Welcome to Workiva's 2025 Analyst and Investor Day. Thank you to those of you who have joined us here in person, and thank you to everyone else for joining us online. We're excited to have you here. I'm Katie White, Workiva's Head of Investor Relations. Before we get started, I'm going to kick things off with our Safe Harbor. During today's presentation, we will be making some forward-looking statements regarding future events and performance. These forward-looking statements are subject to known and unknown risks and uncertainties. All forward-looking statements are made as of today, September 9th, 2025, and reflect our current expectations only. We undertake no obligation to update any statement to reflect any events that may occur after today, and we will also be referring to certain non-GAAP financial measures which are not prepared in accordance with generally accepted accounting principles. We have a full agenda for you today.
Workiva's CEO, Julie Iskow, will kick things off, followed by Mike Rost, our Chief Strategy Officer, and Jill Klindt, CFO, will close us out before heading into Q&A. With that, let me turn it over to Julie Iskow.
Thank you, Katie. Thank you, Katie, and hello and welcome to our Investor Day 2025. Great to see so many of you here with us in D.C. Thank you for making the trek. You know, we intentionally host Investor Day at Amplify just so you have the opportunity to engage directly with our customers and our partners and get the feel for what's going on here because nothing really compares to hearing about Workiva from those who use and experience the impact of our platform. And to those of you who weren't able to join us in person, we appreciate you being here virtually, and please don't hesitate to follow up with us after the session. Since we are at Amplify, I'm going to stay on theme here and kick us off today with an example of a showcase Workiva customer.
This customer is a top 10 global investment firm that recently expanded its use with Workiva on our platform in 2025 with their ninth solution. They purchased their first solution, SEC, back in 2014, and like many of our customers, they remained a single solution customer for a number of years, seven to be exact. In 2021, they became a multi-solution customer with the purchase of their second solution, Investment Reporting. They quickly followed in 2022 with their third solution, Sustainability Reporting. They chose Workiva as the foundation for their reporting against the SASB and the TCFD frameworks. With this additional solution, they became not just a multi-solution customer, but a multi-category customer: Financial Reporting and Sustainability.
In 2022, they also expanded their use of Investment Reporting with access to the broader Fund Reporting solution, and that included fund financial statements, prospectus, registration statements, and investor reporting, and it increased their spend with us, Workiva, by 4x . In 2023, they added three additional solutions: Financial Statements, Global Statutory Reporting, and Policies and Procedures. Using the breadth of the platform across all of our categories, the result was another 60% in customer spend. This is the type of uplift we achieve when customers fully embrace our multi-solution, multi-category platform. But this customer continued their platform expansion. In 2025, they added their seventh, their eighth, and their ninth solutions with us: Insurance Reporting, Bank Reporting, and Enterprise Risk Management. That's seven solutions in three years, nine in total. The customer's ACV grew from $75,000 in 2014 to $4.8 million today, all on our unified platform.
The role of our partners was a significant aspect of this deal, and it really does illustrate how partners have changed the dynamics of account expansion for Workiva. Beginning with their second solution in 2021, this investment firm has consistently used the same regional consulting partner for all of their Workiva implementations, and this trusted partner of both the customer and Workiva was instrumental with each expansion over the past three years. This highlights the power of strategic partnerships and why the strong partner ecosystem is a core tenet of our growth strategy. The partner wins with a continued stream of billable work for 3+ years across multiple solutions, but it's not just about the implementation. They also manage multiple digital and business transformations for their clients, and they capture higher margin advisory work, which can actually be recurring. Workiva wins with an account expansion and increasing subscription revenue.
And most importantly, our customers win. When we provide the tech and the partners provide the expertise, the customer gets significantly more value. This deal also underscores why our business is resilient. It's not just our broad portfolio of best-of-breed solutions, and it's not just that our partners bring value. It's because we solve issues that customers must address. Our customers need to trust the numbers they're disclosing. They need to provide transparency across their business, both financial and non-financial, and yes, they must be accountable, often with assurance as a requirement. And they're looking to us and to our platform to solve the most challenging problems. It's really why we do what we do. So today, I'm going to walk you through and focus on three topics: growth, productivity, and platform innovation.
But we really can't have a substantive discussion on growth, or for that matter, productivity or platform innovation, without taking into account the macro environment that we and our customers operate in. Understandably, in the first half of 2025, the macro environment has been one of the top conversation topics with our investment community. It's also been a key topic of conversation with our customers. Now, as I said in my opening keynote yesterday, the world hasn't become any easier for our customers to navigate. In addition to the challenges they've been facing over the past few years, new challenges just keep emerging. Two of these challenges stand out. First, the rapid pace of technology. AI is quickly changing the way work gets done.
And while this is a great opportunity, it also creates stress and pressure on our customers as they adapt and they manage change, and it can be overwhelming. Secondly, when I talk with customers and prospects, they tell me that, of course, they're facing increased scrutiny, but the additional challenge is that in many cases, they're dealing with these wildly conflicting expectations, like supply chain. In Germany, the expectation is full transparency, proactive audits, deep disclosures, even if they're politically or commercially difficult. In the U.S., supply chain oversight and disclosure can be seen as government overreach or sustainability. In Australia, ESG mandates are tightening. In the U.S., there's pushback. And then there's tax transparency and public disclosure. I mean, the E.U. wants CFOs to be radically transparent. The U.S. sees that as risky or anti-competitive. For our own business, we've seen some changes this year as well.
We're operating in a more uncertain market. We've seen a moderation in demand for sustainability, and we've seen private companies stay longer, sometimes indefinitely, and take a more prominent role in the economy. And of course, we're also dealing with the speed and the impact of AI as well. But it's important to emphasize this is not Workiva's first macro disruption. We've navigated several before. And despite all of the disruption and change, and in some cases because of it, we believe we're well positioned to capture the opportunity in front of us. We have a distinct competitive advantage, and it starts with our unrivaled experience. We've been doing investor-grade and regulatory reporting for well over a decade. We're also the world's leader in XBRL tagging, doing it fast, efficiently, and accurately. Companies trust us to help them to do their most important work no matter what challenge will arise.
We have 6,400 customers supported by a high-performing partner ecosystem of over 200 partners sourcing and co-selling and delivering our platform. Our advisory and consulting partners are trusted by our customers for digital, for financial, and now AI transformation. Partners, they're everywhere we want to be. When partners are involved, we sell higher, we sell broader, we sell more, and we win more with larger deal sizes, and we become stickier, and we have higher retention. We have an ever-expanding capability list on our platform, and now with Workiva AI, our advanced fit-for-purpose technology is bringing intelligence everywhere, across and directly within our platform. We're powering financial reporting, we're powering GRC, and we're powering sustainability, and our increasing competitive advantage is a direct result of the execution of our growth strategy. Despite the macro and the market disruptions we've seen, that strategy still remains relevant and intact.
For those of you that are new to the Workiva story, the four tenets of our growth strategy are our solutions, delivering fit-for-purpose, best-of-breed, high-value solutions that are better together because of our unified platform. Our AI-powered platform, it continues to become more open, more intuitive, more intelligent, and more connected. Global expansion, expanding our global footprint with excellence everywhere we play, in and beyond North America, across Europe, Latin America, and APAC. Finally, our partners, a high-performing partner ecosystem extending the value of our platform and accelerating our growth. While our current strategy has been in place for several years, we've been evolving as a company for much longer. Workiva started as a single solution company selling SEC reporting. Next, we evolved to a multi-solution company with expanded use cases in financial reporting and financial services.
Then, with the introduction of GRC, we evolved from a multi-solution to a multi-category company. And with the addition of connected data capabilities, we evolved into a multi-solution, multi-category platform company. Most recently, we launched our third category, Sustainability Management, and this includes Sustainability Reporting and Carbon Accounting. This evolution defines both where we are today and is the foundation of where we're going. I'll say it again. Workiva is a platform company, and our platform gives us unrivaled capabilities. We have the only unified platform in the industry that brings together Financial Reporting, Sustainability, and GRC in one controlled, audit-ready environment wherever data integrity, data accuracy, and data consistency are required. Our unified platform is an accelerator for all of our solutions. At least 80% of each solution is the platform. This allows us to bring innovation to multiple solutions at the same time.
