Hello, and welcome! My name is Mike Rost, Senior Vice President of Corporate Development and Investor Relations, and I'd like to welcome everybody here to our event. We are doing both an on-site Investor Day as well as, you know, for those of you online. Our on-site event is in coordination with the Workiva annual user conference that we call Amplify. We have 2,000+ customers and partners that will be at our event here in Nashville this week. We have a packed agenda here, and I can't wait to get started. Before we get started, just a little housekeeping. Please review our safe harbor statement. We may be making a few forward-looking statements.
Those forward-looking statements may change, and, you know, again, read the, read the details there, and looking forward to, the rest of, the questions that'll be coming later on today. Looking at our agenda, we're gonna kick things off with, CEO and President, Julie Iskow. That'll be followed up by CTO, David Haila , who will be focusing on product and innovation. Finally, wrapping up our prepared comments, we have CFO, Jill Klindt. We will have a Q&A session at the end, where all four of us will be back up on stage, and we'll talk about Q&A once we get to that section. So to kick things off, I would like to welcome to stage President and CEO, Julie Iskow. Welcome, Julie.
Thank you very much. Good to see all of you here, and thank you for being with us. You know, we intentionally hold an Analyst Day at Amplify, and we do it because it gives you an opportunity that you might not otherwise get to hear from our customers and our partners, both in scheduled sessions and informal conversations. So to hear... You'll get a chance to hear about why they're using our platform. You'll get to hear about how our solutions are transforming the way they work. And while we want to hear, we want you to hear from us this morning, there's nothing quite like hearing about Workiva directly from our customers and our partners.
Speaking of customers, I'm just gonna kick us off here with a deal, and I'm doing that because this deal is so representative of what we hope you understand about Workiva and who we're becoming. It's a Fortune 5 company that recently added management reporting globally across their entire accounting team. This is their ninth solution and their second-largest solution spend with us. They purchased this solution, initially, SEC, in 2013, and then in 2018, they added a second solution. In 2020, they added a third and fourth solution. In 2021, they added a fifth and sixth solution, and in 2022, they added seventh and eighth solution. And in 2023, just last month, they added their ninth solution with us. That's 7 solutions in three and a half years, 9 in total, and ACV grew from $200,000 to over $2 million, all on our unified platform.
But wait, there's more. We're about to close on our tenth solution with this customer, and you know what it is? It's GRC controls for sustainability. This customer will have financial reporting and ESG and GRC. They recognize the importance of GRC controls for both financial reporting and non-financial reporting. Again, all on one platform. Here's why they purchased management reporting. For the exact same reason, exact same reason they purchased the other eight. It's because this is what it looks like before Workiva: complete chaos, lacking a single source of truth, inefficient review process, limited internal transparency, time-consuming manual processes, risks of inaccuracies in reports, and on and on and on. We showed them a better way. We lowered their risk, we increased their transparency, we made it easier and more efficient and more streamlined, and at the same time, they could be more assured of what they report.
What I just showed you is why we win. This is how we roll now. I mean, multiple solution, global account expansion, and with partners. Like many of our large deals, this project is being delivered by a Big Four partner doing financial transformation. Now, this deal also illustrates why we're resilient. It's not just our broad portfolio of best-of-breed solutions. It's because we solve for issues that our customers must address. We're not just another project management tool or travel application. Companies need transparency. Companies need to comply with regulation, and companies need accuracy in reporting and disclosure. We provide solutions that companies need in good times and in challenging times. That's why you'll see more than 2,000 customers here this week in person at Amplify, with thousands more joining virtually.
And there'll also be hundreds of partner attendees and dozens of sessions showing our newest capabilities and innovations. We'll have CFOs and CAOs and heads of sustainability and audit execs here, and they'll be with the teams that execute for them every day. And they're looking to us to bring solutions to their most challenging problems, and it's why we do what we do. Now, with that, I'm gonna take you now through where we are as a company today and where we're headed. So we're gonna start with the opportunity. We have a $25 billion TAM, which is largely untapped. And with companies continuing to invest in digital and financial transformation, and with an ever-evolving and changing regulatory landscape, we see nothing but upside to our TAM moving forward.
When you look at the opportunity in front of us, in financial reporting, in GRC and ESG, we're clearly not opportunity constrained. Now, as the regulatory environment continues to grow in both scope and complexity, so too does the need for transparency and disclosure of both financial and non-financial or ESG data. Just in the past few months alone in the U.S., the SEC has come out with two new regulations. First, focused on the disclosure of cybersecurity incidents. Second, requiring PE firms to provide fund reports subject to audit, and it's on a quarterly basis. These are beyond the climate disclosure rule that we expect to get clarity on in October. In Europe, the opportunity is growing as well, particularly with CSRD.
Now, CSRD requires companies to report the environmental and social impact of corporate activities, and it requires the audit as the assurance of both financial and non-financial data. ESG regulation is not limited to the U.S. and the EU. I mean, we continue to see new ESG laws passed around the globe. In Switzerland and Australia, they both passed laws this summer around ESG regulation. The opening video said it pretty clearly. With increasing regulation globally and the growing stakeholder demands, we help companies respond with speed and with confidence and with accuracy. This is who we are now, and it's what we do, and it's why the Workiva platform is so relevant. Not only are we relevant, but we're also best positioned to capture the growing opportunity.
We have distinct competitive advantage, and these advantages can be seen in three clear categories: our experience, our ecosystem, and our capabilities. We have unrivaled experience. We've been doing investor-grade reporting for more than a decade, and we have regulatory expertise. The day the regulations become law, our software will already have had the latest updates, enabling our customers to be compliant. And we are the world's leader in XBRL tagging, fast, efficient, and accurate. And yes, we've been using AI in tagging for years. We have a quickly maturing ecosystem of over 200 partners. They include the Big Four and the advisory and technology companies and MSPs, and that's globally and regionally. They wanna work with us because of the opportunity for commercial success that it creates for them. We have 5,800 customers worldwide. They already trust us, and they love us.
It's an enviable install base. Think NRR. They already use us for critical functions. They already understand the value of our platform, and this increases their willingness to expand with us. Think ACV. We also have a diverse and growing portfolio of best-of-breed solutions, and it's all within a true platform, the only unified platform, bringing together financial reporting, ESG, and GRC in one secure, controlled, audit-ready environment. This is assured, integrated reporting. So let's take a quick look at the numbers. 5,800 customers in 180 countries, 88% of the Fortune 100, 85% of the Fortune 500, and 80% of the Fortune 1000. And we've got 200+ partners in our ecosystem. We've been on the Fortune 100 Great Places to Work list for 5 years running. And importantly, we've been awarded MSCI's AAA rating.
It's their top rating, and it indicates industry-leading status for us in managing ESG risks and opportunities, and that's two years running. Our midpoint guidance for 2023 remains at $627 million, and our retention rate is consistently greater than 96%. So this is where we sit right now. A clear competitive advantage, a large and relatively untapped TAM, with well-defined strategy that we continue to execute on. So what's next? We've been clear on our next growth target. It's $1 billion, and we're focused on driving productivity and performance to get there. We believe we have the right platform, the right strategy, and the right team to make it happen. Our relevance is increasing, and that gives us optimism that we can capture the opportunity in front of us. So what do we look like two, three, four, five years from now?
What are we evolving to? The opportunity is such, and our technology is such, that we're becoming the world's leading platform for transparency, regulatory, reporting, and disclosure. Why? Because we shine where data consistency, data integrity, and accuracy are critical and narrative is required. So how are we gonna get there? Well, we're gonna start by capturing that TAM right in front of us, that $25 billion TAM. And here's what we're gonna focus on. We're gonna strengthen our leadership, execute on our strategy, and we're gonna relentlessly innovate to keep meeting and exceeding our customers' expectations and strengthening our moat. So let's talk about leadership, which is critical to our strategy. It's my priority to bring on experienced SaaS leaders with a track record of successful results at scale. And make no mistake about it, this is not a replacement...
This is not a replacement of our current teams. We need both new leadership as well as our existing Workiva teams, who have expertise in industry and across markets and with our products. Look at this slide. We've got four new senior leaders with years of experience, and they all have one thing in common. They've all been with multiple SaaS companies, and they've all scaled to the billions of dollars and beyond. And importantly, they also align with our values, and they'll be additive to our culture and our existing leadership team. This team is focused on executing our growth strategy. The four tenets of that growth strategy remain relevant and intact. Fit-for-purpose, best-of-breed solutions that are better together and powered by our platform, our open, intuitive, intelligent, and connected platform. An expanded global footprint with excellence everywhere we play.
