Good afternoon. My name is Alicia and I will be your conference operator. At this time, I would like to welcome everyone to the Workiva Q2 2015 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. [Operator Instructions] Thank you. Adam Rogers, You may begin.

Thank you and good afternoon everyone and welcome to the Workiva Second Quarter 2015 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 replay of this call will be available until August 12. 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 I begin, I’d like to remind everyone that during today’s call, we will be making forward-looking statements regarding future events and financial performance, including guidance for our third quarter and full fiscal year 2015. 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 statements to reflect the events that occur after this call. Please refer to the Company’s Annual Report on Form 10-K and the Quarterly Report on Form 10-Q for factors that could cause our actual results to differ materially from any forward-looking statement. 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. 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 2015 results. We delivered strong second quarter performance, generating revenue and operating loss results that beat our guidance range. Total revenue for the quarter was $34 million and the increase of 28% over Q2 of 2014. With subscription and support revenue up 28% and professional services revenue up 29% year-over-year. Overall our Q2 results show continued strong demand for Wdesk. Investments in sales and marketing and enhancements in Wdesk technology are not only driving new customer wins. But also increasing the average subscription total contract value across our total customer base. Our first half of 2015 results combined with our strong and grown pipeline of new business opportunities give us a confidence to again raise our full year 2015 revenue guidance which Stuart Miller will discuss later in the half. In Q2, we continue to add new Wdesk customers for SEC reporting as Wdesk has become that market practice. We also saw strong demand for our non-SEC huge cases which are driving not only new customer wins. But increasing our ability to add seat and solutions within our existing customer base. We are encouraged by the demand for our subscriber base - SOX compliance solution and we continue to believe we have a significant runway for expansion in this market. As you may read in our press release yesterday, more than 200 companies now use Wdesk for SOX compliance. In the near term to our platform over several months of drive Wdesk adoption for SOX. These enhanced features improved task and evidence management, data collection, flow charts, visualizations, dashboards, audit frail - mobile compatibility. We are also extremely pleased that the unique capabilities of Wdesk and the SOX market are attracting new users to…

Thank you as Matt discussed, we have 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 2015. In the second quarter we generated total revenue of $34 million it increased to 28.1% from the second quarter of last year. Breaking our revenue by reporting line item. Subscription and support revenue was $28.1 million was up 27.8% from Q2, 2015. 57.4% of SMS revenue increase came from new customers added in the last 12 months. The remaining 42.6% of the increase came from deeper penetration of our existing customer base. The average contract value on subscription and support from all customers continue to increase. Professional services revenue was $5.9 million and increase of 29.4% from the second quarter of 2014. Higher customer account and purchases for additional use cases accounted for most of the growth. 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 metrics, we ended the second quarter with 2390 customers a net increase of 287 customers from Q2, 2014. And a net increase of 100 from Q1 of 2015. Our subscription and support revenue retention rate excluding ad-on was 96.3% as if June 2015 measurement date up from 95.9% in March 2015. Customers being acquired or seeking to file SEC reports once again accounted for over half of the revenue attrition. Including ad-ons, our subscription and support revenue retention rates was 108.4% at the June 2015 measurement date. Compared with 105.8% in March 2015, continued to assess by former teams and selling additional use cases was higher annual contract values to our existing…

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

Hi hey guys thanks for taking my questions and nice job on the quarter.

Thanks.

Just curious on the on how the velocity of sales into existing customers regarding a big part of the story as investments on the standard is that cross sale of use case since with the existing base. Are you seeing that your sales people are going back sooner to those to the existing customer well and any - or quantitative metrics on that would be helpful. And then I have a follow up later.

Yeah while we have as I said it's a group that focusing on our current customer. And they - various differences both with them and also stock that we putting a lot of debt. So we are seeing a very encouraging trajectory on how our current customers responding to our Wdesk case they'll used to be able to use it for various different use cases as I mentioned in my talk and as well as we're seeing their healthy and kind a predicted expansion on the stocks within our current customer base.

