Workiva Inc.

Company Overview

Business Model: Workiva Inc. operates as a software-as-a-service (SaaS) provider, offering a unified cloud platform designed to power transparent reporting. Its core value proposition is to unite data, processes, and people across critical business operations, bringing financial reporting, sustainability management, and governance, risk, and compliance (GRC) data together in one controlled, secure, and audit-ready platform. The platform connects and transforms data from various 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. Approximately 90% of Workiva Inc.'s revenue in 2024 was derived from subscription and support fees, with the remainder from professional services.

Market Position: Workiva Inc. serves over 6,300 organizations globally, including over 90% of the top 100 public and private companies that report annual revenue figures to a government agency, over 85% of the top 500 companies, and over 80% of the top 1,000 companies. The company maintains a gross retention rate of 97.4% and a net retention rate of 111.9% as of December 31, 2024. Workiva Inc. has been recognized as an industry leader in managing Environmental, Social, and Governance (ESG) risks and opportunities, receiving an AAA rating in the MSCI ESG Ratings assessment for the third consecutive year in July 2024. In the second quarter of 2024, Workiva Inc. was named a "Best of Breed" provider among GRC platforms by Chartis Research.

Recent Strategic Developments:

• Product Innovation: In June 2024, Workiva Inc. launched Workiva Carbon, a new offering to support global climate regulations (e.g., Corporate Sustainability Reporting Directive, CSRD) and simplify net-zero target management. In July 2024, a new version of the Workiva mobile app for iOS and Android devices was released, enhancing file access, permissions, and executive reviews. In the second half of 2024, core platform enhancements were launched, including linking entire tables, sharable content libraries, and generative artificial intelligence (GenAI) prompt libraries with data referencing capabilities.
• Acquisitions: On June 17, 2024, Workiva Inc. acquired Sustain.Life Inc., a carbon accounting solutions provider, for $98.1 million (net of cash acquired), integrating its capabilities into Workiva Carbon.
• Intellectual Property: During 2024, Workiva Inc. added 10 new innovation patents, bringing its total to 86.
• Corporate Recognition: In April 2024, Workiva Inc. was named among the 100 Best Companies to Work For by Fortune magazine for the 6th time. In August 2024, it was named among PEOPLE's 100 Companies That Care. In December 2024, Workiva Inc. received a Silver Medal from EcoVadis and Prime status from the ISS ESG Corporate Rating.
• Shareholder Returns: In July 2024, Workiva Inc.'s directors authorized a share repurchase program for up to $100 million of its outstanding Class A common stock. As of December 31, 2024, no repurchases had been made under this program.

Geographic Footprint: Workiva Inc. operates globally, with its operational headquarters in Ames, Iowa, and additional offices in the U.S., Europe, the Asia-Pacific region, and Canada. In 2024, approximately 18% of its consolidated revenue was generated from EMEA and APAC regions, with these global markets expected to contribute an increasing percentage of total revenue. Total Americas revenue, primarily from the U.S., accounted for approximately 82.5% of total revenue in 2024.

Financial Performance

Revenue Analysis

Profitability Metrics (2024):

• Gross Margin: 76.7%
• Operating Margin: -10.4%
• Net Margin: -7.4%

Investment in Growth (2024):

• R&D Expenditure: $192.9 million (26.1% of revenue)
• Capital Expenditures: $1.4 million
• Strategic Investments: Acquisition of Sustain.Life Inc. for $98.1 million (net of cash acquired).

Business Solution Group Analysis

Financial Reporting

Financial Performance:

• Revenue: More than 40% of Workiva Inc.'s total revenue is derived from customers using the platform for SEC filings.
• Key Growth Drivers: Increasing regulatory pressure, integration of non-financial data and disclosures, economic volatility, geopolitical instability, expansion of XBRL tagging, and the need for enhanced automations and cross-functional team collaboration, including integrated GenAI. Product Portfolio:
• Global Statutory Reporting: Solutions for multinational customers to manage complex statutory financial reporting across countries and jurisdictions.
• SEC and SEDAR Reporting: Capabilities for preparing and filing major SEC reports (e.g., Form 10-K, 10-Q, 8-K, S-1, proxy statements, Section 16 reports) with Inline XBRL, and Canadian SEDAR reports.
• Capital Markets: End-to-end platform support for companies transitioning from private to public, including Form S-1 creation and SOX compliance.
• Annual & Interim Reporting: Tools for creating financial statements with direct connections to ERPs and general ledgers, enhancing data reliability and automation.
• European Single Electronic Format (ESEF): Compliance solutions for the ESMA mandate requiring iXBRL for annual financial reports in the E.U. and U.K.
• Management Reporting: Solutions for complex financial and managerial reports, including Financial Planning and Analysis (FP&A), board/committee reporting, C-Suite reporting, and tracking key performance indicators.

