Workiva (NYSE: WK) reported Q3 EPS of ($0.22), $0.07 better than the analyst estimate of ($0.29). Revenue for the quarter came in at $52.1 million versus the consensus estimate of $50.64 million.

Third Quarter 2017 Financial Highlights

• Revenue: Total revenue for the quarter ended September 30, 2017 reached $52.1 million, an increase of 16.5% from $44.7 million in the third quarter of 2016. Subscription and support revenue contributed $43.2 million, up 19.3% versus results in the third quarter of 2016. Professional services revenue was $8.9 million, an increase of 4.5% compared to the same quarter in the prior year.
• Gross Profit: GAAP gross profit for the quarter ended September 30, 2017 was $36.4 million compared with $32.0 million in the same quarter of the prior year. GAAP gross margin was 69.9% in the third quarter of 2017 versus 71.5% in the third quarter of 2016.Non-GAAP gross profit for the quarter ended September 30, 2017 was $36.7 million, an increase of 14.1% compared with the prior year\'s third quarter, and non-GAAP gross margin was 70.6% compared to 72.0% in the third quarter of 2016.
• Loss from Operations: GAAP loss from operations for the quarter ended September 30, 2017 was $13.8 million compared with a loss of $12.7 million in the prior year\'s third quarter. Non-GAAP loss from operations for the quarter ended September 30, 2017 was $9.1 million, compared with non-GAAP loss from operations of $9.1 million in the third quarter of 2016. Non-GAAP loss from operations as a percentage of revenue improved 280 basis points for the quarter ended September 30, 2017 compared to the third quarter of 2016.
• Net Loss: GAAP net loss for the quarter ended September 30, 2017 was $14.1 million compared with a net loss of $12.9 million for the prior year\'s third quarter. GAAP net loss per basic and diluted share for the quarter ended September 30, 2017 was $0.34, based on 41.8 million weighted-average shares outstanding, compared with a net loss per basic and diluted share of $0.32, based on 40.8 million weighted-average shares outstanding in the third quarter of 2016.
• Non-GAAP net loss for the quarter ended September 30, 2017 was $9.4 million compared with a net loss of $9.2 million in the prior year\'s third quarter. Non-GAAP net loss per basic and diluted share for the quarter ended September 30, 2017 was $0.23, based on 41.8 million weighted-average shares outstanding, compared with a net loss per basic and diluted share of $0.23, based on 40.8 million weighted-average shares outstanding in the third quarter of 2016.

Operating Metrics

• Customers: Workiva had 2,991 customers as of September 30, 2017, a net increase of 295 customers from September 30, 2016.
• Revenue Retention Rate: As of September 30, 2017, Workiva\'s revenue retention rate (excluding add-on revenue) was 96.5%, and the revenue retention rate including add-on revenue was 108.6%. Add-on revenue includes the change in both seats purchased and seat pricing for existing customers.

Financial Outlook

As of November 7, 2017, Workiva is providing guidance for the fourth quarter and full year 2017 as follows:

Fourth Quarter 2017 Guidance:

• Total revenue is expected to be in the range of $53.0 million to $53.4 million.
• GAAP loss from operations is expected to be in the range of $15.6 million to $16.0 million.
• Non-GAAP loss from operations is expected to be in the range of $8.8 million to $9.2 million.
• GAAP net loss per basic and diluted share is expected to be in the range of $0.38 to $0.39.
• Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.22 to $0.23.
• Net loss per basic and diluted share is based on 42.0 million weighted-average shares outstanding.

Full Year 2017 Guidance:

• Total revenue is expected to be in the range of $206.4 million to $206.8 million.
• GAAP loss from operations is expected to be in the range of $45.2 million to $45.6 million.
• Non-GAAP loss from operations is expected to be in the range of $25.2 million to $25.6 million.
• GAAP net loss per basic and diluted share is expected to be in the range of $1.11 to $1.12.
• Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.63 to $0.64.
• Net loss per basic and diluted share is based on 41.6 million weighted-average shares outstanding.

GUIDANCE:

Workiva sees FY2017 EPS of ($0.64)-($0.63), versus the consensus of ($0.63). Workiva sees FY2017 revenue of $206.4-206.8 million, versus the consensus of $205.44 million.

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