WORKIVA INC (WK)
SIC breadcrumb: Services > Business Services > SIC 7372 Services-Prepackaged Software
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1445305. Latest filing source: 0001445305-26-000016.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 884,568,000 | USD | 2025 | 2026-02-19 |
| Net income | -26,169,000 | USD | 2025 | 2026-02-19 |
| Assets | 1,493,571,000 | USD | 2025 | 2026-02-19 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-19. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001445305.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 178,646,000 | 207,869,000 | 244,344,000 | 297,891,000 | 351,594,000 | 443,285,000 | 537,875,000 | 630,039,000 | 738,680,000 | 884,568,000 |
| Net income | -43,977,000 | -44,426,000 | -50,071,000 | -47,479,000 | -48,398,000 | -37,730,000 | -90,947,000 | -127,525,000 | -55,042,000 | -26,169,000 |
| Operating income | -43,578,000 | -44,303,000 | -49,788,000 | -45,406,000 | -37,802,000 | -29,355,000 | -88,764,000 | -94,527,000 | -76,534,000 | -42,441,000 |
| Gross profit | 127,021,000 | 147,624,000 | 178,484,000 | 212,879,000 | 261,417,000 | 339,452,000 | 407,990,000 | 475,817,000 | 566,625,000 | 694,138,000 |
| Diluted EPS | -1.03 | -1.00 | -0.74 | -1.72 | -2.36 | -0.99 | -0.47 | |||
| Operating cash flow | -10,369,000 | 5,520,000 | 6,400,000 | 30,918,000 | 33,243,000 | 49,844,000 | 11,334,000 | 70,875,000 | 87,706,000 | 140,070,000 |
| Capital expenditures | 1,901,000 | 1,188,000 | 1,122,000 | 3,104,000 | 1,873,000 | 3,534,000 | 3,458,000 | 2,124,000 | 1,363,000 | 2,075,000 |
| Share buybacks | 0.00 | 0.00 | 71,628,000 | |||||||
| Assets | 143,143,000 | 157,715,000 | 231,111,000 | 638,951,000 | 707,006,000 | 786,759,000 | 819,620,000 | 1,218,860,000 | 1,368,469,000 | 1,493,571,000 |
| Liabilities | 146,268,000 | 174,649,000 | 240,851,000 | 584,749,000 | 642,729,000 | 713,780,000 | 813,637,000 | 1,308,250,000 | 1,410,153,000 | 1,499,007,000 |
| Stockholders' equity | -3,125,000 | -16,934,000 | -9,740,000 | 54,202,000 | 64,277,000 | 72,979,000 | 5,983,000 | -89,390,000 | -41,684,000 | -5,436,000 |
| Cash and cash equivalents | 51,281,000 | 60,333,000 | 77,584,000 | 381,742,000 | 322,831,000 | 300,386,000 | 240,197,000 | 256,100,000 | 301,835,000 | 338,769,000 |
| Free cash flow | -12,270,000 | 4,332,000 | 5,278,000 | 27,814,000 | 31,370,000 | 46,310,000 | 7,876,000 | 68,751,000 | 86,343,000 | 137,995,000 |
Ratios
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | -24.62% | -21.37% | -20.49% | -15.94% | -13.77% | -8.51% | -16.91% | -20.24% | -7.45% | -2.96% |
| Operating margin | -24.39% | -21.31% | -20.38% | -15.24% | -10.75% | -6.62% | -16.50% | -15.00% | -10.36% | -4.80% |
| Return on assets | -30.72% | -28.17% | -21.67% | -7.43% | -6.85% | -4.80% | -11.10% | -10.46% | -4.02% | -1.75% |
| Current ratio | 0.98 | 0.89 | 0.93 | 2.46 | 2.25 | 1.02 | 1.47 | 2.08 | 1.77 | 1.57 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001445305.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-30 | -0.55 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | -0.56 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | -0.86 | reported discrete quarter | ||
| 2023-Q2 | 2023-03-31 | -46,150,000 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 155,022,000 | -0.39 | reported discrete quarter | |
| 2023-Q3 | 2023-06-30 | -20,910,000 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 158,175,000 | -1.04 | reported discrete quarter | |
| 2023-Q4 | 2023-12-31 | 166,653,000 | -4,196,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 175,667,000 | -11,687,000 | -0.21 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 | -11,687,000 | reported discrete quarter | ||
| 2024-Q2 | 2024-06-30 | 177,503,000 | -0.32 | reported discrete quarter | |
| 2024-Q3 | 2024-06-30 | -17,548,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-09-30 | 185,621,000 | -0.31 | reported discrete quarter | |
| 2024-Q4 | 2024-12-31 | 199,889,000 | -8,815,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 206,280,000 | -21,371,000 | -0.38 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 | -21,371,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-30 | 215,187,000 | -0.35 | reported discrete quarter | |
| 2025-Q3 | 2025-06-30 | -19,400,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-09-30 | 224,166,000 | 0.05 | reported discrete quarter | |
| 2025-Q4 | 2025-12-31 | 238,935,000 | 11,816,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 247,306,000 | 18,996,000 | 0.33 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001445305-26-000045.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this report and in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2026. In addition to historical consolidated financial information, this discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and those discussed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, in “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q and in any subsequent filing we make with the SEC.
Overview
The Workiva platform powers trust, transparency, and accountability. Accounting, finance, sustainability, risk, and audit teams from more than 6,600 organizations worldwide, including over 85% of FORTUNE® 1,000 companies, rely on Workiva for their mission-critical work. We transform how customers connect data, unify processes, and empower teams in a secure, audit-ready, AI-powered, collaborative platform.
