Workiva Inc (NYSE: WK) CEO Interview


Workiva Inc
Chairman and CEO: Matt Rizai



WSA:  Good day from Wall Street.  This is Juan Costello, Senior Analyst with the Wall Street Analyzer.  Joining us today is Matt Rizai, the Chairman and CEO of Workiva Incorporated.  The company trades on the New York Stock Exchange.  The ticker symbol is WK.  Thanks for joining us today, Matt.

Matt Rizai:  You are welcome. I’m happy to be here.

WSA:  So, starting off, please give us a history and overview of the company.

Matt Rizai:  At Workiva, we set out to create a technology platform for business productivity. We believe there is a lot of unstructured data being created by companies, and a lot of that data needs to be leveraged.  We thought that this leveraging could be cloud-based to be able to provide businesses the capability to be able to create text, work with their numbers, communicate, and collaborate anywhere, anytime.  And to provide transparency to the data as they communicate and collaborate, so everyone knows who is doing what and what types of permission everyone has.

We decided that as we developed the technology, we would see which teams in the enterprise would see the benefits of it.  We started with the group that focuses on filing SEC reports, including 10-Ks and 10-Qs.  These teams have timelines and deadlines.  There is a lot of text and a lot of numbers coming from different sources. There are many types of people working on it — accountants, external auditors. internal auditors, financial analysts, investor relations, and attorneys, both internal and external.

We thought the SEC market would be a good area to introduce our platform, to see how customers would use it.  We set out to do that in March 2010 and we’ve scaled very fast.  Today, we have a good portion of the market share of the companies that produce and file SEC reports.  Seeing early success, we branded the platform Wdesk in 2013 and we began offering Wdesk to the rest of the enterprise as a productivity platform that’s comprised of integrated word processing, spreadsheets and presentation applications that we’ve built on a data management engine.  Today, customers use Wdesk across their organizations for a wide variety of use cases — compliance, risk, finance, and audit management.  We currently have more than 2,500 customers.

WSA:  Great.  So bring us up to speed on some of your current news, including your recent revenue numbers.

Matt Rizai: We reported a strong revenue growth for the fourth quarter and full year of 2015.  Revenue growth in the fourth quarter was 32.4% over the same quarter last year, which was ahead of our guidance.  Total revenue for the year, ended December 31st 2015, was $145.3 million, that’s an increase of 28.9% over the full year of 2014.  We continue to add new Wdesk customers and we see it being used across our customers’ organizations for multiple use cases, including Sarbanes-Oxley, management reporting, risk processes, and auditing.  And, as I mentioned, although we started with providing and offering a platform for SEC usage in the enterprise, we’ve moved quickly to the other parts of the organization.  As a matter of fact, the non-SEC use cases in the enterprise have contributed approximately 25% of our subscription bookings in 2014 and that increased to 39% in 2015.  In 2016, we expect that non-SEC use cases should contribute more than 50% of our subscription bookings.

WSA:  So, what are some of the other key trends that you’re focusing on right now in the sector and how are you positioned with your Wdesk platform to capitalize?

Matt Rizai:  Since we have quite a large and diverse customer base, almost in every industry, we don’t have any customer concentration. Our largest customer represents less than 2% of our revenue. More than 2,500 companies from a wide variety of industries use Wdesk. This diversity in our customers helps us identify trends.  One major trend is the explosion of unstructured data. According to IDC, the data universe will double every two years until 2020. Our Wdesk platform allows users to collect and manage their unstructured data regardless of format or location.

A second trend is increasing regulation of private and public companies. Our customers are faced with the challenge of consolidating a wide range of information across different teams, especially for reporting and compliance with regulatory requirements and legislation, such as the Sarbanes-Oxley Act and Dodd-Frank Act, as well as state and local regulations. Wdesk streamlines and automates compliance and regulatory reporting.  We’re also seeing another trend in increasing management oversight, and this is not just for public companies, it’s also for private companies.

Obviously, businesses are expanding and they’re becoming more complex and are under increasing pressure to report a growing amount of information to internal management teams, their board of directors, internal and external auditors, and other stakeholders.  Wdesk allows our users to collect, analyze, and report business data and streamline processes more rapidly than ever before.  Another trend that we’ve seen lately is the structural shift in the workforce.  Organizations are becoming increasingly global, with employees geographically distributed to support strategic and business needs.  And because Wdesk is cloud-based and web-based, it can be accessed from anywhere with an Internet connection.

And finally, I think another trend is that our users are looking for the consumer software experience at work. The technology features people have come to expect in their personal lives, like speed and access, sharing and linking, are now available at work with Wdesk.

WSA:  Great.  What are some of the key goals and milestones that you’re hoping to accomplish over the course of the next 6 to 12 months?  What can your investors and clients look forward to?

