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Financial and compliance reporting software company Workiva (NYSE:WK) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, with sales up 17.4% year on year to $206.3 million. The company expects next quarter’s revenue to be around $209 million, close to analysts’ estimates. Its non-GAAP profit of $0.14 per share was 94.9% above analysts’ consensus estimates.

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Workiva (WK) Q1 CY2025 Highlights:

• Revenue: $206.3 million vs analyst estimates of $204.1 million (17.4% year-on-year growth, 1.1% beat)

• Adjusted EPS: $0.14 vs analyst estimates of $0.07 (beat)

• Adjusted Operating Income: $4.99 million vs analyst estimates of $241,200 (2.4% margin, significant beat)

• The company reconfirmed its revenue guidance for the full year of $866 million at the midpoint

• Management reiterated its full-year Adjusted EPS guidance of $1.06 at the midpoint

• Operating Margin: -12%, down from -10.4% in the same quarter last year

• Free Cash Flow was -$8.12 million, down from $43.16 million in the previous quarter

• Customers: 6,385, up from 6,305 in the previous quarter

• Net Revenue Retention Rate: 110%, down from 112% in the previous quarter

• Market Capitalization: $4.20 billion

Company Overview

Founded in 2010, Workiva (NYSE:WK) offers software as a service product that makes financial and compliance reporting easier, especially for publicly traded corporations.

Sales Growth

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, Workiva grew its sales at a 18% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell slightly short of our standards for the software sector, which enjoys a number of secular tailwinds. Luckily, there are other things to like about Workiva.

This quarter, Workiva reported year-on-year revenue growth of 17.4%, and its $206.3 million of revenue exceeded Wall Street’s estimates by 1.1%. Company management is currently guiding for a 17.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 17.2% over the next 12 months, similar to its three-year rate. This projection is noteworthy and implies the market is baking in success for its products and services.

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