Welcome to the afternoon session. We're going to start with a safe harbor again, because there will be forward-looking statements here. You're familiar with the language. Okay, the last push. It's an hour and a half. We're going to try to be prompt, because I know a couple of you have flights that you want to catch this afternoon. I'm going to talk for a little bit and then introduce my colleagues, starting with Dermot Murray, who's going to talk about EMEA and statutory reporting, and then Tad Finer on integrated risk, and then Mike Rost on partnerships. We're going to have Q&A at the end of each speaker's talk, and then we'll have a wrap-up Q&A as well. If you need to leave, don't worry. Just step out and we will forgive you. Okay, growth vectors.
This has really been the focus of the day, and this is a slightly different cut at it than perhaps you've seen us talk about before. This is one of the ways that I think about it, is sort of three buckets. Customer bucket, and then meaning really our existing customers, and then new logos, and then the newest vector, which is on acquisitions, which I'll touch on briefly. Growth starts with customer retention. We're very proud of our net retention rate, and we're very proud of our base rate, 95%+, and customer satisfaction is very high. We never take that for granted. We have a customer care program. You got to see Penny Ashley-Lawrence speak this morning. There she is in the back, taking a bow again. She's so shy.
Penny does a great job and runs that team partially on metrics, and does just a phenomenal job there. On solution-based licensing, we talked at the end of the second quarter upon the announcement that the tailwind from solution-based licensing was beginning to wane at the end of the year. That means, from a revenue perspective, that that will start showing up probably in the second quarter. From a bookings perspective, it starts showing up a little bit earlier than that. As we indicated on that call, our challenge is to replace that growth tailwind and exceed it with some of these other growth vectors, and that's why we've been investing so heavily in the last year and a half. You've had a pretty good dose of Wdata earlier, I'm not going to touch too much on that.
Dermot's going to talk about Global Statutory Reporting. Both of those solutions tend to be add-on solutions with existing customers who already begin to understand the power of Wdesk. Integrated risk, remember we started selling SOX in the spring of 2013 and started hearing from some customers that some were interested in a point solution, and others wanted a more integrated solution. We added, most recently, audit management and policies and procedures. There's some other adjacencies there that are pretty interesting to us, and it's an area that we've carved out under a general manager, Tad Finer, who will talk about that this afternoon in some depth. All those factors on the left-hand side under add-on sales are we expect to be strong contributors incrementally in 2020. They are this year.
On the new logo side, our new logos, some come from integrated risk for sure. On the new logo side, the primary contributors from new logos, when we think about it that way, is from EMEA, which Dermot's going to talk about at some length. SEC and SEDAR still continues to contribute to bookings growth. Remember that of our 3,400 or so customers, about 2,700 of them use us, 2,750, something like that, use us for SEC, and there are probably 4,600 in the target set in North America, and there are quite a bit more than that in Canada in SEDAR. They don't use XBRL tagging there, but we have a fairly compelling solution for SEDAR, and we're actually investing in our Canadian team, which makes up about 4% of our revenue.
Private companies, new logo team, we initiated about 18 months ago, and they started hitting their stride about six months ago or nine months ago, and has been a great source of new logos for us. That's really around internal and external reporting because they too have constituents like public companies do, and it also provides a nice pipeline for our capital markets business. Finally, under new logos, is government, and that includes both state and local government. City of Missoula was an example of that on the SLED side, but also on the federal side. I think we had some good traction last year with the federal government and are doing even better than that this year.
Still fairly early days in the federal government side, and they are the largest single purchasers of IT in the world, and it's a market that has some special characteristics, and we're fortunate to have two executives who've spent the bulk of their career, or a big part of their career, selling to the federal government and have helped us tremendously. That's Dermot and Scott. On acquisitions, and let's switch over to that. You may recall, we raised $345 million, that includes the green shoe, on the convert in early August with the use of proceeds being acquisitions, future acquisitions, and investments. I think we want you guys to understand, we've been looking at acquisitions as a team intently for the last three years.
This was not a new thing where we woke up and said, hey, let's go do some acquisitions. We've had an organized effort around acquisitions the last three years. We have kissed a lot of frogs. We have bid on some. We have passed on most. Investments to date aggregate only $2 million. One was a acqui-hire with some IP and the other was a direct investment. Understand that this team is very cautious with investments. We had plenty of opportunity to do deals if that was our goal, but our goal is not to do deals. Our goal is to make wise investments. There's a lot of inside ownership here, so we really regard it as our money. On the team side, we're fortunate to have a fairly broad team, and again, this team has been looking at investment opportunities, acquisitions together for a while.
All of us have done quite a bit of M&A in our previous lives, everybody on the team. Some of us have done more on the transaction side, that would include me, and others have done more on the integration side. We have a healthy respect for the low success rate on acquisitions. The number bounces between 70%-90% fail, and they're probably low. We're highly skeptical buyers and investors, and I think we've demonstrated that over the last three years. We just haven't talked about it a lot. On the kind of deals that we are likely to do, they are likely to be less than $100 million each. They are likely to be in the U.S., Canada, and Europe. I can tell you they will have a clear commercial rationale. It's going to be around leveraging or accelerating our existing strategy.
You're not going to see a diversification move on our part. We've got too large a TAM to be messing around in anybody else's TAM. To give you some examples here, the horizontal tuck-in is pretty likely. There are product extensions available to us in reporting, and that goes for GRC, and that goes for financial reporting. They're all going to have to stand up to a buy versus build analysis. We are fairly confident in our ability to build, but in certain cases, we've seen potential targets have domain expertise or are already in the market, in a market that we think is getting ready to move faster. It may make sense for us to acquire on that basis. On the vertical side, the obvious examples are financial services and energy, where domain expertise is important and hard to replicate.
Even then, we'll show discipline on pricing, on terms of value. Finally, I'd say an acqui-hire where we pick up a team that might have some technology of interest to us, AI or something. We have our own AI capability, but could augment our AI capability, for example. There are great teams out there, and it's important to us that they know how to work together, and trying to go build those teams from the ground up can take time and can involve some false starts. Sometimes that matters. I'm going to pause there and see if there are any questions. Yes.
Hey, thanks for taking the question. What's the opportunity with government, and what are the new vectors that the FedRAMP kind of certification that's almost here, what kind of vectors does that open up?
Yeah, are you talking about in terms of an acquisition or just as a go-to-market strategy? We really haven't thought that much about acquisitions in the government sector. From a go-to-market strategy, I think we have a really good strategy there. They have both financial reporting needs and compliance requirements in terms of internal controls, and we've hired a really good team of people who have been in that business quite a while. The good news is I think it'll grow fast. The bad news is, even though it's the largest IT buyer, it's not a huge part of the TAM, but it will contribute to our growth the next couple of years.
If you go to the FedRAMP marketplace website, it indicates that the General Services Administration is a customer of ours, as is Tennessee Valley Authority.
The Postal Service.