We are becoming the leading AI platform for transparency, accountability, and trust, managing the data that matters for the Office of the CFO and beyond. Managing, tracking, reporting, disclosing data and narrative, again, wherever data accuracy, data integrity, and data consistency are required. Today, it's three categories, over two dozen solutions. Tomorrow, we envision that it won't be just us building solutions on our platform. It'll be our partners and eventually our full ecosystem. They'll be building solutions and extending the value of the platform even further. Now, with the addition of each of these solutions, the platform becomes even more powerful, and it contributes to our advantage. Our unified platform has enabled us to expand our diversified portfolio of fit-for-purpose, best-of-breed, high-value solutions. This is a key factor in our subscription growth resilience, and it contributes to our growing ACV.
That's why you've heard us consistently say on earnings calls, broad-based demand across our solution portfolio powering our quarterly results. Two metrics provide compelling proof points. The first is the steady and sizable increase in our average spend per customer. Since Q2 of 2022, we've delivered a 10%+ rate of growth in average spend per customer each year for the past three years. This is a 40% increase in spend per customer since Q2 of 2022. This increase is powered by larger customer lands and successful account expansion, both of which are enabled by our broad portfolio of solutions. A second metric that highlights our resilience is our consistent subscription revenue growth. Since 2019, our trailing 12-month subscription revenue growth has consistently remained above 18%.
This is in spite of the market volatility of individual solutions, like the rise and fall of capital markets and most recently some changes in the sustainability market. The power of our platform and the diversification and the breadth of our portfolio have enabled us to withstand macro shifts and continue to drive growth. Our increasingly broad portfolio of solutions not only increases our subscription growth resilience, it also continues to increase our TAM. At our investor day last year, we disclosed and discussed the expanded TAM of $35 billion. This reflects the growing opportunity we see across our solutions and our platform. Now, if we look at our TAM, we can look at these solution categories. There are a few things worth noting. Financial Reporting is 50% of our TAM. Sustainability, while a key growth driver, only represents 20% of our TAM.
The remainder is split between GRC at 20% and industry verticals. With multiple solutions in each category, we remain confident in our ability to capture our opportunity. We have clear competitive advantage, and we're executing on our growth strategy. Now, let's turn to the third growth pillar of our strategy, global expansion. We just continue to diversify our business geographically. We have expanded into key growth areas across Europe, APAC, and Latin America, and we've built a significant and growing customer base in these regions. Our success in expanding globally is demonstrated by the increases we've seen in our revenue outside of the Americas. In 2019, less than 4% of our revenue came from outside of the Americas. By the end of 2023, that number grew to 15%. For the full year in 2024, the number reached 18%. And for the first half of 2025, that number increased to 19%.
Europe remains one of our largest market opportunities. We saw record-breaking quarters over the past year, and we've gained momentum from the region's established regulatory environment. In Q2 of 2023, Europe accounted for 12% of our total revenue. By Q2 of 2025, it had grown to 17%, and we believe we still have significant opportunity to grow in the region. Was the CSRD a growth driver that's been moderated? Sure. The market has softened some with regulatory delays and scope changes, but is it still a growth driver? Yes, and it's important to remember that the CSRD is still in effect for the largest companies, those in Wave 1. And the next wave, while still delayed, will still need to comply, so in Europe, we are focused on supporting two groups.
First, the Wave 1 filers as they approach year two of disclosure, and second, the many other companies that are pursuing sustainability, even though they're not required today to do so. We are seeing companies across industries without regulatory mandates still doing sustainability initiatives. They're measuring, and they're monitoring, and they're tracking their progress because this data helps them to drive operational efficiency and business performance. This is highlighted in the following new logo, Customer Win. This top European travel company was a new Workiva customer in Q1. This was a land, and yes, I say land, with seven solutions: Financial Reporting, Global Statutory Reporting, Management Reporting, Controls Management, Policies and Procedures, Enterprise Risk, and Sustainability Management. Here's a bit more detail on this deal. The business requirements were to transform Financial Reporting, Sustainability, and GRC processes.
These processes needed to scale with this company as they pursued the option of an IPO, and it will be subject to external audit review. This company also has to produce country-specific statutory filings and submit via a structured digital taxonomy. Like many businesses in Europe, this company serves multiple stakeholders who are requesting sustainability information. In the future, reporting against the CSRD will be required. This was a competitive win against a CFO-centric corporate reporting platform. Now, like most of our deals in Europe, this opportunity had engagement from our partners. Three different partners worked with our sales organization on a co-sell motion, and two of these partners are also engaged in the delivery of these seven solutions. Let's turn now to new logo growth.
Over the past five years, we've expanded our account base by over 70%, and we've delivered a five-year CAGR of 11% in new logo growth. We are landing with the platform. We're going to market with our partners, and we're moving into new geographies with new solutions. Whether it's new customers in the upmarket or the signing of companies with the next IPOs, VC-backed companies, new customers are drivers of our growth. We continue to see significant progress in building on our already enviable customer base. For those of you that are familiar, again, with the Workiva story, you know that we have a well-established installed base. For the past decade, Workiva has highlighted the significant share of Fortune customers that use our platform, and the numbers just keep getting better. If you are a Fortune 100 company in the U.S., you are an exception if you don't use Workiva.
Just over the past year, we've gone from 90% to 95% of the Fortune 100. We've gone from 85% to 89% of the Fortune 500. We've gone from 82% to 85% of the Fortune 1000. This, our large, loyal, very happy, and very trusting customer base, is a competitive advantage. This trust is clearly evidenced by our greater than 96% gross retention rate. And so while new logo growth is a strategic focus for us, account expansion has been a significant growth driver over the past few years. Let's look at that in a bit more detail. Starting with our customers that have over $100,000 of annual spend with us, our transition to a multi-solution company began in earnest several years back. This was when we transitioned all of our customers from a seat-based to a solution and metric-based pricing model.
This multi-solution-based approach has delivered a steady 30% year-over-year growth in $100,000+ contracts. While we do continue to make progress, here's the opportunity. A majority of our customers will spend less than $100,000 annually with us. Let's talk about our larger contract customers. Our transition to selling multi-category and true platform deals began in 2021, and it's this platform focus that has accelerated the increase of larger contracts. You can see here a 32% growth of customers spending over $300,000, and you can see a 33% growth of customers spending over $500,000. Now, while these larger contracts include new customers landing with the platform, the primary driver of this increased contract spend is solution expansion. A new metric that we're providing for you today is the trend in solution count by customer. This chart highlights our progress in moving from single-solution to multi-solution platform customers.
Note that the blue portion of this pie that represents single-solution customers is shrinking, but every other color representing customers with two and three and four and five and six or more solutions is expanding. In fact, 45% of our customers now have two or more solutions. That's up 32% as of Q2 2022. That's a 78% increase in the number of multi-solution customers, and the number of customers with four or more solutions has more than doubled since Q2 of 2022. While this indicates healthy growth, there is a significant opportunity here ahead of us. We believe that most of our customers have the business need to purchase several of our solutions, and these multi-solution customers are a meaningful accelerator to revenue.
Even with modest growth in the count of multi-solution customers over the past few years, the revenue contribution from these customers has grown from 56% of total subscription revenue in Q2 of 2022 to 71% of subscription revenue in Q2 of 2025. And we're just scratching the surface. We believe that we have a 3x multiplier on our current ACV, just selling our current platform to our existing customers, because our customers trust us, and they know that they can get value from our platform. Here's a customer expansion story that will show you exactly what I mean. In 2017, a top 10 U.S. bank initially adopted Workiva as a single solution for SEC reporting. Later that year, they expanded their use to include a second solution, Management Reporting. That was to support the publication of their internal reports.