From data to disclosure, the Workiva platform empowers customers by connecting and transforming data from hundreds of enterprise resource planning (“ERP”), human capital management (“HCM”), and customer relationship management (“CRM”) systems, as well as other third-party cloud and on-premise applications. Customers use our platform to create, review and publish data-linked documents, presentations, and reports with greater control, consistency, accuracy, and productivity. Our platform is flexible and scalable, so customers can easily adapt it to define, automate, and change their business processes in real time.
While our customers use our platform for more than 100 different use cases, across dozens of vertical industries, we organize our sales and marketing resources into three purpose-built solution groups (financial reporting, sustainability management, and governance, risk and compliance (“GRC”)) focusing primarily on the office of the Chief Financial Officer (“CFO”), Chief Sustainability Officer (“CSO”), and Chief Audit Executive (“CAE”).
We operate our business on a SaaS model. Customers enter into annual and multi-year subscription contracts to gain access to our platform. Our subscription fee includes the use of our software and technical support. Our subscription pricing is based primarily on a solution-based licensing model. Under this model, operating metrics related to a customer’s expected use of each solution determine the price. We charge customers additional fees primarily for document setup and XBRL tagging services.
We generate sales primarily through our direct sales force. In addition, we augment our direct sales channel with partnerships. Our advisory and service partners offer a wider range of domain and functional expertise that broadens the capabilities of our platform, bringing scale and support to customers and prospects. Our technology partners enable more data and process integrations to help customers connect critical transactional systems directly to our platform.
We continue to invest in the development of our solutions, infrastructure and sales and marketing to drive long-term growth. Our full-time employee headcount expanded to 2,880 at March 31, 2026 from 2,873 at March 31, 2025, an increase of 0.2%.
We have achieved significant revenue growth in recent periods. Our revenue grew to $247.3 million during the three months ended March 31, 2026 from $206.3 million during the three months ended March 31, 2025. We generated net income of $19.0 million during the three months ended March 31, 2026 compared to net loss of $21.4 million during the three months ended March 31, 2025.
20
Table of Contents
We continue to invest for future growth and are focused on several key drivers, including our connected AI-powered platform, fit-for-purpose solutions, global expansion, and our partner ecosystem. These growth drivers often require a more sophisticated go-to-market approach and, as a result, we may incur additional costs upfront to obtain new customers and expand our relationships with existing customers, including additional sales and marketing expenses.
Effects of Policy and Regulatory Uncertainty
Sales of our sustainability management solutions have been, and may continue to be, materially impacted by domestic and global policy uncertainties. Shifts in regulatory priorities, market sentiment, and legal challenges to sustainability-related rules and regulations are affecting our market expansion opportunities in the U.S. and abroad. For example, on February 25, 2025, the European Commission unveiled the first “Omnibus” package to advance EU competitiveness and simplification of rules on sustainability. Among other measures, the package proposed streamlining key sustainability frameworks. On December 16, 2025, the European Parliament adopted the Omnibus Directive, which is part of the first Omnibus simplification package. The Council of the European Union formally adopted the resulting directive on February 24, 2026, and the Omnibus Directive was published in the Official Journal of the European Union on February 26, 2026, entering into force on March 18, 2026. The Omnibus Directive revises scoping thresholds, removes the climate transition plan requirement, and implements targeted amendments across the Corporate Sustainability Reporting Directive (“CSRD”). The adoption resulted in substantive amendments to the CSRD. We believe that the revised thresholds under these amendments have influenced the pace of customer adoption of our sustainability solutions. The potential impact on our growth trajectory of these changes, and of global policy uncertainty generally, cannot be accurately predicted.
Ongoing regulatory initiatives, including proposed changes to SEC reporting requirements intended to reduce burdens on public companies and enhance the attractiveness of capital markets, such as a potential shift in reporting frequency, could affect the performance of certain of our businesses. These developments may have positive or negative impacts on our business, but the scope and timing of any effects remain uncertain. We continue to monitor regulatory developments and assess potential effects across our business. The full scope of these potential regulatory developments, and their implications for our financial performance, cannot be predicted accurately at this time.
Key Factors Affecting Our Performance
Generate Growth From Existing Customers. The Workiva platform can exhibit a powerful network effect within an enterprise, meaning that the usefulness of our platform attracts additional users. Since solution-based licensing offers our customers an unlimited number of seats for each solution purchased, we expect customers to add more seats over time. As more employees in an enterprise use our platform, additional opportunities for collaboration and automation drive demand among their colleagues for additional solutions.
Pursue New Customers. We sell to organizations that manage large, complex processes with distributed teams of contributors and disparate sets of business data. We market our platform to professionals and executives in the areas of financial and non-financial reporting, including regulatory, multi-entity and management reporting. In addition, we market to teams responsible for sustainability management and GRC programs. We intend to continue to build our sales and marketing organization and leverage our brand equity to attract new customers.
21
Table of Contents
Offer More Solutions. We intend to introduce new solutions to continue to meet growing demand for our platform. Our close and trusted relationships with our customers are a source for new use cases, features and solutions. We have a disciplined process for tracking, developing and releasing new solutions that are designed to have immediate, broad applicability, together with a strong value proposition and high return on investment for both Workiva and our customers. Our advance planning team assesses customer needs, conducts industry-based research and defines new markets. This vetting process involves our sales, product marketing, customer success, professional services, research and development, finance and senior management teams.
Expand Across Enterprises. Our success in delivering multiple solutions has created demand from customers for a broader-based, enterprise-wide Workiva platform. In response, we have been improving our technology and realigning sales and marketing to capitalize on our growing enterprise-wide opportunities. We believe this expansion will add new users, increase revenue and continue to support our high revenue retention rates. However, we expect that enterprise-wide deals will be larger and more complex, which tend to lengthen the sales cycle.