The Postal Service, for example.
We've just scratched that and are seeing some potential there for sure.
You can go department by department, which is the plan.
Stuart, I know you've been.
There we go. I know you've been getting this question a lot over the last year, now we're kind of getting closer to the moment of truth in terms of when the solution-based licensing impact laps, and you get all your customers on there. You just mentioned a couple of minutes ago, talking about how it's more like, I think you said Q2, when some of those benefits start to dissipate in the model on the revenue side. Can you just go through that in a little bit more detail and help us think about, number one part of that question, how much of the acceleration in growth in the last six quarters would you attribute to the solution-based licensing to have some sense of what's been driving that growth side from just better execution, right?
Number two, can you clarify your comments in terms of the timing of when the model starts to, I don't know if air pocket is the right word, but when you start to see some of the tailwinds from the SBL effect?
Sure. I'll take the last one first. The model we've designed is to pick up the slack with additional use cases with additional solutions. Can you hear me?
Yes.
To pick that up with the other growth factors we talked about. Let's go back for a second. Solution-based licensing started in earnest at the end of the third quarter last year, and it was more of a testing. It was very strong in the fourth quarter and the first quarter, second quarter was pretty strong, third, it starts to fall off. From a revenue perspective, you start to lap. It starts to affect revenue in second quarter next year. In terms of the uplift that we've gotten, as we said on the call at the end of the second quarter, it's a pretty difficult analysis because we had salespeople focused in Q4 and Q1, and to a lesser extent, in Q2, on getting customers upgraded or converted to solution-based licensing. That took away time from selling additional solutions.
The question is, if you didn't have solution-based licensing, what would they have sold from additional solution bases? If they didn't do solution-based licensing, what kind of price increase would the customer have taken? We ran through all that analysis internally and decided that there was no great valid way that we could put both our feet on the ground and say that the uplift from SBL was X because we knew what the situation would have been in the absence of SBL. It was certainly a couple of hundred basis points, but beyond that, we have not been able to quantify it.
I would just go back to what I've been saying consistently. We have multiple growth vectors that we've invested in for several quarters. We're going to go over some of those today. There's other ones that we're not going to talk about today. Government was brought up briefly. We don't need all of them to click. I think we've made enough good bets and enough good investments where the new deal, new solution, add-ons with Wdata, stuff like that is, we have more than enough options to cover that. We feel pretty comfortable.
Yes. We're looking good there.
Thanks. I don't know if this is for Stuart or Marty, but I know you love all of your children equally, but the Wdata, Global Statutory Reporting, Integrated Risk. It seems like we spent a lot of time on Wdata today. If we had to look at those three, the kind of the newer products add-on sales, how would you prioritize those in terms of which could be the biggest contributor over the next 12 to 24 months, or pick the time frame? It seems like we spent a lot of time on Wdata today. I didn't know if that was fair to think about the biggest growth opportunity or how you think about that.
Well, I think Wdata, the reason we brought it up is it totally changed the game for us. It provides value in Global Statutory Reporting. It provides value in integrated risk. It provides value to all of our existing customers already. There's a good long tail add-on sales opportunity for us there. We think that's a very significant part or one of the more significant growth vectors, clearly. EMEA is, Dermot will get into this, we've just scratched the surface there on new logos. I think Stuart said in one of the calls, 180 logos in that ballpark. Compared to the count we have in the states , that's minuscule. We have huge upside in EMEA. I shouldn't say huge, should I? We have really good upside. My GC is coming to get me tonight.
He's not here. It's okay.
He'll watch the recording, and I'll get the call of all the mistakes I made.
He's texting now.
I figured. The Global Statutory Reporting, large number of companies, much bigger deal size. They're all different. They're all very meaningful. I don't know which of my children I like the most, to be honest. EMEA, Wdata, Global Stat, and Integrated Risk is a really nice size market that we have a right to win a lot in, and we've restructured it and put a good leader in you're going to hear from in a minute. They're all cute children.
Going to ask a man with more than one child that question. Brett?
Thank you. Six years of coming before my first question. The acquisition framework-
[crosstalk] To ask questions.
I don't know. I might not be invited back next year. The acquisition framework was helpful. How do you think about product versus professional service, and how do you think about modern cloud offering versus something that's more traditional on-prem than having to rewrite?
Marty wants to take this at some point, clearly from an integration perspective, cloud-based would be easier, if we intended to integrate it, which we probably would. There are lots of companies out there that are in the process, as you know, of moving from on-prem to the cloud. If the client base is compelling and the problem that they're solving is compelling, we'll certainly take that into consideration. On the services side, remember that we're about 83% subscription, 17% services, 17% going to 15%, 2/3 of our services revenue is XBRL tagging, we're services light. We are going to increasingly depend on our partners to pick up the services burden. We're going to continue to employ high-quality services talent because we have to have that domain expertise, that services expertise in-house to help leverage what our partners are doing.
On balance, we're a software company, and we prefer software solutions and certainly high-margin software solutions over services.
Okay.
Okay.
Next.
All right, next slide. You've been waiting for a long time for the great Dermot Murray. Dermot runs EMEA and our public sector, and he runs Global Statutory Reporting. Without further ado, please take it away, Dermot.
Thank you, Stuart. Good afternoon.
He's a Texan, you can tell by his accent.
If you don't understand my accent, I grew up in Ireland, so I have problems with THs and Rs, allegedly. I am trying to blend into the natives. I am disappointed I'm not your favorite child, Marty. We'll talk about that later after the presentation. A couple of things about Europe, just maybe five minutes on a couple of slides so we can set the scene. Large economy, almost the same size as the U.S. Not quite, but almost. $18.8 trillion in GDP. Interesting enough, five of the top five countries in Europe account for almost 70% of that business. 44 countries in Europe, 28 in the EU, and 23 taxonomies. 24 official languages in Europe. There's a prize if anyone can tell me which one is missing from the taxonomy for ESEF, we'll talk about that in a second. People frantically Googling.
We're just getting started in Europe, beginning to ramp up marketing and sales operations across Europe. We have 5,300 is the number, approximately, of issuers that are public companies in Europe that will be required by 2020 to file as part of the ESMA mandate for ESEF. Statutory reporting, CAS, our foreign private issuers for 20F, 6-Ks, all part of our business over there as well. As you'll hear later, we're also looking at the integrated risk markets, which look very promising for us, and of course, the banking and financial institutions have a lot of regulations in Europe, both the banks that are over there, but also the banks that have to participate in the European market. I think we've mentioned that we expect the revenue to be approximately 25% of our total revenue over time.
We have some targets that we're heading towards, and we are moving as quickly as we can to head in that direction. On the right-hand side, you'll see a green chart. It's not that Ireland has taken over, everything has turned green for St. Patrick's Day. This is where we have Workiva users logging into the system. While we're getting started here in Europe, from the sales and marketing and going after this market, Workiva has been in this market for a long time, we do understand Europe. We have users all over Europe. We understand some of the challenges that they have. We understand some of the differences between the country. We have 23 different languages spoken in our European offices today.
