Working for customers it could not have served a year ago

Workiva Inc. (WK) — this company's answers

The model's full reasoning — Q4 2015 call → NOWe need answer YES/NO based on transcript. Need determine if management conveys company can now actually do something it could not roughly a year ago, real customers paying for new capability, early relative to what opens. Let's parse transcript. Key themes: expansion into non-SEC use cases, GRC market, SOX, audit management, enterprise risk management. In Q4 2015 they began marketing Wdesk to broad audit management market. They have expanded TAM from $6.8B to $10.4B due to expansion in maximum reporting on risk, adjacent markets ERM and audit management. They are in investment mode. They have customer examples: MPRO, Americo Logistics, motorcycle manufacturer, New York Life, UPS, Noble Energy, global airline, Talen Energy, etc. But question asks: Does management convey that company CAN NOW ACTUALLY DO SOMETHING — produce, deliver, serve, handle, perform at scale/spec/quality/complexity — that it COULD NOT DO ROUGHLY A YEAR AGO, and REAL CUSTOMERS ALREADY PAYING for that new capability now, with business still early? Need identify a specific capability step-change. Management says "In the fourth quarter of 2015, we begin marketing Wdesk to the broad base audit management market which includes audit risk assessments, audit signing and internal auditing. Audit management along with ERM is a subset of a much larger market that's defined as governance, risk and compliance known as GRC." This is a new market they are entering. But is it a capability they couldn't do before? They already had Wdesk platform; they are now marketing to audit management. They have customers using Wdesk for SOX, ERM, etc. The capability is not necessarily new product feature; it's expansion into new use cases. They mention "we plan to release Wdesk enhancements that will include an enhanced data platform for SOX, next generation workbooks that can handle millions of rows of data at high speeds and an intuit of user experience with improved collaboration and audit trail." That is future, not yet. So no. But maybe the step-change is "Wdesk for SOX and internal controls" now has evidence management feature? They mention Talen Energy uses evidenced management feature in Wdesk. Is that new? Not clear. They say "We continue to see strong demand for Wdesk in the SaaS market because it streamlines how teams document, implement and assess internal controls over financial reporting.

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