to manage their SOX processes, with core Wdesk. We built our database product, that supports SOX. We now have more than 600 customers. It's another double-digit growth business for us. It's a great business for us.
We're having, as we alluded to this morning, some discussions about where we want to go with this aspect of our business and how business partners can help. It's part of why you saw the KPMG announcement. We obviously this week announced Audit. Our team is incredibly excited about Audit. It'll be generally available in January. We have it on limited launch internally as we're building the expertise that we need to be able to deliver it at scale. We're expecting it to have a really positive impact next year on our side. Capital markets, we've alluded to on a couple of our conference calls. Capital markets is an obvious adjacent business for us. It's growing. It's one of our fastest-growing business areas. It's an interesting business for us. We do have a dedicated sales team.
The way that we approach capital markets is more of a holistic view of what we can do for private companies. Your Q and K-like financial reporting, get your house in order, go through the S1 process. On the other side of the S1 process, we can help you with your SEC. We have markets team working together. Pipeline is very strong. I don't think I have to tell the folks in this room the cyclical nature of this business. It's something that's growing. We're trying to be pragmatic and thoughtful about how fast we want that to grow, as we build the expertise that we need to internally from a services perspective. We think this is another area where potentially business partners can help scale on the services side. Management reporting is kind of generic, and I've alluded to it already in the positioning slide.
For me, management reporting, we're known as financial reporting, but that's just because we happen to land in the SEC, and we sit in the office of the Chief Accounting Officer and the CFO more broadly. For us, we've been talking about management reporting for a number of years. However, we lacked functionality from an aggregation and a visualization standpoint. We have the best collaborative reporting platform in the world. We excel at that last mile of reporting, but it's a little bit difficult to get information in, and I know I'm going to have to clean it as I'm pulling information in. That's what Data Prep can do. Then on the visualization side, our presentation product was not our focus. You've had the opportunity to walk through and see some of the innovation.
We talked about how quickly the microservices architecture is allowing us to bring that presentation product to market. Our team is incredibly enthusiastic about having the aggregation piece combined with the visualization piece to give end-to-end management reporting. Something that we expect to see strong growth in 2019. From a new markets perspective, I've got another slide, and I expect some questions on our approach to the international markets. I am going to cover that in just a second. Government, we alluded to this morning. I also have another slide on this one. Government, I spent 10 years selling into government, somehow survived that experience. The question this morning was, we see that you've invested in FedRAMP. Are we going to see any kind of an outcome from that, as we get to the end of the government fiscal year here in the next couple of weeks?
What I will tell you is we've invested in a small team. We are evaluating internally how aggressively we want to move into this market. It is the world's largest IT buyer. There is significant pain in this market, both on the control side as well as the financial reporting side. We think Wdesk is going to be a hit for federal government. Excuse me. We knew we had to make the investment in FedRAMP. We've been trying to build pipeline ahead of the expected FedRAMP ATO. We got the FedRAMP ATO in May.
We've had a number of RFQs that while they weren't brand name justified, while they didn't call out Workiva by name, there are requests for quotes that are out that are absolutely the sweet spot of what we do, where we've had and been engaged in customers, and we're optimistic that we'll see a couple of our first landmark federal customers here in the next couple of weeks. More to come on that one. We will see a little bit of a preview there of some of the business we're hoping for over the next couple of weeks. That's a business that we expect to grow pretty rapidly over the next couple of years. We've got some decisions we have to make about how fast we want to grow that. Not typically a short-term investment. It tends to track on September cycles for enterprise solutions like ours.
See where we go from here. We spent a lot of time this morning talking about Wdata. I've got another slide on partners and happy to take some questions. When we take a look at internationally, obviously, I don't have to tell the folks who are in this room or listening on the phone, these are very, very different markets when you look at EMEA and Asia, and we certainly see it the same way. We've been in EMEA for a couple of years now. Most of what we've been doing in EMEA is supporting our global customers, our global U.S.-based customers. We have had a small sales team there. We see tremendous potential in this market.
The focus on controls, both from the EU and the accounting standards, some of the things that are in the pipeline, on the regulatory space, really give us some optimism. We've hired a senior and experienced leader, runs our European business. We're doing a great job of integrating our sales, our marketing, our customer support teams in order to incubate new solutions. ESMA, I'll call that one out. There's more than 5,000 ESMA companies that have to file under ESMA between now and 2021. We think that's a good use case for us. We've got about a dozen different use cases, things like global statutory tax filing and reporting. We've got a number of different things that we're starting to incubate. We feel very good about the pipeline that we have for that. We're expecting to see some aggressive growth in 2019 in EMEA.
Asia, a little bit different from a regulatory perspective, obviously a less mature financial market. There's still a lot of problems that are being solved with low-cost labor. We do have, and have hired externally, a talented general manager, who is on the ground in Singapore. We're attending a lot of marketing events. We're meeting with business partners. We think this is a business that we could scale with the help of our partners. We are absolutely excited about that based on some of the feedback that we've been getting from Big Four, some of our other technology partners. We think there are a couple of different ways that we can approach that market, leveraging the best practices that we built. We talked a lot about FedRAMP. I've alluded to the opportunity in federal. Again, from our perspective, big market, world's largest IT buyer.