Okay thanks Matt. And maybe for you Marty, if you can maybe just discuss how you're seeing sales productivity during the quarter and how you expect that the trend over the next couple of quarters.

Marty do you want to take that?

Sure I'll take that. We're seeing as obviously we've invest the new sales people to take some of the while to ramp up but certainly the people that we are training to sale the additional use cases into our customer base for seeing those people become more efficient quarter-over-quarter. The things at least now and the number of the things you have to sale. So there is a learning curve or that those thing that improve.

Thanks Marty and then Stuart if I may. The gross margins or subscription gross margin little over better than where we are expecting. Is there any reason to bad debt subscription gross margin should fall back below 80% over the next couple of quarters.

Probably not, probably don't expect it to fall back.

Okay. Thanks very much for taking my questions.

Thank you Michael.

Your next question comes from the line of Stan Zlotsky with Morgan Stanley. Your line is open.

Hey, guys. Good afternoon and thank you for taking my question. So just looking for the 10-Q very quickly. Looks like you added 80 heads in the quarter, nice number of adds there. How are you trending to your overall goal and pace of hiring as we are progressing through the year?

Yeah, we were pretty much largely tracking in terms of hiring and all different parts in the organization. So we are pretty pleased about the performance that we are seeing as we protected for the year.

And as that relates to sales and marketing the target of 25% to 30%, are you still on track for that?

Yeah, we are on track on that.

Okay, great and then also just checking in on the number of customer adds in the quarter. It was looks like in quarter-on-quarter added a net about 100 customers with strong results. Anything specific to point there? What drove the strength? Was this some pent up demands from Q1 maybe?

Part of it also was that our customer acquisition which had less effect within the context of M&A world. So I think we had less churn at least on our sides from an M&A that we get in Q1 and on top of its kind of demand that starts from Q1 and continues on.

Okay and then just last one from me on current billings looks like a very nice number you guys put up in Q2 on for that, was there any benefit to the Q2 number for current billings from your migration to more annual prepayments?

Little bit because again we're just focused on that migration just for new logo and so that's a pretty decent percentage of the new logos for certain new cases in particular where one year. So that definitely helped. But there were no conversions of existing customers in that number.

Okay, got it. Alright, that's it for me. Thank you guys.

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

Hi, guys. Thanks for taking my question. Start up with looking at the new track clients that were added in the quarter. But we are booked them across the win to SEC filing clients and how many were brand new clients versus...?

Can you repeat your question please?

I apologize. Just curious about how many of the new SOX clients were cross sales wins versus brand new clients?

We don't really split that up in general. But majority of the SOX clients that we got were from our current customers which is kind of by design. We do have a sales organization really goes and communicate them and tries to sell their platform to them. But we don't specifically break them out in terms of the percentage or number between customer or non-customer SOX acquisitions.

Okay, great. And I guess looking at the competitive landscape has there been any strange --from the income that execute better in terms - and do they have an online app that if you part of - some of below what Wdesk is - have you seen any competitive choice on making any headwinds or is still too little delay?

Mike do you want to answer that?

Yeah, this is Mike. I'd say it's in the two little category. But we still face competition; they have tied that software to the mix. But we haven't seen really any growth direct from their software solution there. So, I would say it’s pretty status quo on the competition and in SEC business.

Got it and last question from me is for Stuart. At some point we are going to spike a bit in the third quarter for the user conference. What is the expected cost of that, that user…?

It's about $4 million.

Got it. Okay, thank you.

Thank you.

Thank you.

Your next question comes from the line of Tom Roderick with Stifle. Your line is open.

Hey, gentlemen. Good afternoon and apologize a little bit back - if you can't hear me. But I want a follow up on Michael question just regarding certainly upside effort particularly around - I'm really curious for what you are doing in terms of sort of aggressive sales training particularly back to the farmer crowd with respect to training those reps on the Sarbanes-Oxley solution and when you get passed SOX which one or two of these solutions are you seeing most demand for from the up sell perspective from the installed based community?