In 2020, this bank transitioned to a multi-solution, multi-category customer with investment in GRC, with the addition of their third, fourth, and fifth solutions: SOX, Operational Risk Management, and bank-specific CISO reporting. In 2021, they further invested in GRC with the purchase of Enterprise Risk Management, their sixth solution. In 2022, they purchased some of our broad platform capabilities, adding Management Reporting and expanding the use of our data platform. Then they added a seventh and an eighth solution, sustainability and bank-specific Model Audit Management. 2024 saw further expansion of Enterprise Risk Management, tripling their investment in that solution. Finally, in 2025, the firm added their ninth and tenth solutions in an account expansion of nearly $1 million, with the addition of Bank Resolution Recovery Plans and Bank Call Reporting. Over the past eight years, this bank has increased their spend from $120,000 to $2.6 million annually.
Now, what do all these solutions have in common? They power the bank's business processes around trust, transparency, and accountability. This is just one of over 6,400 customers. And while not all companies will reach $2.6 million spend with us, there is a significant opportunity to meaningfully expand our solution footprint in most of our accounts. I'll wrap up this section by summarizing our numerous levers for durable growth enabled by our successful platform journey. We have a large and untapped TAM. We continue to land new logos, private companies, Fortune 1000 companies, and companies across the globe. Account expansion continues to be a significant revenue driver. And the breadth of the platform enables multiple growth paths, purchasing of new solutions, increasing spend in existing solutions, and expansion in platform capabilities. We are focused on growth and capitalizing on the opportunity in front of us.
But we're also focused on driving productivity. Workiva is both an expanding growth and an expanding margin story. As highlighted in our most recent Q2 earnings call, we provided a 200 basis points operating margin raise to our full-year guide. Our margin progress in 2025 reflects the disciplined approach we've been taking to achieve the medium-term and long-term targets that we outlined at our investor day last year. Our approach focuses on four key themes across every function, across every department, and across every team. First, organizational and operating model redesign. We're simplifying spans and layers. We're evolving the operating model across sales, customer success, and R&D. And we're putting a greater emphasis on performance management. The result will be a structure that reduces duplication and strengthens execution. Second, process streamlining and automation. This includes both single and cross-functional initiatives. We're streamlining and improving workflows.
We're leveraging technology where it brings value, and yes, that includes automation of routine tasks and the use of AI. Third, we're optimizing product and go-to-market resources. We're sharpening our investment discipline so that we can focus resources on initiatives with the highest likelihood of success and the greatest customer value, and lastly, more focus on fiscal discipline. We are just exercising greater fiscal discipline across all functions. Together, these four themes are designed to meaningfully expand margins and, most importantly, increase productivity as we grow and as we scale, so let's kick it off with a look at our cost of revenue. We've already driven 400 basis points of improvement in cost of revenue in the past three years, and we believe there's more room for additional operating leverage.
To capture this, we plan to execute on three productivity initiatives: scaling digital support, improving cloud computing cost optimization, and shifting setup and consulting to our partners. Over the next two years, we expect cost of revenue spend as a percent of revenue to improve by another 300 basis points as we continue to execute on these productivity initiatives. Now, let's dive a little deeper into our plans for R&D. As a platform company with a broad portfolio, continued R&D spend is essential to drive both platform and product innovation. Having said that, we know we have an opportunity for further leverage. Three initiatives are in focus for us. First, workforce diversification. Accessing global talent, including lower-cost markets and locations. Second, engineering productivity. Streamlining processes, accountability, better tools and automation, and yes, some AI. Third, improved and scalable operating model.
This is about having the right structure to increase commercial impact and sustain growth through high-performing productive teams. Over the next two years, as we execute on these productivity initiatives, we expect R&D spend as a percentage of revenue to improve by another 300 basis points. And we feel confident that we can achieve this target based on our track record of steady improvement over the past several years. Let's shift to sales and marketing. Our largest opportunity to drive additional efficiency and productivity. Just as we've made progress in R&D spend as a percentage of revenue, we're confident in our ability to make similar progress in sales and marketing. Our approach is practical. We do this to minimize the risk of disrupting growth as we continue our focus on the core objective, which is capturing our large and expanding TAM.
Our plan is to reduce our overall cost to acquire a dollar of revenue, and it focuses on structure, staff, and strategy. Structure. This includes transitioning to a more efficient model. As we scale, we're reducing the reliance on solution overlay sellers and moving away from deploying multiple sellers on every deal. The result will be less salespeople involved in each deal. Better alignment of sellers to territories. In some cases, we're shrinking the number of accounts per seller. It's an enterprise SaaS. This is a proven way to drive larger deals and higher seller productivity. And we're already seeing success here, especially up market. Leaning into our partner ecosystem, we're continuing to see momentum co-selling with our partners. This delivers higher win rates, as I said, larger deal sizes, and more multi-solution deals. These outcomes will continue to drive productive growth. A second area of focus is staff.
We continue to raise the bar on our seller expectations. We're up-leveling our existing sellers and bringing in new hires that have seen scale, that have sold platforms, and that know how to win with strategic partners. They also know how to build trusted customer relationships that expand long-term value. Our sellers are carrying higher quotas. This is supported by improved enablement, refined sales plays, and a broad platform offering. And of course, we'll continue to augment our sales teams with AI capabilities, spending less time on manual activities, enabling them to have even more meaningful conversations with our customers. Third, strategy. We're bringing even more precision to where and to what we sell. In more established markets, we're optimizing coverage models to improve efficiency, to drive focused new logo growth, and to achieve greater account expansion. This includes a new Hunter- Farmer model for our corporate account segment.
We're also expanding across our less mature geographies: Europe, Latin America, and APAC. We're focusing the investment in regions and segments where we see the strongest opportunity for growth, and we're launching and scaling go-to-market plays for new solutions and doubling down our efforts in key verticals where we have the right to win. Here's the bottom line. The results of these efforts are expected to improve our medium-term sales and marketing target as a percentage of revenue from 41% in our prior model to now 39% in 2027. With this anticipated improvement in our sales and marketing leverage, we are raising our medium-term non-GAAP operating margin target from 16% to 18% in 2027. Again, we are raising our medium-term non-GAAP operating margin target from 16% to 18% in 2027.
Now, Jill will provide some additional detail on our mid and our longer-term operating model, but she will, of course, include this update. Before I turn it over to Mike and Jill, I'm going to spend a few minutes talking about platform innovation. We are, as we have stated, a platform company. We have the only unified platform that brings together Financial Reporting, GRC, and Sustainability in one controlled, audit-ready environment. We know it's our competitive advantage, so we continue to innovate to maintain and to extend that advantage. One of the benefits of being a platform company is the ability to scale innovation across multiple use cases and solutions with efficiency. And Workiva's AI is a prime example of platform innovation that drives enterprise-wide value. Workiva AI is not just a bolt-on feature simply integrated into the platform.
It's embedded at the core to bring intelligence everywhere across and directly within the platform. This generates impact and value across all of our solutions. For our customers, AI has shifted from interest to a requirement as teams tackle financial transformation, evolving sustainability regulations, and increasing investor scrutiny. They're looking for a technology partner to help them keep up with and take advantage of rapidly advancing technology. We know our customers and their challenges well. So everything we do with AI is focused on bringing the intelligence right where they need it and where they can use it to realize tangible gains. A couple of years ago, we rolled out GenAI capabilities across the entire platform. We integrated the large language models from Google and from Microsoft and from Amazon in all of our workflows, enabling GenAI in context.
Workiva AI is the next evolution of our AI capabilities built with agentic intelligence. And yesterday at Amplify, we announced the launch of several new agentic extensions to the Workiva platform: Intelligent Finance, Intelligent Sustainability, and Intelligent GRC, each with specialized, fit-for-purpose capabilities. These capabilities equip our customers to thrive with speed and with accuracy. So as highlighted in my keynote yesterday, because AI bots and models are now the first reader-interpreter of our customers' outputs, that is without a human to explain or give context, reports and disclosures have to be intelligence-ready. They've got to be designed for how AI bots and models read, right? They've got to look for patterns that they identify, for the sentiment that they score, for the precision that they always apply. Intelligence-ready means that the data and the narrative have to be structured. It's got to be consistent.
