Good afternoon. My name is Andrew, and I will be your conference operator today. At this time, I would like to welcome everyone to the Workiva Inc. Second Quarter 2016 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-answer session.[Operator Instructions] Thank you. Adam Rogers, Senior Manager of Investor Relations, you may begin your conference.

Thank you, and good afternoon everyone, and welcome to the Workiva Second Quarter 2016 Earnings Conference Call. This afternoon we'll begin with comments from Chairman and Chief Executive Officer, Matt Rizai; followed by Executive Vice President, Treasurer and Chief Financial Officer, Stuart Miller. And then we'll turn the call over to questions. Also on the line today are Marty Vanderploeg, President and Chief Operating Officer; and Mike Sellberg, Executive Vice President and Chief Product Officer. A repay of this call will be available until August 10. Information to access the replay is listed in today's press release, which is available on our website under the Investor Relations section. As a reminder today's conference call is also being broadcast live via webcast. Before we begin I'd like to remind everyone that during today's call we'll be making forward-looking statements regarding future events and financial performance, including guidance for our third quarter and full fiscal year 2016. These forward-looking statements are subject to known and unknown risks and uncertainties. Workiva cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statement to reflect the events that occur after this call. Please refer to the company’s annual report on Form 10-K and quarterly report on Form 10-Q for factors that could cause our actual results to differ materially from any forward-looking statements. Also during the course of today's call we will refer to certain non-GAAP financial measures. Reconciliations of non-GAAP to GAAP measures and certain additional information are also included in today's earnings press release. And with that, we'll begin by turning the call over to our Chairman and CEO, Matt Rizai.

Thank you, Adam and thanks to everyone for joining us today to discuss our second quarter 2016 results. We delivered strong second quarter performance. Total revenue for the quarter was $43 million, an increase of 27% over Q2 of 2015 with subscription and support revenue up 25%, and professional services revenue up 37% year-over-year. We outperformed our guidance for quarterly revenue, operating loss, and loss per share. As a result we're increasing our full year 2016 guidance, which Stuart will discuss in more detail later in the call. We continue to sign new Wdesk customers as well as add seats within existing customers in our SEC and non-SEC markets, including Sarbanes-Oxley, risk proceeds, management reporting at public and private companies and adjacent markets like enterprise risk management. There are some recent examples that show the breadth and the depth of the Wdesk. A large financial holding company uses Wdesk to collect budget data from its ten business units, which rose up to a consolidated budget dashboard. A technology startup company 3D Glass Solutions built its forecasting model in Wdesk. A global retailer has expanded his use of Wdesk for audit management and to review track and comment on financial reconciliations. A multinational private conglomerate uses Wdesk to create a monthly closed analysis workbook that feeds into an executive summary operations book and a treasury book. We also continue to see strong demand for Wdesk in the SOX market, because it streamlines how teams document, implement, and assess internal controls over financial reporting. Here are some of the recent customers, customer examples for SOX. Nextera Energy uses Wdesk to work in one secure version and give access to their auditors, which allow their teams to focus on other value added work and eliminate the need for overtime. Cresta Group, which uses…

Thank you. As Matt discussed we posted strong results in the second quarter and we have a growing pipeline of new business opportunities that should position us well for the second half of 2016. We are progressing on our path to positive operating cash flow by executing the plan we outlined at our IPO and by improving operating efficiency. Our Q2 operating margin reflects these improvements. Today we reaffirm our expectation that for the full year 2016 Workiva will use less cash from operations than we did in 2015. We expect further improvement in 2017. Consistent with our expectations at the time of our IPO and based on our current trajectory we believe that in the second half of 2017 Workiva will reach sustainable operating cash flow at breakeven or better on a forward 12 month basis. Turning to revenue, we generated total revenue in the second quarter of $43 million, an increase of 26.6% from the second quarter last year. Breaking out revenue by reporting line item, subscription and support revenue was $35 million up 24.5% from Q2 of 2015. 54.7% of the increase came from deeper penetration of our existing customer base. The remaining 45.3% of the S&S revenue increase in Q2 came from new customer’s added in the last 12 months. The average contract value on subscription and support from all customers continue to rise. Professional services revenue was $8 million, an increase of 36.7% from the second quarter of 2015. Higher customer count and services for non-SEC use cases accounted for the majority of the growth in services revenue. When comparing results from sequential quarters please recall that Q1 is our seasonal peak for professional services revenue due to higher demand for services associated with the preparation of 10-K and proxy statements. Turning to our supplemental…

[Operator Instructions] Your first question comes from the line of Michael Nemeroff with Credit Suisse. Your line is open.

Hi guys this is Chris Rochester on for Michael. Congrats on the good quarter. It's good to see that operating leverage coming through. I was just wondering if you could maybe provide some color on where that came from. Are you seeing sales reps maybe maturing more quickly than anticipated? And if so can you provide any color on which segments you're seeing the best performance. Is it SEC stocks kind of all the above?