A high-performing partner ecosystem to extend our value and expedite our growth. So we're gonna look more closely at each of these growth tenets. We're gonna start with our best-of-breed solutions. Our solutions are categorized into four groups: financial reporting, non-financial reporting or ESG, GRC, and our industry verticals. We've got a diverse portfolio, which is a key component to our resilience, and it also contributes, of course, to our growing ACV. Now, when you look at this slide, you might think it's, it's a lot, and you might wonder how we're able to maintain the quality of these solutions as we expand. But that's the power of the platform. At least 80% of each solution is the platform. So in most cases, an enhancement to the platform enhances all the solutions. Now, let's dive into the portfolio, and we're gonna start with financial reporting.
Now, it's hard to overstate the importance of this next point that I'm about to make. Financial reporting for Workiva is not just SEC. It also includes, for example, global statutory or multi-entity reporting, private company reporting, management reporting, and capital markets. I mean, you can see it here. We have a sustained growth coming from multiple financial reporting solutions. Now, over the next few days, you're gonna get a chance to see it Amplify customers, and they'll be talking about some of these solutions. Nasdaq will be presenting with our partner, VantagePoint, on how they use Workiva's platform ... to redesign their company-wide statutory reporting process. And you can join in a panel discussion on investment reporting with CBRE and Citadel. And then we've got Duolingo and i3, and they're gonna talk about their private-to-public journey and how they were able to optimize their capital markets transactions.
Okay, we're gonna jump in now to ESG. ESG is a sizable opportunity for us, and we believe we're well positioned for it. So I'm gonna take you through our solution, our platform differentiation, and the market in both North America and Europe. ESG reporting requires the same capabilities that are needed to support financial reporting. This enabled us quickly to go to market and take a leading position just with the existing platform capabilities that we had. I'm talking about capabilities like the ability to handle complex and composite reports with numbers and narrative and charts and graphs and footnotes. I'm talking about a collaborative system where multiple stakeholders can update and edit the same document at the same time. And I'm talking about data and document assembly, taking data from multiple systems of record. Those are the same capabilities needed to support financial reporting.
We decided to move on and develop the fit-for-purpose features that are needed for ESG today, and those features are the support for multiple ESG frameworks and ESG program management and design reporting. This is how we captured the market opportunity for ESG. Let's turn now to that market opportunity. Even before there's ESG legislation in the U.S., we're seeing demand for our ESG offering. In some cases, yes, it's about preparing for what's coming, and in other cases, it's about risk management and surfacing risks for better business outcomes. It's also about stakeholder demand for transparency and accountability, and not just shareholders, but customers, employees, and communities. When it comes to regulation, there are a few we're watching closely right now: the SEC's proposed climate disclosure rule, of course, and the bills in flight in California.
Now, we expect the SEC to provide further clarity of their proposed climate disclosure rule in October, this October. In California, just last week, the state assembly passed the Climate Corporate Data Accountability Act, and it's anticipated that the governor will be signing that into law in October. This new law will require all U.S.-based companies doing business in California that make over $1 billion annually to publicly disclose their full carbon footprint. Bigger U.S. companies are also concerned about the impact of CSRD, which they'll have to comply with as well. Now, we believe we can continue to drive durable growth in North America as these regulations evolve. Now, in Europe, we also expect ESG to be a long and durable demand market with about a five-year adoption cycle.
While CSRD was passed into law last November, with clarity in July, there's a lot still left to be defined. I mean, there's the further definition of reporting standards, the publishing of an XBRL taxonomy, and clarity, of course, on enforcement. Now, we believe that our platform is ready to address the requirements as they get clarified. The key requirements of CSRD are everything we do well: financial reporting, ESG, in the same integrated report with assurance and XBRL tagging. Let's take a look at a few metrics here. We're seeing strong early performance in customer count, 184% increase year-over-year, in partner delivery, at 42% increase year-over-year, and we have 20% of the Fortune 100 using our ESG offering today. We're gonna move on now to ESG. Excuse me, GRC.
GRC is a broad market segment that includes internal audit, controls, risk management, and policy management. Now, some key market drivers are this: a heightened regulatory environment. I mean, this increases scrutiny and the need for governance, risk, and compliance. Increasing regulations are requiring assurance. I mean, just look at CSRD that we talked about a moment ago, and look at the recent PE legislation. Another driver is the changing and evolving risk landscape, and it's a topic in almost every C-suite and every boardroom. GRC is a core component of financial reporting in ESG. I mean, as ESG grows, it will further drive the GRC market. It prioritizes a need for controls. For example, that 9 solution customer that I just spoke to you about in the opening, they're buying controls for sustainability. All companies will need to manage their ESG risks.
All of these factors are driving GRC momentum. Now, Workiva is a recognized leader in GRC, and it's the only software company to also provide ESG and financial reporting. Are there competitors? Sure, but they're mostly point solutions and legacy technology. Here again, we have a decade of experience helping companies solve complex reporting challenges, and we have best-in-class technology, and we continue to innovate. You're going to hear it again, we are the only company bringing together financial reporting, ESG, and GRC on one unified platform. At Amplify, you're going to have plenty of opportunity to learn more about our GRC solution. Just check your agenda, and you'll find lots of GRC customer panels, excuse me, and product sessions. There's also a SOX, a SOX and Internal Controls Summit, and it's the largest dedicated event for SOX professionals in the U.S.
As we wrap up GRC, here's one last slide showing you some of our metrics. We've got 38% increase year-over-year of those customers with greater than $100,000 A-ACV. We've got greater than 40% of our GRC deals being multi-solution deals, and we have our partner- sourced deals increasing by 83% year-over-year for GRC. We're gonna move on to the platform tenet of our growth strategy. Workiva is a true platform company, and you're gonna hear this from us over and over again as well. Quite simply, all of our best-of-breed solutions are better together, and our platform makes that possible. This is a strong and key differentiator in the market, and it's resonating with our customers. We're a tech company, and our success comes from relentless innovation.
It's core to who we are, and it's something that's not new for us. We've been doing it since day one. It sustains our excellence, and it ensures that the solutions that we build are transformative. You're gonna see this throughout Amplify, and David, our CTO, is gonna give you some detail on it in just a few minutes. He's gonna be highlighting some clear examples of how we're leveraging technology to remain differentiated and best-of-breed. Let's talk about global excellence. A core part of how we'll drive to our growth is getting expansion right in Europe. Our focus has been on refining our approach within our market segments, clarifying our platform messaging of Assured Integrated Reporting, and better leveraging our partner ecosystem. We're making progress.
Four years ago, in 2019, revenue from outside the Americas was less than 4%, and at the end of 2022, it was 11.5%. So, a great example of Assured Integrated Reporting win with Telefónica is with Telefónica, one of the largest telecom companies in the world. It's based in Spain, it's listed on the stock exchange, and they have to comply with both SEC and ESEF. Now, with CSRD requirements in multiple regions, Telefónica is leveraging financial reporting, and that's including multi-entity reporting, controls, and ESG. And we believe great customer stories like Telefónica will help us win additional business across the region. We're seeing momentum, and there are some positive signs of progress here in Europe. Our new sales and marketing leadership is improving the effectiveness of our go-to-market capability. Our platform messaging is resonating, and we've also embraced partner-first motion in Europe.
Our partners are providing some of our strongest growth in the region, both in deal size and in win rate. Speaking of partners, we're moving to a partner-first strategy across our entire company, and not just Europe. We know that a high-performing partner ecosystem is an important growth accelerator for us. I mean, look at this, what a great set of logos on this slide. Partners like these drive value to Workiva by sourcing opportunities and co-selling with us and enhancing the value of our platform for our customers. Now, important to note, Workiva, for Workiva, partners are not replacing our direct sales channels. They're an additional channel. So what's the impact? Everyone wins: customers, partners, and Workiva. Partners extend the platform value, shorten the sales cycles, and increase the likelihood of account expansion.
