All right, good afternoon, everybody. My name is Alex Sklar. I'm one of our Application Software Analysts here at Raymond James. Very pleased to have Workiva back with us this year. We've got Julie Iskow, President and Chief Executive Officer. Also in the audience, Mike Rost, Manager of Corporate Development and Investor Relations, and Katie White, who's Senior Director of IR, who just joined the firm as well. So if you have any questions after, come up and ask any of us. Julie, I think just starting off, last year we were at this event, and we kind of talked about some of the priorities for 2024, and expanding the platform, strengthening the partner channels, going deeper on multi-solution and kind of platform sales, executed against a lot of those.
I'm curious, looking back as the years progress, where have you been most pleased with some of the outcomes that you've delivered?
First, thank you for having us here. I appreciate the opportunity to talk with you all, and happy to answer any questions post as well. Workiva has had a strategy implemented over the last several years that is really remaining intact, and the items that you highlighted here are really growth tenets of our strategy. It's best-of-breed, high-value, fit-for-purpose solutions. It's on our connected platform that just continues to get more open and more intuitive and more intelligent. It is ensuring that we are strengthening our high-performing partner ecosystem to expedite our growth. It's, of course, expanding our footprint globally and working towards being excellent everywhere we play. You just happened to highlight those initiatives for us that are still very much high priorities. We were very pleased with the progress that we made in all of them over the past 12 months.
I think when we think about our solutions, you can think about we have three broad categories of solutions: financial reporting, we have sustainability reporting, and we have governance, risk, and compliance. And governance, risk, and compliance encompasses a broad suite of capabilities, audit, risk management, and controls, policies, procedures, et cetera. And financial reporting is broad also. It started out initially as SEC reporting, but we've moved on to a number of other financial reporting capabilities. And the first that you mentioned here on our solutions, we've made considerable progress over the last year. And just as an example, think about ESG. The requirements are still being defined and refined, and we're continuing to build out our capabilities on our sustainability reporting portion of the platform.
So we've gone much deeper there on all facets of the solution, whether it's on the data collection or data management side, designed reporting, and so forth. So we've really become much stronger in the more fit-for-purpose capabilities. And I can run through all the solutions and similar. We've made a lot of strides on the platforms, as you mentioned, continue to bring more generative AI capabilities into the platform. It's across all of our workflows, across the whole portfolio and all of our solutions. We've done a lot, again, around data management portfolio-wise on the platform. So we continue to invest in innovation there. And then, of course, with partners, just core and fundamental to the way we operate. We go to market with partners, get source deals from partners. We want partners to continue doing our delivery.
They take the lower value, lower margin services and work with those and then build alliances, but build capabilities all around those. So we've made considerable progress on all of those that you've mentioned, including expanding into different geos, which we may talk about.
Yeah, definitely a lot we'll hit on there. So you talked about the core, the three core kind of suites that make up the platform. But underlying all of that, I think, is a coin that I'll probably give you credit for. Maybe you'll pass it off to someone else. But the idea of Assured Integrated Reporting. And so what does Assured Integrated Reporting mean? How has that become a moat for you all? Why is that piece so important to the story?
Sure. The integrated report is actually something in the market, right? And particularly these days, you hear it a lot in Europe, where the integrated report is a report with financial data and non-financial or sustainability or ESG data in one integrated report. And when you think about what's happening in Europe, they have the Corporate Sustainability Reporting Directive, and companies must comply with this. And the first cohort of companies, it's phased in depending on size and value of your company, et cetera. But the first phase or the first cohort of companies that need to comply with this regulation is coming up now in the first quarter of 2025. And the integrated report is foundational for that. And they also have what's called preparation for third-party audit or assurance. So this Assured Integrated Reporting, it's not something we made up.
An integrated report is an actual concept in the market with assurance on it. It's Assured Integrated Reporting. And we happen to have all of the capability to help our customers and deliver on that: the financial reporting, the sustainability reporting. And of course, along with that is the concept of getting companies ready for assurance, which involves risk management and controls, audit capability, and of course, policies, procedures as well.
Got it. You brought up the CSRD and some of the rules that are coming into place for taking effect starting next year. You've had a couple great quarters in a row on the booking side with record bookings coming out of third quarter. What are you seeing from the demand environment broadly? How much is that CSRD and some of the regular compliance and the regulations coming out contributing to that? Kind of curious what you're seeing on the demand side?