It's got to be traceable, interpretable, machine-readable, and built with context, not just content, and the good news is our customers don't need to write with, they know how to write with AI because we do. Our platform was built for this. Workiva is intelligence-ready now. Our reports are structured, validated data products, not just documents, so AI and bots can reliably read, reconcile, and publish with full lineage controls and regulator-grade assurance. We embed global frameworks and taxonomies directly into the platform. This turns every report into a structured, machine-interpretable data product, so AI doesn't have to guess what's material, how it's defined, or how to compare it. It is built in. With Workiva AI at the core of our unified platform, we're providing the intelligent companion for our customers to deliver on their most crucial outcomes to all of their stakeholders. AI capabilities and advances are moving fast.
And of course, so are we. So I'm going to leave you with these key messages and these key takeaways. Our opportunity is large and growing. Our strategy is relevant and intact. We believe we're well-positioned to capitalize on our growing opportunity. And we see proof points in our results: large, multi-solution, and platform account expansion deals with partners across the globe. Our solutions and our platforms are resonating with our partners and our customers, and we'll continue to focus on delivering both growth and productivity. We are committed to staying in the lead and going after our growth opportunity. So thank you, and I will now turn it over to Mike Rost, our Chief Strategy Officer.
Thank you, Julie, and thank you for all being here today and for those joining online.
Picking up where Julie left off, I'll be providing some additional detail to support the confidence that we have in our growth opportunity. I'm going to start off with a refresher on our pricing and packaging and the role that plays in our growth. Next, I'll click into some highlights across our portfolio solutions. And finally, I'll provide a quick update on the momentum we have with our partner program. So let's kick this off with pricing and packaging. As a quick reminder, Workiva is not a seat-based licensing model. In fact, we migrated away from that more than five years ago. We utilize a value-based approach that prices each solution based on one or more value metrics. And for each solution licensed, a customer is offered unlimited users for that solution. So some examples of this. For internal controls, we price based on the number of controls.
For Multi-Entity Reporting, we price based on the number of entities. For investment Fund Reporting, we charge by the number of funds. This value-based approach provides a very straightforward method of communicating the value of our solutions and the ability to capture value when a customer expands their use of the solution. Because when they grow, we grow. This value-based pricing approach is one of the drivers behind the solution expansion that Julie spoke of earlier. The pricing model has served us well, and we believe it will continue to play a strategic role for us in the future. We continue to look for ways to unlock greater value for our customers. Starting in Q4 last year, we introduced another dimension to our packaging: a good, better, best model. With this approach, we now package feature capabilities into different solution tiers.
So let's go through a couple of examples on this. Let's start off with Private Company Reporting. So for this solution, we've stratified into three different tiers: an essentials version, a standard version, and an advanced version. The essential solution is tailored, for example, to a small private company just getting started with Workiva. The standard version includes expanded capabilities for presentations, quarterly board reporting, and enhanced design reporting. The advanced version includes all the capabilities in the standard version and financial statement automation, advanced data collection, and multi-language report translation capabilities. We're doing the same across a number of other solutions as well. So for example, for GRC, for internal controls, we have launched two versions: an essentials version and a standard version. So here's where it also gets interesting. Let's talk about SEC. As disclosed in our 10-K, SEC plays a material part in our business.
In our last 10-K, we highlighted that it represented more than 40% of our revenue as of year-end 2024. Workiva serves some of the most sophisticated SEC filers, many of whom we believe will see value in a more premium solution offering for SEC. That premium option is now available to them with the SEC Advanced solution. So SEC Advanced includes enhanced data collection, financial statementization, design reporting, and enhanced AI, including the newly announced SEC Intelligence. We believe that many of our customers will see value in these features. We also believe that this value expansion opportunity for our customers is a significant uplift for them and a growth opportunity for Workiva. This good, better, best approach also provides us with a model to package premium AI capabilities and solution-specific knowledge bases as they become available. So this just announced SEC Intelligence solution is a great example of that.
It offers advanced capabilities with a curated knowledge base of external information. While all Workiva solutions will be delivered with core platform AI capabilities, premium AI may be reserved for more advanced tiers of any given solution. We're trying to keep this simple and value-based, and the flexibility of our pricing and packaging provides multiple levels for future growth, including a way for us to monetize AI. So speaking of AI, what makes Workiva unique and defensible in this AI era? Well, the answer is pretty simple. It is our fit-for-purpose solutions. And that's because we bring together user workflow and an understanding of the domain and the experience in solving specific customer requirements. So I'll take the next few minutes to provide some highlights across our solution categories. So let's start with finance. SEC reporting is just one of the many solutions in the finance category.
Some of the other growth solutions in the finance area include Private Company Reporting, Multi-Entity Reporting, Internal Management Reporting, ESEF, and capital market transactions. Across this portfolio of solutions, we support some of the world's top companies: companies of all sizes and all industries, private companies, public companies, higher ed, federal, state, local government, and companies across the United States, Canada, Europe, LATAM, and APAC. People often equate our finance solutions just with the U.S. public markets. It's our SEC reporting and capital market solutions. But looking at the finance solutions excluding these, we see good growth opportunity, so first, we continue to land and expand within the solution category. These finance solutions are fueling new growth. In the past year, using a Q2 to Q2 comparison, we have grown the count of customers that license these solutions by 23%.
Second, as we're selling into these finance solutions areas, we are landing multi-solution deals. These solutions play a material role in the solution count expansion that Julie highlighted earlier. In the past year, we've seen 78% growth in the multi-solution deals that include these Financial Reporting solutions. This includes both new logo and account expansion deals. Finally, we have a great partner engagement across the finance solution set. Greater than 70% of the finance solution deals sold the past year were delivered by partners. Why? Because these solutions play a strategic role in what these partners provide: finance transformations, ERP migrations, public-to-private journeys, and the list goes on. So one example of a finance solution driving growth is our Multi-Entity Reporting solution. The target market for this is simple. It is multinational companies.
When you do business in multiple countries, you typically have to set up multiple legal entities and report to multiple tax authorities. With Workiva Multi-Entity Reporting, customers with multiple entities can standardize both corporate and local-level statutory reports in one central platform. This includes managing the GAAP to STAT to bridge, tracking statutory requirements, publishing quarterly reports, and disclosing an XBRL with country-specific taxonomies. For many companies, this is a complex process: multiple source systems, multiple ERPs, disclosure requirements, in-country teams, all with external audit oversight involved in the process, and companies see value in moving from a desktop office productivity tool or from a legacy on-prem software to transform these processes. With deal sizes that can range from the low end $75,000 to over $1 million just in the solution area, we see this as a continued growth area for us, so let's shift to capital markets.
We are encouraged by the recent shift to a more positive capital market environment. In just the past quarter, we have supported some of the signature IPOs with our S-1 solution. This includes companies like Figma, Heartflow, and Schoeller Innovations that have all gone public recently. For Workiva, an improved capital markets environment is not just about supporting clients with the S-1. There are three primary ways that we add value to customers on this private-to-public journey. First, we support customers years before they go public with Private Company Reporting. The prospect of a favorable IPO market makes it more compelling to invest in strengthening reporting processes today. Workiva helps organizations prepare years in advance with Private Company Reporting and internal control solutions. Second, as already mentioned, we support customers with their S-1 filings.
We provide a collaborative platform that brings together the company's bank, legal, and internal teams during the S-1 authoring process. Third, the creation of more SEC filers creates an improved market for other Workiva solutions, including our SEC and SOX solutions. Even if we're not involved in a company's S-1, we believe that we will win our fair share of new SEC filers with multiple solutions across our platform. Let's shift the focus to GRC. GRC stands for Governance, Risk, and Compliance. This is one of the many mature markets that Workiva sells into, where we compete with many legacy on-premise installations and very specific point solutions. Workiva stands out by offering a comprehensive suite of GRC solutions strengthened by the broader capabilities of the Workiva platform. Workiva GRC solutions. It includes audit, controls management, risk management, Policies and Procedures, and compliance.
There's a lot here to sell, so let's look at a few metrics across this GRC category. First, GRC has been a strong growth business for us. In terms of ARR growth, we delivered a 19% ARR growth rate 2023 to 2024. This growth rate has accelerated the past year to 30% in ARR. We are encouraged by this growth acceleration and believe that we have further opportunity for growth in this area. For the trailing 12 months from Q2 to 2025, we have seen a 68% increase in the growth of multi-solution deals. This is also another great opportunity for us to sell additional solutions into the install base. And finally, another solid data point on partners. We've seen a 33% increase year-over-year in GRC deals delivered by our partners.
