Upgrade to SI Premium - Free Trial

Workiva Announces First Quarter 2020 Financial Results

April 30, 2020 4:15 PM

Q1 Subscription and Support Revenue of $68.4 Million, up 21.8% from Q1 2019

Q1 Total Revenue of $85.8 Million, up 22.6% from Q1 2019

AMES, Iowa--(BUSINESS WIRE)-- Workiva (NYSE: WK), provider of the world’s leading connected reporting and compliance platform, today announced financial results for its first quarter ended March 31, 2020.

"We are pleased with our first quarter 2020 financial results, which exceeded guidance for revenue and operating results," said Marty Vanderploeg, Chief Executive Officer of Workiva.

"Despite challenges from COVID-19, we believe we are in a stronger, more flexible financial position now than ever before, including nearly $500 million in unrestricted cash and short-term investments," said Vanderploeg.

"The depth and duration of the economic disruption from COVID-19 is unknown," said Stuart Miller, Chief Financial Officer of Workiva. "While we have a large pipeline of new deals, we have limited visibility on when the deals will close. We are providing guidance for the second quarter but suspending specific guidance for full year 2020. We are providing directional commentary for the remainder of the year."

"Working from anywhere in a safe and secure, online environment is becoming the new baseline," said Vanderploeg. "We believe that this shift to remote work will drive increased demand for our cloud platform for years to come."

"We are continuing to hire talent and focus investments on our growth vectors – Europe, Wdata, integrated risk, global statutory reporting and the U.S. government – as they provide enormous opportunities for us to grow and prosper," said Vanderploeg.

First Quarter 2020 Financial Highlights

Key Metrics and Recent Business Highlights

Financial Outlook

As of April 30, 2020, Workiva is providing guidance as follows:

Second Quarter 2020 Guidance:

Full Year 2020 Commentary

"Relative to the guidance that we provided in February, we now expect full year 2020 revenue to grow at a slower pace and operating margin to improve," said Miller.

Quarterly Conference Call

Workiva will host a conference call today at 5:00 p.m. ET to review the Company’s financial results for the first quarter, in addition to discussing the Company’s outlook for the second quarter 2020. To access this call, dial 833-287-0800 (U.S. domestic) or 647-689-4459 (international). The conference ID is 6672089. A live webcast of the conference call will be accessible in the "Investor Relations" section of Workiva’s website at www.workiva.com. A replay of this conference call can also be accessed through May 7, 2020 at 800-585-8367 (U.S. domestic) or 416-621-4642 (international). The replay pass code is 6672089. An archived webcast of this conference call will also be available an hour after the completion of the call in the "Investor Relations" section of the Company’s website at www.workiva.com.

About Workiva

Workiva, provider of the world's leading connected reporting and compliance platform, is used by thousands of enterprises across 180 countries, including nearly 75 percent of Fortune 500® companies, and by government agencies. Our customers have linked over five billion data elements to trust their data, reduce risk and save time. For more information about Workiva (NYSE: WK), please visit workiva.com.

Read the Workiva blog: www.workiva.com/blog

Follow Workiva on LinkedIn: www.linkedin.com/company/workiva

Like Workiva on Facebook: www.facebook.com/workiva

Follow Workiva on Twitter: www.twitter.com/workiva

FORTUNE® and FORTUNE 500® are registered trademarks of Fortune Media IP Limited and are used under license. FORTUNE and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of, Workiva Inc. Note: Claim not confirmed by FORTUNE® or Fortune Media IP Limited.

Non-GAAP Financial Measures

The non-GAAP adjustments referenced herein relate to the exclusion of stock-based compensation and non-cash interest expense. A reconciliation of GAAP to non-GAAP historical financial measures has been provided in Table I at the end of this press release. A reconciliation of GAAP to non-GAAP guidance has been provided in Table II at the end of this press release.

Workiva believes that the use of non-GAAP gross profit and gross margin, non-GAAP loss from operations, non-GAAP net loss and non-GAAP net loss per share is helpful to its investors. These measures, which are referred to as non-GAAP financial measures, are not prepared in accordance with generally accepted accounting principles in the United States, or GAAP. Non-GAAP gross profit is calculated by excluding stock-based compensation expense attributable to cost of revenues from gross profit. Non-GAAP gross margin is the ratio calculated by dividing non-GAAP gross profit by revenues. Non-GAAP loss from operations is calculated by excluding stock-based compensation expense from loss from operations. Non-GAAP net loss is calculated by excluding stock-based compensation expense, net of tax, and non-cash interest expense related to our convertible senior notes from net loss. Non-GAAP net loss per share is calculated by dividing non-GAAP net loss by the weighted- average shares outstanding as presented in the calculation of GAAP net loss per share. Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash expenses, Workiva believes that providing non-GAAP financial measures that exclude stock-based compensation expense allows for more meaningful comparisons between its operating results from period to period. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be accounted for as separate liability and equity components in a manner that reflects our non-convertible debt borrowing rate. This results in the debt component being treated as though it was issued at a discount, with the debt discount being accreted as additional non-cash interest expense over the term of the notes using the effective interest method. As a result, we believe that excluding this non-cash interest expense attributable to the debt discount in calculating our non-GAAP measures is useful because this interest expense does not represent a cash outflow and is not indicative of our ongoing operational performance. Workiva’s management uses these non-GAAP financial measures as tools for financial and operational decision making and for evaluating Workiva’s own operating results over different periods of time.

Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in Workiva’s industry, as other companies in the industry may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Workiva’s reported financial results. Further, stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in Workiva’s business and an important part of the compensation provided to its employees. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Investors should review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate Workiva’s business.

Safe Harbor Statement

Certain statements in this press release are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or the Company’s future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In particular, statements about the Company’s expectations, beliefs, plans, objectives, assumptions, future events or future performance contained in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential," "outlook," "guidance" or the negative of those terms or other comparable terminology.

Please see the Company’s documents filed or to be filed with the Securities and Exchange Commission, including the Company’s annual reports filed on Form 10-K and quarterly reports on Form 10-Q, and any amendments thereto for a discussion of certain important risk factors that relate to forward-looking statements contained in this report. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company’s control. These and other important factors may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

WORKIVA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)

Three months ended March 31,

2020

2019

(unaudited)

Revenue

Subscription and support

$

68,361

$

56,123

Professional services

17,440

13,840

Total revenue

85,801

69,963

Cost of revenue

Subscription and support (1)

12,153

9,809

Professional services (1)

10,243

9,727

Total cost of revenue

22,396

19,536

Gross profit

63,405

50,427

Operating expenses

Research and development (1)

22,994

22,011

Sales and marketing (1)

36,117

25,365

General and administrative (1)

13,448

10,383

Total operating expenses

72,559

57,759

Loss from operations

(9,154)

(7,332)

Interest income

1,706

492

Interest expense

(3,554)

(440)

Other income and (expense), net

718

(172)

Loss before provision for income taxes

(10,284)

(7,452)

Provision for income taxes

289

11

Net loss

$

(10,573)

$

(7,463)

Net loss per common share:

Basic and diluted

$

(0.22)

$

(0.17)

Weighted-average common shares outstanding - basic and diluted

47,545,703

45,229,279

(1) Includes stock-based compensation expense as follows:

Three months ended March 31,

2020

2019

(unaudited)

Cost of revenue

Subscription and support

$

431

$

357

Professional services

425

409

Operating expenses

Research and development

1,583

1,900

Sales and marketing

2,736

1,964

General and administrative

4,761

3,563

WORKIVA INC.

CONSOLIDATED BALANCE SHEETS
(in thousands)

March 31, 2020

December 31, 2019

(unaudited)

Assets

Current assets

Cash and cash equivalents

$

393,434

$

381,742

Marketable securities

102,589

106,214

Accounts receivable, net

45,522

60,228

Deferred commissions

12,554

14,108

Other receivables

2,683

2,432

Prepaid expenses and other

8,452

6,508

Total current assets

565,234

571,232

Property and equipment, net

39,231

39,745

Operating lease right-of-use assets

18,358

15,352

Deferred commissions, non-current

15,751

14,977

Intangible assets, net

1,639

1,651

Other assets

3,503

3,439

Total assets

$

643,716

$

646,396

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable

$

5,501

$

7,057

Accrued expenses and other current liabilities

42,762

49,930

Deferred revenue

172,369

173,617

Current portion of financing obligations

1,361

1,328

Total current liabilities

221,993

231,932

Convertible senior notes, net

282,798

280,601

Deferred revenue, non-current

31,626

32,569

Other long-term liabilities

1,569

1,498

Operating lease liabilities, non-current

20,422

18,564

Financing obligations, non-current

15,536

15,889

Total liabilities

573,944

581,053

Stockholders’ equity

Common stock

47

47

Additional paid-in-capital

435,181

420,170

Accumulated deficit

(365,734)

(355,161)

Accumulated other comprehensive income

278

287

Total stockholders’ equity

69,772

65,343

Total liabilities and stockholders’ equity

$

643,716

$

646,396

WORKIVA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Three months ended March 31,

2020

2019

(unaudited)

Cash flows from operating activities

Net loss

$

(10,573)

$

(7,463)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

1,142

903

Stock-based compensation expense

9,936

8,193

Provision for (recovery of) doubtful accounts

40

(187)

Amortization (accretion) of premiums and discounts on marketable securities, net

101

(81)

Amortization of debt discount and issuance costs

2,197

—

Deferred income tax

—

(18)

Changes in assets and liabilities:

Accounts receivable

14,265

14,818

Deferred commissions

603

(2,029)

Operating lease right-of-use asset

1,098

668

Other receivables

(253)

(214)

Prepaid expenses

(1,955)

(3,236)

Other assets

(74)

(1,464)

Accounts payable

(1,382)

(1,562)

Deferred revenue

(1,228)

1,987

Operating lease liability

(1,145)

(655)

Accrued expenses and other liabilities

(8,023)

(4,541)

Net cash provided by operating activities

4,749

5,119

Cash flows from investing activities

Purchase of property and equipment

(688)