We support the market very well, and one of the things that Workiva's done very well is build a foundation for support and infrastructure to help the growth of sales and marketing, because that sometimes lags behind. They've done a nice job with the setup and enabled us for a strong trajectory of growth. Some of the things on my mind, obviously, while Europe is one market, it's the European Union, and we're all, as you read in the news today, very tightly integrated as a European Union. There are some differences in the market, and it doesn't completely function or work like the U.S. Understanding the localized marketing needs.
If you've checked out our French website or our German website, you'll understand that we have taken the time to begin to look and be able to act local while we bring our global platform to these environments. This is very important as well. We want the right blend of collaboration to take the best of what the U.S. has to bring to the market, but we also need to make sure we're translating it into the local requirements, the local standards, the local regulations, the local language, so we can compete and drive business in that area. The other piece, of course, that's really important for any growth organization is to build the right organization structure. This is probably both the most challenging, also the most exciting piece of what we're doing today.
There's a lot of talent in Europe, maybe me excepted, having grown up in Ireland, but across Europe, there's a lot of talent. This is an opportunity for Workiva to also hire additional talent and hire some very talented people to help, not just with our business in Europe, but our business around the world as well. It's both a challenge to get the right people and bring them on board, which we're doing. We have a very strong focus and a very good team now focused on recruiting right across Europe. Once we get them on board, the next most important thing is to make sure they become effective very quickly, and we spent a lot of time working and making sure that we have our new hires getting up to speed quickly and delivering on the bottom line.
I would be remiss if I didn't talk about ESEF, the mandate that's coming around annual report filings within Europe. The purpose is to provide, obviously, easy access to financial information, so very similar to what the SEC did here for XBRL filing. It's part of ESMA, and when you hear ESMA name, now know what it stands for. It begins 2020. For your first filing will be the first quarter of 2021. For your accounts for 2020, you have to tag your face statements in iXBRL and file them. There'll be 23 languages. Each country will have its own filing gateway, which you file, and then they will be integrated at the European level. The interesting thing about this for us is that 2022, you have to tag your footnotes, block tagging, as they call it.
The important thing about that is that's the point for both the narrative and the numbers now need to be tracked. Again, for all of you who are well-versed in understanding Workiva solutions, this ability to link and have this connected report and have compliance and trusted across the team become really important as you begin to look at tagging both the numbers and the narrative. This is a very solid use case for us and an area where many people are talking to us about this for market. We've been busy, and I know this is a busy chart, but I wanted to show that we didn't just suddenly wake up when ESMA published the taxonomy.
We've been at this for a while, and we have a number of ESEF road shows all across Europe, with the ability to demonstrate in French and German and multiple languages. We have put a lot of effort into ensuring that we can have the conversations we need to have with the customer. Remember, I think you heard this morning as well, iXBRL, we are the market leaders in this space. We are the market leaders in connected reporting and compliance. This is a use case that is really right up what we do really well, and we have a lot of interest. In addition, bank and financial services, obviously since, I think Marty talked about this morning how much money he lost on the stage. Since this happened, we have had a whole host of regulations. I've just put a couple of them up there to show you.
We have many customers looking at us as a platform to manage this whole environment. The cost that it incurs for banks to continuously manage and change the regulations and financial institutions is excessive. They're very excited to see the platform, and what we have to offer in these areas. Tad is going to talk more about integrated risk, again, particularly in Europe, this concept of combined assurance is being talked about a lot, and having the ability to look at the totality of risk across your organization is an important piece of what's going on here. Whether it's from integrated risk, SOX, internal controls, et cetera, this whole business of compliance and being able to manage that business is becoming an important piece for companies in Europe.
Again, you'll see lots of opportunity of companies that have not moved to look at how they're integrating and managing this. It's a big topic of conversation and a market that we're certainly paying a lot of attention to. I will pause there as sort of a quick overview and answer any questions. As long as it's not who's my favorite boss.
Just curious how many other players are competing for this opportunity, and how they're going at it versus the way you're going at it.
Yeah. Good question. The market's very fragmented, so we have a lot of small local niche players that tend to look at it. Maybe not too dissimilar from what happened with the SEC market where they're looking at very simple tagging solutions, with not a lot of control on the data, just from a tagging perspective. We know this doesn't work. It doesn't build compliance. It doesn't allow you to make changes in the process, as you begin to run down to the wire where you have to file. One of the things we've learned is that this market tends to The amount of time you need for pencils down and the time you need to file really narrows as you move to an online solution.
This ability to export your data and tag it in a simple tool is not really a solution that I recommend.
You might want to touch on what pencils down means.
Oh.
What pencils down.
Pencils down. Okay. In Europe today, when you go back to the old days of printing, well, not everyone's old enough to remember. You would stop maybe a week or two before your annual report, and they would do what's called pencils down. That was probably before they had computers as well. They would stop, and they would go off to the printer. If something happened, which it often does, in your accounting close where you needed to make a change, it became very difficult to make changes. The value of having an online system where you're filing and doing the whole thing and it's all connected at the back end is you can make changes right up to the last minute, and that allows you to have much more effective control over what you think.
That's pencils down because there's no printing time now. This is going to drive it out. This idea that you can export it out and then disconnect it and tag it, and then file it without changes coming, it's not a very good solution for a real business. There will certainly be some of the 5,300 that will do it that way, but if you're a sizable company with controls and process, and you want to be careful about what's being filed, and remember, you're signing off to the board about what's being filed, the last thing you want to do is have it out of a controlled environment.
Just a brief comment. The companies that are making noise about competing with us, we've been doing a lot of intelligence work on them. When the U.S. market started, there was already a format of filing called EDGAR, which was a form of HTML. There was already the big printers that already built EDGAR tools to actually EDGARize and file, and they had already gone through that part of the process. They were asked to put a second XBRL file in conjunction with that so that the technology lift was actually more stepped up in the U.S. gradually, as opposed to the step that they're making them do in EMEA. The companies that we've looked at so far are just getting their legs under them, and they have a long way to go to compete.
It's been sort of a pleasant surprise, frankly, how much lift they have yet to do to really compete. Yeah, they'll get 20, 30, maybe 100 customers each. There was probably four viable competitors in the U.S. when we started, all with their structural issues, but still, they could actually do it. I think at one time, Rivet had 2,600 customers, I believe, or in that range. Over time, just the superiority of our connected reporting, well, you know what happened to Rivet. It's going to be a similar thing, but the European people have even a bigger lift to get the first filings due, and especially, is it 2022, the next one, or one?
2022 for the block tag.
Yeah. It's when they have to have all the-
Footnotes
...text tags as well. It's going to be a heavy lift for those companies.