GRC is a great example where our partners not only benefit in the setup of consulting, but in the high margin of RSV work and services they can provide that's wrapped around these projects. The durable growth we have seen in GRC is driven by our broad and competitive solution portfolio. This GRC portfolio includes solutions across a wide spectrum of things. So internal controls, which includes SOX, internal controls over Financial Reporting, Model Audit Rule for insurance, Circular A-123 for public sector, and broader controls management. Look at internal audit. This is about managing work papers, internal audit planning, audit fieldwork, and risk assessments. Audit analytics, which includes the automation and process for testing samples and managing sampling populations, continuous controls monitoring, and source system integration. Policy management, which includes policy authoring and approval, policy and review and sign-off, certifications and attestations, and risk and control mapping to policies.
Finally, risk management. This is managing risk at both an enterprise and operational level. This includes risk assessments, risk heat maps, managing the risk register, reporting the dashboards, risk reporting, and many more capabilities. The end result for all of these solutions is that we have a great growth business with significant expansion opportunity and where we have the opportunity to serve a growing list of customers that are driving value across the set of GRC solutions. Let's move on to sustainability. As we highlighted in our Q2 call, we saw a dynamic market in the first half of the year. This is influenced by shifting policies, proposed regulatory changes, and just an overall change in the market sentiment of sustainability. Yes, we did observe a moderation of demand within our mid-market accounts across both the U.S. and Europe.
While the strong momentum we saw in the latter half of 2024 has tapered some, sustainability continues to drive both new logo wins and account expansions. So with much of the dust now settled on some of the changes we saw in the first half of this year, the end result is sustainability is still a market for us to sell into and to drive growth. The continued wins we see in sustainability are supported by the comprehensive set of solutions and competitive differentiation that we provide. So the broader platform capabilities we offer sets Workiva apart in this market. We deliver Sustainability Reporting, Carbon Accounting for Scope 1, 2, and 3 emissions, Integrated Sustainability for financial reports, and disclosure for multiple frameworks and disclosures to rating agencies. We continue to win in sustainability and deliver value to our customers. This list shows it.
Those customers that are represented by the names here are recognized leaders in their industries. Workiva sustainability continues to be the solution of choice and essentially the standard for the top companies in the world. So let's highlight a few metrics on sustainability. First, our annual contract value. As we've grown to market experience with the sustainability, we are encouraged by the value proposition that's resonating. In the last 12 months, we've seen a 22% increase in the average contract value. It's simple. We are winning larger deals. Our averages for account deals are going up. Second, our partners have played a strategic role in the success of this business. We have taken a partner-first approach in the go-to-market with sustainability. We sell with partners, and more than 85% of our sustainability deals have been delivered by partners in the past 12 months.
Finally, sustainability is driving a lot of multi-solution activity. In the past 12 months, 40% of our sustainability deals involve multi-solutions. We believe that sustainability is a long durable demand market and one that offers a lot of solution expansion opportunity. Let's move on to financial services. It's one of the vertical solution categories that we call out in a TAM. These solutions for financial services have been a great growth driver for us. When we speak of this vertical solution area, we are talking about the specific solutions we provide for banks, insurance companies, and investment firms. For banks, for example, we provide solutions for capital planning and risk reporting. These solutions include capital adequacy and strategic planning, regulatory capital planning, stress testing, and recovery and resolution capital. These are complex requirements with disclosures that can be tens of thousands of pages of length.
For insurance companies, we provide solutions for many different individual state regulatory requirements and country-by-country requirements. This includes insurance stat reporting, actuarial memorandum, risk and compliance, including the Model Audit Rule and CASS resolution plans, regulatory reporting, including NAIC, ORSA, capital adequacy tests, and Solvency II frameworks. For investment firms, we deliver our Fund Reporting solution. This solution provides support across the Fund Reporting and shareholder reporting lifecycle. We have been providing Fund Reporting for private funds and regulated funds for the past five years. We recently introduced support for public funds to address the complex requirements of ETF funds. Let's look at a couple of metrics here. First, this is a high growth area for us. We have delivered sustained ARR growth in the high 30% and low 40% range for the past three years.
While these growth numbers are impressive, we believe that we have a lot of opportunity for future growth in this vertical solution area. Second, another key driver for growth, our financial services solutions customer base continues to grow. As of Q2 2025, we saw a 22% growth year-over-year in the number of customers using financial services solutions across the board. And finally, we have a great base of companies to sell into. In North America, we have many of the leading banks, insurance companies, and investment firms that are already our customers. For example, this includes 100% of the top 50 American banks as measured by assets under management. Now, as highlighted by the solution count information that Julie shared earlier, many of these firms, even though they are large banks, still only have one or two solutions. Back to that growth opportunity.
We believe there's a lot of growth in front of us in this vertical solution area. So we're going to finally wrap this up here in my section and talk about our partner ecosystem. So as Julie highlighted, partners is one of the four tenets of our strategy. Our partners are everywhere we want to be. Our partners are aligned with us in go-to-market activities, co-selling deals, sourcing deals, and standardizing on Workiva to deliver managed service solutions to add value to their customers. We have a very strong partner ecosystem. We have partners represented by the Big Four and regional audit firms, global consulting companies, and vertical-specific advisors. We have managed service partners, technology partners, and vendor relationships with design agencies in Europe. With our partners, we have built a solid distribution engine that is scaling up market as well as down market.
This provides us durable long-term levers for us to grow. This starts with solution implementation. Throughout our solution metrics, we highlighted the data points on partner delivery. For our partners, it's just not about the implementation. It's about all the additional advisory work that they can deliver to the customer as well. Finally, with Workiva, there is a recurring services opportunity. With our broad platform, there is always another solution to drive value to the customer and a way for the customer or a way for the partner to make billable service hours. Workiva benefits not only on top-line growth, but also on margin expanding performance. With our partners driving the delivery, that reduces the low-margin services work delivered by the Workiva team. We've talked about this quite a bit in our calls.
We have been executing well on this plan to shift those services to our partners. I highlight this chart. Setup and consulting revenue is now only 1.5% of revenue compared to 4% in 2022, so together with this ecosystem of partners, we are selling more, delivering more value, and scaling faster, so a few metrics on this. When we source deals with our partners, we have a 2x, two times higher win rate. We see a 30% larger deal size, and 31% of our partner source deals are multi-solution. Our partners are a very strategic part of our growth equation, so as I wrap up this section, I want to leave you with three points here to affirm our confidence in our growth opportunity. First, we have a value-based pricing model that enables solution expansion.
With the addition of the good, better, best product tiering, we have a new way for us to add value and continue to sell more to our customers. Second, we have a lot of solutions to sell. There's a lot on the truck for us to go and sell right now. These solutions solve business-critical requirements for our customers. These are all powered by a single platform. We have differentiation across every solution category because of the platform. Finally, our partners. You've heard both Julie and I mention partners throughout today's presentation. We're about five years into scaling this partner ecosystem. For those of you who remember, I was up on stage in 2019 and 2020 talking about this. Not only have we scaled this, our partners are continuing to drive growth and, as I mentioned earlier, that margin leverage.
What's all this lead to? Julie said it earlier. Workiva is an expanding growth and expanding margin story. To talk more about the numbers here, I'd like to welcome to the stage our CFO, Jill Klindt.
All right. Thank you, Mike. And thanks to everybody for joining us here today and in person. It's great to see you. We're going to start here, and you've heard a lot today about Workiva's vision and strategy, particularly around our dual focus on both growth and productivity. Now, I'll tie everything back to our financials and our medium-term and long-term operating models. We're going to start by looking at our strong subscription revenue growth. This is a great story here, right? As Julie mentioned, the durability and resilience of our business is highlighted in our consistently strong subscription revenue growth. We've delivered a 22% CAGR for subscription revenue growth over the last six years, including re-acceleration from 2024 to 2025. During this timeframe, we've also experienced several market shifts, as you all are aware. One example is when capital markets spiked in 2021 and then subsequently slowed.