Sure. Our demand certainly has been healthy over the past year. In Q2 and Q3, we did, in fact, see record bookings quarters, and it wasn't even a Q4, which is typically our strongest bookings quarter. And we attribute it to a couple of things. I mean, we did see a loosening of the constraints on the buying side, right? The macro seemed a bit healthier to us over the last couple of quarters. Yes, you are correct in calling out the CSRD or Corporate Sustainability Reporting Directive. As I said, the first cohort of companies needs to start complying. And there are thousands, thousands of companies in Europe, estimated 40,000 over the next few years, four years, that will need to comply. So companies are thinking about that.
And we are actually seeing the impetus for the buy on some of our solutions, sustainability, of course, forefront with the CSRD in mind. So yes, that, but it's also, I think, just general, the trends of accountability for companies and transparency is really increasing the demand on why the bookings quarter, I would add, why the strong bookings quarter. I would also add that we're maturing as a company. We're becoming more effective. We're doing things internally as we transition to a company beyond the 500 million and into towards the billion. We're maturing our own processes and becoming stronger and more ready for scale. So we've made some changes internally too. And admittedly, still in the process, they're evolving and maturing.
But I would attribute to our success in bookings, yes, demand on one side, and then on the other side, it's us internally making change to go after our TAM.
So why don't we just stay on the internal changes? So one of the areas specifically in go-to-market, I think you've talked about, besides kind of expanding geographically into APAC and LATAM, you're also talking about the idea of more platform selling and bringing in some personas that have experience with that. So maybe talk about some of the go-to-market changes you've already made. What's kind of next for the next 12 months within the context of some of the things you laid out in go-to-market?
Sure, and we've been very open about our transition from go-to-market. I mean, as I mentioned, Workiva started out as a single solution sale. It was SEC reporting and automating and helping to transform the way those SEC reports were submitted, and from then, we evolved into multi-solution, and we brought on more financial reporting capabilities, but also the governance, risk, and compliance suite, audit and controls and risk management policies, procedures, et cetera. And so we've transitioned from a single solution to a multi-solution sell, but now we've moved into the realm of the platform, which is a game changer for us, right? Companies are buying. There's benefits just in the platform itself, but also our suites or categories of solutions play together well. Single source of truth. They work with each other. You need governance, risk, and compliance, assurance, et cetera, both on financial reporting and sustainability reporting.
We're seeing the play together. And that requires a different level of commercial expertise, a different level of going to market in terms of who's out there on the street for us. It requires a profile of seller that can sell differently, that can sell a platform, also can embrace the partner ecosystem and sell with partners, understands the motions. We're also coming out of a very expensive sales motion. Historically, Workiva has had overlay sales teams along with account owners or account executives, and we have a lot of those overlays. So we're looking at shifting the ratio to have less of those, rely more on solution consulting, solution engineering, and of course, account executives who can sell the platform. We're also working on moving towards some hunter-farmer models. We did a prototype in 2024, and we're going to expand on that play as well.
So just a lot more sophistication in the sale, moving to market with a platform. And then also, as you mentioned, we're moving geographically outside of North America too in a stronger way. Europe, as you would imagine, is a big growth vector for us. And in Europe, as you know, it's very different than moving in the United States, where you have one way of selling. In Europe, you've got all the different countries, and they have different strategies and different regulations. So we need to be thinking about our strategy. So when you put it all together and you think about the way we're, I'll use the word transforming our commercial organization, it really is about the structure of the sales organization. It's about the staff or the profile of sellers, new sellers, sellers coming in, and leadership, sales leadership coming in who've seen scale, right, in companies.
We've hired a number of people from the companies that have gone well beyond a billion, multi-billion dollars. And so it's its structure and its staff, and of course, its strategy depending on how you move in the various regions and so forth and how we go to market with the different categories of solutions. So we've admittedly said, yeah, we're not efficient yet. We're moving in that direction. But for us, we're doing it at the same time. We're going after this market with this tremendous TAM that a lot of other companies want to get into, where there's a time element because of some of the regulation that we feel the need to move into quickly. So we're transforming the commercial side of things as well as going after the TAM in a rapid way.
Yeah. So you kind of alluded to this. We've already hit on ESG a little bit. But why don't we kind of stay on ESG? Because I think that kind of people can see the catalyst. Investors can see the catalyst out there. It seems like it should be a huge opportunity for you. So just in the context of kind of ESG, and you've called out kind of sub 10% today, but a top booking solution for the last, what, nine quarters now, a top three solution. So where are you seeing kind of the most demand from your ESG, your sustainability portfolio? Has it kind of been from the U.S. side? Is it now Europeans with the CSRD?