Sure so as indicted by some of the margin discussions, a lot of the operating leverage came from on the R&D side where as you know we have made significant investments and we're still growing but it still growing that team. But a lot of the heavy lifting has been done on building out our platform. And then on sales and marketing we definitely are seeing some improvement on the maturation of the sales force.

Okay that's helpful. And also kind of looking at bookings, where I know you're tracking previously greater than 50% of that coming from non-SEC use cases. How are you tracking relative to that target?

We're still tracking as expected. We believe that our non-SEC bookings will be a greater than SEC bookings by the time of year end.

Great, thanks. That's all from me.

Your next question comes from the line of Tom Rodericks with Stifel your line is open.

Yes hi Matt [indiscernible] on for Tom. Thanks for taking my questions. So I guess first could you give us an update in terms of what the development timelines is still looking for the next gen product. And if expectations once that rolls out to really see some moderation on the R&D spend moving forward?

Yeah, I think Marty can jump into let me kind of start with this is that, I mean as a technology company we're continuously looking at to see how our technology is adapting to the current situation from a development point of view. I think as you can imagine as a technology company that really never ends a lot of ways. So we really don't look at it as a significant thing. That's kind of the ending everything a lot of ways. In fact there is a continuous technical with that. There is continuous maintaining what we have and making sure that we're continuously working to work that we use the best technology as possible. So it seems like the from a technology development point of view the technology is advancing so much in general. There is always opportunity to do things better and to make sure that our platform and capabilities are doing much better than they would be. So I think that's an ongoing development in general. So and then -- and the other thing is that it's not because the way that we deploy our software and that come out with the kind of the new versions so to speak at several times a week. It's not like a one-time event that everything is going to change. It's an ongoing development that allows us to do a better job in developing and using the new generation technology tools and it allows our customers to be able to get access to the latest and greatest from a technology point of view ongoing basis. Marty, do you want to add anything?

I think that summed it up, I mean we are already putting parts of our next generation to customers as we speak and it will be a transition that is very organic. We'll just see incremental improvements in different parts of the platform.

Alright, great. And then as you guys looked for additional opportunities to push the platform into non SEC use cases you obviously highlighted several new customer wins for the quarter. But were there any I guess net new or significant growth opportunities that you maybe uncovered in the last couple of months that either customer brought to you or through development that you guys are now looking at really expanding adjustable market moving forward?

Yeah, we are always looking to see what's available. But we do have a pretty rigorous process that we take our any opportunities that come into picture to make sure that through product marketing and to understand exactly how the new opportunities may fit and we have number of those that we're continuously accessing. But from an execution point of view obviously we are continuing to focus on making sure that we do a good job for our SEC customers and then we are also gaining new customers on that side. But on the non-SEC side we are definitely have a lot of focus on the SOX area that we've talked about quite a bit. I think this is the year that we are gaining a lot of customers from that point of view and when you look at all the regulatory risk area that we gain a lot of footprint, including enterprise risk management and then we are also now at least have gone outside of accessing certain markets like [indiscernible] where we are looking at the municipalities as well as universities and we see that there is some opportunities for us to move in that directions. So I think those are the areas that we think that we can execute while we do have a several different areas that we are also continued to look at for the future and focusing on currently to make sure that we are doing a good job for our current customers and non SEC side and the SOX and we are also as we indicated seeing a lot of traction from private companies. So we are pretty excited about that opportunity. I think these are the private companies and SOX and enterprise risk management regulated risk all the areas that we are focusing and right now and we think that sledge [ph] market is going to be very good market as it grows and then we have multiple different opportunities that we are looking next we can deploy next 18 months or so.

Great. Thank you.

Your next question comes from the line of Terry Telman [ph] with Raymond James. Your line is open.

Hi, guys. This is McDownie [ph] on for Terry. Thank you for taking the questions. I was wondering if you could give us an update on price increases and how that's been received in the market and then from there any overall plan for pricing as we think about the next six to 12 months.

Before I turn that to Stuart, but our philosophy is in general, so we understand is that it's how do we create a lot of value to our customers. If that is really the thought process we believe that as we create more value to our customers, as we come out with new capabilities, the pricing and the opportunities for additional revenue that will come from there. But we have opportunities to be able to do some price adjustments as we go along. So that's really the philosophy we had in general and we are seeing quite a bit of that type of response whenever we come up with new capabilities, our customers are willing to pay for those additional capabilities that – pay for that and in general then are overall deal sizes getting larger. But Stuart, do you want to add to that?

The important contract for this is remember that as a SaaS company we're able to and because of our capabilities able to put out quite a few new releases. We're still putting out sort of three or four new releases week. Many of those are small but some of them are large. And for a customer that joined us few years ago we've added quite a lot of value to that relationships. And so that's important concept. The second part of this is that you're trying to overtime homogenize if you will or equalize the price that being paid by some of the earlier customers with more current pricing model. So all that's going well.