When partners are involved, our win rates are higher, our deal sizes are larger, and our customer experience is stronger. We have a number of sessions at Amplify where our partners are presenting with our customers. And they'll talk about how they've implemented Workiva, and they've extended the value and capabilities of our platform. And just down the hall right now, we have a few hundred partners at our Partner Summit, and our partners are engaged, and the impact on Workiva, their impact on Workiva and our customers, it's just, it's, it's clear, it's significant, and it's growing. As I wrap up the overview of our opportunity and our strategy, here are a few closing thoughts. Our strategy is intact, and it's relevant. Our opportunity is large, and it's relatively untapped, and we're confident in our ability to execute on our strategy.
Because we're the only unified platform for financial reporting for ESG and GRC, all in one secure, controlled, auditable environment. We have a significant edge in experience and expertise, and we have a large install base and a growing partner ecosystem, and we have the team in place to execute. Our opportunity is growing, and at the same time, we're getting better. We remain confident in the resiliency of the business, the continued demand of our Assured Integrated Reporting platform, and our ability to expand in our large and relatively unaddressed TAM. I'm going to leave you with this, another example of the power of the platform and the opportunity in front of us, and this time it's 11 solutions and almost $3 million. It's with a Fortune 50 company, and they started with SEC 12 years ago, back in 2011.
Yes, it's another customer recognizing the value of Assured Integrated Reporting, SEC, with ESG and GRC. Take notice here, too. They're also leveraging our platform for a number of use cases beyond our core. And this is what I mean when we say we are becoming the leading platform for technology platform for transparency, regulatory reporting, and disclosure. The proof points are here, and we're going after more. So now I'm going to hand you over to our CTO, David Haila. He's going to take you through a deeper look into some of our critical investments in innovation. David?
All right. Well, thank you, Julie, and thank you to those who have joined us in the room today and those who have joined us online as well. As Julie mentioned, I took over my role of CTO this past spring. I feel like I'm uniquely positioned to take on this role. For those that aren't familiar with my journey, I started Workiva back when we were just in our startup phase. At the time, there were just a handful of us sitting around the room, working long hours to develop a first-of-its-kind solution to help financial reporting teams overcome daunting new challenges. Much in the same way as we see today, they were facing increased regulations that were piling on and making things a lot more comfortable... Uncomfortable. Sounds a bit familiar, right?
So, at that time, I was an engineer, but I journeyed from there through product, and along the way took on this role as CTO. So for me, though, it was never just about the technology. My passion has always been to sit at the combination of customers as well as the technology itself. So, throughout the years, I've been deeply impacted by the stories of our customers, the stories of how our platform has been life-changing for them. In fact, one year at Amplify, a customer even told us, "Workiva saved my marriage." Now, I'm sure that you'll all be this week hearing more stories, maybe not exactly like that, but I see the opportunity ahead for us to delight more and more teams around the globe. And now, as our CTO, I'm excited to be de...
Leading the team responsible for delivering new and innovative solutions on our powerful, one-of-a-kind platform. And as Julie mentioned, one of our core drivers of our ability to execute was to continue to strengthen our leadership team, and we've done just that. Julie already mentioned our new Chief Product Officer over here, Nitin Bhat. And Nitin brings over 18 years of experience in product and engineering at companies like Amazon, Microsoft, Intel, and Smartsheet. Our SVP of Technology is Clay Stanley, and Clay's been with Workiva for 3 years. In that time, he's transformed our engineering and productivity processes... and he's responsible for the technology direction of our platform. The next leader on this slide is Paul Volpe, our SVP of Growth Solutions. Now, Paul's been with Workiva for 12 years and is a leader with deep expertise commercializing enterprise software.
Paul's responsible for the incubation, launch, and go-to-market strategy of our new solutions, including ESG, which will be discussed throughout the week. The fourth leader on this slide is Kevin Mannie. Kevin joined Workiva late last year from ServiceNow as our SVP of Platform Solutions. Kevin brings more than 25 years of experience building cloud solutions and taking them to market. We have built this team to blend technical proficiency and commercial expertise, and with them, I am confident that we'll continue to build on the legacy of innovation that we have and keep bringing solutions, customers, the best solutions in the market. As we continue to expand our portfolio of best-of-breed solutions, innovation is foundational to how we operate across the technology team. We're constantly refining, developing, and enhancing new features and capabilities.
This afternoon, I'll be on the main stage showcasing three important investment themes shaping our vision for Workiva. Those are AI, controlled collaboration, and the unified platform. For the next few minutes, I'm gonna give you a preview of what our customers are gonna see this afternoon. Let's start with AI. Anyone in the market been talking about AI? We are not new to this space. We started a data science team a number of years ago, and we've been conducting a set of research projects that are now being productized. We see AI as transformative technology that will shape the next decade of innovation. It'll be our customer's co-pilot for writing content, a creative partner for brainstorming new ideas, a research assistant generating insights, and a workhorse for automating their tasks.
The foundational efforts that we've put into machine learning and prompt engineering have enabled us to move quickly and responsibly to take advantage of the latest advancements in large language models. You may have seen our press release six weeks ago announcing our generative AI offering. Every one of our Workiva solutions can be leveled up with generative AI, harnessing best-in-class LLMs that are embedded directly into the platform. We've approached generative AI in tight partnership with our vendors, including Google, Microsoft, and Amazon, and it's been incredibly well received from our early adopters and partners due to our responsible implementation. First, we provide the assurance that no customer data or prompts are stored or used in any way to train the models. By solving for enterprise-grade security, we've eliminated one of the top concerns of using publicly available generative AI tools.
In fact, one CIO at a financial services company called Workiva generative AI, and I quote, "Exactly the kind of implementation they wanted to use from a data security standpoint." Second, we're leveraging Gen AI to augment user workflows versus fully automating them. These capabilities supercharge work, allowing users to accomplish more with less. And because the human element remains intact, our customers remain in the driver's seat. Let me show you a solution-specific example of how we'll be delivering generative AI. Unlike other off-the-shelf AI-powered chat tools, Workiva's AI extensions will be anchored to specific content in financial reporting, ESG, and GRC. For example, if you ask ChatGPT a question about the European Sustainability Reporting Standards that were rolled out earlier this year, you get an answer that's dated, vague, and it fumbles trying to explain what the ESRS is.
By contrast, when you use Workiva's AI extension, you get concise information from an up-to-date version of the framework with a clear list of disclosures. In the results, you actually get links, which take you directly to the information conveniently located in our ESG Explorer. Trust, but verify. As you can see, we're building in security, transparency, control, and context to deliver a generative AI experience with a high degree of trust that our customers expect from Workiva. We'll be announcing today that the availability of Workiva GenAI will extend to customers across North America. The second investment theme that we'll be highlighting today is collaboration. With Workiva, it's not just collaboration, it's collaboration with control. In the earliest days of Workiva, we combined and united the work of accountants and XBRL specialists on a single document versus a bolt-on approach.
Now, not only did that provide a better way of working, it also reduced the risk of data getting out of sync. Solving the initial challenges around auditability, permissions, and real-time collaboration got us here. But since that time, the number of teams that we serve and the processes themselves have gotten even more complex. New people keep getting added to the mix, and we all know that there's always gonna be more data…. So whether it's the customer's external auditors, their legal teams, or a design agency, my team spends an enormous amount of time thinking out how we can ensure the best experience for every one of those groups, collaborating in the platform, all while keeping the reporting team in control.
Earlier this year, I spent about a week in Europe meeting face-to-face with some of our top design partners, and each one of them shared an all-too-familiar narrative about the inefficiencies and risks of using disconnected tools. Prior to Workiva, their teams would work around the clock during busy season, trying to ensure that design document didn't get out of sync with the reporting document. They were always worried that they'd missed updating a number or narrative. But now, with in-platform design with Workiva, these agencies have mitigated their biggest risks and have become strong advocates for this better way of reporting. For example, the designs you're seeing here from Mastercard and Cognizant are just a glimpse of what's now possible when designers and reporting teams work together, and it was all created completely in the Workiva platform.
Today, we're pleased to announce that we're extending the capabilities that we originally built for our ESEF and ESG customers to our SEC customer base as well. To do this, we actually had to create an entirely new engine for how we export EDGAR. Instead of simply writing paragraphs that freely flow and compromise the design aesthetic, we now explicitly place every line of text, every chart, and every image. We believe this innovative approach can't be easily replicated and further differentiates Workiva from our competitors. That brings us to the third investment theme that we'll be discussing today, which is our unified platform. We believe a unified platform is critical to achieving the vision of Assured Integrated Reporting. With Workiva, the platform that powers financial reporting is the same platform that powers ESG, and it's the same platform that powers GRC.