Add Partners. We continue to expand and deepen our relationships with global and regional partners, including consulting firms, system integrators, large and mid-sized independent software vendors, and implementation partners. Our advisory and service partners offer a wider range of domain and functional expertise that broadens our platform’s capabilities and promotes Workiva as part of the digital transformation projects they drive for their customers. Our technology partners enable powerful data and process integrations to help customers connect critical transactional systems directly to our platform, with powerful linking, auditability and control features. We believe that our partner ecosystem extends our global reach, accelerates the usage and adoption of our platform, and enables more efficient delivery of professional services.
Investment in growth. We plan to continue to invest in the development of our platform, fit-for-purpose solutions and application marketplace to enhance our current offerings and build new features. In addition, we expect to continue to invest in our sales, marketing, professional services and customer success organizations to drive additional revenue and support the needs of our growing customer base and to take advantage of opportunities that we have identified in Europe, the Middle East and Africa ("EMEA") and Asia-Pacific ("APAC") regions.
Seasonality. Our revenue from professional services has some degree of seasonality. Many of our customers employ our professional services just before they file their Form 10-K, often in the first calendar quarter. Our operating cash flow may be affected by the timing of employee cash bonus payments during the first and fourth calendar quarters and by the timing of payouts under our commission plans in the first quarter.
22
Table of Contents
Key Performance Indicators
Three months ended March 31,
2026
2025
(dollars in thousands)
Financial metrics
Total revenue
$
247,306
$
206,280
Percentage increase in total revenue
19.9
%
17.4
%
Subscription and support revenue
$
225,355
$
185,512
Percentage increase in subscription and support revenue
21.5
%
19.7
%
Subscription and support as a percent of total revenue
91.1
%
89.9
%
As of March 31,
2026
2025
Operating metrics
Number of customers
6,665
6,385
Gross retention rate
97.3%
97.3%
Net retention rate
112.4%
110.1%
Number of customers with annual contract value $100k+
2,575
2,079
Number of customers with annual contract value $300k+
605
439
Number of customers with annual contract value $500k+
265
191
Total customers. We believe total number of customers is a key indicator of our financial success a
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report. In addition to historical consolidated financial information, this discussion contains forward-looking statements that involve risks and uncertainties. Investors should review the Special Note Regarding Forward-Looking Statements and Information herein. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and those discussed in “Section 1A. Risk Factors” included elsewhere in this Annual Report.
Overview
The Workiva platform powers trust, transparency, and accountability. Accounting, finance, sustainability, risk, and audit teams from more than 6,600 organizations worldwide, including over 85% of FORTUNE® 1,000 companies, rely on Workiva for their mission-critical work. We transform how customers connect data, unify processes, and empower teams in a secure, audit-ready, AI-powered, collaborative platform.
From data to disclosure, the Workiva platform empowers customers by connecting and transforming data from hundreds of enterprise resource planning (“ERP”), human capital management (“HCM”), and customer relationship management (“CRM”) systems, as well as other third-party cloud and on-premise applications. Customers use our platform to create, review and publish data-linked documents, presentations, and reports with greater control, consistency, accuracy, and productivity. Our platform is flexible and scalable, so customers can easily adapt it to define, automate, and change their business processes in real time.
While our customers use our platform for more than 100 different use cases, across dozens of vertical industries, we organize our sales and marketing resources into three purpose-built solution groups (financial reporting, sustainability management, and governance, risk and compliance (“GRC”) focusing primarily on the office of the Chief Financial Officer (“CFO”), Chief Sustainability Officer (“CSO”), and Chief Audit Executive (“CAE”).
We operate our business on a multi-tenant SaaS platform accessible around the world. Customers enter into annual and multi-year subscription contracts to gain access to our platform. Our subscription fee includes the use of our software and technical support. Our subscription pricing is based primarily on a solution-based licensing model. Under this model, operating metrics related to a customer’s expected use of each solution determine the price. We charge customers additional fees primarily for document setup and XBRL tagging services.
We generate sales primarily through our direct sales force. In addition, we augment our direct sales channel with partnerships. Our advisory and service partners offer a wider range of domain and functional expertise that broadens the capabilities of our platform, bringing scale and support to customers and prospects. Our technology partners enable more data and process integrations to help customers connect critical transactional systems directly to our platform.
We continue to invest in the development of our solutions, infrastructure and sales and marketing to drive long-term growth. Our full-time employee headcount expanded to 2,860 at December 31, 2025 from 2,828 at December 31, 2024, an increase of 1.1%.
We have achieved significant revenue growth in recent periods. Our revenue grew to $884.6 million in 2025 from $738.7 million in 2024, an increase of 19.7%. We incurred net losses of $26.2 million and $55.0 million in 2025 and 2024, respectively.
We continue to invest for future growth and are focused on several key drivers, including focusing on multi-solution adoption by new and existing customers, further developing our partner
47
Table of Contents
program, accelerating global expansion and our fit-for-purpose solutions. These growth drivers often require a more sophisticated go-to-market approach and, as a result, we may incur additional costs upfront to obtain new customers and expand our relationships with existing customers, including additional sales and marketing expenses.
Effects of Policy and Regulatory Uncertainty
Sales of our sustainability management solutions have been, and may continue to be, materially impacted by domestic and global policy uncertainties. Shifts in regulatory priorities, market sentiment, and legal challenges to sustainability-related rules and regulations are affecting our market expansion opportunities in the U.S. and abroad. For example, on February 25, 2025, the European Commission unveiled the first “Omnibus” package to advance EU competitiveness and simplification of rules on sustainability. Among other measures, the package proposed streamlining key sustainability frameworks. On December 16, 2025, the European Parliament adopted the Detailed Omnibus Directive, which is part of the first Omnibus simplification package. The Detailed Omnibus Directive revises scoping thresholds, removes the climate transition plan requirement, and implements targeted amendments across the Corporate Sustainability Reporting Directive (“CSRD”). It is expected that the adoption is likely to result in substantive amendments to the CSRD. We believe that the revised thresholds under these expected amendments have influenced the pace of customer adoption of our sustainability solutions. The potential impact on our growth trajectory of these changes, and of global policy uncertainty generally, cannot be accurately predicted.