Then I'd love to kind of, as a follow-up, kind of get into what you're seeing now post-election, if you see any changes coming from some of the administrative changes.
I'll talk about more ESG or sustainable demand for sustainability capability and technology. Three years ago, it was a twinkle in our eye. We didn't even have that category, right, sustainability reporting. And as you said, nine quarters in a row now, it's one of our top booking solutions. So we're absolutely seeing the demand, and it's accelerated over the last two years. And initially, when we started selling, we went in and we were able to sell it to our existing base in the U.S., customers that know us well, that have bought investor-grade reporting and regulatory reporting from us over the past decade or more. They know who we were. We're trusted in there. And we went in and explained. And many of these are, well, 40% of the Fortune 100 now have it.
And they're looking at their sustainability programs, not just here in the U.S., but planning globally. And that's really what they're looking at, global programs. They might report locally in the various jurisdictions or complying to certain regulations, but they're looking at a program. And so we had initial success there as an expansion. But more and more, as we've become known in the market, we've been selling more new logos. And of course, in Europe now with CSRD coming, we're selling more there, top booking solution in Europe as well. So it's evolved since we've rolled it out, and regulations are becoming more real. Now, I will say also that in Europe, they've been doing sustainability reporting or some form of it for a decade or so, right? So they have capabilities and solutions in place, whether it's spreadsheets or something else they've developed or purchased.
So it's not like they're all rushing suddenly because 2025 has the first cohort of companies purchasing. I mean, it's not going to be a hockey stick, but more and more, they'll see the complexity of the regulations, what it takes to comply with them. And we feel very confident that we're going to continue to see this uptick. And it's long-term durable growth for us. I mean, 40,000 companies needing to comply. And then companies around the world who, while may not need to comply directly with the CSRD, will certainly want to play in the ecosystem of those that need to comply. If you're a supplier to a company in Europe or even in the U.S. in 2030 that will need to comply, you're going to want to be reporting your non-financial information as well as your financials.
This is CSRD coming out of Europe, but it's not really a Europe-only regulation, impacting regulation.
Yeah. Walmart starts asking everyone in their supply chain to what their footprint was.
Exactly.
Then it's going to drive a lot of demand from that standpoint.
Walmart's been doing this for a while. They're very strong in ESG or sustainability reporting, yes.
So I alluded to the election, but the CSRD, the horse and kind of cart have left the station, right? And so that's done. Obviously, the SEC will see what happens, but you also do have some individual states passing regulations. So from your seat today, I know it's pretty soon after the election, but how do you see the kind of the U.S. landscape for complying with U.S. rules, whether it's New York or Washington we talked about, or New York and Illinois versus kind of the overall kind of SEC broadly? How are you seeing the U.S. opportunity?
As you can imagine, it's a topic of conversation. What's happening with the SEC? We're not likely to see an SEC climate disclosure law on the books anytime soon with the current administration. But remind you that we've been selling sustainability capability and solutions well ahead of or without regulation. And as you said, you said cart horse. I'm saying the trains left the station. But it really is a generational movement, right? And it's about satisfying stakeholder demand, yes, investor interests, but also stakeholders. But it's also companies want to play in a global landscape with their solutions, with their capabilities. Consumers are demanding it, companies, as you said. And you're seeing in the U.S. itself, right? We have, as you mentioned, California. You sell anything at all in the state of California, a billion-dollar company or more.
2025 data will be reported on in 2026 for Scope 1 and 2 emissions. And the following year, you'll be reporting in Scope 3. And we see this happening in the state of Washington, gone through a committee and likely to become law. We're seeing similar bills and regulation proposed, potential regulation in New York and in Illinois. So states are doing this on their own, regardless of the federal legislation that we may or may not see. So yes, regulation could be a tailwind, and we'd get the box checkers or compliers in the U.S. But as you can see, companies are understanding this as a part of their performance, part of their need to do business, and particularly globally, if not just in the U.S. with the regulations coming out from states.
I think one of the more underappreciated things that we've talked about is the idea that the sustainability reporting is not like a land everything up front. There's an expansion motion to it, whether that's more geos that they have to report in or if it's the idea of going from Scope 1- 2- 3. But you just bought a really nice tactical kind of tuck-in with Workiva Carbon. Can you just talk about? It's only been four or five months, I think, but can you talk about what the learnings there have been and that expansion motion, what carbon gives you as kind of an expansion motion for this?