I do think as you look at it's important, and again, people are beginning to get up to speed very quickly on the customer side here in Europe as well on this, is that as they begin to see that it's not just the face statements that need to be tagged, but that you are eventually going to block tag, people are suddenly realizing that it needs to be a more comprehensive solution than just being able to tag a table. Again, not a lot of solutions for tagging the footnotes.
Hey, Dermot, do you want to talk about what's been driving your revenue growth pre-ESEF in Europe and EMEA?
Sure. Absolutely. I didn't think I was going to get any difficult questions from you, Stuart, as well. I'm trying to figure out if this is a question I should answer, or is this you trying to understand where I'm going from a business perspective. Yeah. Look, we have a lot of use cases. Obviously, again, the SEC business for foreign private issuers, SOX, have been strong for us. We've also begun to see CAF in the U.K. as a banking regulation. It'd be a big winner for us as well. We've looked at IFRS 17 from the insurance perspective. Annual and quarterly reporting has been really big for us as well, and so again, we've actually got quite a few customers who have done their annual and quarterly reporting, and they'll be natural expansions for us into the ESEF market as well.
That's basically the use cases. Yeah.
Dermot-
Hi.
What's your sense of how rigorous the review's going to be for the tagging? The SEC wasn't terribly rigorous at the beginning. It was kind of a, let's get our feet wet, and we'll correct mistakes as they take place, and we'll just kind of evolve here. Are we going to see the same approach playing out in Europe, or are they going to be coming down hard on companies that don't do a good job of tagging?
Yeah. This is the how long have I got? Three minutes 45. This is about a 10-beer answer. Really quickly, right, there are 23 filing authorities, or well, of course, each country's going to have their filing authority across Europe, right? Every one is going to have it. They're all at different stages. So, you can imagine France, Germany, the U.K., Ireland, Netherlands have to be careful not to leave any of them out. Austria. All those countries, they'll be fairly rigorous, and they've had rigorous requirements already as it relates to driving regulations. They've also got a lot of experience in the XBRL space as well. It's not they've had other types of filings in XBRL. Some of the other countries, I think, will be playing catch up, and we've been watching carefully how they have been addressing the filing needs over time.
As with Europe, it's not a simple, yeah, they're going to do that, or, no, they're not. I think you'll see a variety. I will say that, and you can see as the mandate rolls out, I don't think this is any different in the U.S., it will become more rigorous over time. As people get used to it and begin to use the data, I think you'll see a lot more rigor across Europe. I will tell you, as it relates to regulation, Stuart and I sometimes, joke may not be the right thing, but Europe, everything from both the numbers to how they view sustainability within their organizations, European businesses are really a lot more focused on ensuring that the companies are doing the right things, not only for the shareholders, but for their employees and for their communities.
This focus, not just on the numbers, but on what's not in the numbers, becomes a very important piece of this, and again, ideally set up for the platform that we have.
Maybe just two quick ones. 5,300 issuers required to do XBRL reporting in three months. What are they all doing now? I guess second of all, is the mandate for just inline XBRL, or is it the broader XBRL as well? Yeah.
Well, it's not wrong. You'll finish your report hopefully in December of 2020, and you'll have three months to tag it and file. It's just the face statements initially, so it's not a huge lift. Although there are a couple of unique things within the XBRL, iXBRL structure, the XBRL structure that they have for the taxonomy around anchoring and extensions that have some play. Not getting too technical, what they've done already, every year, is they print and publish an annual report, and they usually file that report with the regular authority in the country. It's slightly different in different countries. They have to do that just like you have to do a filing here in the U.S. with the SEC. It's very similar.
The change here will be that, A, you now have to do an iXBRL filing as related to the taxonomy, and you'll also have to produce an XHTML file as well, and in some countries, also a PDF. Did that answer your question, or are you sure? Thank you.
Yeah, just wanted to ask a little bit more. This is a very topical thing for investors. That's why we're asking you a lot of questions. The buying pattern, do you see it just over multiple years, maybe they don't go with a solution initially, but they know that was a band-aid or just trying to understand, as we go throughout 2020, how you actually see the buying pattern, potentially linear, or just curious on that. Secondly, in Europe, with Wdata and connected reporting, how much of a messaging are you, and traction are you getting with that broader strategic messaging for Workiva in Europe? Thanks.
Okay. Yeah, two great questions. As it relates to the whether it's linear or exponential, obviously everyone's got to do it. There'll be a segment of the market for sure that will look at fixing the entire reporting process, and we're well-placed for that. We're looking closely and are well-placed for the people who want to tag only and then want to upgrade, and that'll be sort of the main component of our market. We believe that the majority of those companies over time, just like here in the U.S., will want to have an integrated, connected reporting and compliance solution, or we probably wouldn't be master the business, and I'd probably be out of a job. Over time, that will happen.
Certainly by 2022, where you're starting to look at everyone will have extensions, some countries will have their own extensions, mandates across what they believe is important for their country-specific filings. You're looking at block tagging for the notes and some other requirements. At that point in time, people are going to have to be in a real solution that manages this very effectively. Of course, a lot of them are in the usual suspects today, in Word and Excel, and having fun with that. You just have to walk around the conference here, talking to users to ask them about how it's changed their life in the SEC process. I don't believe Europeans like working any later than Americans. Don't quote me on that one.
We're going to have to move on to your next section.
Yeah
In the essence of time, if you don't mind.
Okay.
We have a time for Q&A after everyone has spoken as well. You can go ahead. Thank you.
Okay. I have to switch hats here. Yeah. On the Global Statutory Reporting side, and again, I want to make this very clear, this is really a financial report that has to be filed in every country where you have an entity, and most companies have multiple entities in multiple countries of all different shapes and sizes. We see customers with anything from 30 entities up to thousands of entities, as you can imagine. Globally, 80,000 public companies, 1.7 million entities globally, as we've counted them. This is, I think Hugh is still here. This must be your slide, Marty, with Hugh. It's a big market. Yep.
It's a painful problem, again, as you look at it. We'll drill in in a second. You often have hundreds and hundreds of Word documents here. Again, this is not a small group of people that are working on this. This is a global group of people that are working on this problem across the world, trying to provide insight into what gets filed for each entity in each country. A lot of lack of consistency, no standard process, a lot less oversight in this process than you might imagine, certainly I imagined from talking to financial controllers. People have begun to wake up to the risk of their business in not understanding what happens here. It's very inefficient, it's very costly to audit, and has a lot of issues.
Our solution reduces the risk, streamlines, does all that good stuff, which you can go see it at the booth. 71% of organizations rely on spreadsheets today to do this. The number of customers I've been to where you find a set of accountants, trained accountants, cutting and pasting documents in this process is amazing. I'm sure it's not what they trained to do. Again, this comes back to the transparency and the insight. We want the system to be providing the transparency. We want the accountants who are trained to be looking at the data to ensure there are no errors. People worried about errors, and finance believe they'll never be free of spreadsheet dependency. They should come to our conference.
