Workiva Accelerates Margin Target as Revenue Growth Slows
The cloud-based reporting company reported total revenue of $255 million for the second quarter.
Workiva (WK), the cloud-based reporting software provider, reported second-quarter total revenue of $255 million.
The company is shifting its focus toward profitability and capital returns as its top-line growth trajectory moderates. Workiva accelerated its medium-term operating margin target of 18%, stating it is now positioned to achieve that goal a full year ahead of its original 2027 schedule.
Total revenue grew 19% year-over-year, representing a slight deceleration from the 20% growth recorded in both the first quarter of 2026 and the fourth quarter of 2025. Subscription and support revenue growth also slowed to 19% year-over-year, down from 21% in the two preceding quarters.
Profitability metrics showed a mixed trend. Non-GAAP operating margin expanded to 16.8%, a 1,300 basis point increase over the 3.8% margin reported in the second quarter of 2025. However, this figure declined sequentially from 18.4% in the first quarter and 19.1% in the fourth quarter of 2025. GAAP operating margin improved to 4.6% from a loss of 10.2% a year earlier, though it fell from 6.2% in the prior quarter.
Customer retention and acquisition showed signs of cooling. The net retention rate declined to 111% as of June 30, 2026, compared to 112% on March 31 and 113% on December 31, 2025. Growth among high-value customers also slowed; those with annual contract values exceeding $300,000 rose 34% year-over-year, while those exceeding $500,000 rose 33%, compared to growth of 38% and 39% respectively in the first quarter.
Cash flow and capital allocation activity increased. Free cash flow margin rose to 30.5% from 22.9% in the second quarter of 2025. The company repurchased $123 million of Class A common stock during the quarter, up from $50 million in the first quarter.
Workiva also modified its non-GAAP diluted EPS calculation beginning in the second quarter to add back interest expense using the if-converted method, as it achieved GAAP profitability.