We think there's a product fit. We don't want to go too fast. As Marty had alluded to, we are at FedRAMP Low. There is a part of the addressable market that you can get after with FedRAMP Low. We have the authority to operate. The RFPs that we've seen that are out there publicly available indicate FedRAMP Low. We think there is some business we can get after. Ultimately, as a company, we have to make the investment going forward with FedRAMP of some of these trade-off decisions that we alluded to this morning. Do we go down the path and get more aggressive in the short term in the federal business? Certainly, a business we want to grow, but how quickly do we want to grow that relative to some of the other things we might be able to accomplish with the next generation?
Snapshot from our customer base. Again, still pretty early in this journey for us. We've only been at it about 18 months. Started with the regional firms, saw the KPMG announcement, again, pursuing specific practice areas, particularly finance transformation. As the new product comes online, capabilities of aggregation and visualization, that last mile of finance, we think there's absolutely the opportunity to be part of the value chain there. Technology side, we talked a little about SAP. This Marty alluded to, we've made investments in first-party integration, certifications, and building our skills. We've made investment, have good sponsorship at the executive management level. It's a process. We've already benefited tremendously in our ability to go in and articulate the value of this relationship to our customers.
Regardless of where we go from here in terms of the specific to the SAP partnership, this is absolutely something we felt we had to do in order to best serve our larger customers and SAP customers. See some of the other names on there as well from the other ERPs, and we're in the process of building first-party integration with all these. Managed service BPOs in the SOX space. We're looking into, in Asia, for instance, where much of the accounting and the reporting processes are outsourced. We know we're going to need to have those skills, that expertise, and the knowledge of how to partner. That's a big part of why we've deployed it here in the U.S. We got about a dozen or so SOX managed service partners.
The OEM and reseller, Trident. We talked a lot about the technology this morning, specifically about Workspaces. I have a little bit of a different perspective on Workspaces from a go-to-market strategy standpoint. Workspaces has helped us to evolve as a company to driving the number of users in our customers. It's a metric we have and will continue to look at internally. It's how we price the product. Part of what we've asked our new product marketing team to do is come in and take a look at how we price the product. Are we getting the optimal value? Are our customers benefiting from the way we price the product? After that study, we determined very quickly we wanted to move to a solution-based license model.
This one, there may be a few questions, happy to answer any about this. We are in the process. The user-based license model has served us well. It's gotten our company to this point, obviously tremendously successful for us. As we look at the ability to deploy rapidly new solutions, we want to be able to charge for those. For us, from an economic perspective, it makes absolute sense to price on a solution basis based on the horizontal nature of the platform and wanting to take and identify new use cases, new solutions, and ask business partners to build new solutions. That's absolutely true. It also gives us the ability to create intellectual property. On top of that partition, whether it's us or a business partner, we can go to market.
Our customers have been asking and have felt a lot of pain in our license model, and obviously, it's a trend in the industry to get away from user-based licensing, with a lot of administrative costs on both sides in managing users. We are also fundamentally, under the hood, a productivity platform. As we drive increased productivity, we need less users involved, and so it's a bad model from that perspective. The other thing is that we've seen in our customers a sub-optimization of the product. When you sell a collaborative platform, obviously the value of the platform goes up when you drive usage. The user model was getting in the way for some of the intermittent users or casual users, if you will. Companies were avoiding the costs of incremental users and were deploying the software in a way that was suboptimal.
We listen to customer feedback. We have solution-based pricing. The way it basically works, there is a value metric. You can think about solution-based pricing. I think of it as a platform fee that comes in a small, medium, and large, if you will. We have value metrics, we've aligned the value of the product with specific metrics. The other challenge with users is the number of users are not always a good predictor of the value that you're getting from the software. You may be getting something that's tremendously valuable that four people are using, and of course, the converse can also be true. You get a misalignment of the value. We have specific value metrics, and we have essentially a platform fee that you could think of as small, medium, and large.
For example, in the SOX space, this is one where we listened to our customers, we were getting a ton of feedback, "Hey, I'd love to get more people involved in the SOX process." In the case of SOX, we've aligned the solution-based license value metric for that is the number of controls. That's pretty standard. Some of the other companies in the industry are also doing this in the SOX space. The point there is value of the software with the problem that you're solving, that value metric of controls has a much stronger correlation of value than user. We have about a dozen or so solutions today. We're obviously looking to build them out as we go. What we've done is we've aligned different value metrics with each of the solutions.
It's tax, it's entity, in SOX, it's users. We have other value metrics for. Questions on this? The value metric for SEC, we do it by revenue. There wasn't a great R-squared with SEC, quite frankly. We had initially kept the SEC model in place. We now have transitioned our existing customers to a solution model that's based on users, it's small, medium, and large. The key point that I want to make is within the solution, the number of users is unlimited. It changes the behavior inside the customer. If you're an SEC customer with us and you've got however many users you've had, in the solution-based world, we align the cost of the solution by. Is it number of users or revenue, Arthur, for SEC? Is it revenue? Okay. Yeah.
