Workiva Inc. (NYSE:WK) Q3 2019 Earnings Conference Call - Final Transcript
Nov 06, 2019 • 05:00 pm ET
Thank you. [Operator Instructions] Your first response is from Terry Tillman of SunTrust Robinson. Please go ahead.
Hey, gentlemen. Can you hear me okay?
Martin J. Vanderploeg
Yes. Solid job on the quarter. I guess the first question, Stuart. That was nice to hear about a little bit on the guidance for next year. I don't actually, I haven't done the calculation, but could you give us some sort of kind of directional commentary on the subscription revenue kind of breaking that part versus the total $340 million. Just trying to gauge kind of the vitality of that growth versus total revenue?
J. Stuart Miller
Thanks, Terry. We have historically not done that. As you know, services revenue is -- is pretty -- or can be volatile and it's pretty hard for us to predict. Some of it sold and delivered within the same quarter. Our long-term guidance on the mix of revenue, as you know, over time, we're expecting it to be sort of 85% subscription and 15% services. So we're still heading in that direction on an annual basis. And we did say, of course, that we expect subscription revenue growth -- growth rate to exceed the growth rate in professional services. It's also very early to be talking too much about 2020 but we wanted to get the Street some idea of what we were thinking.
No, I understood, understood. Well, maybe a follow-up question and I know it's going to have potential material implications for '20 and it is still early but you get lots of questions about Europe. It seems like you have an event-driven catalyst there with the the regulatory mandate. So I would just love some perspective from you or Marty, in terms of what are you seeing and how does it look like it's going to shake out in terms of the buying pattern as we move through 2020 and even into 2021 around trying to get one's [Phonetic] health in order around the new mandate. Thank you.
Martin J. Vanderploeg
Well you're right, you're right about one thing, it's really early. But we definitely have seen an influx of customers and prospects wanting to discuss it with us, that's been very promising. And we've also seen larger customers that are already engaging with us in terms of putting together plans and actually buying. So we're still very optimistic on the high-end. I think, we have good visibility versus the -- maybe the 500 largest, 2,000 [Phonetic] largest ESOP customers. On the low end, we're very optimistic too although they're slower, they don't get going as quickly. And it's just hard to say, but we are getting great response. We are having lunches and breakfast that around ESOP and we've had great luck getting people to come to those. So we're quite optimistic.
Yeah, maybe Marty since you're on a roll there, you do have four key kind of growth vectors here. Of the four and I'm sure you're proud of them all and excited about all of them, but