On that platform, we make solution-specific investments that distinguish our solutions and set us apart from competitors. Today, we'll highlight a number of the investments that we've made in the past year. Again, each of these investments create differentiation between our offerings and also help to tailor these solutions to compete and win as best-of-breed solutions. As Julie said, every time that we invest in the platform itself, we get leverage, driving new capabilities across all of our solutions. That's why the largest share of investment goes into the platform itself. In addition to GenAI, we'll be announcing platform-wide support for the following capabilities today: automated table of contents and text documents, private comment support in documents, spreadsheets, and presentations, a new certifications experience, and a new task experience. Our platform goes far beyond these shared capabilities.
At the foundation, we provide a layer of shared data without an IT integration project. This afternoon, we will unveil an advancement to our core linking technology we call Smart Links. With Smart Links, one team can publish a reported metric, like revenue or number of employees, for use across all their other Workiva solutions. This has been a highly requested feature, and we can't wait to get it in the hands of customers. And in addition to linked data, we're designing experiences to optimize key cross-solution workflow with a new capability we call GRC Connections. GRC Connections is a tailored experience to create specific relationships of risks and controls with the metrics that they're designed to govern. We're excited to build on this to deliver future innovations that bring both automation and insight without customers having to work for it.
You'll get to see all of this and more later this afternoon. And while we're on stage highlighting these advancements, our teams are hard at work, actively building out new capabilities. Our innovation journey is just getting started. We have a talented team that operates with a disciplined approach to researching, defining, building, and launching new solutions and platform innovation. Now, one of the most common questions that I get from customers and investors alike is, "What solution is next?" And while we won't discuss any specific new solutions today, I can assure you that we have a disciplined approach to building what we believe will be commercially successful. The guideposts that we operate on in this journey are, number one, amazing our customers. We recognize one of our most valuable assets as a company is having a customer base of raving fans who become champions of Workiva.
We want them to advocate for expansion opportunities that improve our annual contract values and our net revenue retention. Right now, in another room, we're running Customer Advisory Board with over 50 combined members. These CABs are a great venue for soliciting feedback from our customers and hearing how we can best innovate on their behalf. The second guidepost is innovation for growth. Our team is constantly evaluating new opportunities to expand our TAM through the addition of new solutions to our portfolio. Internally, we have a disciplined Shark Tank-like process to evaluate new opportunities and score them against criteria like platform fit and market fit. We call that process ideation to incubation, or I2I. The benefit of that process is that we have a fast-moving but focused team that helps us arrive at a go, no-go decision as quickly as possible.
During the incubation cycle, we work through all facets of getting the product market fit while refining other aspects of the new business model, like our support and partnership strategy. The third guidepost is agile development and continuous deployment. By the time that we make a broad release, we've already been through numerous release cycles with a small cohort of customer development partners. We believe that more validated learning cycles that we go through and the more feedback that we get, the better positioned that we are to drive commercial success at scale. To enable this, we continue to make investments in automated testing to tighten our QA cycles and be able to release with confidence. I'm proud to say, with these strategies in place, we're in the upper portion of high and elite across benchmarks that measure delivery performance. And finally, accelerating our partner success.
As Julie described, high-performing partner ecosystem is critical to our strategy. For our teams, accelerating partner success means that we're investing in their enablement. And just like the CAB, we're taking every opportunity this week at Amplify to invest in our network of partners. Yesterday, I spent the bulk of my afternoon and evening with our partners at the Partner Summit. But it doesn't stop at just evangelization. We're continually investing in opening up our platform to equip partners to extend and build on it, to solve larger problems for our joint customers, all while improving their service margins. Additionally, as more and more partners choose to power their business as managed service providers, we're committed to their satisfaction and efficiency in the same way that we are other customers. To recap, the leadership transition from Jeff to myself has been a seamless one.
Over the past six months, we've driven stronger internal alignment, and we've strengthened our leadership team. We now have a great blend of experienced, long-time Workivians, along with seasoned external talent to help lead us forward. We're innovating to strengthen our unified platform that already stands alone in its ability to deliver Assured Integrated Reporting, and we have the discipline to continuously deliver innovations to power the next phase of our growth. Now, for a closer look at our financial outlook, I will hand it over to our CFO, Jill Klindt.
Hello, and welcome, everybody. Thanks, David, for handing it over. And really excited to have you in the room here, for those of you that were able to attend in person. Very excited that you that are online were able to join us today. Thank you for taking the time. And what I'm really excited about, because did you just hear everything that Julie and David were talking about? What an amazing opportunity we have in front of us. Myself, personally, I'm excited to be a part of this team. All the great new leadership that Julie talked about and that David talked about, this is just a phenomenal opportunity, and we're all very glad to have you here to speak to it about, because, what fun would that be if we couldn't share what all we're doing? So thank you for joining us.
I'm gonna dive a little bit into the numbers that show our progress and the things that really give us the confidence that we can execute on the strategy that Julie talked about and some of the things that David talked about as well. There's a lot that we have going on, and starting out, thinking about subscription growth. Subscription growth is one of the main things that we focus on, when we talk about how are we doing. I think that you all know, and hopefully, if you don't know, call us. We're happy to have a conversation. What you all know is that our subscription growth is really made up of, our entire portfolio of solutions.
Everything that I'll go through right now is really in support of all the tenets of our growth drivers that Julie mentioned. So we're talking about our broad portfolio of solutions here. We also have our connected, unified platform. We have our global excellence. We've got our partner ecosystem. But in thinking about subscription growth. One of the things that I think, you know, all those things are feeding into that. But one of the things that we really focus on, and you saw it, actually, Julie and David had the same slide, thinking about that really broad portfolio of solutions, supported by the platform. Majority of 80% of it is supported by platform's functionality. The way that I hope that you can think about it is that it's complex, but it's also how we win.
When we think about how we grow within our customer base, we would not have that growth within the base if we didn't have all the additional solutions. So bringing in new logos with multiple solutions, bringing additional solutions and new functionality to customers as they grow their relationship with us, that is a really big opportunity for us and something that really does drive our growth. And then Julie talked about our large untapped TAM, so that's even more that we can go after. There's more new customers that we can approach. There's more, growth within our existing customer base. And thinking of that, we've got some operating metrics that really support and show, we hope. I know these are all things that all of you in the room and online, you all pay a lot of attention to.
We think that these metrics really reflect the success that we're having in the execution of our strategy. Thinking about our durable retention, not only gross retention, 98% for Q2, it's a great result. We're very happy with that. We think that, as Julie mentioned, we aim for 96% plus. There's always some more that you can do and push on price. I know that question will probably come up, and sometimes that can have a negative effect on that number. In any case, we are very confident that even at that, it's still best in class. We have an engaged customer base. They love us, and we want to keep growing that. Then thinking about the net retention, showing how we can sell into existing customers. It continues to get stronger, and we're very happy to see the results there.
The quality of the customer base. You heard Julie talk about some of our customers, statistics greater than, customers in the Fortune 500 and the Fortune 1000 plus. Our customers are quality in size and scale, but they're also quality in the users within the organizations and how they enjoy our platform. David mentioned the Customer Advisory Board is going on right now. I got a chance to sit at a table with some customers last night, and just hearing them talk about not only how they're enjoying and using the platform today, which is great, but also how they expect to use it in the future, which I love to hear, and I hope all of you get a chance to speak with them, those that are in the room, and hear some of those stories as well.
So this is a quality customer base. These are great customers. They have businesses that are growing as well, and we just wanna be there to help them. And so, you know, we think that we can. Again, take that opportunity to speak with them here, if you're here. If you're joining us online, reach out to them. They'll be happy to talk to you. I, I know it's the case. And then we've got our annual contract value growth and seeing how that will go into a little bit more detail in a bit, but how we continue to grow annual contract values across, the base, and that is another thing that shows the execution of our strategy and shows how we're doing. Finally, we've got our financial model.