We align it by revenue, you now can deploy that in an unencumbered way. Of course, you want to use this in a legal department. As long as it fits that SEC use case, you can deploy it in an unlimited way. As we think about our enterprise customers, part of what we hope to do is really change the demand trajectory. Where we have either Byzantine procurement processes that are getting in the way and the inability of people to add users, or they have a vision for how they want to use the software for a particular solution and want to be able to deploy it without counting users, physically counting users, and having that burden, that notion of having unlimited per solution is going to drive a different value.
Yeah. Okay. Good afternoon, everyone. This is Terry Tillman from SunTrust. There's a lot going on here. We're replatforming the product. We're going to introduce solution-based pricing to your customers. I'm just curious, the replatforming, you all have given us a lot of information, and it seems really systematic. They're getting touches and feel of some of these capabilities earlier on. There's a nice transition going on, or there should be. On the pricing, how are you going to push that through your installed base? New customers-
Yeah
it seems more simple.
Yeah.
Is this a phased approach? Theoretically, if whatever the use case they were using, if they have unlimited usage, it would seem like, mathematically, these customers, maybe their bill is going to automatically go up, I'd love a little bit more color.
Yeah. I'll take the last part first, the sales guy. They should expect to spend more if they're going to get the value of unlimited. The question, it's incumbent on us to help the client understand the value of having unlimited. I will tell you, first and foremost, part of the reason we kicked this off is extreme frustration with our existing user. Clients don't want to count users. They're frustrated because they want to grow it. Maybe they can't go get the whatever the incremental amount of money might be for those users. They're slowed down by procurement. They don't have the time to work on it, whatever it might be. The first value that they get in moving to solution is just getting off of users. That's a pretty easy conversation.
The second thing that we do with our customers is we help them. When you go and you do a very quick process assessment, you take a look at how they're using the technology, what we find way more often than not is there are areas and individuals that they want to participate in the process that will give them more value in the software. They readily agree that I should have more people involved in this process than I don't today. It actually is a fairly straightforward conversation for the customer. I've had 50 or 60 of these at this point. Once they understand the value that they're getting, the notion of paying more is not that hard for them. They very quickly understand that, hey, I've got 50 users today. There's probably another 50 people that could be involved in this process.
Maybe they're a casual user, and I don't really want to pay the full cost of a Workiva user, but I definitely want them participating. I don't want them to have to share back and forth with an Excel spreadsheet. It's a more straightforward conversation than you might expect. It's a very strong value statement. It's the fact that they, by and large, have assets. If you look at the SOX space, they were clamoring for something other than user, because they know that they have a ton of hundreds or thousands, depending on the size of the company, of people that could be participating in the SOX process, but they're not willing to pay a full-blown license for somebody who's just providing evidentiary information. It's relatively straightforward. It looks like Marty have a comment.
Comfort thing here. No
Want to be ready to jump in at any minute? No, you're going just fine. The only thing I wanted to say was that we have good experience. We just went through the quarter to annual transition on contracts. We have a really professional team, they work with the salespeople, they work with all the ops teams. We put together a waterfall of who we're going to touch when and why, we've gotten very good at that. This is a more complex conversation than the quarterly to annual. To Scott's point, he's done a great job of training the salespeople, we'll improve that even more on how you go through that process. It's something we're confident we're going to come out ahead on. There may be some churn, financially, we'll come out way ahead.
The other thing that I think, just to emphasize what he said, because he does talk fast, very eloquent, but he talks fast.
Jersey.
Jersey. The way it's structured now, customers do go through a lot of unnatural acts to keep their price down. It really deflects from the total value. If someone uses it marginally, they don't see why they should spend $1,000 a year, they go through a whole bunch of pain, introduce risk. It's just an unnatural act, and that's been going on for a long time. The friction to add one seat would be so painful. On our side, we have all these seat adds, processing, all sorts of costs in our back office. Even speccing a solution for a customer used to be the first question we ask, "Well, how many users do you want?" It would take them a month to figure that out sometimes. This is shortening sales cycles. Everything is affected in a positive way.
We do have to have a very careful, intelligent conversation with the customer to explain why it's better for everybody, they generally get it. They're generally thoughtful, intelligent people.
Yeah, we've been at it. This is really the first quarter that we've implemented it, the early returns are very positive in terms of the potential impact on churn.
Could you just give us a customer
We'll be able to redeploy Stuart somewhere pretty soon, fear not.
Could you give us a customer story or something, like a real-world example of somebody who's done this and what's happened? Or is it still too early to do that?
I don't think it's too early. There was a lot of pain in SOCs, I will say that, right? There are probably a dozen this is a very easy conversation in SOCs because you have people by nature who want to bring more folks in for the control benefit of that. That's probably the easiest. I think within regulated risk is another one. I was traveling to a customer recently in the Midwest, and we were talking about their CCAR process. We had a champion who was originally an SEC filing manager, now the Chief Accounting Officer, had positioned us with her colleague in the regulated risk reporting space around CCAR, and was telling us how the product really wasn't living up to its potential with that team.