Sustainability Management

Financial Performance:

• Key Growth Drivers: Increasing stakeholder demands for sustainability data, complex and rapidly changing regulatory landscape (e.g., CSRD in the E.U., California's Climate Corporate Data Accountability Act (SB-253) and Climate-Related Financial Risk Act (SB-261)). Workiva Inc. plans to accelerate investments in this area. Product Portfolio:
• Sustainability Management Solution: Platform for managing, collaborating on, and disclosing sustainability information to stakeholders, with support for XBRL tagging.
• ESG Explorer: Tool for reviewing and comparing guidelines from multiple frameworks and standards (e.g., Global Reporting Initiative (GRI) Standards, Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD), United Nations Sustainable Development Goals (SDGs)).
• ESG Program: A digital hub for sustainability teams to operationalize initiatives, identify material topics, automate data collection, and connect metrics to reports and surveys (e.g., CDP submissions).
• Workiva Carbon: A new offering launched in 2024 for carbon accounting, tracking, and disclosure of Scope 1, 2, and 3 emissions, supporting net-zero, supply chain, and regulatory reporting requirements.

Governance, Risk, and Compliance (GRC)

Financial Performance:

• Operating Margin: Not specifically disclosed for this solution group.
• Key Growth Drivers: High priority for CEOs and boards to identify, track, and manage risk, ensuring legal, ethical, and regulatory compliance. Product Portfolio:
• Controls Management: Solutions to increase efficiency in documenting, implementing, and assessing internal controls over financial reporting (ICFR) for SOX compliance.
• Internal Audit Management: Broad-based audit market solutions for risk assessments, planning, workpaper management, testing, issues management, and audit reports.
• Enterprise Risk Management (ERM): Platform to integrate risk management practices, identify systemic risks, assess magnitude, plan responses, and report to stakeholders.
• Policy and Procedure Management: Tools for establishing connected, enterprise-wide policy and procedure management, including content management, review cycles, mapping to risks/controls, and employee attestation tracking. Market Dynamics:
• Competitive Positioning: Workiva Inc. was named a "Best of Breed" provider among GRC platforms by Chartis Research in Q2 2024.

Industry Verticals

Product Portfolio:

• Financial Services: Solutions for banks (global regulatory standards like Basel 1, 2, 3; regional requirements like Federal Reserve, European Banking Authority, European Central Bank), insurance firms (U.S. state regulations, actuarial memorandum, European Insurance and Occupational Pensions Authority), and asset management firms/fund administrators (end-to-end internal and external fund reporting).
• Public Sector: Solutions for state and local governments (Comprehensive Annual Financial Reports, budgeting) and U.S. government agencies (FedRAMP authorization, connecting/controlling up to 80% of information types).
• Energy & Utility Sector: Connected reporting solutions for compliance with the Federal Energy Regulatory Commission (FERC) XBRL mandate, state commission filings, utility rate making, SEC filings, and SOX documentation.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Workiva Inc.'s board of directors authorized a share repurchase program for up to $100 million of its outstanding Class A common stock on July 30, 2024. As of December 31, 2024, no repurchases had been made under this program.
• Dividend Payments: Workiva Inc. has never declared or paid cash dividends on its capital stock and currently intends to retain any future earnings to finance business operations and expansion. No dividends are expected in the foreseeable future.

Balance Sheet Position (as of December 31, 2024):

• Cash and Equivalents: $301.8 million
• Total Debt: $764.9 million (net carrying amount of convertible senior notes)
• Net Cash Position: -$463.1 million (Net Debt)
• Debt Maturity Profile: Convertible senior notes include $70.8 million due August 15, 2026, and $694.1 million due August 15, 2028. Total contractual obligations for convertible senior notes, including principal and future interest payments, amount to $809.9 million. Key maturities include $9.6 million due within one year, $89.6 million due in 1-3 years, and $710.8 million due in 3-5 years.

Cash Flow Generation (Year ended December 31, 2024):

• Operating Cash Flow: $87.7 million
• Free Cash Flow: $86.3 million (Operating Cash Flow less $1.4 million in capital expenditures)
• Cash Conversion Metrics: Cash provided by operating activities was driven by a $73.8 million increase in deferred revenue, primarily due to the timing of billings and growth in the customer base.