(1,743)

Purchase of marketable securities

(20,832)

(22,155)

Maturities of marketable securities

12,975

7,390

Sale of marketable securities

11,423

—

Purchase of intangible assets

(77)

(84)

Net cash provided by (used in) investing activities

2,801

(16,592)

Cash flows from financing activities

Proceeds from option exercises

2,794

11,055

Taxes paid related to net share settlements of stock-based compensation awards

(1,379)

(390)

Proceeds from shares issued in connection with employee stock purchase plan

3,660

2,149

Principal payments on capital lease and financing obligations

(320)

(294)

Net cash provided by financing activities

4,755

12,520

Effect of foreign exchange rates on cash

(613)

105

Net increase in cash and cash equivalents

11,692

1,152

Cash and cash equivalents at beginning of period

381,742

77,584

Cash and cash equivalents at end of period

$

393,434

$

78,736

TABLE I
WORKIVA INC.
RECONCILIATION OF NON-GAAP INFORMATION
(in thousands, except share and per share)

Three months ended March 31,

2020

2019

Gross profit, subscription and support

$

56,208

$

46,314

Add back: Stock-based compensation

431

357

Gross profit, subscription and support, non-GAAP

$

56,639

$

46,671

As a percentage of subscription and support revenue, non-GAAP

82.9

%

83.2

%

Gross profit, professional services

$

7,197

$

4,113

Add back: Stock-based compensation

425

409

Gross profit, professional services, non-GAAP

$

7,622

$

4,522

As a percentage of professional services revenue, non-GAAP

43.7

%

32.7

%

Gross profit

$

63,405

$

50,427

Add back: Stock-based compensation

856

766

Gross profit, non-GAAP

$

64,261

$

51,193

As percentage of revenue, non-GAAP

74.9

%

73.2

%

Cost of revenue, subscription and support

$

12,153

$

9,809

Less: Stock-based compensation

431

357

Cost of revenue, subscription and support, non-GAAP

$

11,722

$

9,452

As percentage of revenue, non-GAAP

13.7

%

13.5

%

Cost of revenue, professional services

$

10,243

$

9,727

Less: Stock-based compensation

425

409

Cost of revenue, professional services, non-GAAP

$

9,818

$

9,318

As percentage of revenue, non-GAAP

11.4

%

13.3

%

Research and development

$

22,994

$

22,011

Less: Stock-based compensation

1,583

1,900

Research and development, non-GAAP

$

21,411

$

20,111

As percentage of revenue, non-GAAP

25.0

%

28.7

%

Sales and marketing

$

36,117

$

25,365

Less: Stock-based compensation

2,736

1,964

Sales and marketing, non-GAAP

$

33,381

$

23,401

As percentage of revenue, non-GAAP

38.9

%

33.4

%

General and administrative

$

13,448

$

10,383

Less: Stock-based compensation

4,761

3,563

General and administrative, non-GAAP

$

8,687

$

6,820

As percentage of revenue, non-GAAP

10.1

%

9.7

%

Loss from operations

$

(9,154)

$

(7,332)

Add back: Stock-based compensation

9,936

8,193

Income from operations, non-GAAP

$

782

$

861

As percentage of revenue, non-GAAP

0.9

%

1.2

%

Net loss

$

(10,573)

$

(7,463)

Add back: Stock-based compensation

9,936

8,193

Add back: Non-cash interest expense related to convertible senior notes

2,197

—

Net income, non-GAAP

$

1,560

$

730

As percentage of revenue, non-GAAP

1.8

%

1.0

%

Net loss per basic and diluted share:

$

(0.22)

$

(0.17)

Add back: Stock-based compensation

0.20

0.19

Add back: Non-cash interest expense related to convertible senior notes

0.05

—

Net income per basic share, non-GAAP

$

0.03

$

0.02

Net income per diluted share, non-GAAP

$

0.03

$

0.01

Weighted-average common shares outstanding - basic, non-GAAP

47,545,703

45,229,279

Weighted-average common shares outstanding - diluted, non-GAAP

51,749,547

50,550,143

TABLE II
WORKIVA INC.
RECONCILIATION OF NON-GAAP GUIDANCE
(in thousands, except share and per share data)

Three months ending June 30, 2020

Loss from operations, GAAP range

$

(22,050)

-

$

(22,550)

Add back: Stock-based compensation

15,300

15,300

Loss from operations, non-GAAP range

$

(6,750)

-

$

(7,250)

Net loss per share, GAAP range

$

(0.50)

-

$

(0.51)

Add back: Stock-based compensation

0.32

0.32

Add back: Non-cash interest expense related to convertible senior notes

0.04

0.04

Net loss per share, non-GAAP range

$

(0.14)

-

$

(0.15)

Weighted-average common shares outstanding - basic and diluted

48,200,000

48,200,000

Investors:

Adam Terese

Workiva Inc.

[email protected]

(515) 663-4493

Media:

Kevin McCarthy

Workiva Inc.

[email protected]

(515) 663-4471

Source: Workiva

Categories

Business Wire Press Releases

Next Articles