Ongoing regulatory initiatives, including proposed changes to SEC reporting requirements intended to reduce burdens on public companies and enhance the attractiveness of capital markets, such as a potential shift in reporting frequency, could affect the performance of certain of our businesses. These developments may have positive or negative impacts on our business, but the scope and timing of any effects remain uncertain. We continue to monitor regulatory developments and assess potential effects across our business. The full scope of these potential regulatory developments, and their implications for our financial performance, cannot be predicted accurately at this time.
Effects of Volatility in the IPO/SPAC Markets
In the U.S., volatility in the public markets has led to a decrease in the number of initial public offerings (“IPOs”) and special-purpose acquisition companies (“SPACs”) since fiscal 2022. New sales of our SEC and capital markets solutions were adversely affected by this decline in the IPO and SPAC markets. Although there has been an increase recently in the number of IPOs in 2025, we continue to expect reduced valuation multiples caused by higher interest rates, inflation, global trade conflicts and geopolitical instability to continue to create uncertain impacts on the number of IPOs in fiscal year 2026. Whether and to what extent the IPO and SPAC markets will continue to moderate cannot be accurately predicted.
Key Factors Affecting Our Performance
Generate Growth From Existing Customers. The Workiva platform can exhibit a powerful network effect within an enterprise, meaning that the usefulness of our platform attracts additional users. Since solution-based licensing offers our customers an unlimited number of seats for each solution purchased, we expect customers to add more seats over time. As more employees in an enterprise use our platform, additional opportunities for collaboration and automation drive demand among their colleagues for additional solutions.
48
Table of Contents
Pursue New Customers. We sell to organizations that manage large, complex processes with distributed teams of contributors and disparate sets of business data. We market our platform to professionals and executives in the areas of financial and non-financial reporting, including regulatory, multi-entity and management reporting. In addition, we market to teams responsible for sustainability management and GRC programs. We intend to continue to build our sales and marketing organization and leverage our brand equity to attract new customers.
Offer More Solutions. We intend to introduce new solutions to continue to meet growing demand for our platform. Our close and trusted relationships with our customers are a source for new use cases, features and solutions. We have a disciplined process for tracking, developing and releasing new solutions that are designed to have immediate, broad applicability, together with a strong value proposition and high return on investment for both Workiva and our customers. Our advance planning team assesses customer needs, conducts industry-based research and defines new markets. This vetting process involves our sales, product marketing, customer success, professional services, research and development, finance and senior management teams.
Expand Across Enterprises. Our success in delivering multiple solutions has created demand from customers for a broader-based, enterprise-wide Workiva platform. In response, we have been improving our technology and realigning sales and marketing to capitalize on our growing enterprise-wide opportunities. We believe this expansion will add new users, increase revenue and continue to support our high revenue retention rates. However, we expect that enterprise-wide deals will be larger and more complex, which tend to lengthen the sales cycle.
Add Partners. We continue to expand and deepen our relationships with global and regional partners, including consulting firms, system integrators, large and mid-sized independent software vendors, and implementation partners. Our advisory and service partners offer a wider range of domain and functional expertise that broadens our platform’s capabilities and promotes Workiva as part of the digital transformation projects they drive for their customers. Our technology partners enable powerful data and process integrations to help customers connect critical transactional systems directly to our platform, with powerful linking, auditability and control features. We believe that our partner ecosystem extends our global reach, accelerates the usage and adoption of our platform, and enables more efficient delivery of professional services.
Investment in growth. We plan to continue to invest in the development of our platform, fit-for-purpose solutions and application marketplace to enhance our current offerings and build new features. In addition, we expect to continue to invest in our sales, marketing, professional services and customer success organizations to drive additional revenue and support the needs of our growing customer base and to take advantage of opportunities that we have identified in Europe, the Middle East and Africa ("EMEA") and Asia-Pacific ("APAC") regions.
Seasonality. Seasonality affects our revenue, expenses and cash flows from operations. Revenue from professional services is generally higher in the first quarter as many of our customers file their 10-K in the first calendar quarter. As of December 31, 2025, the majority of our SEC customers reported their financials on a calendar-year basis. Our sales and marketing expense also has some degree of seasonality. Sales and marketing expense has historically been higher in the third quarter due to our annual user conference in September. In addition, our operating cash flow may be affected by the timing of employee cash bonus payments during the first and fourth calendar quarters and by the timing of payouts under our commission plans in the first quarter.
49
Table of Contents
Key Performance Indicators
Year ended December 31,
2025
2024
2023
(dollars in thousands)
Financial metrics
Total revenue
$
884,568
$
738,680
$
630,039
Year-over-year percentage increase in total revenue
19.7%
17.2%
17.1%
Subscription and support revenue
$
812,627
$
667,646
$
558,645
Year-over-year percentage increase in subscription and support revenue
21.7%
19.5%
20.2%
Subscription and support as a percent of total revenue
91.9%
90.4%
88.7%
As of December 31,
2025
2024
2023
Operating metrics
Number of customers
6,624
6,305
6,034
Gross retention rate
97.2%
97.4%
97.9%
Net retention rate
112.8%
111.9%
110.3%
Number of customers with annual contract value $100k+
2,507
2,055
1,631
Number of customers with annual contract value $300k+
592
416
311
Number of customers with annual contract value $500k+
248
181
137
Total customers. We believe total number of customers is a key indicator of our financial success and future revenue potential. We define a customer as an entity with an active subscription contract as of the measurement date. Our customer is typically a parent company or, in a few cases, a significant subsidiary that works with us directly. Companies with publicly-listed securities account for a substantial majority of our customers. As customers acquired through our Sustain.Life acquisition in 2024 renew their contracts with Workiva, they are added to our customer count above.