So we've got a strong balance sheet, we have a lot to work with, and we're continuing to get leverage out of our business. You heard David talk about how we innovate and grow within the platform, thinking about how we use those resources. How do we get leverage out of the existing business that we have, the existing people that we have? How do we continue to grow and scale to that billion plus? Well, this strength in our financial model, we think, will help us get there. So we've got a strong balance sheet. We recently had raised a little bit more additional funds through the convertible debt offering you would have seen. And not to say that acquisitions is the only way that we will grow, cause we have everything that Julie just laid out. We have this huge untapped TAM.
We have so much opportunity in front of us, but that doesn't mean that potentially we couldn't have in the future some sort of an M&A opportunity that will help us to further that growth. And that's what we'll focus on, is that measured additional adds to the existing base functionality within our platform, whether it's and then using, potentially, acquisitions to accelerate that growth. It's definitely an opportunity and one that we think is made stronger by not only the raise that we did, but we're cash generating. We've been generating cash as a company, as an organization for 7+ years now. And so thinking about the strength of our financials and how it helps us execute on that strategy is very encouraging for me, and I hope it's encouraging for you. So I'm going to dive into a few more metrics.
These are ones that I know that you know and love. I do as well, but thinking about our strong subscription revenue growth. So this is something that has been durable. This is growth across the solution portfolio. Again, if we didn't have that broad base of solutions, we would not be sitting here with this result. We have just now over the past year or two gotten to the point where more than half of our subscription revenue is coming from solutions outside of SEC. And that's taken a while because, obviously, our business was built on SEC reporting, and it's a nice base. We've got another slide here, we'll talk about that in a little bit. But it takes a while to build up and grow past that really nice base of revenue.
We're encouraged that we're growing outside of SEC. The other metric that we talk about is that, in Q2 in particular, 55% of this revenue growth came from customers that were already in our base, so coming from existing customers. We tend to have about a 50/50 split. It fluctuates a little bit, but over time, we always expect to have about half of our revenue growth coming from our existing customer base and about half coming from new logos. And this is a metric that we talk about at each earnings call, and so hopefully you're seeing that result, and I just wanted to point out how important that is as well, because we can't succeed as a business unless we have both.
We'll see more of that new logo growth, as we go into some of the other geographies outside of North America, but we are growing in North America as well with new logos. I want to go back and then dive into revenue retention. This is a slide that you all have seen, but it's worth diving into and talking about it a little bit more because, again, these revenue retention, both gross and net revenue retention, is a great way to see the success that we're having as a business. It is a great way to understand why we are so optimistic about our future opportunities. It takes execution, absolutely. There will be things that we need to execute on, things that we need to do.
But without this strong revenue retention, we would not have as much, again, enthusiasm, or we would not be as sure about how we can go forward. And it takes us. Again, execution is required, but retention like this helps make that job easier because we're not losing a lot of existing revenue, and the majority of the revenue that we lose is not controllable. So we've got M&As and bankruptcies and that sort of thing. And then thinking about our net revenue retention, the majority of this strength of that metric and the growth that we've seen there is coming from additional solutions. So while we have been pushing more on price increases, and we've talked a little bit about that, the majority of that growth is still coming from additional solutions into our existing portfolio. We're not getting this result from those price increases.
So there's an opportunity there and we will keep pushing. But if we can take an additional solution into an existing customer, we'll do that all day long over pushing harder on pricing. And then we know, history has shown, that we are able to grow that base revenue, that base pricing for each solution and the customer over time. And so it's worth more to us to get that additional solution now. So these are very strong metrics. And then talking about our customers, we already talked a little bit about this. New logo growth has been very encouraging. We're very happy to see this continued growth over the last four years. And a part of this was ParsePort, which has been a great add to the company and some good opportunity in Europe.
But it really just shows that the continued interest in our platform, the continued way that we're delivering this message, and that we're bringing in these customers in a very real way. I'm thinking about that CAB dinner that I had out last night. One of the people that I was talking to, he, he's in audit, and he said that his past two job offers, the job, like, offer letter that he had, he put in there that he was required at all times to be able to use Workiva in the execution of his duties and his job. So I can't help but think that that is a great story. I, I think we've even had stories like this before, but he specifically, in his offer letter, requires Workiva.
And so, you know, of course, you're going to have some amount of logo growth. When you have these really excited customers that are using the platform, they're engaged with our teams, they want to know more. So to the other side of me was a person that was talking to me about how they use Workiva today, and she said, "But I'm trying to talk them into more. I think we should do this. I think we should do that." It's those kinds of things that within these customers that we think is such a great opportunity for us, that makes this such a strong metric, because we have this great base of customers that we can continue to sell into, and that we are getting the word out, and that we are continuing to grow this base as well.
So it's all opportunity for us. Thinking about how we grow the customers within the related to average contract value. So we've been giving these metrics now for a while, and looking at customers with greater than $100,000 annual contract value, greater than $150,000 annual contract value, greater than $300,000 annual contract value. The growth that we see here in continuing to drive, especially at that top level, this is what we're trying to do. This is everything that Julie was talking about and how we really win when we have multiple solutions, whether we're going in brand new to a new logo with multiple solutions, whether we're selling additional upsells like that first example that Julie talked about. This growth helps to underpin how we're executing, and so we hope that you see this.
Now, another metric that I wanted to talk about is to go into what is the average annual contract value for each of those tranches? Looking at this growth over the past four years of that information, so of that average, and this growth has really been strong, because bringing that whole group of customers on average to such a high level, and then thinking about that first tranche, so those 100K plus average contract value customers, annual contract value customers. There's about a quarter of our customer base that sits in that tranche. That means we have three quarters of our customer base that we can continue to sell into and bring into that 100K plus. This is nothing but opportunity to us.
This is all of those customers that aren't in one of these tranches yet, that we can continue to sell into. This is nothing but opportunity and seeing growth within each of these. And so we're very happy that this has been the result within each of these tranches. Now, another thing that we've brought in past years as well, and it's actually very relevant from the customer examples that Julie talked about, too, is how we grow within these cohorts of customers based on the year that they came into the company. So from 2010, when we first released our product in March, until today, well, this is through 2022. And one of the examples she gave was a customer that came on board originally in 2011. Another one was 2013.
Looking at these tranches of customers and how they have not only stayed with the company, but how they've continued to grow, and looking at just that multiple of growth within each of these tranches. It's again, it's, it's showing the results of everything that has been built, that we've built today, and how that gives us comfort continuing to make the platform better. David said it best in, in his, in his slides, and just thinking about how we can continue to innovate, drive more functionality, keep our customers engaged. This is the result. And then also thinking about our subscription revenue by customer type, being either single solution or multi-solution. This is another example of that. 62% of our subscription revenue coming from customers with multiple solutions.
Again, it's something that's a very strong metric, and we hope that you're able to use this to not only build your models, because I know we all love the models, but also to really just see how we're expecting to continue to succeed. Speaking of models, I did want to dive into a little bit our operating model and talk about some of the changes that we've seen over the past year as we've been executing and thinking about, and talking a little bit about how we intend to move towards that 2027 year. Julie talked about that we're a company that expects to have over $1 billion in revenue, certainly by the end of this model horizon. We expect to be in that range, so more than $1 billion in revenue.
While we will continue to make progress, it won't be linear. I have to throw that out there, and I know that it's very hard to model then, so I apologize for that, but it won't be linear. We will continue to make progress, but it's not gonna be a straight line to the end of this. I wanted to walk through at each level a few things just to give you some updates and information, starting with our subscription revenue. Thinking about how we will continue to grow subscription revenue to that 92% target, and what it's going to be, is that we will continue to grow subscription revenue at a faster rate than services. That is something that we talked about before and something that's not a surprise to you.
But calling that out is that's how we will approach that goal. Specifically around services revenue, and we've talked a little bit about this, especially in the past couple of quarters and into the guidance for the end of this year. We are going to grow and continue to grow XBRL services revenue. It's a way that we. It's another way that we are very sticky for our customers because that's work that they don't want to necessarily have to staff in-house. It's work that we can easily do. It's a very high margin business for us, and that will maintain. It'll grow at a rate of low single digits, mid-single digits, around in there. In thinking about, though, the setup and consulting revenue, that's the piece that we are moving specifically, methodically over to our partners. We want our partners to do that work. It's low margin.
