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.Workiva Quarterly Revenue

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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Customer Retention

One of the best parts about the software-as-a-service business model (and a reason why they trade at high valuation multiples) is that customers typically spend more on a company’s products and services over time.

Workiva’s net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 110% in Q1. This means Workiva would’ve grown its revenue by 10.4% even if it didn’t win any new customers over the last 12 months.Workiva Net Revenue Retention Rate

Workiva has a good net retention rate, proving that customers are satisfied with its software and getting more value from it over time, which is always great to see.

Key Takeaways from Workiva’s Q1 Results

It was great to see Workiva grow its customers this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its EPS guidance for next quarter missed significantly and its net revenue retention decreased. Overall, this was a mixed quarter. The stock remained flat at $74.84 immediately following the results.

So do we think Workiva is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.

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