Yeah let me start with that and then Marty can follow up on that, that’s a good question like all the other questions. The first of all we have very focused training for all of our sales teams so we don’t really seeing a lot only team or the team we don’t favor them and one of the reasons that we really offer to sales people who come and work for is that it’s very important for them obviously to have a great product and great - customer reference but as well as training. So we do a lot of training and we spend a lot of in-person as well as with digital access we continually train our sales organization and obviously SOX is one area that we see our customers are resonating but we as I mentioned in my talk at the beginning that we are seeing lot of other used cases that are resonating with the enterprises. Marty do you want to add anything on that.

Sure certainly the thing that we - the used cases that we see starting to get more traction certainly is in the management reporting or internal reporting area we’re seeing companies as that used to the SEC solution the internal folks start to see what they are doing and that’s starting to pick up momentum. The other thing is in the general risk area we do several different things in the risk market itself and we’re starting to see those also picking up. So to Matt’s point we’ve really spend a lot of effort training both the customer teams and the new direct team for an non-customers and to SOX and now we’re starting to move into putting together more structured training for these other teams that look quite promised.

Mike do you want to add anything?

Yeah I wanted to just add we’re already seeing some really good early trends in up sell from the initial SOX sale into audit groups into the internal audit at these companies. So we’re seeing things like risk assessments audit planning and audit field work that kind of extends out of the initial SOX into the audit department as well.

Great feedback. Matt I want to follow up earlier question to about just the case and sales hiring so far. So appreciate the data point that you are on track a 25%, 30% growth can you go into a little bit more detail with respect to the construction of that of how you are looking to add to hires so in other words kind of layering in that evenly across hunters and farmers what are you doing on the indirect side of the business or I should say the inside sales reps side of the business and lead generation can you talk a little bit more about how you want to build that team out this year and strategically what that does for you?

Yeah first of all on all different parts of the sales organization we are hiring and obviously we have group that does nothing but - and we have a group that really farms and goes after current customers and we have people who are business development group that sets up meeting for the hunters and sales organization and then we also have inside sales people that we have put together that allows us to be able to sell the appropriate pricing seats and platform to the right people. So from our point of view in all those areas that we are trying to hire the number of people that we are looking at and we are pretty pleased with our hiring effort so far and strategically I think at the end of the day we are focusing on few things one is to make sure that we are on track with hiring the sales people and number two is we’re also making sure that our sales people learn quickly and start producing so that we have good and expected sales productivity in our sales organization.

That’s great, that’s it from me guys. Thank you very much.

Thank you, Jeff.

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

Thanks so much. I am going to circle back and actually just ask maybe a different variation of some of those same questions people have asking around SOX. When we look at the initial deal size of the SOX deal versus SEC maybe you could comment on that and remind us and then separately, I think it's my understanding that those SOX deals can actually land and expand and while you just talked about the fact that you could land what SOX in that leading to other continuous market. The SOX deployment itself increase and do you follow on deals there after you initially landing.

Marty why don't you start that - Marty?

The first thing you asked about what the SOX deal size and that has been a real pleasing thing for us that we've seen that grow faster than we anticipated and that's been a very positive thing for us. The second thing about the - and we definitely see larger and faster ad ons in this market. Of course our data set us to early small. But we're definitely seeing companies come back and want seat sooner and want more seats.

Perfect and I would like to ask a question that's probably for Mike and it has to do around new product. You talked about evidence manager and I know you talked about maybe I should say task and event manager. Are there other new products in the pipeline that we may see coming up here in the second half of the year?

Yeah, we are... we've got a pretty active pipeline there. We are going to be announcing at our annual user conference a couple of new key capabilities for existing customers and the logo. So we're kind of keeping those under wraps until we can do that first with our customers.