Operational Excellence

Production & Service Model: Workiva Inc. delivers its solutions through a multi-tenant cloud software platform, deployed in multiple regions worldwide and built primarily on Amazon Web Services (AWS). The platform is designed for enterprise-grade scalability, availability, and security, supporting millions of end users. It is browser-based, allowing for rapid deployment (days or weeks) and easy configuration by customers. Workiva Inc. emphasizes continuous improvement, releasing new platform versions several times each week. The platform's data-linking capabilities ensure consistency and traceability across documents, spreadsheets, presentations, and dashboards, with a detailed audit trail for accountability and transparency.

Supply Chain Architecture: Key Suppliers & Partners:

• Cloud Infrastructure: Amazon Web Services (primary provider for cloud platform).
• Advisory & Implementation Partners: Over 200 advisory, technology, and service partners, including global consulting firms, systems integrators, and regional consulting firms, which extend geographic reach and facilitate professional services delivery.
• Technology Partners: Independent software vendors that enable data and process integrations with critical transactional systems.

Facility Network:

• Manufacturing: Not applicable, as Workiva Inc. provides cloud-based software.
• Research & Development: The research and development organization is responsible for the design, development, testing, and validation of the platform and solutions. Workiva Inc. has invested over $1.1 billion in R&D over the last decade.
• Distribution: Not applicable, as Workiva Inc. provides cloud-based software.
• Corporate Facilities: Corporate headquarters is located in Ames, Iowa, leasing approximately 120,000 square feet of office space. Additional office facilities or flexible workspace providers are utilized throughout the U.S. and internationally.

Operational Metrics:

• Gross Retention Rate: 97.4% (as of December 31, 2024)
• Net Retention Rate: 111.9% (as of December 31, 2024)

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Workiva Inc. primarily sells its subscription contracts and related services globally through its direct sales organization, which includes field sales, inside sales, and partnership channels. The sales organization comprises sales development representatives, pre-sales engineers, and account managers.
• Channel Partners: Workiva Inc. leverages an ecosystem of over 200 advisory, technology, and service partners, including global consulting firms, systems integrators, and independent software vendors. These partners extend geographic reach, accelerate platform adoption, and provide professional services.
• Digital Platforms: The Workiva Marketplace offers over 200 ready-made templates, no-code data connectors, and services from industry experts, streamlining processes within the Workiva platform.

Customer Portfolio: Enterprise Customers:

• Total Customers: 6,305 as of December 31, 2024.
• Customer Concentration: No single customer represented more than 1% of total revenue in 2024, 2023, or 2022. The largest 10 customers accounted for less than 10% of total revenue in the aggregate for these periods.
• Strategic Partnerships: Customer success and professional services teams provide advice and best practices to build existing customer relationships.
• Customer Growth by Annual Contract Value (ACV):
  • Customers with ACV $100k+: 2,055 as of December 31, 2024 (up from 1,631 in 2023), representing 71.2% of total subscription and support revenue.
  • Customers with ACV $300k+: 416 as of December 31, 2024 (up from 311 in 2023), representing 35.7% of total subscription and support revenue.
  • Customers with ACV $500k+: 181 as of December 31, 2024 (up from 137 in 2023), representing 23.9% of total subscription and support revenue.

Geographic Revenue Distribution (Year ended December 31, 2024):

• Americas: 82.5% of total revenue ($609.4 million)
• Other (EMEA and APAC): 17.5% of total revenue ($129.3 million)

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The market for Workiva Inc.'s solutions is characterized by intense competition, rapid evolution, and fragmentation, driven by changing technology and shifting customer needs. Key macro trends driving demand include the global shift to cloud deployment, finance transformation initiatives (e.g., integrated reporting, ERP upgrades), the prevalence of remote and hybrid work environments, the influx of disparate data sources, the increasing complexity of the global regulatory environment (e.g., structured data mandates like XBRL), and heightened stakeholder demands for sustainability data.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Status Quo: Manual business processes relying on legacy software productivity tools.
• Diversified Enterprise Software Providers: Companies offering a broad range of enterprise software.
• Niche Software Providers: Vendors providing point solutions for specific reporting or compliance needs.
• Professional Services Providers: Consultants and financial printers.
• Sustainability and Data Management Software Providers: Specialized vendors in these growing areas.
• Governance, Risk, and Compliance Software Providers: Competitors focused on GRC solutions.
• Business Intelligence / Performance Management Software Providers: Vendors offering BI and corporate performance management tools.