Matt Rizai:  Our ambition has been to redefine the way enterprises work, to make them much more productive, and to respond to our markets as they grow and change, Workiva built Wdesk as a  productivity platform for compliance, management reporting, risk processes, and audit management.  We provide our customers the ability to harness their unstructured data, which is becoming more and more important for them to do their work every day.

WSA:  As far as investors and the financial community are concerned, Matt, what are some of the key drivers that you wish they better understood about the company?

Matt Rizai:  I think our job as a management team is to be continuously communicating with our stakeholders, to make sure that they understand who we are and what we’re trying to do.  We will always strive to do well.  But, of course, at the end of the day, and rightly so, shareholders are saying, “Well, okay.  Tell us the numbers.  Talk is one thing, where’s the performance?”  So as we continually drive performance and we continually exceed expectations.

We also talk to our shareholders and continually update them that our retention rate is strong, around 95.8%.  And if we include the add-on sales, our revenue retention rate is 112.5%.  That’s another indication not only that our customers love our platform, but also that they want to use it for more purposes.

On our last conference call, we communicated for the first time the mix of bookings from SEC and non-SEC use cases in 2014 and 2015 and what we expect in 2016.  We’ll continue to communicate that every year because it helps to illustrate the growth of Wdesk as a productivity platform for a wide range of use cases.  It tells our expansion story, which is our ability to grow Wdesk across our customers’ organizations.  It’s also important for us that we continue to listen to our customers and we continue to innovate.

Workiva files more annual and quarterly reports with the SEC than any other third-party provider. We continually tell our shareholders that we have a very strong management team, we’ve done this before, we have a lot of experience, and we’re great at execution.  So not only do we talk about what we’re going to do, but we also want our shareholders to know that this experienced team will continue to execute.

WSA:  Well, perhaps you can briefly walk us through your background experience, Matt, and talk a little bit about the management.

Matt Rizai:  Most of our executive management team has known each other for 25 years or more.  We’ve been in battles before. We’ve started and scaled companies before.  We’ve always been in the business-to-business environment.  My business partners are Chief Operating Officer Marty Vanderploeg and our Chief Technology Officer Jeff Trom.  We scaled another company called Engineering Animation, Inc. In 1996, we took it public and it traded on NASDAQ under the symbol EAII.  It was a highly innovative and profitable enterprise that created leading-edge software for the design and manufacturing productivity arena. We then sold Engineering Animation to Unigraphics, another public company, in 2000.

The rest of our executive management team is very experienced, and we also have very strong senior management that works closely with my executive team. We’re proud to be continuously developing the next generation of senior executives, because at the end of the day, that’s what this is all about.  We’re pretty excited about where we are today and where we’re going as a company with our top-notch management team.

WSA:  Well, great.  So once again joining us today is Matt Rizai, the Chairman and CEO for Workiva Incorporated.  The company trades on the New York Stock Exchange, ticker symbol WK, currently trading at $12.59 a share and the market cap is about $520 million.  And before we conclude here, Matt, to recap some of your key points, why do you believe investors should consider the company as a good investment opportunity today?

Matt Rizai:  Well, first of all, we have a great and experienced management team.  Number two, we have a broad customer base and a lot of customers who love what we’re doing and who see that it is innovative.  And third, we deliver financial performance, and we do what we say we’re going to do. And we continuously innovate.

We have a 95% customer satisfaction score, and we get rave reviews from so many of our customers, so we know that Wdesk has become very important to them, too.

Workiva has a great product, great customers, and fast-growing markets — it’s over $10 billion right now — and great management.  So, I think those are good reasons for people to look at us and see if we’re the kind of company they’d like to invest in.

WSA:  Well, we certainly look forward to continue to track the company’s growth and report on your upcoming progress.  We’d like to thank you for taking the time to join us today, Matt, and update our investor audience on Workiva.  It was great to have you on.

Matt Rizai:  Thank you very much.  It was great to talk with you.



About author

This article was written by The Wall Street Analyzer

The Wall Street Analyzer's staff of writers, analysts, publishers, producers, market researchers, and PR professionals aim to provide investors with the tools they need to make informed decisions on buying stock. Our staff is a mix of financial professionals and media savvy individuals whose experiences bring the best talent from both ends of the spectrum. On one hand our financial experience gives us the ability to identify promising, off the grid companies before they are uncovered by the rest of the market, and on the other hand our media experience allows us to produce interviews which appeal to a large audience because we provide a format in which more investors can understand a featured companies' upside. Our philosophy is to turn stock tickers into stories, ideas into headlines, and technical and financial data into easy to understand tidbits, easier to digest and therefore consumed by a larger audience. These interviews provide a jumping off point for investors to do further research into a prospective company. Our editorials seek to provide an out-of-the-box perspective found in few other financial sites.