Gross retention rate. Our gross retention rate is based on subscription and support revenue. We calculate our gross retention rate based on all customers that were active at the end of the same calendar quarter of the prior year (“base customers”). We begin by annualizing the subscription and support revenue recorded in the same calendar quarter of the prior year for those base customers who are still active at the end of the current quarter. We divide the result by the annualized subscription and support revenue in the same quarter of the prior year for all base customers. We believe gross retention rates are an important metric to track how the Company retains its base revenue for each year.
Our gross retention rate was 97.2% as of December 31, 2025, down slightly from 97.4% as of December 31, 2024. We believe that our success in maintaining a high rate of retention is attributable primarily to our robust technology platform and strong customer service. Customers whose securities were deregistered due to merger or acquisition or financial distress accounted for just over half of our revenue attrition in the latest quarter.
50
Table of Contents
Net retention rate. Our net retention rate is based on subscription and support revenue, and includes revenue from up-selling or cross-selling additional solutions, and pricing changes for existing customers and securing multi-year contracts renewals containing periodic pricing term increases. We calculate our net retention rate by annualizing the subscription and support revenue recorded in the current quarter for our base customers that were active at the end of the current quarter. We divide the result by the annualized subscription and support revenue in the same quarter of the prior year for all base customers. We believe our net retention rate is an important metric to measure the long-term value of customer agreements and our ability to retain our customers.
Our net retention rate was 112.8% as of the year ended December 31, 2025, up from 111.9% as of December 31, 2024.
Annual contract value. Our annual contract value (“ACV”) for each customer is calculated by annualizing the subscription and support revenue recognized during each quarter. We believe the increase in the number of larger contracts shows our progress in expanding our customers’ adoption of our platform. As customers acquired through our Sustain.Life acquisition in 2024 renew their contracts with Workiva, they are incorporated into our ACV metrics in the following table.
Year ended December 31,
2025
2024
2023
Subscription and support revenue from customers with annual contract value of $100k+ as a percent of total subscription and support revenue
76.8%
71.2%
66.3%
Subscription and support revenue from customers with annual contract value of $300k+ as a percent of total subscription and support revenue
41.1%
35.7%
31.7%
Subscription and support revenue from customers with annual contract value of $500k+ as a percent of total subscription and support revenue
27.4%
23.9%
21.5%
Components of Results of Operations
Revenue
We generate revenue through the sale of subscriptions to our cloud-based software and the delivery of professional services. We serve a wide range of customers in many industries, and our revenue is not concentrated with any single customer or small group of customers. For each of the years ended December 31, 2025, 2024 and 2023, no single customer represented more than 1% of our revenue, and our largest 10 customers accounted for less than 10% of our revenue in the aggregate.
We generate sales directly through our sales force and partners. We also identify some sales opportunities with existing customers through our customer success and professional services teams.
Our customer contracts typically range in length from 12 to 36 months. We typically invoice our customers for subscription fees annually in advance. For contracts with a two or three year term, customers sometimes elect to pay the entire multi-year subscription term in advance. Our arrangements do not contain general rights of return.
Subscription and Support Revenue. We recognize subscription and support revenue on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Amounts that are invoiced are initially recorded as deferred revenue.
51
Table of Contents
Professional Services Revenue. We believe our professional services facilitate the sale of our subscription service to certain customers. To date, most of our professional services have consisted of document set up, XBRL tagging, and consulting to help our customers with business processes and best practices for using our platform. Our professional services are not required for customers to utilize our solution. We recognize revenue for document set ups when the service is complete and control has transferred to the customer. Revenues from XBRL tagging and consulting services are recognized as the services are performed.
Cost of Revenue
Cost of revenue consists primarily of personnel and related costs directly associated with our professional services, customer success teams and training personnel, including salaries, benefits, bonuses, travel and stock-based compensation; the costs of contracted third-party vendors; the costs of server usage by our customers; information technology costs; and facility costs. Costs of server usage are comprised primarily of fees paid to Amazon Web Services.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of personnel and related costs, including salaries, benefits, bonuses, commissions, travel, and stock-based compensation. Other costs included in this expense are marketing and promotional events, our annual user conference, online marketing, product marketing, information technology costs, and facility costs. We pay sales commissions for initial contracts and expansions of existing customer contracts. When the relevant amortization period is one year or less, we expense sales commissions as incurred. All other sales commissions are considered incremental costs of obtaining a contract with a customer and are deferred and amortized on a straight-line basis over a period of benefit that we have determined to be three years.
Research and Development Expenses
Research and development expenses consist primarily of personnel and related costs, including salaries, benefits, bonuses, travel and stock-based compensation; costs of server usage by our developers; information technology costs; and facility costs.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel and related costs for our executive, finance and accounting, legal, human resources, and administrative personnel, including salaries, benefits, bonuses, travel and stock-based compensation; legal, accounting, and other professional service fees; other corporate expenses; information technology costs; and facility costs.