The reason for that was they had a very limited budget, they chose to deploy it in a very suboptimal way, they were essentially sharing files back and forth, they had basically a core team in that particular CCAR process that was doing all the Wdesk work. Well, that is not at all the way the product is intended. That particular customer was thinking about a broader enterprise license agreement, instead of that, we decided to back off a broader, longer-term agreement to focus on a couple of solution areas where we implemented the solution-based license model for them. They get the benefit of unlimited, they get the success, we gain the momentum internally. When we want to go have that next conversation around a more comprehensive enterprise license, we have got the right demand.
We have got a happy customer, we have got the right demand projections. The product is working. We have great value points as we go into procurement, that is the best recent example I can-
If I think about the effect of solution-based pricing simplistically on revenue, you have got one where I had 50 users, I was looking at these other 50 casual users who would add value to me. I do solution-based pricing, now Workiva is getting 5%, 10%, pick some number more in revenue from me as a customer. Case 2 is I am now exposing more people in my organization to Workiva and to Wdesk, they may then adopt it for a totally separate solution in their area-
Correct
Because they just simply did not know about it before, as they had not been exposed to it.
Right.
Could you talk to the two of those, as revenue impacts?
Sure. Specific to revenue, let me try to put it this way. First, our product marketing team did a ton of analysis on the potential impact to our revenue. We obviously wouldn't go down the path of implementing solution-based licensing if we felt it was going to have either a near term or a longer term. We're building for the long term, as you saw this morning. We think about both at the same time. Without getting into the guts of it, we definitely looked at, okay, post SEC, which is typically how we land in a publicly traded company. Post SEC, what's going on with that adoption? What are the barriers to that adoption, and how do we change the adoption pattern? What are we giving up? How much do we have to charge from a very simplistic financial model?
How much higher would we have to get in terms of the average deal size in order to cover those incremental users we might see in year one or year two. To your point, we looked at it as a trade-off decision for us. We had to make sure the financials worked, and they do. Once they worked, we knew that the dynamic of starting to expose Wdesk to more people in the organization was going to create a tremendous opportunity from a marketing perspective, a brand standpoint, and an awareness standpoint within the customer that will now allow us to go in with WorkSpaces as the technology underpinning and create new solutions. Today, yes, to Terry's question, we have a lot going on.
As you think about the maturation of the product and the pricing model working together into the future, as we build intellectual property on top of those WorkSpaces, as we deliver templates or we deliver best practices or whatever that intellectual property might look like around these specific solution areas, it becomes very clear that today I'm using you for SEC, and we've got a lot of people participating in it. I want to go use Workiva for my management reporting, and I understand what's in that. We saw that as a positive, both short-term and long-term question, specifically.
Just one thing on top of that. We've been struggling a long time how to get broader adoption. It wasn't until we brought in Yaser and some of the marketing people that we've been trying to drop unit price, at the suggestion. Exactly the wrong thing to do. We raised it back up. That was a gymnastic move, nonetheless, is that the only way you approach, but where you get a lot of viral movement is to reduce the friction of adding seats to zero. The only way. We can't predict what that's going to do, but it's going to help us. The more people that log in every day, the more opportunity we have to grow and the faster we'll grow. That's the punchline. I can't say there's a lot of companies around to copy this model from and see what it's done.
I know in the freemium model, it works very well. You just need eyes on it. It's hard for us to predict, but we're very optimistic about it.
The challenge for us with the freemium model, direction to go, but didn't drive the kind of adoption we were hoping for is, the product as you saw, looks like a productivity suite. It does. That's part of the reason users love us, is because the adoption curve, very easy to adopt the software because you're working in tools that you're already comfortable with. The downside of that is it is an approach. What happens when you encourage the premium is customers were going off, starting to solve business problems that we would not recommend they go solve with the technology. Trying to get more prescriptive, I think the solution-based licensing does that.
To Marty's point, we think it could be an inflection point change in the demand curve in terms of how the software is used in organizations, it'll make the enterprise conversation
Are customers required upon renewal to go to solution?
We are looking at the renewal points to transition them to solution-based licensing. We believe the value point is there that they should. We encourage them to do so in a number of ways, but they don't have to move to solution-based licensing.
The example of a customer moving you used was 50 users with maybe 100 potential users that are a little bit more casual in nature.
One example.
That conversation was around maybe the internal users. If I think about your SEC customers, you obviously have people that have outside partners in tax, audit, consulting.
Yeah.
In that specific relationship, generically, of those incremental 50, how many are outside the organization versus inside the organization? Is that another 10 to 20?
Again, the thing to understand about the solution-based license is it is bound by the definition of the. Remember that we are licensing the product for use in what we define as our SEC. Within the natural boundaries that we describe contractually of SEC, you're free to use it. We do get customers from time to time who want to think about the participation of external users. We're okay if they're okay from a security perspective. They tend to be more restrictive than we are because of some of the security implications. We have discussions with them about that. In the SEC use case, sure, you may be going back and forth with external auditors. For us, it's potentially a rounding error. It isn't a high percentage basis for that particular use case of people that would be At least not traditionally.
If we start to see that happening, it becomes something we need to be more aware of, and we'll obviously have that data.
The SEC space, they traditionally brought one or two advisors in, I think, on average. I think that from my point of view, that number would potentially go up because it always ends up being a cost issue at some level and justifying buying a license for an outsider inside the company. That's even a harder sell. From my point of view, we know we can do it technologically, but as long as they're restricted to that Workspaces, the more the merrier.