It's something that if we can pass that revenue over to our partners, they are more engaged, and it helps to drive even more success for us, we think, by having those partners engaged, it helps to grow that partner ecosystem. Unless we can move some of that work over to our partners, it makes it harder for them to see a path forward to also execute on their strategies and succeed with Workiva. Moving those revenues for setup and consulting will continue. We will see total revenue services will be continuing to be smaller as a portion of total revenue. What moving those low-margin services off does for our gross margin helps us to improve this metric, because those are expensive. We're not necessarily making money on those setup and consulting revenue.
And so this is part of the way that we will continue to achieve our goals around gross margin. Another part of this is B, that we continue to be more efficient in the way that we help to serve our customers, driving more of the platform to help them succeed, being more efficient in the way that we can serve those customers. And again, it's on here, but these are all in non-GAAP, so these are all non-GAAP results. And so diving into the operating margin, focus on productivity. You heard Julie say productivity. We're talking about getting leverage from our existing business. So throughout the rest of this model, where we focus on is getting leverage, making sure that we're putting... David talked about it within our R&D teams.
How do we make sure that we put the right resources on the right project to have the best returns? And that is something that we focus on, both from a productivity standpoint, looking at the opportunity in front of us. That's a big piece of it, so we'll do that within R&D. Within sales and marketing, how can we make sure that we can continue to be more efficient in the way that we sell and market our product? G&A, being more efficient, use more systems that can automate things. It's really just a matter of productivity throughout. Julie introduced some new leaders that we have on board, people that have helped to scale companies past a billion. It's that knowledge. How do we shift our operations to be more productive? How do we make changes that help us achieve these goals?
These are things that we're acting on. We're bringing people in. We're learning. We're making changes to be more productive and start to execute towards these targets. All coming down to moving towards profitability, which for this year, we talked about will be non-GAAP profitable for the second half, non-GAAP profitable for the full year, 2024, all on the path towards this 2027 target. We hope that you understand where we're going. I hope that these metrics help to really show you the direction and the way that we intend to execute on that strategy. Thinking about those key growth tenets, our fit-for-purpose solutions, connected platform, our global excellence, global growth, and our strong partner ecosystem. All of those things, supported by our new leadership, helping to become more productive, helping to really get leverage for our existing business.
We feel like this is the way that we are going to win. This is the way that we will execute and not only take on and achieve our additional bookings from that untapped TAM, but also just grow our business and help make our customers' lives easier, continue to make our customers' lives easier. I know... Has your company saved any marriages? I don't know. So I think that there's just some really great opportunity here, and I'm going to leave that with you, and we're going to then move into a Q&A session.
All right, start the Q&A session. For Q&A, we're going to have two microphones in the room. What I'd ask for people in the room is, please state your name and the firm you're with, when you ask the question. For those of you online, please utilize the Vimeo Q&A feature, and we will take those questions online as well. So with that, I'm assuming there's a bunch of shy people in the room here. I see some hands already. So, all right, I think I found the first victim here. All right.
Great. Thanks for taking the question. Adam Hotchkiss with Goldman Sachs. Would love to hear a little bit more detail from the broader team on how customer conversations are evolving in Europe around the new regulation. Has stakeholder pressure changed at all from investors in boardrooms to the actual regulation coming into effect, and how do you see that impacting numbers over the next five-year period?
Julie, you want to take the first on the conversation?
Sure, I'll start in.
Yep.
Uh, we're-
We're absolutely seeing the interest and pipeline building. We're having—they're having conversations now. They've been doing sustainability for a long time, but I do think the law itself has moved people in the direction they understand it's coming. But listen, Europe is slower to move in general, and that's why I mentioned it's, you know, we look at Europe with a, say, you know, a durable demand, kind of a five-plus year adoption. That CSRD is over a period of a couple of years, so it's not a hockey stick. Suddenly, the law passed in November, got some more clarity in July, and they're all going there. It evolves over the couple of years, which companies, depending on size and type, will need to be compliant. So again, we're seeing the interest.
We're having the conversations. Our teams are out on the ground, and just they're very interested in moving forward, but again, not a hockey stick.
Thanks. Andrew DeGasperi from Berenberg. One question on the partner-first strategy. I know you started that in Europe last year, or EMEA, excuse me. Just wondering, why change that for the U.S. as well, specifically, given that's a market you're more penetrated in? And maybe can you elaborate, what does that mean in terms of your sales strategy, going forward, and if that translates into any of your financial metrics as well?
Sure. And I love the question because, again, it gives us a chance to talk about why a high-performing partner ecosystem is so important for us and how it expedites our growth. It's not just because we have a base that we won't need partners, but they help bring value to our customers. They extend the value of our platform. They make us stickier. They're there in digital financial transformation everywhere we wanna be, so they will, of course, support us and help with our account expansion, so deals we win faster. That's initial deals and follow-on deals. We win faster, you know, the sizes of deals are larger. The win rate is higher. So for a number of reasons, partners in our deals are significant.
We also have costs associated with the services, and they were happy to give those services, although those are lower margin, you know, work, not our XBRL services, of course, that are higher margin. But the services that they provide take us... We're interested in the SaaS revenue, subscription revenue, and we're happy to have them take that. Makes them more commercially successful, and they could offer other services around it. So we use partners for so many reasons, not just to go in as a channel.
Hey, Dan Jester, Bank of Montreal. Maybe two questions, if I can. First, Julie, appreciate all the insight about the changing of the executive leadership and all of the changes in terms of people. Where are we in terms of that? Is that complete, or should we expect continued kind of evolution as you work through those new folks joining the team? And then, Jill, on the target model, it seems, if I remember correctly, sales and marketing as a percent of revenue looks higher now than the last target model. Maybe just expand about what exactly is driving that. Thank you.
I'll start on the leadership side. Those four individuals, those senior, senior vice presidents, they are here and have hit the ground running. We will continue to level up the teams as we move forward to the billion and beyond. We're, we're never done with anything. It's a, it's an evolution, particularly in software. As new technology becomes available, we may bring on more leaders around certain technology, but where we are today, we have a good, solid executive team. We'll continue to continue to level up. We're never stopping.
Specifically on your other question, sales and marketing in the model did update last year, so it's not changed from last year's model. The original model, the version that we had before that, we did not feel like it properly reflected the investments that we were going to need to make within sales and marketing to sell within that broad base of solutions. That was one of the updates that we made specifically in order to just better reflect how we expected to invest towards that, towards that broad base of solutions, was the reason behind the change.
Thanks. Alex Sklar...
Oh.
This is Alex Sklar with Raymond James. Julie or Jill, I wanted to ask kind of on the expansion opportunity. Julie, you highlighted that Fortune 5 customer that's taking 10 solutions now and over $2 million ACV. I remember kind of going back 4 or 5 years, we talked about $150K per customer, so clearly, we've seen a lot of expansion to date. But can you just talk about ways that you're still looking to accelerate multi-solution adoption? I don't know if that's more product bundling or other work around ELAs, but just ways to kind of accelerate that multi-solution journey. Thanks.
Sure. I'll let Jill talk on numbers financials, but I will say one is going out with the Assured Integrated Reporting. There are some going and taking that opportunity. We're not just selling single solutions anymore, we're selling a platform. And that is resonating both in the U.S. and in Europe, as you can see. And so it really is leaning that from a marketing and a branding front, but also our organization going out from a go-to-market perspective around the platform. You asked about the partners earlier. That is a significant way we'll be able to expedite our expansion opportunities. And it isn't just they're in there helping us with value in the customer. They're bringing us sourced deals, and we have co-sell opportunities, and those are within our base as well as new customers.
So with partners, with our opportunity there, with the platform, and the Assured Integrated Reporting , we're able to move and expedite.
And then just a little bit more on the financial. What we expect that to show us financially would be thinking about those, the net retention metrics and how we can keep that strong. And specifically, those are better wins. They make us more sticky, they encourage more solutions, so new solutions to get additional new solutions. It really is just a, you know, a factor that helps to drive additional growth. Back to that customer that I sat next to last night, so they have added some additional solutions over time, and it's that, it's that thought process of, "Oh, well, we didn't use to use Workiva for this, and now we do." And I think there's more opportunity.
I think it's that having in their mindset within our customers that Workiva is a company that can help them execute against their goals as well, and that we make their teams better, being able to utilize our platform for them to control the narrative, control their numbers. And I think that's how we see it in our financials, is that it makes everything stronger.