Emerging Competitive Threats: The market is expected to see increasing competition from more highly specialized software vendors, larger vendors that may acquire or bundle products more effectively, and open-source software initiatives.

Competitive Response Strategy: Workiva Inc. aims to maintain its competitive advantage through continuous innovation, expanding its platform's capabilities and extensibility, strengthening its sales and marketing efforts, and deepening its partner ecosystem. The company focuses on providing high-quality, reliable, and cost-effective solutions, supported by robust customer service.

Risk Assessment Framework

Strategic & Market Risks

• Market Dynamics: Over 40% of total revenue is derived from customers using the platform for SEC filings, creating concentration risk. The business is sensitive to subscription renewal and upgrade rates, which are not accurately predictable. Volatility in the IPO/special-purpose acquisition company (SPAC) markets has adversely affected sales of capital markets and SEC solutions.
• Technology Disruption: Failure to keep pace with rapid technological changes, including advancements in AI and machine learning, could render solutions less competitive.
• Regulatory Changes: Legislative and regulatory changes from bodies like the SEC, Federal Reserve System, Federal Deposit Insurance Corporation, and foreign regulatory bodies (e.g., CSRD, California climate acts) could adversely affect demand, increase compliance costs, or impose operational limitations. A lack of harmonization in global sustainability reporting regulations creates uncertainty.
• Geopolitical Exposure: Operations outside the U.S. expose Workiva Inc. to economic, political, and regulatory risks, including those arising from geopolitical conflicts (e.g., Russia and Ukraine, Middle East) which can impact global markets and customer operations.
• Brand Development: Failure to continuously develop and maintain brand awareness could hinder widespread acceptance of solutions and impact customer acquisition and retention.

Operational & Execution Risks

• Cybersecurity Vulnerabilities: Workiva Inc. faces continually evolving cybersecurity risks, including data loss, theft, misuse, unauthorized disclosure, or destruction of confidential information, which could disrupt solutions, damage reputation, and lead to legal and financial losses.
• Cloud Service Reliability: The success of cloud-based software depends on providing reliable solutions. Errors, defects, viruses, or security flaws could lead to service outages, harm reputation, and impact customer retention.
• Third-Party Dependencies: Reliance on third-party providers for cloud infrastructure (e.g., AWS), software licenses, and internet infrastructure exposes Workiva Inc. to risks of service interruptions, increased costs, or reduced service levels.
• Growth Management: Significant growth in business, customer base, and employee headcount places strain on management, operating systems, and financial controls. Failure to effectively manage growth could lead to deployment delays, declines in quality, or increased costs.
• AI/ML Development Risks: Issues related to the development, deployment, or governance of AI/ML technologies in solutions could result in reputational harm, liability (e.g., intellectual property, privacy laws), and adverse financial results.
• Intellectual Property Protection: Inability to protect intellectual property rights (patents, trademarks, copyrights, trade secrets) or defend against third-party infringement claims could impair proprietary technology and brand.
• Open Source Software: Use of open-source software carries risks of non-compliance with license terms, potentially requiring the release of proprietary source code or limiting technology licensing.

Financial & Regulatory Risks

• Demand Volatility: Quarterly results may fluctuate significantly due to various factors, including seasonality in professional services revenue (higher in Q1) and sales and marketing expenses (higher in Q3).
• Foreign Exchange: Fluctuations between the U.S. Dollar and other currencies (e.g., Canadian dollar, Euro, British Pound Sterling, Danish krone, Japanese yen) can impact operating results, as a portion of sales and operating costs are denominated in foreign currencies. Workiva Inc. does not currently engage in currency hedging.
• Capital Availability: Future liquidity and capital requirements are difficult to predict, and additional capital may be needed but not available on favorable terms.
• Debt Servicing: Servicing existing convertible senior notes requires a significant amount of cash, and future performance may not generate sufficient cash flow.
• Tax Strategy: The adoption of new tax legislation (e.g., TCJA Section 174 requiring R&E capitalization), complexity in determining income tax rates, and limitations on net operating loss (NOL) carryforwards (e.g., Section 382) could adversely affect financial condition.
• Litigation: Involvement in legal proceedings or regulatory inquiries, though not currently deemed material, could result in defense and settlement costs, diversion of management resources, and adverse impacts.