Yeah.
When we get to have millions of users, you guys are going to value us a whole different way.
Yeah.
That's our end goal is just to get as many eyes on the product as possible. It's nothing but a good thing.
You look at outside counsel as a good example. That's good referral business for us, potentially. The trade-off for us is not so significant. It's not as if we expect to see 50 SEC users in turn, 200 external. Again, if we start to see something we're not anticipating, we'll make the appropriate
What's the process by which, let's say a company's doing SEC reporting. What's the process by which a workspace that they haven't purchased previously gets enabled? Isn't that still a friction if, for example, the FP&A team wants to put five people on performance reporting or something?
I am not sure I understand the question entirely. Let me see if the answer is on point. Today, separate a little bit the technology from. As the technology is evolving, as we're coming to market with Workspaces, as we're transitioning our customers from generation 1 to generation 2, which we talked. There is a transition period of moving from first classic version, if you will, to the next generation. From a licensing perspective, part of what we have to do as a sales team is help to educate the customer the benefits of. First, we have to notify them that the change is happening, obviously. If they look to expand into one of our other use cases, then we are typically talking to them about it. It is not as if a customer using SEC suddenly decides to go do SOX.
What is more typical is that we are out engaging with them actively, talking about the different solutions that we have, and we are helping them through that discovery process. If a customer wants to go there and they are currently on Users, then it is really incumbent on us from a value perspective to figure out how we are going to. Does that answer your question? There was a bit of a technical question in there with the license piece. From a licensing perspective, it is an education process with our customers, and we are being very proactive in helping them understand why we are making the transition, why it is good for them and us. The idea is we are catching a minimum number of them by surprise. That is not intentional. That part of the conversation.
Anytime we go sell a new solution, it is a sales motion.
Yeah.
It is a sales motion.
Yeah.
That's fine and healthy. It's just we know we're going to get a consistent amount of revenue from that sales motion, and I don't want to get excited about an FP&A team that wants to buy three seats, right?
Yeah.
I want to go in and say management reporting or performance reporting costs this much. If they say, "Well, we only wanted two seats," the sooner I know that, the better. I just don't want to deal with them. If it's a bunch of people in FP&A that are doing work for SEC reporting, that's great. Get them exposed. They come on as part of the other solutions. We just don't see any downside to this change yet. We just don't see it.
No.
One other thing. When we make these changes, by the way, we do very careful waterfalls with the customers, and we test it. We did 200. We're almost 3,300 customers now. We're well over 3,200. We test it a couple of hundred at a time. Then we get the data, and we know exactly what we're doing right or wrong, and we tweak it and continue on. If something really bad goes wrong, we know right away. That hasn't traditionally happened.
I've been running around bothering all your customers on this question.
I found a couple that have said they've seen the solution-based pricing offer from you guys.
Most of them seem to think it's like a 25% or 30% increase in the total Workiva
Yep. Yeah.
just.
I mean.
In other words, obviously, they're getting unlimited users, so we know the price is going up, but I guess I'm just asking order of magnitude.
Yeah.
Is that kind of what we're talking about?
We don't have enough data to know that yet. We really don't.
We are still early enough in this that it's going to depend on solution. It's going to depend on how they're using the product. There's a bunch of different dependencies in there, is the best way I would answer the question right now. We got early data on it. When we have numbers we feel good about, we'll share.
Yeah, I think that we anticipate it's going to be a positive, obviously.
Yeah.
I don't know how many of our customers you're harassing all the time, Adam.
Yeah.
I'm just--
You have a white lanyard, though, and not blue.
I'm just kidding you. I'm just pulling your leg a little bit. No, talk to our customers all you want. Like we said, the first group we put through the process in the waterfall was a good experience for us and them.
We have customers, as you might imagine, have discount expectations that range, so it's a little bit hard to answer that question, right? Suffice it to say we're looking to increase the average deal size as we go. They should expect to spend more.
Everything's a statistical thing here that we are executing on. Some customers are always going to not like change. At the end of the day, we're operating in a statistical world where we're looking for the bulk to be satisfied and improve everybody, the customer, and the investors, and our own delivery and positioning of the company.
Situations where we're proactive and we're properly positioning On that stack. Oh, yeah. I did get a couple of questions about this particular report, Gartner analyst. Financial close solutions, upper right. The way that we use this in the field, I was asked to talk about how do we really use this with customers. It helps us in a couple of ways. It helps us significantly with procurement as we're entering into, particularly with larger customers, where we're starting to talk enterprise and we're moving in a direction of working with their procurement teams on a more structured, longer-term solution. It helps from a validity standpoint to help them understand, hey, we're upper right.
The place where it's even more significant with this is with business partners. For the different practice areas that we're looking at, think about financial transformation, and if you are a Big Four partner focused on financial transformation, you care about this quadrant and the fact that Workiva's in the upper right. Next slide.