We looked around for carbon capability. Our head of corporate development there, Mike Rost, scoured the earth, and I will say the earth, every geo, looking for the right capability for us. We wanted to move into carbon accounting, and it was both tactical and strategic, primarily strategic for us, but tactical as well. What we were finding is when we went out to market, there were some companies that wanted to purchase carbon emissions calculation or carbon accounting first as the first step in their journey towards sustainability reporting, and then secondly, we found that for some companies, particularly in mid-market, they wanted a single vendor thinking platform, right, for carbon accounting capability along with their ESG or sustainability reporting, so in order to be able to have access to those first and go in and win in those situations, we wanted to have our own carbon accounting capability.
So we found a company, Sustain.Life, a small company with excellent technology that fit very nicely. And we didn't just roll that out. We didn't just buy it and spend a year integrating it. We acquired it and integrated it in with our platform. So we rolled out what was called Workiva Carbon, which is our platform, including Sustain.Life capability. So again, we did that as an entree in, understanding that when you have sustainability reporting, which is Carbon and ESG, yes, expansion play for a broader platform. So carbon accounting, Workiva Carbon for us was really a platform play. And we are seeing the uptick. And you asked, how's it going? I mean, we reported several of these wins on the earnings call. So we are seeing traction, very early days, of course.
We just rolled this out, announced it in June, and began selling it within the next few months. So yes, we're seeing traction. We're seeing strong interest, building pipe, win rate solid. So we're very enthusiastic about adding Workiva Carbon to our portfolio. And when you think about CSRD, yes, it's financial reporting and non-financial sustainability reporting in one integrated report. It also includes carbon emissions calculation along with, of course, the capability for third-party audit or assurance. So assured integrated reporting now, including carbon emissions, completes the Workiva platform as a capability needed in Europe.
So as you sit here today and we talk about all this momentum here, I mean, it's been a top booking solution for the last nine quarters. You sit here today, is there any reason investors should think that this won't continue to be a top booking solution kind of for the next several quarters? I mean, is the opportunity that large?
We believe that sustainability reporting will be larger than our first act of SEC reporting, and that's the way it's going. We, of course, and I won't deny we get the question, hey, what's happening with the backlash? I mean, our numbers to date have not indicated any sort of backlash. In fact, it's the opposite, and continuing again is our top three booking solution quarter after quarter, so the demand's not waned. Are there risks? Of course. Every software company has risks. Who knows what's going to happen in the days to come, in the weeks to come, but we're optimistic about it, and as you and I talked about, this is not just about the U.S. Administration. Companies are going after reporting of their financial and non-financial because that's what stakeholders are asking for. It's transparent accountability, and it's risk management.
It's surfacing risks associated with non-financial factors, which of course impacts the financial valuation of companies, so we're optimistic. We will continue to work hard. Again, a large unaddressed TAM here, and you can see competitors are looking at that TAM too, but with the platform as our huge differentiator, with a decade of experience in regulatory reporting, a decade of experience in investor-grade reporting, and we feel very confident that with our fit-for-purpose capabilities, we'll be able to go after this TAM, and the momentum will continue to increase.
I know we spend a lot of time on this piece of the business, and I think rightfully so. But you've had a lot of success outside of ESG, sustainability reporting outside of SEC. And I think one of the areas that's showing up kind of the largest is outside the U.S. internationally. So international has accelerated. So I'm kind of curious, outside of kind of the CSRD, what have you seen as kind of the biggest drivers? How do you feel about the setup internationally going into next year?
So, I think end of 2023, we reported we were 15% outside of North America. Now it's to 17%, half year. We reported that as well. And we expect we'll continue to see the momentum. And yes, it is impetus CSRD, but it's also we're getting more well-known with our partners in the market. And we're seeing lands with GRC and with financial reporting. We've got ESEF. We've got private company reporting, a lot of the financial suite capability. So in Europe, we're seeing growth across the portfolio.
Yeah. So capital markets, this room, this audience is intimately familiar, but it seems like some kind of warming on that topic. But I know it's not something you like to put into the outlook, and it kind of serves as a nice upside. But what are you seeing from kind of the capital markets? And I'll ask it through the lens too of you spent a lot of efforts the last couple of years moving earlier in the private-to-public journey.
Yes.
So from a standpoint, do you feel more well-positioned today going into if we do get kind of any kind of resurgence in that kind of activity?