It really goes back to that relevancy that I talked about earlier, the combination of what we have, the financial reporting with ESG and the controls and GRC. It's the way we can go to market that brings all the solutions together and getting good at that. Again, not going into a customer site, selling a pain point, solving a pain point, but talking about it and going in, and as Jill says, solving the complexity of everything they're dealing with around those three categories.
Great. Thank you.
Rob Oliver with Baird. Thanks for taking my question, and thanks for all the info today. You guys are starting to look and sound a little like a much bigger SaaS company we follow, with the opportunity for expansion within existing accounts, partner-led focus, platform, global workflow opportunity. So in that context, I just would like to help on, like to understand a little bit better how, as the platform becomes more important, if that at all changes the calculus around acquisitions. Because is there an increased risk with that platform being something, you know, David even talked about how you started in a small room, and you guys have had this benefit of, benefit of really being a true platform out there. So how does that, if at all, impact your thought process around acquisitions? Thanks.
You want me to take it?
You wanna start with it?
Yeah.
Yeah.
I'll start with... First off, you know, from an M&A standpoint, you know, we're thorough and thoughtful on how we go about looking at things, and that is one factor, right? It, you know, if there is something interesting that we start looking at, Dave is usually the first person that I bring on a field trip with me, and, you know, we are looking at all those aspects. You know, that being said, right, I mean, there are areas where there could be some adjacencies and things like that, and, you know, but yeah, how things would factor into rolling in, that is one of those criteria that we do look at. And you know, our technical screen is high because we do have the platform.
But we're open to, you know, whether it be top end or even larger. We'll look at everything right now and look for the best areas of growth. David, you wanna?
Yeah. And one, one of the things that I hear time and time again when I talk to partners, as well as interact with some of these customers that we've seen grow and expand, is how much they realize, the more time they spend in Workiva, the depth and breadth that exists in the platform as it is today. I think most people are just scratching the surface of what's possible. So as it comes to acquisitions, if you take a look at what we did with OneCloud as an example, we also like to look at integration, you know, first and maybe having a partnership in place.
In this case, we did an OEM with them for a number of years, and that way, we had a lot of confidence when we went forward with that acquisition, that we would have the ability to have those capabilities embedded in a first-class way that made a lot of sense to our customers. So again, that's not gonna be the only model that we follow, but that is what we're looking at. And build by partner is always gonna be something that we look at for all of our technology decisions.
Yeah. Just one addition to that, right? I think the interesting thing is, if you remember, when we went and did the redo of the platform and that we launched in 2020, it is microservices based, right? So one of the other ways to think of things, right, is an acquisition could, in essence, be another set or set of microservices that become part of the broader piece, right? So the fact that we're not one monolithic, monolithic code base doesn't make it a little more open and, you know, I think that's the, the long-term gains we get for all that re-platforming we did back in our teen years.
Great. Thank you. This is J. Parker from Stifel. Just a question on the Europe opportunity that you guys laid out. I think you've spoken about 25%-30% over time of your revenue coming from Europe. With 11% today, do you think that the CSRD opportunity is large enough, or would that potentially be an area of acquisition as well? Thank you.
I can start, and then Julie can fill in blanks. So I would say that CSRD will be a big part of what will help to drive forward additional revenue in Europe, but it's not the only thing. There's a lot more that those companies, similar to our strong base in North America, it might be a way that they come to Workiva and start with Workiva, but it's not where it ends. If we think about what that CSRD reporting requirement is over time, there's also assurance components of it that become more strong through 2026 and 2028. And so it's additional audit services that can be purchased alongside of the reporting. It's the ESG reporting.
How can we help them expand their ESG report in support of those numbers that they're also going to have to report for CSRD? There's - it might be an inroad, and it's a good conversation starter, great conversation starter, but it probably not the only way that we will continue to expand within Europe.
The good news is what CSRD is, is it says that requires that you have financial reporting along with ESG, along with assurance, and then ultimately, XBRL tagging. So it really is the full portfolio. It's Assured Integrated Reporting. And I think what Jill's saying is, over time, we'll, we'll get there. But yes, I mean, it's a tremendous opportunity for us in Europe, and will, will be significant in terms of the revenue from the area and region.
All right, great. Thanks for taking the question, Steve Enders with Citi. I guess I'll ask the AI question, and now that it's out in customers' hands and, you know, people can utilize it, I guess, what's been the early feedback from customers? And I guess, how do you view the monetization potential of those opportunities now?
Yeah. Yeah, I'll start off. Early feedback has been really encouraging. So, just to zero in on one specific customer example, and I think it's a customer that actually is speaking on a panel this week around their experience. They were sitting on a policy backlog in their organization for a while, and when they got access to the Workiva generative AI capabilities, within a week's time, I think they were able to plow through 10 different policies that were just sitting there. And what they would tell you is it wasn't perfect. They needed to take it, you know, out of that, but that's where when we talked about having our customers remain in the driver's seat, it got them so many steps down the road.
It's much easier to edit than it is to create oftentimes. So instead of staring at that, you know, blank sheet of paper, they're starting now with a starting point that gets them a few steps down the road. So we've also heard examples of looking at new audits and again, using it as that brainstorming partner for what are the risks that they might encounter. And again, maybe it just gives them one new insight that they didn't have before, but that would be an example of where we're going. So as it relates to the monetization aspect of it, right now, we're focused first and foremost on getting value into the hands of customers.
As it relates to adoption of software, there's oftentimes a number of other hurdles that you have to overcome without putting a monetization wall in place. I think we've demonstrated our ability as an organization to drive larger and larger contract values over time. Right now, our focus is really on adoption and also using this as a differentiating capability. Think about the quantity component, being able to go in and showcase it in new opportunities that we're having to drive the acquisition of new business and new logos and use AI as part of that. I don't know if anybody else wants to weigh in, but that's kind of how we're thinking about it right now.
It's all about value and iterating with customers to find what really does bring the value. We have lots of potential use cases, putting them in customers' hands and understanding what really does move the needle for them and their willingness to pay ultimately. So monetization is there, you know, for us in the future. It's what we're looking towards. But for now, it's all about, you know, making sure the customer has what they need to do their work efficiently and effectively and productively, and what can expedite that for them.
Before we get to one question, we have a question online. Jill, this one's for you. It's on the long-term model, and the question is: what assumptions are you making long term for stock-based comp?
Stock-based comp, we do assume about 12% of revenue for the stock-based comp expense. By the end of that model term, the GAAP operating margin would be 10%.
Thanks again. Andrew from Berenberg. Just one question on the EMEA, changes with CSRD this summer, just in terms of what you were expecting. I guess the timeline seems to have been extended out, at least from initial expectations earlier this year or even last year. I'm just wondering, did you change in terms of maybe not the total, in terms of the investments that you're making, but did you change the allocation of resources going to EMEA versus North America?
I think we've anticipated the increase that we would need to go to market for this. Again, a slow uptick, where their willingness to adopt the regulation itself and its definition, again, we got some clarity. It became law in November, was clarity in July, and then there's still a lot yet to be defined. So we really haven't. We are investing, however, we have invested in teams in Europe to go after the opportunity, and we'll continue to do so to go capture that market opportunity. But I don't think there was any change in. There was no change in that for us. We've been thinking about it in that same way.
One thing I would add as well, and it builds on what, what Julie talked about, the European Sustainability Reporting Standards, those were just launched this summer. So we took those, and we put them right into our ESG Explorer, as an example. The XBRL taxonomy, that they'll correspond to the CSRD. A member of our team sits on the working group for the development of that taxonomy. It's not even released yet, so it's not we're diverting resources. We're applying resources there, and anytime that we have the, the opportunity to be a first-mover advantage, you know, we're gonna be there, and companies have to be getting ready right now. So some of those timeline extensions, their preparation work starts today, so it's not that that's impacting us in that way.
Thanks. Rob Oliver with Baird. Jill, this one's for you. So you said the majority of growth in NRR is coming from new solutions and not price increases. I was wondering if you could put a little bit more granularity around that, and as you start, you know, you have three-quarters of your customers, you know, obviously, they're still have an opportunity to migrate above that $100K number. How should we think about, you know, that majority and, you know, and how is that gonna move around or fluctuate, i.e., price increases versus, you know, software upsell cross-sell? Thanks.