I've got sort of a couple of slides and not much. You guys get to hear from me more than you like. Safe harbor. Scott talked about these in some detail. I put them in the way that I think about it, which is a little bit in terms of time dimension. With the overlay here, we've got the near-term SEC. Merrill exited the business, and now the Japanese financial printer that acquired Merrill is going through re-platforming. There's probably some opportunities there that we haven't had before. The SEC business continues to grow, double digits. SOX and internal controls, as Scott talked about, with the extension with audit management that's been enabled by Workspaces, we expect to be able to make some nice add-on sales and appeal to some new customers who were looking for a broader platform.
Financial services has always been a strength of Wdesk. We had the fortuitous case of being in the market when the regs around CCAR and Dodd-Frank resolution plans came out. With the broader functionality of Gen2, we'll be able to scale that up even more. It's a market that is slow from landing a new logo, but the add-on sales come very quickly. When we look at customer acquisition cost, it has to be looked at holistically. The capital markets side, I think Scott covered that. In management reporting, we think it's going to be accelerated by Data Prep, which I hope all of you have a chance to test drive downstairs. Corporate income tax reporting is a new use case that has been enabled by Workspaces.
As a CFO, I can tell you, it means a lot to me because we spend almost as much. We're not profitable. We spend almost as much money with our external tax counsel as we do with our external auditor. As we push out internationally, it has complicated our tax calculations significantly. We talk to customers, and they've got serious pain in this space. I'm pretty optimistic about this solution. I do think we're going to need some domain expertise and help from partners. It's a perfect use case for Workiva, because finance and accounting professionals are producing reports under time pressure with a lot of unstructured data, and have to meet deadlines. On the longer term, when we talked about federal government, APAC, where we're just getting started, and then certain other industry focuses, which we'll talk about perhaps again next year.
The overlay of the partnerships as force multipliers, and that, again, it's a broad concept for partnerships and includes SAP and KPMG, to take two disparate partnerships, but others are contributing. As Scott said, it's early days, and we're getting some traction building muscle memory there. Solution-based pricing, licensing, which we've talked about. I wanted to reiterate the target financial model that we promulgated at the time of the IPO, way back in December 2014. It has not changed. Right-hand column there, this is non-GAAP for equity compensation, and then, in this case, the severance of our former CEO in the left-hand column. The target's at 75% gross margin, 25% for R&D expense, which we acknowledge is still high. It's the nature of what we're doing.
The sales and marketing expense line is going to be the last one that we achieve, in my opinion. At scale, the account management model that we follow settles out about there, and then G&A expense at 10%. Marty made a commitment to profitable growth on the last conference call. That's a commitment from the entire management team, and we take it seriously. As we indicated earlier this morning, we do see some benefit in operating leverage on the R&D line, beginning in 2019, and perhaps a couple of the other lines. We are committed to have consistent improvement in operating margin. Questions about that? Not exactly breaking news here. Many of you guys have seen this slide, but the point of it is this is our revenue cuts by the industry of our customers and by the size of our customers.
Our subscription revenue is very granular, and there's no customer who accounts for more than 1% of revenue. It's amusing to me to have procurement departments of big companies who pound the table and act like they're 10% of our revenue, but we've had to break it to them that they're actually not that big, and we love them, but we don't love them at any cost. It's a great diversity among industry groups, and you can see on the right-hand side there, we think we've got quite a bit of upside left with the Fortune 1000, particularly with the enhanced scalability of Gen2. On the addressable market side. One illustration on the addressable market is that Scott and Marty talked about the end-to-end solution for SAP customers. We really enhance the investment our customers have already made in SAP by adding that last leg for them.
Well, SAP has 404,000 customers in 180 countries, and only 1,000 of our customers run SAP. We're fairly optimistic about our ability to ramp it up here. The 150K number comes as our definition of what we are trying to achieve for enterprise customers. As you guys know, we started promulgating this data earlier this year to give you an idea of how many customers are already paying us 150K in subscription, and over 10% are now paying us over $100,000. I look at that as our pipeline for enterprise. The likes of Ultimate Software and others have built pretty nice businesses with 150K model. Scott's been doing a great job of tweaking the delivery model to shift some more to inside sales and lowering the customer acquisition. Those are our prepared comments. I'm wondering what questions you might have. Meaning, yes.
The ESMA Inline XBRL opportunity in Europe seems pretty exciting. How do you plan on capitalizing on that?
Go ahead. As I alluded to, it's early stages. We have a team that's been in Europe for a number of years now. We're scaling that up, making significant investments rolling out here. We don't expect to see significant benefit from that on the revenue side till 2020. We think we're very well positioned. It does seem to fit in our sweet spot when you look at the execution on the SEC side and the opportunity in Europe. From my perspective, at least on the go-to-market side right now, it's about making sure we've got the team in place ready to capitalize. Did a pretty nice job last year with some of the IFRS regulation. This is much bigger. There's more than 5,000 total target customers.
We are looking at some of the intricacies of that market. Much of what companies do is outsource to accounting firms. A big part of what we're asking our general manager to do is go off and make sure we're vested in the right relationships. Not only the direct model, we want to take the best practices that we built and what we learned in the U.S., and we want to learn from that, but we also want to leverage some of the foundational things that we build with a business partner. I think you'll see us with more of a hybrid approach from a go-to-market standpoint. We absolutely feel like that we should see a very strong.
Europe's really a greenfield opportunity for us. We have fewer than 100 logos there now.