The other thing I want to say about this is, when you look at SEC, I won't say one-dimensional, but it's this process. When you look at Global Stat, it operates at multiple different levels, right down into the organization across different companies, across different types of entities, specialized entities for this, intellectual property, tax. There's quite a few different things why people would be setting them up. This starts to multiply out the number of entities at an organization, which makes control and oversight very difficult. We have a huge spaghetti of data and process that's going back and forward. Everything from sending reviews out to the directors of the company to provide approval. Their statements come back in. It's usually handwritten or managed on a PDF. Little security, et cetera. This becomes a real problem.
The other interesting thing is when you start looking at entities, whether they've come from acquisitions or set up, they're often not fully integrated into the system yet. There's a lot of stuff happening outside the system of record. Again, some of the stuff you saw from Will earlier, around how we're able to manage and build the source data and then manipulate it in Wdata is making a real difference here. If you think of the number of different formats you need, UK GAAP, IFRS, US GAAP, and you start to look globally at the number of different structures that you need to have your reports in, you can begin to see the value of Wdata in this particular scenario for us as well, and the ability to set them up, have one source of the data, and do it.
The other thing that happens here outside the system is things called top-side adjustments or adjustments after the books have closed. Keeping track of those, keeping track of the supporting evidence, being able to come back and audit them, the cost of auditing, all this is a real problem in the current situation. This particular process has been really a great process for us, for what we do with our platform. Obviously, we can connect the data at the back end. We have, obviously, the compliance and the reporting when you come back for audit. We have a complete view into being able to orchestrate and manage the information as it happens outside the system of record. Again, just to give you the idea, this is a global challenge as you look across the world.
I've set the U.K. up here, but could be headquartered in the U.S. as well, or anywhere. You're trying to look into your organization and understand exactly what is going on in all these countries, often in different languages. Our ability to be able to manage the reporting process here, manage the numbers, and also manage the narrative, which may be different as well, depending on the local regulations. You just really need to have a platform like Workiva has in order to have the reporting oversight, the data integrity, disclosure consistency, and audit preparation. Global Stat.
Dermot, how are people handling Global Stat reporting without Wdesk? How are they doing it now?
Well, I don't know, if you fail as an accountant, you must get put in a room for Global Stat. I think that's kind of how I look at it. It's like, you didn't make it in the tax department, you didn't make it in financial reporting, you've got Global Stat. I mean, today, it's very manual around the world, right? Lots of people are still using Word, Excel, other types of document editors to manage this process, and it is a nightmare. If you think of a 10-Q, and you multiply it by 3,000 and try and manage that process. Some people, they spend six months, seven months managing the paper trail here, and when they get audited, they are awake night, noon, and morning trying to pull up the documentation to use this.
The number of controllers I've talked to, and would recommend you talk to them as well, that have full insight into what's happening and what's being filed by their entities is very low and very limited. This is a market, again, obviously we're a cloud-based platform, global reach. People can deploy this very quickly and get this up to speed and get insight into what they're doing and begin to manage their global operations the way it should be. Sir.
How many entities would a company need to have, like legal entities, in order to make for this solution to make sense for them to purchase? Or am I just ignorant and all these companies have so many legal entities, and I just don't really even realize it, I just think of it as one entity?
No. Good question. Obviously, I'm a little biased, I would say if you had one entity, you should use Workiva. That's my answer. We've looked at about, usually from about 20 to 25 entities up, this starts to make real sense. Below that, maybe you can manage it. I'm not saying it's easy. We have a few customers that are below that, but in essence, we manage about 20 to 25 entities up. You see some with thousands of entities managing it this way.
Could you give us a sense of the cost of adopting something like this? I'm just looking at, I know it's larger enterprises, and then the cost, the uplift of going to something like that. I'm just curious what that might look like adopting statutory reporting.
What do you charge? What's the sort of range?
Yeah. The typical range is-
It's based on the number.
It's based on the number-
Number of entities
...of ntities.
That they track.
Current pricing is about $5,000 an entity. There are many variances in that. I want to be careful in case you do some math. There are many variances in that as it relates to, in how you come out with the price point. There are also many different components to which we add on, like audit and some other stuff as well. It's not a straight math number. Yeah.
How do you get companies to even know about it?
They're aware of it. Believe me, when you find the financial controller and you say.
I think he means make them aware of that Wdesk can solve this problem.
Yeah. We're targeting.
Known. Do they know they have the problem? They know it's not an efficient usage of their time and people, but is it a high enough priority where they understand? Is it completely a missionary sale? I don't think somebody else is out selling this, so it's not like it's a market that's known.
It's definitely a problem that's known. When you talk to financial controllers, and you ask them, "How are you managing your top-side adjustments, and do you know what's actually gone on and what was filed in each country?" They know they have a problem. You can usually tell they turn a little white, and then they go a little pale, and then they kind of say, "Well, that doesn't happen here." When you drill in and ask them, are they ever able to balance their books back to be able to look at what was originally signed off and at the end of the year, all the adjustments that took place and what was filed outside on behalf of them from a legal perspective, very few places are able to do it today.
It's for sure a known problem, and it's becoming a bigger problem because the overseas regulatory authorities are now getting a lot more active as well. There's a lot more exposure in this market that may not have been there four or five years ago.
We're not having any trouble getting substantive meetings about this with potential buyers. Not having any trouble getting those meetings.
Other questions? Okay. Thank you.
Thank you, Dermot.
Now, Tad Finer, who's the General Manager of Integrated Risk.
Hey, good afternoon, everybody. I'm going to walk us through a little bit of brief history on, as Stuart alluded to earlier, we entered this market deliberately as part of a demand pull. Our existing customers were already using this technology. Over the course of four years, we added a number of solutions on top of our SOX offering. At the end of last year, we reached a point where we saw opportunity in the market, and we saw that in order for us to move more effectively, respond to change, and essentially have a faster closed loop process in order to react more quickly to opportunity, that it made sense to break off into a separate business unit. We really stepped back and organized that around a set of principles, a set of operating principles.
Focus, when we talk about speed, focus, and that teamwork, that ability to have R&D all the way to the post-signing of our customer, all the way through to customer success, where we're all under one umbrella. That's one team focusing on the uniqueness of the risk market, being able to attack that, and compete really effectively. We're just about a year into that journey. A couple of factors that are in play today in our market and also how we're organizing ourselves to compete in that market. Dermot talked earlier about global expansion, and you saw today Wdata.
That has real relevancy to us in the integrated risk market because as we open up our platform beyond simply being a testing and certification and a very granular tactical point solution, as we open that up with a broad set of APIs, we're giving an opportunity, I'll talk about it more on some subsequent slides. We're essentially creating opportunity for our customers to get even greater yield from the investment they've already made with us. Some other changes that are happening also, it also allows us to go after some near adjacent use cases, which I'll speak to. Also, when we look at our market, there's an increased shift from traditionally internal audit or from the SOX team. Increasingly, we're seeing enterprise IT play more of a role as a buying center.