52
Table of Contents
Results of Operations
The following table sets forth selected consolidated statement of operations data for each of the periods indicated:
Year ended December 31,
2025
2024
2023
(in thousands)
Revenue
Subscription and support
$
812,627
$
667,646
$
558,645
Professional services
71,941
71,034
71,394
Total revenue
884,568
738,680
630,039
Cost of revenue
Subscription and support(1)
136,645
118,697
99,193
Professional services(1)
53,785
53,358
55,029
Total cost of revenue
190,430
172,055
154,222
Gross profit
694,138
566,625
475,817
Operating expenses
Research and development(1)
214,844
192,935
172,790
Sales and marketing(1)
408,872
347,243
287,035
General and administrative(1)
112,863
102,981
110,519
Total operating expenses
736,579
643,159
570,344
Loss from operations
(42,441)
(76,534)
(94,527)
Interest income
34,153
39,395
25,882
Interest expense
(12,777)
(12,865)
(53,639)
Other (expense) income, net
(1,350)
563
(1,814)
Loss before provision for income taxes
(22,415)
(49,441)
(124,098)
Provision for income taxes
3,754
5,601
3,427
Net loss
$
(26,169)
$
(55,042)
$
(127,525)
(1) Stock-based compensation expense included in these line items was as follows:
Year ended December 31,
2025
2024
2023
(in thousands)
Cost of revenue
Subscription and support
$
10,271
$
7,979
$
5,030
Professional services
4,261
3,221
2,540
Operating expenses
Research and development
28,867
21,036
18,441
Sales and marketing
42,108
35,339
27,774
General and administrative
37,438
34,575
44,980
Total stock-based compensation expense
$
122,945
$
102,150
$
98,765
The following table sets forth our consolidated statement of operations data as a percentage of revenue for each of the periods indicated:
53
Table of Contents
Year ended December 31,
2025
2024
2023
Revenue
Subscription and support
91.9%
90.4%
88.7%
Professional services
8.1
9.6
11.3
Total revenue
100.0
100.0
100.0
Cost of revenue
Subscription and support
15.4
16.1
15.7
Professional services
6.1
7.2
8.7
Total cost of revenue
21.5
23.3
24.4
Gross profit
78.5
76.7
75.6
Operating expenses
Research and development
24.3
26.1
27.4
Sales and marketing
46.2
47.0
45.6
General and administrative
12.8
13.9
17.5
Total operating expenses
83.3
87.0
90.5
Loss from operations
(4.8)
(10.3)
(14.9)
Interest income
3.9
5.3
4.1
Interest expense
(1.4)
(1.7)
(8.5)
Other (expense) income, net
(0.2)
0.1
(0.3)
Loss before provision for income taxes
(2.5)
(6.6)
(19.6)
Provision for income taxes
0.4
0.8
0.5
Net loss
(2.9)
%
(7.4)
%
(20.1)
%
Revenue
Comparison of Years Ended December 31, 2025 and 2024
Year ended December 31,
Period-to-period change
2025
2024
Amount
% Change
(dollars in thousands)
Revenue
Subscription and support
$
812,627
$
667,646
$
144,981
21.7%
Professional services
71,941
71,034
907
1.3%
Total revenue
$
884,568
$
738,680
$
145,888
19.7%
Total revenue increased $145.9 million in 2025 compared to 2024 due primarily to a $145.0 million increase in subscription and support revenue. Growth in subscription and support revenue in 2025 was attributable mainly to strong demand and continued solution expansion across our customer base. The total number of our customers increased 5.1% from December 31, 2024 to December 31, 2025. Revenue from professional services was relatively flat in 2025 compared to 2024. We continue to transition consulting and other services to our partners and expect the revenue growth rate from subscription and support to continue to outpace revenue growth from professional services on an annual basis.
54
Table of Contents
Cost of Revenue
Comparison of Years Ended December 31, 2025 and 2024
Year ended December 31,
Period-to-period change
2025
2024
Amount
% Change
(dollars in thousands)
Cost of revenue
Subscription and support
$
136,645
$
118,697
$
17,948
15.1%
Professional services
53,785
53,358
427
0.8%
Total cost of revenue
$
190,430
$
172,055
$
18,375
10.7%
Cost of revenue increased $18.4 million in 2025 compared to 2024. Subscription and support cost of revenue increased $17.9 million due primarily to $11.1 million in higher cash-based compensation and benefits costs, $2.3 million of additional stock-based compensation, a $3.3 million increase in the cost of licensed platform content, a $1.0 million increase in intangibles amortization, and a $0.7 million increase in software expense, partially offset by a $0.7 million decrease in travel expense. The increase in compensation was primarily driven by normal compensation increases for existing headcount and includes a benefit for our transition from a paid-time-off (“PTO”) model to a flexible-time-off (“FTO”) model which was announced in the second half of the year. The increases in the cost of licensed platform content and software expense resulted primarily from our continued investment in and support of our platform and solutions. Professional services cost of revenue increased $0.4 million due primarily to $1.0 million of additional stock-based compensation, partially offset by a $0.4 million decrease in cash-based compensation and benefits costs. The change in compensation was primarily driven by standard compensation increases for existing headcount partially offset by our continued transition of consulting and other services to our partners.
Operating Expenses
Comparison of Years Ended December 31, 2025 and 2024
Year ended December 31,
Period-to-period change
2025
2024
Amount
% Change
(dollars in thousands)
Operating expenses
Research and development
$
214,844
$
192,935
$
21,909
11.4%
Sales and marketing
408,872
347,243
61,629
17.7%
General and administrative
112,863
102,981
9,882
9.6%
Total operating expenses
$
736,579
$
643,159
$
93,420
14.5%
Research and Development
Research and development expenses increased $21.9 million in 2025 compared to 2024 due primarily to $14.8 million in higher cash-based compensation and benefits and $7.8 million of additional stock-based compensation, partially offset by a $0.8 million decrease in the cost of cloud infrastructure services. The increase in compensation was primarily driven by a modest increase in employee headcount, an executive transition and a benefit for our transition from a PTO model to an FTO model which was announced in the second half of the year.