Our ability to adapt to changing market conditions and to sell across our broad portfolio of solutions has enabled us to continue driving durable growth. That's exactly what we're doing today. Next, our platform and growing set of solutions have been a driver of larger deals over time, both landing new multi-solution larger deals as well as expanding contract values with our existing customer base. You can see here that the average ACV for customers spending over $100,000 per year more than doubled the base, coming in over $200,000. This trend continues as we look at customers who spend more than $300,000 with us, having an average annual contract value exceeding $600,000. For customers spending over $500,000 with us annually, the average ACV surpasses $1 million.
The platform's power and broad solution set have led to customers spending over $1 million, over $2 million, over $3 million, and even the first customer spending more than $5 million with us per year. Moving on to revenue by customer cohort. I love this slide. It shows a lot of the history of the company back to what Julie was talking about earlier about the trajectory of our company and how we changed over time, but it also reflects our strong customer retention, with customers staying with Workiva not only because of the value they see from our platform, but also the excellent customer service that we provide. Workiva constantly helps customers develop and integrate the platform into their businesses, embedding us into their daily work. I do it on my team too, we have to tell you. Our extensive solution offerings drive growth within existing customer cohorts.
One example here is the 2010 cohort, with those customers that started with us in 2010 have a CAGR of 23% in ACV through 2024. This speaks volumes. We've been able to excel at customer satisfaction, retain our customers for a longer period of time, and enable them to continue to spend on the Workiva platform. For those of you with us in person here today, you probably have already had some customer conversations, and you can feel the sentiment in the way they talk about both the platform and the Workivians who support them. They're very, very passionate about their CSMs. Workiva consistently has best-in-class gross and net retention. Our gross retention has not fallen below 97% for the past 15 quarters, exceeding our 96% internal target. Net retention has also shown a positive trend, increasing from 109% last year to 114% in the most recent quarter.
Even with the 1% FX tailwind that we discussed and saw in Q2 2025, net retention surpassed our expectations, demonstrating strong platform expansion within our existing customer base. Going forward, we continue to model the business with an annual NRR of 110%. Also, as Julie discussed, we are making good progress on global expansion, increasing the percentage of revenue coming from outside the Americas. To provide a little bit more color, Europe has consistently delivered strong revenue growth over the past few years. You saw Julie talk about this. On a trailing 12-month basis, Europe has grown 38% year-over-year. This healthy growth rate is an example of how our international strategy is continuing to contribute to overall durable growth. Now, let's do a quick recap of our growth trends. First, our platform and broad portfolio of solutions have enabled us to sustain strong, durable subscription revenue growth.
Second, our customers are spending more with us. Contract sizes are growing, both when we sell new logos and also when we expand into our existing base. Third, our solutions are sticky, as shown by our best-in-class revenue retention rates. And finally, our international play is delivering strong growth for us, becoming a larger and larger piece of our revenue over time. So what's in store for our future revenue? As we provided during our Q2 earnings call, for 2025, we project total revenue to be between $870 million and $873 million. As a reminder, this guidance assumes a 20% subscription revenue growth rate at the midpoint. This is a risk-adjusted guide and takes into account the market shifts we've experienced. Moving on to our 2027 medium-term revenue target.
We remain committed to the range we communicated last year and expect our total revenue to range from $1.1 billion-$1.2 billion in 2027. Execution in 2025 has shown significant progress towards this target, and we remain confident in our ability to achieve this result. As we look at our 2030 longer-term targets, we remain committed to achieving total revenue growth of $1.8 billion-$2 billion. This growth will come from new logos and also from the massive opportunity we have to upsell and cross-sell additional solutions into our existing customer base, as Julie discussed in detail earlier. Now, let's shift to productivity. We reiterated several times today that we're focused on both growth and productivity. So let's dive into our expanding margin story.
First, while you can see that the overall op margin trend is up and to the right, we do have seasonality, which results in quarter-to-quarter variances. We believe this seasonality will continue, and you should expect similar seasonality in our medium-term and long-term operating model. While we're not providing guidance for 2026, you should assume a similar quarterly linearity to 2025, including a seasonally low Q1 that trends below the prior year's exit value. Second, operating margin growth from 2024 to 2025 is a result of our disciplined approach to managing the business. We are outperforming our expectations from the beginning of the year. Finally, our 2025 guidance shows solid progress toward our updated, as Julie talked about, medium-term op margin target of 18% for the full year 2027. It gives us and should give you even more confidence in our ability to achieve our targets.
Julie spoke earlier about the strategy behind our margin expansion over the next few years. Here's a table that summarizes all of our operating line items and how we expect to achieve each. But first, you can see we are also providing more detail on the spend expectations built into our existing full-year 2025 margin guide. A little bit more here. So starting with gross margin, we expect a 200 basis point improvement from 2024 to 2025, moving from 78% to 80%. For R&D in 2025, we expect a 100 basis point improvement year-over-year, moving from 23% in 2024 to 22% in 2025. Our 2025 sales and marketing margin will remain relatively unchanged compared to 2024 due to the annualized cost of the additional quota-carrying reps we hired in the second half of 2024.
Finally, for G&A, we will deliver improvement year-over-year in order to achieve the 7%-7.5% non-GAAP operating margin in 2025, which we guided to on our Q2 earnings call. Our progress in 2025 puts us on a good path toward our 2027 medium-term target operating model. Julie went through all these drivers and how we plan to execute to achieve our 2027 target margins, so I won't repeat them all. But I wanted to remind everyone that today we are updating our 2027 sales and marketing margin target to 39% from 41% in our previous model. As a result of this update, we are able to increase our 2027 target non-GAAP operating margin to 18% from 16% in our prior model. Moving on to our long-term operating model, we remain committed to the 2030 targets we laid out at last year's Investor Day.
This model shows that our dedication to operational discipline and to achieve margin expansion continues well beyond 2027. As we move toward our 2030 target of $1.8 billion-$2 billion in annual revenue, we also have a plan in place to achieve a 24% non-GAAP operating margin. This is the result of our dual focus on both growth and productivity. Now, let's turn to cash flow and fluctuations between our operating margin and our free cash flow margin. As we continuously deliver improved operating margin, we will also deliver improved free cash flow margin. However, cash flow margin over time does not always correlate with the trajectory of operating margin. So let's walk through a few drivers of that gap. First, the timing and rate of growth in quarterly bookings can have an outsized impact on cash flows compared to op margin.
The second driver is the timing of cash inflows based on contract duration, renewal timing, and customer payment terms. While the majority of our customers pay us annually, we do have some customers who choose to pay upfront for multi-year deals, which can create fluctuations in our cash flows, and you've heard us talk about this occasionally when it's been a material impact, and the final driver is the impact of non-cash items such as PTO, so I wanted to make sure that you were aware and let you know that in the U.S., we will be transitioning from our current accrued paid time-off or PTO program to a flexible time-off program starting at the beginning of 2026. As employees burn down their accrued PTO, this will have a positive impact on our op margin, but this impact will not flow to our free cash flow margin.
I wanted to also call out very clearly, there is no one-time cash impact on the balance sheet due to this transition. This change is included in the 2025 guidance we provided on our Q2 earnings call. Moving on to our capital allocation strategy. Starting with our share repurchase program, over the past two quarters, we have retired $50 million of the $100 million share repurchase program that was approved by our board last year. We will continue to evaluate share repurchases as part of our capital allocation strategy. Now, next, let's talk about our outstanding 2026 and 2028 convertible notes briefly. You can see the outstanding balances listed here, and we continue to evaluate our options on whether to retire early or hold these notes to term. But we've been very pleased with the optionality our use of convertible debt has provided.
And it was also valuable because we've been able to get more interest income than the interest expense that we've paid due to the market conditions over the past couple of years. In closing, I hope you leave today feeling the same level of confidence and excitement that we feel about Workiva's future. To summarize everything you've heard, we have a resilient platform with a growing number of solutions that resonate with the market. You're hearing that here today. We have a strong setup for long-term durable growth, and we're focused on delivering productivity and expanding margin leverage. This winning combination sets us up for an exciting future, and we're happy to have you all along for the ride. Thank you for joining us today. Very much so. We'll pause briefly here to set up the stage before we open it up for Q&A from the audience.
