Workiva (NYSE: WK) reported Q4 EPS of $0.00, $0.10 better than the analyst estimate of ($0.10). Revenue for the quarter came in at $64.4 million versus the consensus estimate of $62.71 million.

“We posted strong results for the fourth quarter and full year 2018,” said Marty Vanderploeg, CEO of Workiva. “Operating margin improved significantly in the quarter, and we outperformed our guidance for revenue, operating loss and loss per share. We remain committed to achieving profitable growth over time.”

“The significant operating efficiencies we gained in 2018 are enabling us to accelerate growth investments in 2019 in integrated risk, European financial reporting and compliance, and global statutory reporting,” said Vanderploeg.

“We expect cash flow from operations to improve significantly in 2019,” said Stuart Miller, CFO of Workiva. “Our guidance on operating margin reflects the investments in growth we plan to make in 2019.”

“Wdesk is the only cloud platform that provides data assurance and connected reporting throughout the entire reporting process — from ERP transactional data to final reports,” said Vanderploeg. “As customers add more use cases in Wdesk, the value of our connected reporting platform becomes more powerful.”

Fourth Quarter 2018 Financial Highlights

• Revenue: Total revenue for the fourth quarter of 2018 reached $64.4 million, an increase of 18.2% from $54.5 million in the fourth quarter of 2017. Subscription and support revenue contributed $53.8 million, up 18.1% versus the fourth quarter of 2017. Professional services revenue was $10.7 million, an increase of 19.0% compared to the same quarter in the prior year.
• Gross Profit: GAAP gross profit for the fourth quarter of 2018 was $47.0 million compared with $38.4 million in the same quarter of 2017. GAAP gross margin was 73.0% versus 70.5% in the fourth quarter of 2017. Non-GAAP gross profit for the fourth quarter of 2018 was $47.4 million, an increase of 22.1% compared with the prior year\'s fourth quarter, and non-GAAP gross margin was 73.5% compared to 71.1% in the fourth quarter of 2017.
• Loss from Operations: GAAP loss from operations for the fourth quarter of 2018 was $7.8 million compared with a loss of $14.7 million in the prior year\'s fourth quarter. Non-GAAP loss from operations was $0.3 million, compared with non-GAAP loss from operations of $8.4 million in the fourth quarter of 2017. Adoption of ASC 606 caused loss from operations to be $4.5 million less for the fourth quarter of 2018 than what would have been recognized under the legacy standard.
• Net Loss: GAAP net loss for the fourth quarter of 2018 was $7.7 million compared with a net loss of $14.3 million for the prior year\'s fourth quarter. GAAP net loss per basic and diluted share was $0.17 compared with a net loss per basic and diluted share of $0.34 in the fourth quarter of 2017.
• Non-GAAP net loss for the fourth quarter of 2018 was $0.2 million compared with a net loss of $8.0 million in the prior year\'s fourth quarter. Non-GAAP net loss per basic and diluted share was $0.00 compared with a net loss per basic and diluted share of $0.19 in the fourth quarter of 2017.
• Balance Sheet: As of December 31, 2018, Workiva had cash, cash equivalents and marketable securities totaling $98.3 million, compared with $97.0 million as of September 30, 2018. Financing obligations totaled $18.4 million as of December 31, 2018.

GUIDANCE:

Workiva sees Q1 2019 EPS of ($0.05)-($0.04), versus the consensus of ($0.06). Workiva sees Q1 2019 revenue of $68.8-69.3 million, versus the consensus of $68.24 million.

Workiva sees FY2019 EPS of ($0.39)-($0.34), versus the consensus of ($0.30). Workiva sees FY2019 revenue of $282.5-284.5 million, versus the consensus of $279.05 million.

Financial Outlook
As of February 20, 2019, Workiva is providing guidance for its first quarter 2019 and full year 2019 as follows:

First Quarter 2019 Guidance:

• Total revenue is expected to be in the range of $68.8 million to $69.3 million.
• GAAP loss from operations is expected to be in the range of $9.5 million to $10.0 million.
• Non-GAAP loss from operations is expected to be in the range of $1.5 million to $2.0 million.
• GAAP net loss per basic and diluted share is expected to be in the range of $0.22 to $0.23.
• Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.04 to $0.05.
• Net loss per basic and diluted share is based on 45.0 million weighted-average shares outstanding.

Full Year 2019 Guidance:

• Total revenue is expected to be in the range of $282.5 million to $284.5 million.
• GAAP loss from operations is expected to be in the range of $49.5 million to $51.5 million.
• Non-GAAP loss from operations is expected to be in the range of $15.0 million to $17.0 million.
• GAAP net loss per basic and diluted share is expected to be in the range of $1.10 to $1.15.
• Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.34 to $0.39.
• Net loss per basic and diluted share is based on 45.7 million weighted-average shares outstanding.

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