That's a shift that's occurring inside of our market that we want to be better prepared to react to. I'll talk more a little bit here in a second about some emerging technologies. One of the other changes we're making with respect to our go-to-market is that when we look at our customer base, over 50% of internal audit and SOX customers outsource some step in that process. There is an advisory firm somewhere in that either the entire process is outsourced and consumed as a managed service, or maybe it's something just minute, like testing. We are increasingly shifting our routes to market, our go-to-market motion, to mirror that buying center and buying behavior of our customers.
As we coalesced, kicking off when we created the business unit, three big strategic priorities for us, latter half of this year going into 2020, is securing our existing and strengthening our existing footprint, becoming the best in the market when we look at SOX, finding those near adjacent use cases, expanding that, and then penetrating very aggressively those new markets. All as an underlying layer, and you'll hear from Mike Rost here in a little bit talking about partnerships, is optimizing that go-to-market motion through both managed services and with our delivery partners. Let me talk a little bit about strengthening our core from the business. The biggest shift that we have seen is now as our platform is open, is the ability to go in and have a broader conversation beyond just a point solution.
We are shifting from, like I said, just that granular set of controlling, testing, certification. You're now being able to have a broader conversation. That lends itself well for us positioning the broader platform, and we're seeing the ability to position a broader package versus just a single solution. Case in point would be when we talk about connected reporting for GRC. Over the years, this market, not unlike the ERP market with the late 1990s into early 2000s, our customers had tremendous sunk costs in large legacy GRC systems. There's a slide to show them. Those systems are not coming out today. Those house much of their control data, much of their risk data is in there. Where they gap out is the ability to report effectively on that information that's housed there.
They have this inflexibility of reporting, and we offer a solution that is an intelligent layer around that. The incremental value associated with this is that this creates tremendous opportunity for our partners. If any of you are out on the expo floor today, I'd encourage you to go see some of our Big Four partners that are out there today that have already built services offerings around this concept and are already taking it to market today. We're very excited about what traction this gives us in our existing customer base and also our ability to create opportunity for our partners.
Second pillar, when we look at how we're going to market with integrated risk, really across three emerging areas. Let me talk a little bit about OMB A-123 and then agency audit. Where we're excited about federal government, obviously with FedRAMP dependent, is OMB A-123.
We have a 37, 38-year-old forcing function that still hasn't been solved with the greatest efficiency. We're bringing to bear new technology on an old problem. Again, creates a great opportunity for our partners to go in and sell controls rationalization, essentially internal controls for the federal government. At the same time, the amount of scrutiny at the agency and departmental level from essentially their watchdog agencies, think Office of Inspector General, an OIG, which exists in each department, a congressional investigation. Those number of audits, they call them audits. They're essentially investigations, requests for information. They're extremely detailed. They're far-reaching. There's massive amounts of data and hundreds plus of collaborators. This is an unwieldy process today that we are seeing well-received by our customers when we position this agency audit solution.
I have a very experienced federal team that's already out there today, and we expect to have customers up and running these solutions in the near future. We're very excited about that. Dermot touched on EMEA. One thing I will cite is that we see a great deal of increased scrutiny around privacy and the reporting associated with that, and that's a great segue into where we see some of the near adjacent opportunity around IT risk and compliance. When you look at in the EU, you look at requirements specifically around whether it's chain of custody or privacy. We're starting to see that, particularly when you look at CCPA out in California. You're essentially seeing the first privacy, the beachhead of some of the privacy regulation landing here in the U.S. We expect that to only expand.
The other thing we see real opportunity and when we look at IT risk and compliance is much like some of our earlier use cases, this is one that is held at a board level. Cybersecurity, security as a whole, it's often at the board level. It's one that's very frequently budgeted for, and companies have made significant investments. Many of those investments, whether it's endpoint security, network scanning, vulnerability scanning, incident event management, all of that has been approached in a segmented and siloed fashion, which gives our customers a great ability to defend and detect, but not the ability to report. That's where we are really excited because we already have a lot of that information, a lot of that data housed, and we're already doing a lot of reporting and use cases very similar to that.
This is just a picture to kind of give some illustration about how we view this market. When we look at IT risk, think of it as very broad. Just a metric for you to take away. A majority of audits, an audit universe established in some sort of internal audit department, roughly 20% of those controls are IT controls today. Already our customers are using our platform to pull in data, whether it's user data, access data, incident reports, into our system for reporting. We see that compliance landscape only expanding. I mentioned CCPA. We also expect to see an increased drive, and we're already seeing this, where our partners are finding an opportunity where they can make a market around a forcing function in some shape of a regulatory requirement, and go to market with us in a joint go-to-market fashion.
When I touch on that, we really have two ways in which we've gone to market with our partners teams over the last couple of years. One is when we go arm in arm, and we're going in as a trusted advisor to solve a problem of strategic nature and sell a solution, ends up giving us an opportunity for larger deal size, but most importantly, it takes us in with a trusted advisor, and we find ourselves in a much better opportunity for stickiness and follow-on sale. When we look at managed service, where we've had some success with Big Four partners, essentially white labeling our technology and delivering, whether it's SOX or audit, as an outsourced managed service.
That's a part of our business we're really excited to continue to try to grow, especially since, as I mentioned earlier, over 50% of our markets are already outsourced in some way. Just to touch on this was a little bit about some of the drivers behind why we created this business unit. I really want to talk about more importantly is the speed at which this gives us. It also really allows us to fully exploit our cross-sell opportunity. Of all of our customers inside our integrated risk customer base, over 30% of them have more than one of our solutions, and we see that continuing to increase.
That was really one of the drivers when we looked at this market, is a need to really intently focus on it as we saw a number of our customers become cross-sell customers, and the importance of being able to bring the domain expertise and the focus to that market. There we go. Next slide there. Any questions?
I like the idea of white labeling. That sounds like you have strategic value for these partners. Maybe you could talk about where you are in the evolution of white labeling and actually revenue being generated from some of those relationships.
Yeah. We're not disclosing externally where we are from a revenue basis. We are already in a couple of those white label partnerships with some of the Big Four as well. We're not breaking out the number of endpoints.
We did disclose it's KPMG-
Oh, you are?
...the first one, yeah.
With KPMG, we're already seeing really good traction with their existing customer base as they start to go into what they segment as the national markets. If you look at where they primarily operate, it's in that Fortune 1000, and they're seeing real challenges with their footprint of being able to go down market and compete. When you look at a white labeled KPMG instance, essentially, of our platform, it allows them to drop that in at a $250 million-$750 million or even up to $2 billion size customer, and allows them to go in and take that business. Eventually, as those companies climb that growth curve, they've got a relationship established with them early stage, and they're able to sell ancillary services around that over time.
It's a great way for them to get at early-stage companies from their risk advisory side of the business.
