Workiva's carbon accounting software, based on the $100 million Sustain.Life acquisition earlier this year, is off to a strong start in the market, company executives told Wall Street analysts during a November 6, 2024 earnings call.
Workiva Carbon, launched at the end of Q2 2024, allows customers to track and disclose carbon emissions for Scope 1, 2 and 3 and decarbonization. The software category is particularly important to European companies -- thousands of which are striving to comply with CSRD regulations. Moreover, the CSRD mandates will extend to thousands of U.S. companies that have operations or partner with European companies.
Amid that backdrop, Workiva executives say their new carbon accounting capabilities are gaining traction quickly with customers.
Workiva Carbon Accounting Software: Initial Deployments, Partner Wins
Company executives stopped short of disclosing specific revenue figures for Workiva Carbon. Also, it's important to note that dozens of companies compete in the carbon accounting software market.
Still, Workiva executives offered multiple customer and partner anecdotes, and positioned carbon accounting software as one piece of a larger ESG and sustainability software platform play.
Among the anecdotes:
- Workiva signed a six-figure five solution account expansion deal with a UK-based IT services company, CEO Julie Iskow said on the earnings call.
- The sales engagement has expanded from global statutory reporting in Q4 of 2023 to five additional solutions in 2024: Management Reporting, Controls Management, Policies and Procedures, ESG and Workiva Carbon.
- A regional European consulting firm won the deal and will handle the implementation.
- Iskow mentioned additional wins involving a European advertising and PR firm, and a U.S.-based manufacturing company.
"Workiva Carbon is a platform play," Iskow said. "Our results in Q3 have confirmed that this was a strategic addition to our platform that has made our ESG solution an overall assured integrated reporting platform even more relevant. The CSRD is not the only regulation that's driving market demand. Sustainability regulations continue to advance in North America."
Example North American regulations include various laws that require large companies operating in California to report their greenhouse gas emissions, as well as their climate-related financial risks. Companies must still begin reporting Scope 1 and Scope 2 emissions in 2026 with Scope 3 emissions reporting starting in 2027, Iskow noted.
Workiva Quarterly Financial Results
As for Workiva's current business performance:
- Total revenue was $186 million in Q3 of 2024, up 17% from Q3 of 2023.
- GAAP net loss for Q3 of 2024 was $17 million compared with a net loss of $56 million in Q3 of 2023.
"Workiva is once again in a beat and raise position," Iskow said. "Our results highlight an acceleration of our growth and improved operating leverage. We delivered another record bookings quarter with broad based demand across the entire solution portfolio and a high volume of account expansion deals and platform wins across North America and Europe."
Amid the financial news, Workiva's stock was up roughly 20% for the week ended November 8, 2024.