55
Table of Contents
Sales and Marketing
Sales and marketing expenses increased $61.6 million in 2025 compared to 2024 due primarily to $49.2 million in higher cash-based compensation and benefits, $6.7 million of additional stock-based compensation, a $1.5 million increase in marketing and advertising, a $2.6 million increase in professional service fees, a $1.3 million increase in internal event costs, and a $1.2 million in software expense. The increases in compensation and internal event costs were primarily due to an increase in employee headcount as we continue to invest in our go-to-market activities, as well as an executive transition and a benefit for our transition from a PTO model to an FTO model which was announced in the second half of the year. The increases in marketing and advertising, professional service fees, and software expense were the result of our continued investment in and support of our platform and solutions.
General and Administrative
General and administrative expenses increased $9.9 million in 2025 compared to 2024, due primarily to $5.0 million in higher cash-based compensation and benefits, $3.0 million of additional stock-based compensation, and a $2.6 million increase in internal event costs, partially offset by a $0.7 million decrease in travel expense. The increase in compensation was primarily driven by normal compensation increases for existing headcount, an executive transition, and a benefit for our transition from a PTO model to an FTO model which was announced in the second half of the year. The increase in internal event costs was due to a new internal event held in the second quarter.
Non-Operating Income (Expenses)
Comparison of Years Ended December 31, 2025 and 2024
Year ended December 31,
Period-to-period change
2025
2024
Amount
(dollars in thousands)
Interest income
$
34,153
$
39,395
$
(5,242)
Interest expense
(12,777)
(12,865)
88
Other (expense) income, net
(1,350)
563
(1,913)
Interest income decreased $5.2 million in 2025 compared to 2024 due primarily to lower interest rates. Interest expense remained relatively flat compared to the same period a year ago. Other expense, net increased $1.9 million in 2025 compared to 2024 due primarily to losses on foreign currency transactions.
Results of Operations for Fiscal 2024 Compared to 2023
For a comparison of our results of operations for the fiscal years ended December 31, 2024 and 2023, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 25, 2025.
56
Table of Contents
Liquidity and Capital Resources
Overview of Sources and Uses of Cash
As of December 31, 2025, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $891.6 million, which were held for working capital purposes. We have financed our operations primarily through cash generated from operations and issuances of convertible debt. We have generated significant operating losses as reflected in our accumulated deficit on our consolidated balance sheets. While we may incur operating losses and negative cash flows from operations in the future, we believe that current cash and cash equivalents and cash flows from operating activities will be sufficient to fund our operations for at least the next twelve months and beyond.
Convertible Debt
In August 2023, we issued $702.0 million aggregate principal amount of 1.250% convertible senior notes due 2028 (the “2028 Notes”). Proceeds from the issuance of the 2028 Notes totaled $691.1 million, net of initial purchaser discounts and issuance costs. We used $396.9 million of the net proceeds from the 2028 Notes offering to repurchase $273.8 million principal amount, together with accrued and unpaid interest thereon, of our 1.125% convertible senior notes due 2026 (the “2026 Notes”) in separate and individually negotiated transactions with certain holders. As of December 31, 2025, we had outstanding debt relating to our 2026 Notes and 2028 Notes of $71.1 million and $696.3 million, with corresponding maturity dates of August 15, 2026 and August 15, 2028, respectively.
Share Repurchase Plan
On August 1, 2024, we announced that on July 30, 2024, our board of directors authorized a share repurchase plan for up to $100.0 million of our outstanding Class A common stock (the “2024 Repurchase Plan”).
During the fourth quarter of 2025, Workiva purchased approximately 131,000 shares for $11.5 million under the 2024 Repurchase Plan. As of December 31, 2025, approximately $28 million remained available under the plan for future share repurchases. On February 16, 2026, our board of directors modified the 2024 Repurchase Plan to authorize an additional $250 million of the Company’s outstanding Class A common stock for repurchase under the plan. The timing, manner, price and amount of any repurchases will be determined at the Company’s discretion, and the share repurchase program may be suspended, terminated or modified at any time for any reason. Shares may be repurchased through open market purchases in accordance with the requirements of Exchange Act Rule 10b-18, or privately negotiated transactions, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act.
Cash Flows
The following table summarizes cash flow activity during the years ended December 31, 2025, 2024 and 2023 (in thousands):
Year ended December 31,
2025
2024
2023
Cash flow provided by operating activities
$
140,070
$
87,706
$
70,875
Cash flow used in investing activities
(34,952)
(45,249)
(357,253)
Cash flow (used in) provided by financing activities
(74,944)
6,741
301,265
Net increase in cash, cash equivalents, and restricted cash, net of impact of exchange rates
$
37,131
$
45,629
$
16,524
57
Table of Contents
Operating Activities
Our largest source of operating cash is cash collections from customers for subscription and support access to our platform. Our primary uses of cash from operating activities are for personnel-related expenditures, marketing activities, and costs of cloud infrastructure services.
Cash provided by operating activities of $140.1 million for the year ended December 31, 2025 consisted of a net loss of $26.2 million adjusted for non-cash charges of $130.6 million and net cash inflows of $35.6 million from changes in operating assets and liabilities. The increase in deferred revenue was primarily due to timing of billings and growth in our customer base.
Cash provided by operating activities of $87.7 million for the year ended December 31, 2024 consisted of a net loss of $55.0 million adjusted for non-cash charges of $103.2 million and net cash inflows of $39.6 million from changes in operating assets and liabilities. The increase in deferred revenue was primarily due to customer growth. The increase in deferred costs was primarily due to growth in subscription bookings and commission plan achievement at year-end.
Investing Activities
Cash used in investing activities of $35.0 million for the year ended December 31, 2025 consisted of $425.5 million in purchases of marketable securities and $2.1 million in purchases of fixed assets partially offset by $390.5 million from the maturities of marketable securities and $2.5 million from the sale of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of our work force.