And maybe in general terms with these new capabilities help you in the SOX market or is that they help you push into management reporting a little more. Just in general can you give any flavor on that?

Yeah, as I mentioned there could any of that - it's kind of exciting us more and more as we see our customers or companies are using for their SOX solutions and there are so many different aspects that they look at it and then we start seeing on giving into the more - side of the business. So we are seeing quite a bit of an expansion of SOX type. What we thought was that we - SOX allows us to get a lot of exposure and various different parts of the organization and now that we are seeing that and what we are seeing in that and very way that how the customers are using SOX capabilities and other capabilities and Wdesk will be used quite a bit by our customers. Mike, you want to add on that?

Yeah, I would just echo that I think the GRC spec and GRC and enterprise risk management space. SOX is a very nice kind of - into those broader areas. I mentioned audit earlier. There is a lot of interconnections between audit and risk departments and other areas. So as I mentioned we're seeing our customer use Wdesk for as I mentioned before audit planning and risk assessments on the audit side. We are also seeing risk appetite statements KRI dashboards, several use cases in kind of more enterprise risk management and risk groups as well. Including reporting to risk value and monthly reporting that includes both financial and risk data.

That's helpful color. Thanks very much.

[Operator Instructions] Your next question comes from the line of Terry Tillman with Raymond James. Your line is open.

Good afternoon. My list of questions that I could ask continuous to - but few left. Maybe the first question Stuart for you. You talked about the higher annual contract value. I guess what I'm curious about what are some of the components of that if you could kind of stock rank what's more relevant. First in terms of - are you having some price increases like-for-like functionality or is it bigger benefit to that higher annual contract value renewal from expansion of additional products?

Yeah. So I'd say in ranks and I'd say that the larger contract value on new solutions and sometimes new customers is probably the most important factor there. I think that price increases are in there, but if they are not, you are not driving that number upward just the higher annual contract value and the customer mix solutions.

Okay and I guess what I'm curious about is as you work to take the customer base that is on the quarterly auto renewal and move them to something that's more of an annual renewal or an annual prepay. Are you making any assumptions around maybe some increased attrition at least from a customer standpoint just maybe some folks might pushback or how do you think about that transition or do you think that you really wouldn't see any impact to retention rates?

Well as you could imagine we'll managing the equity carefully which is why that I mentioned a 24 month period for a well this at. There are we've got almost 3400 customers and 3400 contracts and they mature at different times related to come up renewals different times. And we have other issues to tackle with renewal than just whether there quarterly or annual prepay. So each customer is when we look at on a customized basis, but we certainly taking into account no less distributed demand there.

Okay. And just the last question, you all talked about this last quarter in the last quarter call in terms of increased brand investments starting in the second quarter and you did mentioned that that was part of the makeup of the sales and marketing this quarter. And I know that's not going to convert right away into some of the new customer adds in 2Q, but anything you can offer up in terms of some of the benefits if there are ROI you see from some of these brand investments whether it's more lead whether it more prominent mentioning by industry associations. Just anything at all we could understand on how you get the payback from these marketing investments. Thanks.

Yeah one other thing before I turn it to Mike and answer to that just want to do that I think I'm just - 3400 is actually 2400 customers which is in prepared remarks, sorry. Mike you want to about that ROI from the marketing investment spend.

Yeah I think you kind have to breakdown the different categories. We focus a lot of our spend on website and different digital acquisition type tactics as you will see as we have very high ROI from just as like webinars. And last with partners like compliance. And those are typical things that are pretty easy to measure as far as lease coming end and moves through the opportunity pipeline. And then as you move towards things like advertising and different types of media those get little tougher to measure tend to be little more expensive that are again very important for overall earning. But it’s little hard to connect directly to sales --.

All right. Thanks.

Thanks Terry.

Okay in closing, I want to thank you for joining us today. And operator you may now end the call.

Thank you. This concludes today's conference call. You may now disconnect.