Cloud computing technology is everywhere, especially in the business world. It allows organizations to reach more customers and streamline their operations, which means they have the opportunity to make a lot more money. 

The cloud also breaks down geographical borders for companies. Employees can work from anywhere in the world, and departments and teams can collaborate digitally, which speeds up projects. 

But all of those benefits create their own challenges, too, and Workiva (WK -1.05%) has built its business on solving them. The company just reported its financial results for the fourth quarter of 2022, and with its stock down 44% from its all-time high, here's why investors might want to buy in.

Why the corporate world turns to Workiva

One of the complexities created by cloud networks in large organizations is visibility. Teams of remote employees could be working across dozens of online applications, and if those workers are scattered across the globe, too, it can be something of a nightmare for managers to monitor their progress.

Workiva's platform unifies data from multiple sources on one dashboard. Whether teams are working in software applications from Microsoft, Salesforce, or Alphabet's Google, Workiva can pull data from all of them through a host of integrations. 

The result is simple and easy reporting, whether that's to the executive team or to regulators like the Securities and Exchange Commission (SEC). In fact, Workiva provides templates for 350 different SEC reports to streamline submissions even further. 

Recently, Workiva has focused on an emerging opportunity: reporting for environmental, social, and governance (ESG) purposes. As more governments around the globe mandate that companies track their impacts not just on their shareholders, but on the places in which they operate, ESG reporting is becoming increasingly important.

Workiva's platform helps organizations design their ESG frameworks and organize their data sources to prepare reports, whether for auditing purposes or simply for management's own assessment. 

Workiva's growth is steady and reliable

Workiva hasn't delivered the blistering revenue growth that some other technology companies have. But it consistently grows at rates above 20% with little volatility, with top-line gains stemming from a combination of new customers coming aboard and a net revenue retention rate of 108.5%, which reflects its established customers spending more with Workiva than they were a year ago.

In 2022, Workiva's revenue topped $500 million for the first time, and the chart below shows the company is on a positive long-term trajectory.

A chart of Workiva's revenue from 2014 to 2022.

Workiva has 5,664 total business customers, and it categorizes them based on how much they spend. Interestingly, its highest-spending cohort was its fastest-growing in the fourth quarter. There were 236 businesses spending $300,000 on an annualized basis with Workiva, up 29% compared to the same time last year.

The company is still investing in customer acquisition and product improvements, and has sacrificed profitability in the process. It booked a net loss of $90 million in 2022. However, it does have $430 million in cash, equivalents, and marketable securities on its balance sheet, so it can afford to keep investing in growth for several more years before it has to start turning a profit.

Why Workiva stock is a buy now

Across audits, financial reporting, compliance, and ESG, Workiva estimates its total addressable market is worth $25 billion. But that might grow substantially over the long term, especially since ESG only accounts for $3 billion of that figure, and reporting requirements in that area are only likely to grow more stringent in the years to come.

In the United Kingdom, for example, many listed companies are already required to make disclosures in their annual reports in line with the Taskforce on Climate-related Financial Disclosures (TFCD). And the SEC has proposed rules that would require U.S. companies to disclose how their operations might impact the climate, and how they contribute to carbon emissions. Workiva's opportunity in this area should be a point of focus for investors.

On top of that, organizations will continue to lean on cloud technologies to drive their businesses, leading to complexities that Workiva's core platform can help solve. 

Given the breadth of the company's opportunities and the fact that it has only scratched the surface of its addressable market, with its stock price down by 44% from its all-time high, this might be a great moment to buy in.