Great. We've got Julie, Mike, and Jill back on stage for Q&A. We will open it up to the audience for Q&A. While we're waiting for the mics to make their way to people who have questions in the in-house audience, we will kick it off with a question from online. As a reminder to anyone at home, you can also submit a question online. I guess this first one is for you, Julie. Great to see the commitment to the margin expansion materialize in the updated 2027 op margin. What's changed over the last year to give you the confidence to improve this guidance?
I'll start by saying we're making the change today, but our mindset and our actions over the past few years have led us to today and have given us the confidence to change the targets.
We've laid the foundation over the last few years. We've had that focus on productivity, but we've seen results, which is why we actually changed our guide for the year on the operating margin, and we just have plans in place. We know what we're going to be doing over the next six months, 12 months, 18 months to ensure that we are working towards that new operating margin. So again, not an abrupt change for us, but rather we've been gaining the confidence as we've been executing and making progress on some of our productivity initiatives. Again, productivity to become stronger and continue to execute on our growth strategy as we scale.
Terry Tillman, Truist Securities. Thanks for all the content. Probably took a few hours to put that together. Maybe a few less hours with AI. But I think the subscription growth has been impressive, though, given the macro and 20% type growth. You're talking about the margin improving to 18%, I think, or 16% from 14%, or I may have that off, but in 2027. Are you giving up anything on bookings and driving growth, though? Because I care about the bookings. And so some of this seems like optimization efforts and go-to-market. But what's the confidence in, give us comfort on you're still going for bookings growth to sustain that 20% or even higher subscription growth going forward? Thank you.
Sure. I mean, two things I'll say. And the first is, as I mentioned, we're taking a practical approach, and our highest priority is not to disrupt the bookings momentum. The changes we are making, and this is the second point, the changes we are making are actually making us stronger. We're, again, elevating the profiles of the sellers that we bring in. We're strengthening the ones we have to enable them to sell more, sell with the platform, embrace our partners. While we are reducing spend, we are increasing the strength of the organization and the ability to go after our commercial goals. So again, taking a practical approach, and the changes we are making will actually strengthen our go-to-market.
Good afternoon, Brett Huff from Stephens. Thanks for all this content. Really appreciate it. One of the things that you talked a little bit about, but I'd like to unpack a little, is the strength of your own customer base, those that have been loyal customers from early days. To us, it seems like a really big and maybe underappreciated growth driver. You talked a little bit about some of the metrics. Can you give us more meat on the bone on what is the sort of plan to go after all those folks? I know they're in good dialogue and things like that. What's the next solution that typically they buy? What's the trigger for them buying and kind of what's their propensity? Appreciate that.
Sure. I'll take that question in that this is something we've been building a muscle on over the last several years. As we said, we in earnest really started selling the platform in 2021, but our organization has, again, been building the muscle to go after the account expansions and bring more and more value. A customer starts, we build a trusted relationship. They don't land with necessarily one specific solution, and we expand from there every customer, maybe at a different place.
But we go in, we show value, and again, it's the power of the platform that really makes the difference. So our teams, again, we have transitioned from that single solution, multi-solution to the platform play, and our sellers are more confident. We've organized for this. We've got teams going in to focus on exactly that. Expansion opportunity is significant, as we've described.
Okay, great. Steve Enders from Citi. Thanks for doing this today. I guess two-part question. I guess first part, just on the AI capabilities you've rolled out here, just how are you thinking about the incremental monetization of those solutions and what that means? And then secondly, on the new tiering model that you're rolling out, how should we think about the price uplift that comes from that and maybe what that conversation looks like with the customers? Thanks.
Sure. Thanks, Steve. I'll take that question. So I think first off on the tiering question, and we'll use SEC as the example, right? The notion typically is an on-renewal topic unless there's something else that's going on, but that's one trigger event. We do have some account owners that are going in and pitching earlier if they've had some requests from their customers. But for SEC and for the others, it's typically a renewal type of conversation. The second piece is on the uplift, right? So for example, for SEC, what we've experienced so far is we are north of a 20% uplift on the specific solution contract value of moving from the SEC Standard to the SEC Advanced. We do believe that with the addition of capabilities like AI that we introduced here yesterday, that that might also be another trigger event.
It's interesting, the dynamics for the customers have been changing with AI, and it provides another event for that. And then the first question was related to AI. Oh, the AI specifically, yeah. So yeah, on the monetization there, it's interesting, right? For us, when we look at AI, it's become almost, it's showing up in RFPs. It's become a just standard part of what people expect. And for us, again, it's the monetization through the additional packaging tier. For the advanced tier, you get the AI with it rather than a specific unit price specifically for one AI feature. It's all about moving to that more premium set of capabilities in a given product tier. So yeah, we'll see over time how that works.
But the other piece I would say is on AI, which has already been part of our story for the last couple of years, has been on winning more deals, right? Monetization comes through quantity, not only changing price. If you win more, you have monetization.
Thanks. Alex Sklar with Raymond James. I want to follow up on Steve's question there. So when you talk about pricing and packaging broadly, can you just help frame what percentage of your installed base is maybe on those Standard packages versus an Advanced or Essentials today and what that journey will look like? And then related, just the idea that capital markets activity is picking up now, you now have this good, better, best motion. Is the outlook for SEC reporting, because that's something we could see actually accelerate here in the next couple of years between those two kind of growth drivers? Thanks.
Well, I'll just start off the timing of it, right? We just started. So we're a couple of quarters into it. We're encouraged by what we've seen, but I don't think we have enough data points yet to forecast a trend. So there's no guide on this with specifically on that uplift. When we look at this in general, we see this as a long durable demand opportunity, right? This is not a everybody has to move by Q3 or Q4 or some time date piece here, right? This will be a multi-year durable demand story as customers evaluate moving from a standard to a premium option, for example. As it relates to cap markets, I don't know if anyone, Julie or Jill, if you want to talk about cap markets.
Sure. I mean, we're encouraged by what we're seeing in the market. We've not counted on any comeback as we've put out our guide, so that's the way we have been approaching the market right now, but we do see some increased activity, but again, nothing significant that would be upside for us in the guide.
Andrew DeGasperi from BNP Paribas. Just on a follow-up on the question of go-to-market, just wanted to know the timing of the changes that you made or are you making. And then maybe second, you've seen confidence not going to impact bookings. Just wondering because this has happened in the past with other software companies when they make some drastic changes, it does have an impact, so just want to understand what's the confidence behind that.
We've rolled out the changes over the last, as Mike said, several months, quarters, so again, encouraged by what we're seeing, but it has not yet been a dramatic change. We've begun to see the momentum, and we're very encouraged and continue to do that across our portfolio.
Yeah, I was just going to jump in, Andrew. I think you were asking about the sales reps, right? Just a sales rep impact. Yeah, I mean, I think in general, I think, I mean, Julie highlighted it, right? We've been going through organizational changes throughout. You saw the changes in R&D. You saw the changes in cost of sales. We've been very thorough and thoughtful about how we make those changes in sales and marketing. No one's a different type of thing. And yes, we don't want to minimize any risk around bookings by making drastic changes. How we've been doing that is piloting things. We'll pilot a change, see how it works. If it works well, then we'll roll out in general. So there's a methodical approach to that that we've been executing over time.
Hey, guys. Allan Verkhovski from BTIG. Thank you for the very concise and impactful presentation today. I really like how you guys have a 3x multiplier opportunity on your install base just by selling the platform. In addition to 2/3 roughly of your customers still spending under $100,000 in ACV, I was wondering if you could talk about how you envision the mix of your growth coming from existing customers versus new, maybe over the next three to five years. And the second part, if you could just talk through the opportunities with AI to drive more margin expansion. Is this something you're really excited about? Are there maybe more exciting opportunities that you see than AI where you don't think it's that substantial? Would love to just get your take on that as well. Thank you.
