Workiva 2025 Q2 Earnings Misses Targets as Net Income Declines 10.6%

Workiva (WK) reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. Workiva's earnings results fell short of expectations, showing a wider net loss compared to the previous year's quarter. The company's guidance for the third quarter anticipates revenue growth, yet net loss projections remain high. Despite these ongoing financial challenges, Workiva continues to see strong demand for its solutions, positively impacting its subscription revenue and customer base with high annual contract values. The outlook for the full year also indicates steady revenue expectations.

Revenue
The total revenue of Workiva increased by 21.2% to $215.19 million in 2025 Q2, up from $177.50 million in 2024 Q2.

Earnings/Net Income
Workiva's losses deepened to $0.35 per share in 2025 Q2 from a loss of $0.32 per share in 2024 Q2 (9.4% wider loss). Meanwhile, the company's net loss widened to $-19.40 million in 2025 Q2, representing a 10.6% increase from the $-17.55 million loss recorded in 2024 Q2. The company has sustained losses for 12 years over the corresponding fiscal quarter, highlighting ongoing financial headwinds. The EPS reflects the company's continued financial difficulties.

Price Action
The stock price of Workiva has dropped 3.24% during the latest trading day, has dropped 4.02% during the most recent full trading week, and has dropped 6.75% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Workiva (WK) shares after a quarter-over-quarter revenue increase on the earnings release date, followed by holding the shares for 30 days, has resulted in negative performance over the past three years. This approach yielded a compound annual growth rate (CAGR) of -0.59% and encountered a maximum drawdown of 0.00%. Furthermore, the strategy's Sharpe ratio stood at -0.01, underscoring significant underperformance and risk. These metrics indicate that the strategy has consistently failed to generate positive returns, reflecting the challenges faced by investors attempting to capitalize on short-term revenue growth in Workiva's stock. The persistent underperformance highlights the need for a more robust investment strategy to mitigate risk and improve potential returns in the context of Workiva's financial landscape.

CEO Commentary
"We delivered another quarter of solid financial performance, powered by the continued demand for our broad portfolio of solutions and unified platform," said Julie Iskow, President & Chief Executive Officer. The company reported strong growth in subscription revenue and a significant increase in customers with high annual contract values, reflecting effective execution on strategic priorities and a disciplined approach to margin expansion. Iskow emphasized the durability of the business, noting the achievement of results that exceeded guidance for both revenue and operating margin.

Guidance
As of July 31, 2025, Workiva expects third-quarter total revenue to be in the range of $218 million to $220 million, with a GAAP operating margin between (7.4)% and (6.4)%. For the full year 2025, total revenue guidance is set at $870 million to $873 million. The company anticipates a GAAP net loss per basic share between $(0.79) and $(0.72) and expects non-GAAP net income per diluted share to range from $1.31 to $1.38.

Additional News
In recent weeks, Workiva welcomed SaaS executive Astha Malik to its board of directors, strengthening its leadership team. Additionally, Workiva's study highlighted the urgent need for high-quality data and governance to unlock AI value, emphasizing the importance of these resources in leveraging AI for corporate reporting. Furthermore, the company repurchased $10 million of Class A common stock under the 2024 share repurchase plan, indicating confidence in its long-term strategy and commitment to returning value to shareholders.