When we-
All referenceable.
When we think about what's here and now in terms of growth, because obviously, with our install base, as was pointed out earlier, we're migrating to the new solution. We are changing our pricing model. We are positioning ourselves very well. We absolutely, to the point about greenfield, will be investing in Europe over the course of the next . Building that team now. We're hiring in Q4. We are expecting to see from our investment in Europe in .
Good, thanks. Matt Van Vliet from Stifel again. I guess, as you're looking at the overall partner community, you said you focused on regional players first, and now as the product and large customers have scaled up and you're looking at the federal opportunity, you announced KPMG. What has been the level of interest from maybe the bigger global SIs as Workspaces opens a lot more opportunities for you within a customer? You guys have sort of openly talked about not wanting to get in the services game quite as much as maybe those opportunities require. What is the balance, though, of supporting the partners that came on early versus cultivating new partnerships that are sort of direct competitors to those that have already helped you along the way?
Yeah, it's a really good question. Thank you. We're going through our equivalent of a fall planning exercise right now, looking at. I talked about optimizing the revenue and getting very efficient in how we go capture, share, and stocks and some of the use cases that we're very familiar with. Part of what we're doing under the hood is looking at what can we invest because we have to invest. To your point, we've got great regional partnerships, and we've got some managed service companies base. For us, from a global scale perspective with new technology, we really believe we need to, whether it's with a regional partner or with a strategic global partner, we want to be moving more into the financial transformation space.
We know to do that. We don't know how to do it. We're not going to do it. Obviously, when you're thinking about pursuing larger scale transformation, you've got to work with an ERP, or you've got to work with other budget planning point solution or whatever it might be. You're going to need that system integrator expertise in terms of tying things together holistically. We're not going to build that. What we will have, however, is making a significant investment more inside. We've got new logos, we've got relationships, we've done some business together. We know who we want to work with.
Now it's about that next level of granularity of how can we build under the hood inside Workiva, the right business unit to fit underneath those global partners, those regional partners, to help them deliver the first few times. It's really moving more into, when you think about aligning the two organizations, sales and services, allows us to make some trade-off decisions about how we want to invest in those types of skills that we can embed in business partners and really start.
Thank you. Hi, Hamza Fodderwala from Morgan Stanley. Just a couple quick questions for Scott. On the partnerships with SAP and KPMG, could you maybe share on a high level how those economics work, both from a go-to-market and a technology integration standpoint? For Stuart, you just reiterated the 20% long-term operating margin target. What kind of growth rate do you foresee associated with that? I know the SSC market's still growing double digits, any commentary over there?
The only guidance we've given on growth is through the end of the year, through 2018. We'll get to that when we put out 2019. I think that, as you know, we were forecasting $240 million to $241 million revenue for, which implies services and subscription together about 16% top line growth. We just put up 19%, but that's for the full year. We haven't put it out yet is the answer. On SAP, we have not come to even the discussion about economics or split. We're still working with joint customers on proving out the use cases.
The specific economic lift that we expect from business partners is centered around our managed service business box. As I alluded to, that's a nice run rate business for us with a dozen or so companies. That creates real lift. For everything else, it's in the general category today of an assist business. With SAP, we announced an OEM relationship, and what that means in practical terms for companies of our size in working with SAP is that we're moving through, as Marty alluded to this morning, various SAP gates. Ultimately, as Marty alluded to, we get tremendous brand benefit in front of the customer, the clarity that positions us as an extension of what they're already investing in with SAP. Today, you're going through some kind of a migration from your on-prem solution to HANA.
That's going to take an extended period of time. It's going to be very, typically, it requires a very significant financial investment and sponsorship. We can help you with the manual parts to tail in today. I think that's what, without having SAP here, I think that's part of what SAP sees in the relationship. The practical reality is we're working through the various stages. As we go along the way, there are various levels of OEM relationships within SAP, and that's going to have a different impact on the economic model. From a practical standpoint, part of the reason we haven't been able to model it yet, we don't know exactly where we want to be, and it's got to be a mutual decision. They have various levels of partnership going through the gates.
We'll figure out ultimately what's going to work best for them and us, and then we'll be able to build some economics. Very optimistic about the partnership, but a little bit difficult to predict the economics and exactly where we're going to land inside the SAP ecosystem. As it relates to KPMG, again, broad partnership. I think what it validates is market position that we have and that we're starting to move upstream looking at global-type deployments and companies that want to think about us that way. Certainly, KPMG and their peers are in the category of being able to help us. We know we don't have the expertise. We know we won't want to scale as a software company that way. We know we're going to need their help and the help of others.
The SAP relationship is fundamentally focused, although it's broad, it's fundamentally focused initially in this.
KPMG's.
Oh, I said SAP, I'm sorry.
KPMG.
KPMG is fundamentally focused in the SOC space. Correct. That is the first thing that we're going to go off and work on together. We have the new audit product, which we've released. We have other capabilities as our engineering capacity is freeing up, thinking about some other things that we can build in the control space. That's where we're going to be going to market with KPMG. There again, still early, a little bit difficult for us to build an economic model on it. We should have, over the course of the next quarters, we should have a better idea how, what benefit we
Right. Very well.