Okay, great. Thank you. That was really helpful. And then my second question are you on stand [ph] with your goal to add an additional 25% to 30% to your sales force in 2016 and then how has the productivity been of the reps that you've added over the last year.

Yeah, it's a good question. I think we're more now focusing on making sure that the productivity and the sales efficiency is there. We're not necessarily focusing on let's hire as many as sales people that's possible. So our focus has been really within the context of making sure that our sales organization is becoming as efficient as possible. And I think at the same time we're continuing to hire sales people as we look at new opportunities, as we find the new one. So it's but at the end of the day, I think the theme for us is always is to make sure that the sales people that we hire are becoming as productive as possible.

Okay, great. Thank you.

Your next question comes from the line of Steve Ashley with Robert W. Baird. Your line is open.

Great, thank you. This is Jason [indiscernible] on for Steve. Thanks for taking my questions. And first question I have is on the competitive front. R. R. Donnelley announced there will be breaking the three companies. I know it's really early just curious if that will have any effect in your porting business maybe more displacements or anything on that line?

Yeah, I really we really focus on in our market to make sure that we provide as good value as possible to our customers. And we also do the same thing with our potential customers and we continue to tell them that we have a great track record. We have a platforms that's by definition by now is best in class. And we provide a great service and we have a great retention rate and we have a great customer satisfaction. And that's why we really focus on more than what competitors may do. And specifically to some of this companies that you are talking about we really don't know, exactly what they're doing what their strategy is. It really would be not good idea for us to even waste our time in our minds to think about what competitor like that is or will be doing. We really focus on what we're doing and we're focusing on our customers and potential customers.

Great that's helpful. And one thing I wanted to touch on. The net new customer adds just a slight decel there from last quarter. And I think we've talked about this before is that primarily driven by larger more complex deals anything you should call out there?

I'd say that some of it, we're quoting you the net number, and the gross number was pretty comparable. It's really – it was a fair bit of terms due to M&A which in relates to my earlier comments as we all know this is been a pretty heavy M&A market. And that's accounted for majority of our terms. So we're feeling pretty good about it on a gross basis.

Okay that's helpful. And then just one more from me. Any update on plans for international expansion. I know you've talked about the potential for distribution partners till you found the right seat there. Just any update you can provide on that will be great.

Yeah I think our philosophy and our thought process in term of international expansion is pretty much what we've talked all along at least the last couple of quarters. Number one is we do have to pay attention and we do and we want to make sure that we take care of our customers since we have a lot customers who are also international global basis. From that point of view we do a lot of we service them and we also are always prudent and careful to make sure that as we spend our resources where the business is and we have a lot of business to be done in United States and in Canada and we believe that also Europe, Northern Europe is valuable choice for us to expand and we’re expanding accordingly. And we think that next three to four years we’ll continue to focus and expand Internationally and to make sure A, we keep our global customers happy and B, to some of the capabilities that we have and word gets around and we’re doing some marketing efforts and we’re gaining new customers regardless of the global customers that we have now and we’ll continue to do so in Europe.

Great. That’s it for me. Thank you.

Thank you.

Your next question comes from the line of Jeff Houston with Northland. Your line is open.

Hey guys. Thanks for taking my questions. Looking at SOX compliance are the current customers that are using this product more smaller marketing cap type public companies and sorry I think I recall you mentioning that before and if so have you starting selling to your largest SEC clients the SOX compliance product?

Well first of all I think in terms of a lot of our SOX customers by definition our current customers that have used for other things. So I think we try to go after that market because it’s easier for us to be able to get a lot of traction. So we’re doing that and we’re also continuing to get new customers and so that’s helping us. In terms of sizes it’s really not whether it’s a small one or a large one. We’re actually in the mid-market I would say that we see a lot of that and we’re also seeing the private side of it so I think that’s our at least for now what we see in terms of our focus to make sure that we’re marching toward our current customers with sales organization as well as we’re also getting new customers for SOX regions which by the way is really is helping. We’ve gotten several SOX customers where because that business we end up getting there SEC business as well.

Got it. Is it correct that the pricing for SOX kind of scales with the size of the organization unlike SEC filing that is more it’s bigger public companies will pay about the same as far smaller companies is that?

Yes well it depends, it depends again goes by certain number of seats and certainly that when you have a large organization more people are involved in the SOX but it’s a medium size or a small size company that they’re putting the comparable for the SEC team so forth but typically it will scale if it’s a larger organization.

Great. So it seems that if most of the customers current use – currently use SOX compliance more mid-size and smaller public companies but it’s a bigger opportunity for you to sell it to your larger companies, larger - companies. Is that a fair adjustment?

Yes.

Okay, thank you.

Thanks Jeff. Okay well I think we’re done and in closing I want to thank you for joining us today and operator you may now end the call.

This concludes today’s conference call. You may now disconnect.