Innovation & Technology Leadership

Research & Development Focus: Workiva Inc.'s research and development organization is responsible for the design, development, testing, and validation of its platform and fit-for-purpose solutions. The company focuses on innovating new solutions and enhancing the openness and extensibility of its platform. Over the last decade, Workiva Inc. has invested more than $1.1 billion in R&D. Core Technology Areas: Workiva Inc. is focused on advancing capabilities such as artificial intelligence (AI), machine learning (ML), hyper automation, low-code/no-code application development, database scalability, consumer-grade user experiences, and collaboration. Innovation Pipeline: Workiva Inc. employs a disciplined process for tracking, developing, and releasing new solutions and features, with continuous improvements and new platform versions released several times each week. Customer engagement is integral to envisioning future platform capabilities.

Intellectual Property Portfolio:

• Patent Strategy: As of December 31, 2024, Workiva Inc. held 86 issued patents and had 13 patent applications pending related to its platform or technology.
• Licensing Programs: Not explicitly detailed as a revenue generation or strategic partnership mechanism in the provided text.
• Trademarks: Workiva Inc. has registered trademarks and logos, including "Workiva," "Wdesk," and "Wdata," in the U.S. and other jurisdictions.

Technology Partnerships: Workiva Inc. forms strategic alliances and research collaborations with technology partners to enable powerful data and process integrations, connecting customers' existing ecosystems directly to the Workiva platform.

Leadership & Governance

Executive Leadership Team: Workiva Inc. relies on the stability of its leadership team and other key employees. The company's 10-K refers to its definitive proxy statement for the 2025 Annual Meeting of Stockholders for detailed information on directors and executive officers, including their tenure and prior experience. Leadership Continuity: The company's growth plan requires attracting and retaining highly qualified personnel, particularly engineers, senior sales executives, and professional services personnel. Board Composition: The Board of Directors is composed of members with diverse expertise, including risk and financial management, technology, cybersecurity, and finance. The Board oversees cybersecurity risks and its committees (Audit, Compensation, and Nominating and Governance) have responsibilities relating to sustainability oversight.

Human Capital Strategy

Workforce Composition:

• Total Employees: As of December 31, 2024, Workiva Inc. employed approximately 2,828 full-time people worldwide.
• Headcount Growth: This represents a 12.0% increase from 2,526 full-time employees as of December 31, 2023.
• Geographic Distribution: Employees are located across the U.S., Europe, the Asia-Pacific region, and Canada.
• Skill Mix: Workiva Inc. seeks highly qualified personnel, especially engineers with experience in software and internet-related services, senior sales executives, and professional services personnel with financial reporting experience.

Talent Management:

• Acquisition & Retention: Workiva Inc. has been recognized on Fortune's 100 Best Companies to Work For® list since 2019 and was named among PEOPLE's 100 Companies That Care in 2024. The company offers market-competitive compensation and benefits and fosters flexible work environments to attract and retain talent.
• Employee Value Proposition: Workiva Inc. attributes its success to a values-based culture that encourages fairness, teamwork, and respect.

Diversity & Development (as of December 31, 2024):

• Diversity Metrics: Women represented approximately 43% of the global workforce and 38% of leadership (director and above). Approximately 22% of U.S. employees and 16% of U.S. leadership (director and above) were from underrepresented racial/ethnic groups.
• Development Programs: Workiva Inc. supports employees in maintaining professional certifications and licenses and hosts regular company-wide education sessions on business, industry, technology, and workplace topics.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Emissions Targets: Workiva Inc.'s near-term greenhouse gas emissions reduction targets were validated by the Science Based Targets initiative (SBTi) in 2024.
• Carbon Neutrality: Workiva Inc. was the first SaaS company to join the United Nations’ CFO Coalition for the SDGs and one of the first 130 "early movers" to join the UN’s Forward Faster initiative, committing to five action areas for impact by 2030.
• Renewable Energy: Not explicitly detailed in the provided text. Supply Chain Sustainability:
• Supplier Engagement: Workiva Carbon, launched in 2024, enables organizations to measure, manage, and report carbon emissions, including data from third-party supply chain partners.
• Responsible Sourcing: Not explicitly detailed in the provided text.

Social Impact Initiatives:

• Community Investment: Workiva Inc. engages in philanthropic programs and local community support.
• Product Impact: The integrated platform facilitates broader conversation, education, and awareness through its ESG professional group, sustainability education workshops, webinars, blogs, and an ESG Talk podcast.