Okay. Can I stay on that SAP point? If I know my German fellows well, at the moment, they're trying to force their customer base to go to HANA, which is basically a huge project, and you have to do all your customizations again. All of the SIs that we're talking to are kind of all really happy because they're going to do process change, et cetera, et cetera, for the next two, three years and get rich. What does it mean for you guys in terms of available dollar? Because if the big guys
Yeah
people have to move up, is there money left for you guys to kind of be involved in that?
Yeah. I didn't make the point when I showed the slide. Thank you for the question, though, because I meant to make this point earlier. There is quite a bit of competition. You look at the office of the CFO space, the logos that I showed, which is only a representative sample of the companies we bump into in the office of the CFO. A lot of competition for dollars. I don't want to represent SAP's position on this. What I will say is, as you allude to, the migration from any ERP, from on-prem to cloud, which is fundamentally something that just about every company on the planet is working through. The challenge for whether it's the implementation partner that is performing that or SAP or Oracle or whichever on-prem vendor is trying to make that migration, they want to find quick wins.
What I would say, and the opportunity for us, and the financial opportunity for us in the short term, is moving from that SEC provider to that management reporting provider, where we're helping you find that quick win. Because at the end of the day, even when that's finished, you're going to take the output of that work and more likely than not dump it into Excel, and you're going to put it on a shared drive, and you're going to pass it around via email. We can help with that today. You've made this monumental investment, ERP platform migration, be it SAP or Oracle or any of the other providers, we can provide that quick win for the executive sponsor that This project. Hopefully, that's helpful.
I would also say that we're interacting with customers who have already made that transition to S/4HANA. The other interesting thing is that the interface that they provide works equally well with HANA and with their on-prem solutions. They have a very robust interface that we go through. There are some in the middle of that transition, and the issue you talk about is potentially real there. There's a lot of them that are saying, "We're not doing it for a while." There's more of those than anything, frankly. That's only roughly half the market, all the Oracle customers. It's a small number of accounts that see. For dollars. It's always competitive.
Yeah.
That extra intensity because of an S/4HANA conversion, we run into that occasionally.
Yeah
it's not a high % of our accounts.
Sorry to go back to Europe, I want to make sure I'm thinking about it right. There's 5,000-ish people who need to file by what, like January or February of 2021?
That's right.
That's when they have to file Inline XBRL. XBRL, as I understood it, is what really drove your SEC business in the U.S. when it first took off. Are you expecting?
We think analogous to the SEC mandate from 2012. It is 5,000 companies for financials that are really adopters in 2020, but it'll be mainly a 2021.
Okay. Is the revenue per customer going to be similar, or are these smaller businesses with smaller needs?
It's early to tell, but I suspect it'll be as high or potentially higher for the following reason. It is more expensive to hire an accountant in Europe than it is in the U.S., and it is much more difficult to get rid of them. The European CFOs are much more attuned to labor-saving automation software than U.S.
I have in my head there's like 4,000 accelerated filers in the U.S., there's more.
A bit more than that, yeah.
Thank you.
Thank you.
Yeah. The one dynamic I would say, Alex, and I alluded to this before, is, again, there is more co-source outsourcing of accounting reporting processes. That is part of what we're digging into, that we're well-positioned to capitalize not only on the direct opportunity, where self-service will be an important part of the value proposition, but also how do we make sure that we leverage. The current use of XBRL in Europe in general, and particularly in the U.K., is, was for income tax. That was a natural thing for the accountant, accounting firms to pick up and provide as sort of a tail-end service. "We did your income tax, now we'll tag it and send it off to the HMRC organization." This is different. This is tagging your public financial results and your annual report, essentially. They take that very seriously.
You have to be very careful not comparing it to the tax thing. It's like us comparing our SEC thing to the call report XBRL mandate. I think that as we get closer, you'll see to Stuart's point, companies starting to look very carefully at it. They're going to understand there's going to be a skill and labor shortage for a year or two during the transition. I think that we'll be well-positioned, and I think that to Stuart's point, the price point will be comparable anyway.
How about the DATA Act? Are there any federal agencies who are going to do anything with XBRL or any states that are going to do anything with XBRL just seems like it's that thing that created the pain point that resulted in the largest sales driver for you guys, so.
Yeah, I think you know about this too, but there was a memo from the OMB that indicated that they were okay with sticking with CSV files for now. Treasury has a different viewpoint on that, which, again, we've never been in our forecast, we were not expecting it. OMB did come out with a decision four months after they were supposed to. We'll see. It would be positive if they did, there's nothing on the
Back to Europe quickly. Who would you be displacing there? Here it was Donnelley and Merrill. Who would you be displacing with the XBRL as an opportunity?
Well, it is incremental, right, for everybody, I think. The cast of characters is fairly similar.
Is it the same cast of characters?
Yeah. Fairly similar. There are a couple smaller European players. There are a number of XBRL. Most of those are tax-related services. It's a big enough opportunity, though, that it wouldn't surprise us to see somebody pop up who hasn't played before. Okay. Well, thank you, guys. Thanks, everybody, for coming. We appreciate it very much. I hope you can stick around for the keynote this afternoon and for the Wildhorse Saloon this evening.