Leverages their cost structure, right? It leverages their cost structure with smaller accounts, where it's hard for them to serve a $2 billion revenue company, so. Other questions?
Okay. Thanks, everybody's time.
Thanks, Tad. Mike Rost, who runs partnerships for us, is another important growth factor. I should have pointed it out earlier. I apologize, Mike. It's a force multiplier for sure.
Yeah. I think when you look at the growth factor side of it, I really look at partners and alliances as essentially a leverage point for all of our growth factors, similar to what we just talked about with Tad there. When I look at kind of framing this up and how you look at what we're doing here, I think there's kind of three things you look at. One is, it is a growth factor across everything we do. How do we leverage this other community out there of both advisory firms and technology partners to drive business? The second thing is when you think about Wdata, supply of data creates demand for Workiva, and we have to have the right technology partner alliances and the ability to integrate with them on driving that demand for Wdata.
The more complex the data, the more demand for Wdata, the more need for Workiva on driving that demand. The third interesting point that we've been finding now in this partner community is we're bringing a level of complexity now with partner integrations, with data integrations, with more complex reporting that really has got the attention of the advisory firms. Advisory firms drive revenue out of complexity. They can go drive significantly larger projects and get more attention from there. That's really when we think about framing this up is kind of consider that into what we're doing. We have a lot of momentum going on. Many of you might have seen the press releases that came out in the last couple of weeks, starting last week. Today we announced an alliance agreement with Deloitte. This is a global framing of an agreement.
We've actually been doing quite a bit with Deloitte over the last two years. This is really a formalization of that relationship, which really then gives us a license to hunt in a lot of different partner areas for Deloitte. You heard Yasir on stage today talk about our partnership with ServiceNow. ServiceNow, I know many of you are familiar with them. They actually had their New York release announcement in the last two weeks. They have an entire new business unit focused on the Office of Finance.
We've been working with ServiceNow the last eight months as part of their financial close application and have a couple different points of integration. We see the workflow that ServiceNow is bringing to this market and the weight they have behind them as a company as an interesting play for us and a great complement to what we're doing with Workiva.
BlackLine, we had an announcement with BlackLine last week. It's interesting, with both of us being leaders the last several years in the financial close, the Cloud Financial Close Magic Quadrant from Gartner, oftentimes people get us confused and say, "Well, gee, BlackLine and Workiva, you're both financial close vendors. You must compete because you're in the same Gartner quadrant." That couldn't be further from the truth. When you look at a lot of our clients, and you go out and walk the show floor here and talk to people that use it, BlackLine is all about reconciliations. They're involved in the close process. Workiva is all about connected reporting.
It's a very interesting data source for our clients to bring in as part of their connected reporting process, when you think about the nature of the balance sheet information they have, and with Workiva being that source of record for the balance sheet there. FloQast is actually a fascinating company, for those who are not familiar with them. They get about 700 customers, privately held company. They operate primarily in the mid to upper mid-market with private companies. FloQast has more private companies than Workiva has. This is an interesting complementary channel where FloQast looks at us as having some weight behind us and market size. We look at them as actually having some real expertise in going after private companies, and again, very complementary from a solution side.
We've had great momentum with them in the field and look at that as a great way for us to expand in the private market. Sentieo, we announced the Sentieo relationship this week as well. Sentieo is a financial research platform. Think of it as, for those of you that lived on Bloomberg terminals in the past or Eikon or Quotron if you want to go way back, Sentieo is a modern version. I'm an ex-Thomson Reuters person. I had to go Quotron here. Sentieo is a fascinating financial data platform that we really see as taking SEC reporting to the next level. When you're going in and preparing Ks and Qs and doing analyst reports, you can actually go on this platform.
Many of you here in the room are actually searchable in this platform because all of your commentary on every earnings call, I can bring up like that. When I enter an earnings call, I can actually figure out what questions you might have asked in the last three earnings calls. If I'm researching a K and want to know what three of my competitors wrote on their K about a certain topic, I can go instantly search that, copy and paste to bring into the Wdesk, and we're looking for some further integrations on that. We see that as a very exciting complement to what we're doing in the SEC reporting area. We're going to move into the Q&A thing. To frame up Q&A, this is generally how we look at our partner community. We look at it from the advisory side of things.
These are people that are out there working with our clients, helping them bring through, whether it's connected reporting, whether it's SOX and internal or integrated risk or broader compliance initiatives. On the managed service side, Tad covered off some of those. That's primarily in the integrated risk area and managed service. Our technology partners, again, a very important part of what we're doing. We need to live in the ecosystem of our customers and integrate with the solutions that are most critical for them as far as a system of record goes. We do have several reseller relationships as well. That's an emerging area for us from a partner side of things. With that, questions?
You could ask questions now, if anybody's still in the room, if you'd like. We have a few minutes to do any of that. Oh, here.
Hi, I'm just curious about the go-to-market strategy with the service partners and how much you're utilizing them to drive new business as well as maybe them, vice versa, you guys helping them bring in new business for theirs as well?
That's a great question. From an advisory firm standpoint, there's a couple things that we look at. First off is for them leveraging Wdesk, and we brought over Workiva for developing new use cases. Many advisory firms are organized in a vertical way. For example, we're working with a Big Four firm on several insurance use cases. They're utilizing Workiva to help build out, utilizing their IP, a solution they can bring to market. That brings Workiva into net new opportunities where they're sourcing new opportunities for us. Obviously important for them, it brings a whole transformational service line to them, so they're gaining the revenue.
That's typically, and Tad actually had it on his slide, where it's these win-win joint pursuits, where we're providing additional services for them by them basically building their IP on top of Workiva. As I mentioned earlier, the more complexity and the more complex use cases we go after, which we can really fuel with our Wdata chain builder and broader Wdata, that really then opens up the door for these interesting use cases, where the numbers are big enough for them to invest time and effort behind us. On the technology partners, it's also a great question. Each of them is probably a little different. If you look at a ServiceNow, for those of you who were at the ServiceNow event, I was actually at their user conference.
They did a presentation on their financial close application, and the presenter asked the question of the room saying, "How many accountants in the room?" About three hands raised up. They have less experience in selling to the financial audience than we do. For them, they're looking at us as an interesting channel. There is go-to-market relationship we're looking for them, where they're going to bring us into other areas, potentially, that we're not in. BlackLine is a mutual thing where really it's about connecting the data and it's really serving our customers. We look at it as really a greater attachment rate, a greater renewal rate on both of our platforms for there. Plus, if we are trading back through, most of our relationships have some referral part to them, where they refer us over.
FloQast, as I mentioned earlier, is all about going into a market where they have more dominance, and we're actually learning from them on how to best optimize that private market. Each of them has a little different flavor to it.
Like KPMG and Deloitte in the advisory bucket, KPMG is also in the managed service bucket. How do you think about relationships? I'm trying to figure out why a company like KPMG is in both of those and Deloitte's not. How do you think about that?