Yeah. So, I hope I get both of them, both questions. So specifically on the NRR, we do push on price increases, and I think a way to think about that is that we've moved from... For the customers that are eligible for a price increase in a new period, because we do have the majority of our contracts are now on three-year contracts, so we're, of course, only even looking at a customer, you know, maybe every three years. For those that are eligible for a price increase, we've moved that from maybe a low single digit on average to maybe mid to mid single digit for a price increase.
And so that will continue to expand a bit, but the majority of that growth within NRR is just going to continue to come from the growth into the existing customer base. And so that, that's the, that's that piece of it. And then specifically around your other question, so that was around, remind me?
It's kind of one different.
Yeah. Oh, sorry. Yeah.
Around it, if there's a target, as you get the opportunity to expand it, if there's a-
If there's an opportunity, you know what I mean, majority could be 51%. So I'm just trying to get a better sense for how we should think about those two variables within the NRR. Thanks.
Yeah. So then, as far as expansion into the, continued expansion of revenue within, I think that we'll continue to see that growth within, from new logos and growth from existing customers will tend to just... It still will sit around 50%, so specifically on revenue growth. And then thinking about how we are able to expand into that three-fourths of customers that aren't above $100K, it's not gonna be linear, but it's something that we are paying attention to. We're trying to sell multiple solutions in even at a new logo. We go in and have the conversation. We don't necessarily just want to sell one solution, but we will if that's all that they're interested in at the time, because the past history has shown that we are successful in expanding into the base.
And if you think about that $100K in annual contract value, that's approximately a breaking point. If it's less than that, more likely than not, they have one solution. If it's greater than that, more likely than not, they have a, you know, it's multiple solutions. And so it, it's not a, it's not something that is just defined. It really is about how we execute over time and continuing to expand with multiple solutions, as a way to make that usage more sticky, the customers, getting more data into the platform, more connected elements. It's, it's all those things that will help to drive that.
Hi, Corey Tobin from William Blair. Quick question on, what I'll call it ESG NRR. So, like, the upsell of ESG modules once you've sold the initial ESG modules into a customer, what would that look? What does that look like? Thanks.
We've talked a little bit. Yeah, I think we talked a little bit about that, is that a lot of the business, majority of the business that we've been having for ESG is into our existing base. We have this really strong portfolio of customers. Honestly, in North America, when you have that many large companies, it's just more likely that you are going to sell ESG when you're selling it into an existing customer, because it's more likely than not that they're already a customer. And so it really is that we're selling at a higher level for those ESGs in North America into the existing base, and so it is showing up in that NRR.
Right. Thank you. But I just... I'm curious, once you sell the ESG module into a customer, what is the opportunity for additional ESG module sales into that same customer?
Hmm.
For ESG module sales?
Yes, specifically for ESG.
Sure. I mean, there is, as we showed on the customer, there is an opportunity for audit and controls around ESG, and some start out with their in one area of the business and expand for larger, for more entities. Or if you're talking about just ESG specifically, but again, all three, financial reporting and ESG and the GRC capabilities, risk management, controls, and audit, all tie into doing ESG?
There are some companies who might adopt initially one of our packages, which is an ESG Essentials offering, and for them, there's the opportunity to go back and sell the larger platform to them for ESG, which would be an expansion play just with ESG alone. But as Julie pointed out, some of the conversations that are happening within GRC right now are happening because companies are looking at ESG, how do I provide the assurance around the new processes that need to be stood up around countless new data sources that exist around our organization? So we'll see it as likely there as it is in the ESG expansion.
Also, for some of the Fortune 1000 that we've sold ESG to, they will need to comply ultimately with the CSRD, and there's opportunity for selling more into that customer. So there's a number of ways you can expand with entities and regions and so forth.
Hi, great. Steve Enders with, with Citi again. I just want to ask on, on some of the newer opportunities that are coming out there. I mean, California has, you know, has new regulations on, on the, on the ESG side, and I guess SEC was mentioned about coming out with new PE regulatory reporting. So I guess, how are you thinking about those opportunities and, how the kind of platform develops to, to maybe go capture some of those?
Exactly. That's why we put up there on the big slide, it's not about ESG and and financial reporting and GRC as we move into the next, you know, 2, 3, 4, 5 years. It's about being a platform for being able to accommodate the regulatory reporting again, where data narrative and so forth is required and accuracy is required. That private equity regulation, we can do that today. It's essentially our fund solution, right? The cybersecurity, that's all about controls and disclosure. That's us, right? All these regulations coming out, that's not baked into our TAM. That's upside as we move into the next, you know, 2, 3, 4, 5 years. That is exactly the point we're trying to make.
In building our platform fit for purpose for financial reporting over the last decade plus, fit for purpose for ESG, and fit for purpose for GRC, audit, risk management, and controls, what we've done is we've created a platform suitable for regulatory, right? And disclosure and transparency, and that's what we're enthusiastic about in the coming years. And you can envision laws like what you described as potentially going into certain verticals and so forth. So that's the picture we put out there and what we want to become, you know, over the next few years.
Yeah, just a little color on that, Steve. I was having dinner last night with a PE firm that's now using our fund reporting product. I said, "So what did you do before?" They were using... They had 600 Word docs, right? So people oftentimes ask about our competition, right? There is an incredible amount of still manual process that sits out there, and the value and the time, and more importantly, you can't have an auditor come in typically and look at 600 Word docs, right? They, you know, Jill, what would happen if your auditors came in?
That would be expensive.
There is a lot of opportunity in just those new things that you're getting at these processes that are not automated yet. It is just manual, and organizations know they need to pass an audit, go through and have a, you know, investor-grade platform to manage that process.
Dan Jester, Bank of Montreal again. To David, you said that customers are just scratching the surface and what they can do on the Workiva platform. So what are you doing in terms of customer success and driving adoption to actually utilize these tools and to go back and harness that, accelerate the back-to-the-base opportunity?
Yeah, I'd say a couple things there. One is that there's internal things that we're doing as an organization, but also this represents a pretty massive opportunity for our partner network as well. So internally, it's all about our data strategy as an organization. So we're taking the telemetry data, those insights, making sure that they're getting fed into the dashboards for our customer success team, so they're able to, you know, take a much more proactive approach with our customers. So when they go in and they do a QBR, they're talking to them about areas where they've seen other customers like them go further. And customers are looking for that. They're looking for a little bit more prescriptive journey both on how they can take more advantage of what they already have access to.
Maybe that's in the workflow automation capabilities. Maybe it's taking advantage of some of the data and connectivity capabilities that have been added over time. And it also has to do with our expansion into what is the next solution that I should be using now as well? What are other companies like me doing? So, to hit on the partner point then, we have some partners who specialize specifically in just coming back through our customer base, going in there, and talking to them about more, what more they have at their disposal as well.
It's fantastic because once they're in there, once they're talking to them, they're, they are creating more value with those customers, which makes it stickier, but they're also talking to them about what else they could be doing as well, which is gonna lead to those expansion opportunities as well. So those are just a, a few of the things that we're doing.
I'll say that, when we talked about Partner First strategy, meaning go with the Partner First to deliver a little earlier, but partners, as David's describing, they've been a growth tenet of our growth strategy for the last several years, and we recognize we're not going to achieve those growth objectives without that high-performing partner ecosystem. So exactly what David is saying. But I would also say that we have a customer success organization under our Customer and Partner Experience organization that is second to none. I mean, please go out and talk to the customers around, and they have tears in their eyes describing our customer success managers.
And they are in there every day with the customers, working with them, ensuring that they are exposed to the ability to leverage the capabilities across the platform, both within the applications that they have today, and also explaining to them what other opportunities there are. And we're doing that more and more as we move toward that platform company.
All right, we're reaching the top of the hour. We have one final question in the room. All right, Andrew. Andrew got one more question here.
Thanks. Just one question on AI, specifically, David. Just in terms of the data protection you put through, you mentioned the customer privacy aspect of it. Was that something that, Workiva specifically implemented, or was it something that, Microsoft or others have delivered to you?
Yeah. It has been a conversation that we've had with all of our vendors to make sure that we have the assurance that none of that data is stored or used in any way by them, which is not the default policies for some of those tools. There are additional things that we've put in place as well, so you can think about a data processing pipeline, essentially, before it even goes to one of those services. So, we have done some additional things on our part as well.
Excellent. Well, that concludes the session today. Thank you for all the great questions, and thank you for everyone online for joining. With that, we will conclude the 2023 Analyst Day.