Cash used in investing activities of $45.2 million for the year ended December 31, 2024 consisted of $402.2 million in purchases of marketable securities, $98.1 million for the acquisition of Sustain.Life, and $1.4 million in purchases of fixed assets partially offset by $452.0 million from the maturities of marketable securities and $4.6 million from the sale of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of expanding our infrastructure and work force.
Financing Activities
Cash used in financing activities of $74.9 million for the year ended December 31, 2025 consisted of $71.6 million in repurchases of our Class A common stock under the 2024 Repurchase Plan and $22.7 million in taxes paid related to net share settlements of stock-based compensation awards partially offset by $13.7 million in proceeds from shares issued in connection with our Employee Stock Purchase Plan (“ESPP”) and $6.2 million in proceeds from option exercises.
Cash provided by financing activities of $6.7 million for the year ended December 31, 2024 consisted of $13.8 million in proceeds from shares issued in connection with our ESPP and $4.9 million in proceeds from option exercises partially offset by $11.5 million in taxes paid related to net share settlements of stock-based compensation awards.
58
Table of Contents
Contractual Obligations and Commitments
The following table represents our contractual obligations as of December 31, 2025, aggregated by type:
Payments due by period
Total
Less than 1 year
1-3 years
3-5 years
More than 5 years
(in thousands)
Convertible senior notes
$
800,369
$
80,819
$
719,550
$
—
$
—
Operating leases including imputed interest
18,384
6,525
8,796
1,160
1,903
Finance leases, including interest
20,457
1,353
2,707
2,708
13,689
Other contractual commitments
121,379
37,351
57,028
27,000
—
Total contractual obligations
$
960,589
$
126,048
$
788,081
$
30,868
$
15,592
Total future payments related to our convertible senior notes shown in the table above includes $773.2 million aggregate principal amount and future interest payments associated with the Notes of $27.1 million. For more information on our convertible senior notes, refer to Note 8 of our accompanying notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
We lease certain office space, residential space, buildings and land with various lease terms which are primarily accounted for as operating leases. We have entered into a lease agreement for land and an office building in Ames, Iowa, which was constructed in two phases, and is accounted for as a finance lease. The lease term includes an initial 15-year term and three five-year extensions at our option because renewal was determined to be reasonably assured at the inception of the lease. The lease contains purchase options to acquire the landlord’s interest in the land lease and building at any time beginning three years from June 2014 (the commencement date of the second phase of the lease). In addition, the lease requires us to purchase the building from the landlord upon certain events, such as a change in control.
We enter into certain non-cancelable agreements with third-party providers in the ordinary course of business. Our total commitments under these agreements are $121.4 million and are primarily for cloud infrastructure and cloud services. These amounts are included in the table above under other contractual commitments.
59
Table of Contents
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, provision for income taxes and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
We believe that of our significant accounting policies, which are described in Note 1 to our consolidated financial statements, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of our operations.
Revenue Recognition
We generate revenue through the sale of our cloud-based software and the delivery of professional services. Revenues are recognized when control of these services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those services.
We determine revenue recognition through the following steps:
•Identification of the contract, or contracts, with a customer
•Identification of the performance obligations in the contract
•Determination of the transaction price
•Allocation of the transaction price to the performance obligations in the contract
•Recognition of revenue when, or as, we satisfy a performance obligation
Subscription and Support Revenue
We recognize subscription and support revenue on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our subscription contracts are generally 12 to 36 months in duration, are billed either annually or in advance and are non-cancelable. We consider the access to our platform and related support services in a customer contract to be a series of distinct services which comprise a single performance obligation because they are substantially the same and have the same pattern of transfer.
Professional Services Revenue and Customer Options
Professional services revenues primarily consist of fees for document set up, XBRL tagging, and consulting with our customers on business processes and best practices for using our platform. We have determined that an agreement to purchase these professional services constitutes an option to purchase services in accordance with ASC 606 rather than an agreement that creates enforceable rights and obligations because of the customer’s contractual right to cancel services that have not yet been used. In the limited case of agreements where we determined that the option provides the customer with a material right, we allocate a portion of the transaction price to the material right based upon the relative standalone selling price. Professional service agreements that do not contain a material right are accounted for when the customer exercises its option to purchase additional services.
60
Table of Contents
Revenue is recognized for document set ups when the service is complete and control has transferred to the customer. Revenues from XBRL tagging and consulting services are recognized as the services are performed.
Contracts with Multiple Performance Obligations
Some of our contracts with customers contain multiple performance obligations. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. We determine the standalone selling prices based on our overall pricing objectives, taking into consideration market conditions and entity-specific factors, including the value of our arrangements, length of term, customer demographics and the numbers and types of users within our arrangements.
While changes in assumptions or judgments or changes to the elements of the arrangement could cause an increase or decrease in the amount of revenue that we report in a particular period, these changes have not historically been significant because our recurring revenue is primarily subscription and support revenue.
Acquisitions
We account for acquisitions under Accounting Standards Codification 805, Business Combinations. In general, the acquisition method of accounting requires companies to record assets acquired and liabilities assumed at their respective fair market values at the date of acquisition. Determining the fair value of assets acquired and liabilities assumed requires significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, earnings before interest, tax, depreciation and amortization margins, and discount rates. We engage the assistance of third-party valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities assumed in a business combination. Any amount of the purchase price paid that is in excess of the estimated fair values of net assets acquired is recorded as goodwill in our consolidated balance sheets. Transaction costs, as well as costs to reorganize acquired companies, are expensed as incurred in our consolidated statement of operations.
Recent Accounting Pronouncements
Refer to Note 1 of the notes to consolidated financial statements for a full description of recent accounting pronouncements.
61
Table of Contents