Sure. I think historically we've been striving for the 50/50 blend of new logos versus new solutions, account expansion. I think as you saw today, as our base on our Fortune 1000 companies continues to rise, that shift, and because we have more solutions to sell and because we're focusing on account expansion, we are more likely to move towards 60% account expansion, 40% new logos. There is a lot of upside on the expansion, as we've all highlighted today. So we do see that becoming a larger percentage of our revenue going forward. On the AI side, I assume that you mean internally the way you asked the question. So we've been seeing the largest gains, of course, in commercial organizations and sales and marketing and customer success. We've been rolling out the capabilities. We've been leveraging SaaS platforms that we use internally.
So we've been getting some benefit from that. We've done some of our own building with capabilities. Our CIO organization is hard at work doing that across the organization. So I would say that we take a very practical approach to using AI across the organization. We do not subscribe to the 50%-80% lift internally for efficiencies, but we are using it everywhere we can that it makes sense in getting a lift. And we have incorporated that mildly and again, practically in the guide, but not as a significant dramatic change.
Great question. Jake?
Yeah, thanks. This is Jake Roberge with William Blair. Just wanted to go back to the 2027 and 2030 targets that you all have. You're maintaining the top-line targets that you put out last year, but this is obviously a different macro environment than you were selling into. So, could you talk about what's underpinning that confidence and maybe the one or two things that might have changed to the positive versus those targets last year?
Jill?
Sure. So, on the top line specifically?
Yes, specifically on the top line.
So, we have outperformed from our original expectations 2024. We've talked a lot about the last three quarters of 2024 being very strong. And that, of course, is helping to feed into strong revenue growth over the past year, but also is helping to boost our overall ability to reach that goal. And we've talked about that some in the slides. And I think that it's back to that strong base of revenue and our ability to consistently maintain our retention.
With that great captive audience of customers being willing to come with us along in this journey and understand the value that we're providing to them, we do believe that there's an opportunity to continue to execute within those customers to sell more solutions, and so, I mean, I think it really is, it's the broad portfolio of solutions. It's everything that you've heard us talk about and our ability to continue to execute on that strategy and up-level within each customer to grow into that result. We feel very confident about that, as you heard today. I think there's one here in the front.
Hi, thank you. Good morning, Rob Oliver at Baird. Thanks for the presentation and information. Good to see you all. I had two questions. I guess, Mike, for you first, I really appreciated you including kind of the focus on the non-seat-based model in your portion of the presentation. Obviously, that's a tremendous concern right now in the market for software investors, and you guys have not been selling seats for a long time. We saw, I think it was either Braze or McCormick earlier on stage talking about their GenAI usage with you guys already. So I'd be curious to know your take or Julie about how, as you guys are approaching your customers already in a solution and value-based model, how you feel that empowers you guys to have that AI conversation in a way that helps you capture more of that value.
And then the second question I had was just around, Julie, you laid out a vision for a true platform, which I think you guys have been, but what's the timeline to having developers really working on that platform? Thanks.
Yeah, I'll start off with the AI adoption piece. We've seen the markets change now, I'd say, in the last year. We're now seeing AI showing up on RFPs. It becomes more of a central part of a conversation. And in that regard, I think it's the we see customers, even from their top down, and a lot of organizations now have a mandate that they have to see some form of AI being embraced in the organization. With that, again, to me, it opens the door for us to have those conversations with our tiered model on premium pricing and for that premium model with the additional features.
So that on the monetization side is there. And I think we're having a lot more, I'd say, commercial conversations now that relate to AI as even a differentiator in our competitive wins than we maybe did a year ago. So I think we are in an interesting transition in the market on that, and we're optimistic that we are in a great position with what we launched today and have had in the past on AI.
And I'll take the platform question. We put out a vision there where we will ultimately have partners building on our platform, and we will have our full ecosystem building on the platform. And we're already seeing it to some extent today. C an think about some of the capabilities that our partners are building for our customers that bring them even more value on the platform, whether accelerators or other capabilities to help them, again, get more out of the Workiva solutions and the platform. A good example of what we're seeing is tax, right? That's something that is very unique. There are a lot of customizations. It's something partners get value from by helping customers with billable hours, and we provide the tech platform. That's something partners are building capabilities around our platform on.
There's one that's happening today, but we continue to see that in financial services. There are a lot of specific use cases that our partners are building for our customers to get more value out of the platform. They're built upon and using and leveraging the Workiva platform.
But as our platform gets stronger and stronger and more capable of serving the solutions we have, it's getting us a greater opportunity to roll out more solutions with ease. We just rolled out a public funds offering not too long ago. That's an example of another fit-for-purpose solution, great platform fit for us. We can continue to do that. But as we build the platform that gets easier for us to build solutions, it also becomes easier for our partners to build upon it, which is why we envision that ultimately we'll have a larger number of solutions built by partner and ecosystem, but leveraging the Workiva platform, which is good for all of us and for the customers and getting value.
Any further questions in the room? Great. We'll have a follow-up.
There's always lots of questions. The GRC, I thought that was strong, actually, seeing the 30% ARR growth. I'm curious, do you think that that can continue to sustain higher growth than the overall business? And I think you said, I think it was you, Mike, that was talking about there's the legacy platforms and we know who they are and then point solutions. Does one area seem more actionable in terms of winning business there in GRC? Thank you.
No. Yeah. So looking at that market, yes, we are pleased with the growth rate that we've seen in the last year. We're not going to give a guide by solution on a specific growth rate. But again, we're encouraged by our execution in the market. As I highlighted, we have a lot of different solutions in that category to sell. And many of our GRC solution customers are multi-solution GRC customers.
We oftentimes see people starting with internal controls and then adding internal audit or risk management, policy management, or additions and land with one and expand another just inside of GRC. So we're encouraged by that, and yeah, we believe it's a good growth area for us. We have both on a new logo and an account expansion side opportunity there. So we're encouraged by that and look forward to continuing to grow there.
Steve.
Great. Steve Enders again. I want to ask on the PTO changes. Just as we think about that rolling out or that change coming through in 2025 and 2026, what impact does that actually have on the margin trajectory?
So as I mentioned, it is built into the 2025 margin that we provided our last earnings call. But we do think that there will be some acceleration of PTO usage in the second half of the year. We announced it to our employees in June. And we do expect that there'll be some accelerated usage of that balance as they work through it prior to rolling out the new flexible PTO, the flexible time off program. And so you'll see that in the margin as part of our results of the guide that we provided. Going into 2026, there will be continued burndown of that balance as employees continue to use that as they transition into the flexible time off. But again, I just wanted to reiterate that there will be no one-time cash impact. So you will not see that as part of the transition.
Okay. Is there a way to think about the magnitude of the benefit it's having for this year and into next year as well, just as we try to think about our models for the 2027 outlook now?
So I would say that we've given the guide for this year. And so you can use that as we've given a guidance for free cash flow for 2025 and for the op margin for 2025. Going into 2026, we do think that we'll continue to see improvements in both of those margins, both the op margin and the free cash flow margin. But there could be some of those. It could be quarterly fluctuations or just overall fluctuations. Free cash flow will continue to be better than op margin, we believe. But you could see some narrowing and widening of that gap as the balance of that accrued PTO balance comes down for those in the U.S.
Great. Jake?
Yeah, Jake Roberge again from William Blair. Just wanted to follow up on the go-to-market again. As you roll out those changes on reducing sales overlays and accounts under coverage, how have they actually been received by the field? And then what inning would you say we're in for those changes, just given you're taking more of a layered approach to them?
So in terms of changes being received, again, we've been doing it in a thoughtful way. A number of those overlay solution reps are incredibly competent, and they are capable of selling across the portfolio. So some of them will and do move into account executive roles where they are responsible for the broad portfolio and an account. Others have moved into other solution areas. Then by attrition as well, we let them go. It has not been abrupt, nor do we intend it to be abrupt. We're doing it over time, again, in a practical and thoughtful way.
Any further questions? Great. We've covered a lot today, so I think that we will wrap it up. Thank you for taking all of these great questions. Thanks for you guys in the audience for providing us with all of these questions. We will post a replay of this event on our IR website in addition to the slide deck. If you'd like to review that, that will be available online. Please don't hesitate to reach out if you have any other questions. Thank you all for joining us here in person. Thank you for joining us online, and we look forward to continuing the conversation. Thank you.