Governance: Workiva Inc.'s sustainability strategy is anchored by a robust governance structure. The Nominating and Governance Committee of the Board of Directors provides general oversight and accountability for sustainability. A Sustainability Task Force, led by the Chief Financial Officer, ensures progress towards sustainability targets and alignment with frameworks like the United Nations SDGs, TCFD, GRI, SASB, and CDP. An external ESG Advisory Council provides expertise on global sustainability regulation, strategy, practices, and reporting. Workiva Inc. received a Silver Medal from EcoVadis and Prime status from the ISS ESG Corporate Rating in 2024.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Revenue from professional services exhibits some seasonality, typically being higher in the first calendar quarter as many customers file their Form 10-K with the SEC. Sales and marketing expenses historically are higher in the third quarter due to the annual user conference in September. Operating cash flow may also show seasonality due to the timing of cash bonus payments to employees in the first and fourth calendar quarters.
• Economic Sensitivity: Workiva Inc.'s business is sensitive to overall demand for technology and the economic health of its customers. Weakened global economic conditions, including those from inflation, tariffs, interest rates, and armed conflicts, can lead to longer sales cycles, lower prices, and reduced bookings. The capital markets business, particularly sales of SEC and capital markets solutions, is affected by volatility in the IPO/SPAC market.
• Industry Cycles: Not explicitly detailed beyond the impact of IPO/SPAC market fluctuations.

Planning & Forecasting: Workiva Inc. manages its business with a focus on future growth, investing in platform development, solutions, and sales and marketing, which requires anticipating revenue and managing expenses accordingly.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Financial Reporting: Workiva Inc. operates within the regulatory frameworks of the SEC (e.g., Form 10-K, 10-Q, 8-K, S-1, Inline XBRL), Canadian SEDAR, European Securities and Markets Authority (ESMA) ESEF mandate, and Sarbanes-Oxley Act (SOX) for internal controls.
• Financial Services: Compliance with global regulatory standards (e.g., Basel 1, 2, 3), regional requirements (e.g., Federal Reserve, European Banking Authority, European Central Bank), and in-country regulations (e.g., Central Bank Stress Tests) for banks and insurance regulatory requirements in the U.S. and globally.
• Energy & Utility Sector: Compliance with the Federal Energy Regulatory Commission (FERC) XBRL mandate. International Compliance:
• Data Privacy: Workiva Inc. is subject to U.S. and foreign data privacy and protection laws and regulations, including the European Union's General Data Protection Regulation (GDPR), which imposes robust obligations and significant penalties for non-compliance. Changes to legal bases for data transfer (e.g., E.U.-U.S. Privacy Shield invalidation) can affect service provision.
• Sustainability Reporting: Compliance with evolving global climate regulations, such as the E.U.'s Corporate Sustainability Reporting Directive (CSRD) and California's Climate Corporate Data Accountability Act (SB-253) and Climate-Related Financial Risk Act (SB-261).

Trade & Export Controls: International operations expose Workiva Inc. to risks related to export licenses for technology, tariffs, quotas, and other trade barriers, as well as sanctions compliance.

Legal Proceedings: Workiva Inc. may become involved in legal proceedings or claims in the ordinary course of business. As of December 31, 2024, management does not believe that any currently pending legal proceedings would have a material adverse effect on its business, operating results, financial condition, or cash flows.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: The effective tax rate is influenced by various factors, including the federal statutory rate (21.0%), state taxes (net of federal benefit), Section 162(m) limitations, stock-based compensation, the net impact of global intangible low-taxed income (GILTI) inclusion, induced conversion, meals & entertainment, base erosion waived deductions, federal R&D credit, effects of foreign operations, and valuation allowances.
• Geographic Tax Planning: Workiva Inc. is subject to federal income taxes, state taxes, and taxes in foreign jurisdictions where it operates.
• Tax Reform Impact: The Tax Cuts and Jobs Act of 2017 (TCJA) amended Internal Revenue Code Section 174, requiring capitalization and amortization of research and experimental (R&E) expenditures. This change generated U.S. taxable income for Workiva Inc. and resulted in a deferred tax asset of $101.9 million as of December 31, 2024.

Insurance & Risk Transfer

Risk Management Framework: Workiva Inc. employs stringent data security, reliability, integrity, and privacy practices. It maintains general liability insurance coverage and errors and omissions insurance policies, which include liability coverage for security breaches. Customer contracts often include indemnification clauses for damages arising from Workiva Inc.'s solutions.