Yes. Yes to your questions. I mean, we do feel poised for the comeback when it comes. But we have moved earlier in. We sell private company reporting. We sell internal controls for those companies that would be going public. They would purchase those in advance of their S-1 or their IPO event. And then, of course, we move on to the public side of it, helping them with their filing, SEC and SOX and so forth, and then move on to ESG, whatever else, multi-entity reporting, management reporting, et cetera. But as far as when it's coming back, you know as well as we do, right? You hear maybe 2025, my first half's now moved to second half. I'll tell you this. The summary of it is we've not baked it into our guide, our forecasts, our targets. We're not thinking about it that way.
Any comeback at all for us will be upside. So what you see here for our targets is not inclusive of any sort of comeback. We get our share of IPOs. We've had them this year in 2024. When they're there, there have been some. There's a list. We do secondary offerings, so it's not zero consistent, but we're keeping it at that level. So again, any comeback for us in 2025 will be just upside.
You kind of alluded to this, but it's not just the public events. It's kind of the subsequent. This is kind of a source of kind of your top of funnel almost because then you got the SEC, you got the SOX, you can sell more of the GRC. And so now it's something I think that's exciting optionality kind of going into the subsequent years.
It is. But I'll say that's the beauty of the platform, right? One of our markets essentially dropped off a cliff, to be candid. And we're still resilient and able to keep our growth rate moving forward. And I mean, that's the beauty of the platform.
So, maybe one last question before we kind of wrap it up, but the partner side. So we hit on a lot of the go-to-market from the internal Workiva side, but I think all going through this new wrapper of we're going to try and work with partners as much as possible. We're going to give them more on the implementation side. They're a great source of leads. And where do you feel about the partner maturity today? What's kind of the next steps from that channel?
Sure. We've put a lot of emphasis on the partner ecosystem. And primarily, when we talk about partner ecosystem, we're talking about consulting and advisory partners, and certainly the Big Four and maybe the Global Seven. But we go to market with them. We work together. I mean, they are everywhere we want to be in digital and financial transformation in our enterprise accounts. So where they are, we want to be. And we sell more. We sell higher. We sell broader. Our ADS is higher. We continue on with expansions because of them. They help make our customers stickier. They help bring more value from our platform to our customers, building accelerators, helping them with their consulting and advisory. And in exchange, we are handing off to them our low-value, low-margin implementation services. We'd rather have them do it.
They want those billable hours, but they also then get to define the higher value, higher margin services and have those not just maybe annually, but recurring. So it's a great model for us, low-value, low-margin services set up in consulting outside of us, but we also get commercially successful partners who want to do business with us and are happy to recommend us or bring us into deal cycles and go to market with us. So we get asked a lot, where are you? We're just getting started. We started in earnest several years ago, less than five years ago. So we have a lot of room. They're helping us already to accelerate our growth, but we see a lot of opportunity there. We're going to continue to enable. We're going to continue to educate.
We're going to get better going to market with them, having our sales organizations and theirs work together with our joint customers and our joint prospects. So a lot of opportunity there. And we see that as an accelerator to our growth as we move toward the billion and beyond.
So maybe just to wrap up here, you've had a lot of investor conversations probably since third quarter. As you hear some of the questions people are asking, what do you think are kind of maybe one to two areas you think investors should be most excited about heading into 2025?
When I think about Workiva, it is the opportunity for us and our TAM just growing because of the regions we're moving into, because of our noticing the willingness to pay for our capabilities and our solution. It really is just about the opportunity and who we are in the world and how we fit with the trends in the market. It's not just about digital and financial transformation and move to the cloud and ERP systems. Those are important, or the selling of a platform, which is really important in these days for buyers of SaaS capability. But it really is this drive towards accountability, about transparency, about stakeholder demand for all of that, about surfacing risks, about all of those things that companies are needing to lean into. And we help companies do that, looking at their data. Data's exploding.
Being able to collect all of the data, make use of all of that data to report again with accuracy, with data integrity, data transparency, and data consistency. Workiva does that, and those are core and fundamental to companies. It's not a travel app or a project management tool. It is necessary for companies to do this, and they're not going to be able to do it and become efficient and be accurate without technology solutions. The opportunity for our platform in the market continues to grow, and we become, again, ever more fit for purpose for these use cases and for the market today and what's being demanded. TAM just increased by $10 billion. We rolled that out at investor day. We continue to see strong market demand, so we continually become more and more optimistic as macro trends unfold and opportunity increases.
Awesome. Appreciate the time, Julie. And thanks, everyone, for joining us. Thank you to you and Workiva.
Thanks.