Yeah. Anybody that's ever dealt with advisory firms know that they are very franchised and fragmented organizations. You have basically buying centers, essentially, or business centers inside of those advisory firms. If I look at managed service, our business around KPMG has primarily been on SOX, and to some lesser degree on internal audit. We're really aligned with the risk advisory group. Part of this goes through our early dealings with them. Part of this even goes through some past relationships we have with them. We have a sponsor in DMNR, who is the Head of Global Risk Advisory, and his broader team that has basically seen the value in Wdesk, and then they are carrying us through on that side of it. Deloitte, on the other hand, you see Deloitte over there as a reseller. That's actually the Deloitte Australia team.
Deloitte Consulting in Australia is a reseller of ours. They actually are standardizing, in this case, on IFRS 17 deployments for disclosure with Workiva. Deloitte up on top under Global Advisory, part of the relationship, that was all through the digital controllership practice. Completely different area than we'll compare with KPMG. It's where we've gotten that foothold where they see the value, and we have the support of some senior partners to drive that business. That's really how you have to attack the advisory firms, is find those right partners to see the value proposition, then they'll carry the weight of the organization with you once they get the mass behind them and see the value proposition.
I'd say generically, when the Big Four see that a company is looking to buy purpose-built software, that tells them that there's a consulting opportunity to rethink business processes, and that gives them the incentive to go and say, "Well, you can implement the software, but have you considered the best practices around the business process that it's supposed to address?" That can result in consulting fees at 3x or 4x what the software costs.
Question for Dermot on the Global Stat side. On the XBRL business, there are specific drivers of adoption, like the SEC and the ESMA mandate. I'm just curious, what do you see on the Global Stat side? Are there specific catalysts to adoption, or is it more just the complexity of managing all these thousands of different legal entities?
With the statutory reporting, obviously, the statutory reporting is required for every country. There's no huge mandate coming up. There are different filing practices in different countries. Some are XBRL, some are forms-based filing. You see it across the board. They are statutory filing, and you have to do them every year. If you start getting them wrong, you can get in trouble with the local regulator.
You got to do them in local accounting.
You got to do them in local accounting.
French GAAP or Dutch GAAP.
Local statutory requirements. It is a statutory report, so there is a mandate for it. It's not a big one like each country has its own legacy mandate, which creates complexity, which is really good for us.
One of the interesting things is why do they do it, right? The governments over there use it for gathering economic statistics to report their GDP and employment data. They also use it to validate that a foreign corporation is properly capitalized and has economic substance in case it needs to be pursued legally. In certain cases, not all cases, they share that data with the tax authorities.
I think that's a good point, because it is statutory and required, we are getting access now to some fairly senior-level people who are looking at this problem globally. From a call plan perspective, financial controllers are worried about how they are managing this process globally and the conversations at the top level. That enables us to talk about the broader base of our platform as well.
Got a lot of nice features to how we go to market on it.
Anything else from the broader group? Yes. Let her just run over and get you the microphone so people online can hear.
I think during the morning presentation, you talked about 150,000 users in that 3,400 companies, customers. I'm just curious how that's trended post solution-based licensing, if that's been a major uplift in user growth, and if that's at all indicative, if that's a metric we could all track to see growth in some of these new solutions?
Dermot, you want I mean, Yasser, you want to take that question? The question was, the 150,000 users that we quoted, what was that before solution-based licensing?
Yeah. It was a 115% increase in access to users over the last year. The number of users that we had in the system the first nine years, we added the same amount from an access perspective over the course of the last one year, right? That's 115% increase since May of 2018.
Thank you.
What number is that now, Yasser? Is that like 230,000 or something? Over 200,000 have access, and the 150,000 was people who have actually used it. There's typically a time after they get turned on when some reporting cycle or some audit cycle or something actually triggers them to get in.
Right
Addition of users hasn't all been realized yet in terms of actually logging in and being active.
Tom.
Marty, in your opening remarks, you had the wheel, the 16-solution slide. This has never been a company that's been shy about, as you noted, spending money on R&D to keep innovation high. That's been great, but you've got a very complete solution set. If we look at even just the last year, it seems like you've done a lot more to sort of focus your sales team on the solutions at hand and maybe a smaller subset of those and really drive customers into heavier usage of what you have. Do you see that wheel expanding aggressively if you look out over the next three, four, five years? Or do you feel like you've got the platform at its nearly complete state, and at this point, you kind of aim to expand productivity on the sales side?
I think that there'll be some of that. I do. I think that the ultimate driver is going to be after we're already seeing this in its infancy, where we have five or six solutions, and we start getting attention from IT, we start getting attention from higher-level business users, and they say, "You're going to use case us to death," that's the way they view it, and say, "Let's do some type of SLA or something like that, or ELA, enterprise license agreement." We try to structure those so that as this, it's sort of funny, we tack back to a user model almost. Where we have some number that they agree to over a two- or three-year timeframe, then have a chance to renegotiate if that number goes dramatically higher.
I think before we go sell a lot of these other solutions, we're going to sell the ones that have the biggest total SAM. The other characteristics are important, too, how fast it takes to actually generate the business and what the cost is to generate the business. We're going to try to find the things with the highest ROI to get the customer to the point where they're ready to do a broader deal with us. I'm sure if we find a couple more use cases that are really good deal size and we can push them fast, we'll do that. I think we have enough use cases now, for the most part, to really get to that. We have, what, 140 different ways people use it. We don't sell all those yet.
Ones we've identified.
Ones we've identified, that we find them all the time. Eventually, the IT teams and the people start to really get creative and understand what they got.
Couple points. One, I think as we expand geographically, we're going to be picking up additional use cases, just like you did with CASS in the U.K. as a classic example of that. It took us to get a certain level of global reach from a sales and marketing perspective to realize the opportunity in statutory reporting. Right? It was always there, but when you're selling on a seat basis, statutory reporting doesn't make a lot of sense. When you move to solution basis and you start to have a more global sales team, it makes a lot more sense. We've discovered that a couple dozen customers were already using us for Global Stat. I think that will continue to happen.
I mean, that's how we got into the SOX business, was discovering that several dozen customers were already using us for SOX or running and looking over their shoulder going, what are you doing there? Then you go, product marketing goes and builds a campaign around that. Yasser, did you have something you wanted to add?
Yeah, I think Marty had asked the question what the delta looked like. We began SBL in May of 2018. We were roughly about 196,000 provisioned seats. I don't have the data for August, but we finished July of this year with 429,000. It's a little over 115, about 119% increase.
Thank you. What was the $150 that you quoted this morning?
Hundred and-
115? Sorry. Okay.
I think I said 150. That was what I saw for the.
That active?
active users. Yeah.
Yeah.
We have about two more minutes. Anybody else have a question to wrap this up?
Anything else? Well, thank you very much for coming to Amplify. Please do go get over to the expo if you haven't already. Go talk to some customers. Thank you.
Yeah. Thank you very much, everybody.