- Increased Q2 2023 Subscription & Support Revenue by 21%
over Q2 2022
- Generated Total Q2 2023 Revenue of $155.0 Million, up 18% over
Q2 2022
- Achieved 28% YOY Growth of Customers with Annual Contract Value
Over $150K
Workiva Inc. (NYSE:WK), the world’s leading cloud platform for
assured, integrated reporting, today announced financial results
for its second quarter ended June 30, 2023.
"Workiva delivered another solid quarter. Our subscription
revenue grew by 21%, driving a beat to the high end of our revenue
guidance," said Julie Iskow, Workiva President & CEO. "Our
growth during the quarter showcases the flexibility of our
innovative technology, and speaks to the value of managing
financial reporting, non-financial - or ESG - reporting, and audit,
risk and controls all in one platform. Our results also reflect the
strength of our partner program and its contribution in both new
logo wins and account expansions."
"We're winning with assured, integrated reporting," said Jill
Klindt, Workiva CFO. "This is evidenced by the growth we're seeing
in our large contract customers. Compared to second quarter 2022
the number of contracts valued over $100K increased 24%; those over
$150K increased 28%; and contracts valued over $300K were up
40%."
Iskow added, "I've had the opportunity and pleasure during my
first quarter as CEO to spend a lot of time meeting with employees,
customers, and partners all around the world. I'm more optimistic
than ever in the opportunity in front of us. Despite the
challenging macro environment, I'm confident in Workiva's ability
to successfully execute our growth strategy and advance our
productivity initiatives."
Second Quarter 2023 Financial
Highlights
- Revenue: Total revenue for the second quarter of 2023
reached $155.0 million, an increase of 18% from $131.5 million in
the second quarter of 2022. Subscription and support revenue
contributed $136.8 million, up 21% versus the second quarter of
2022. Professional services revenue was $18.3 million, relatively
flat compared to the same quarter in the prior year.
- Gross Profit: GAAP gross profit for the second quarter
of 2023 was $115.5 million compared with $99.3 million in the same
quarter of 2022. GAAP gross margin was 74.5% versus 75.5% in the
second quarter of 2022. Non-GAAP gross profit for the second
quarter of 2023 was $117.6 million, an increase of 16.6% compared
with the prior year's second quarter, and non-GAAP gross margin was
75.9% compared to 76.6% in the second quarter of 2022.
- Loss from Operations: GAAP loss from operations for the
second quarter of 2023 was $22.7 million compared with a loss of
$28.2 million in the prior year's second quarter. Non-GAAP loss
from operations was $0.6 million compared with a loss of $8.3
million in the second quarter of 2022.
- GAAP Net Loss: GAAP net loss for the second quarter of
2023 was $20.9 million compared with a net loss of $28.9 million
for the prior year's second quarter. GAAP net loss per basic and
diluted share was $0.39 compared with a net loss per basic and
diluted share of $0.55 in the second quarter of 2022.
- Non-GAAP Net Income/Loss: Non-GAAP net income for the
second quarter of 2023 was $1.2 million compared with a loss of
$9.0 million in the prior year's second quarter. Non-GAAP net
income per basic share and diluted share was $0.02 compared with a
net loss per basic and diluted share of $0.17 in the second quarter
of 2022.
- Liquidity: As of June 30, 2023, Workiva had cash, cash
equivalents, and marketable securities totaling $466.3 million,
compared with $430.8 million as of December 31, 2022. Workiva had
$345.0 million aggregate principal amount of 1.125% convertible
senior notes due in 2026 and $14.8 million of finance lease
obligations outstanding as of June 30, 2023.
Key Metrics and Recent Business
Highlights
- Customers: Workiva had 5,860 customers as of June 30,
2023, a net increase of 479 customers from June 30, 2022.
- Revenue Retention Rate: As of June 30, 2023, Workiva's
revenue retention rate (excluding add-on revenue) was 98%, and the
revenue retention rate including add-on revenue was 111%. Add-on
revenue includes changes in both solutions and pricing for existing
customers.
- Large Contracts: As of June 30, 2023, Workiva had 1,470
customers with an annual contract value (“ACV”) of more than
$100,000, up 24% from 1,186 customers at June 30, 2022. Workiva had
823 customers with an ACV of more than $150,000, up 28% from 642
customers in the second quarter of 2022. Workiva had 272 customers
with an ACV of more than $300,000, up 40% from 194 customers in the
second quarter of 2022.
Financial Outlook
As of August 3, 2023, Workiva is providing guidance as
follows:
Third Quarter 2023 Guidance:
- Total revenue is expected to be in the range of $155.0 million
to $156.0 million.
- GAAP loss from operations is expected to be in the range of
$24.0 million to $23.0 million.
- Non-GAAP loss from operations is expected to be in the range of
$1.0 million to break-even.
- GAAP net loss per basic and diluted share is expected to be in
the range of $0.40 to $0.38.
- Non-GAAP net income per basic and diluted share is expected to
be in the range of $0.03 to $0.05.
- Net income (loss) per basic and diluted share is based on 54.1
million weighted-average shares outstanding.
Full Year 2023 Guidance:
- Total revenue is expected to be in the range of $626.0 million
to $628.0 million.
- GAAP loss from operations is expected to be in the range of
$109.0 million to $107.0 million.
- Non-GAAP loss from operations is expected to be in the range of
$3.0 million to $1.0 million.
- GAAP net loss per basic and diluted share is expected to be in
the range of $1.88 to $1.85.
- Non-GAAP net income per basic and diluted share is expected to
be in the range of $0.09 to $0.12.
- Net income (loss) per basic and diluted share is based on 54.0
million weighted-average shares outstanding.
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 second quarter 2023,
in addition to discussing the Company’s outlook for the third
quarter and full year 2023. To access this call, dial 888-330-2469
(U.S. domestic) or 240-789-2740 (international). The conference ID
is 8736384. 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 August 10, 2023, at 800-770-2030 (U.S. domestic)
or 647-362-9199 (international). The replay pass code is 8736384.
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 Inc. (NYSE:WK) is on a mission to power transparent
reporting for a better world. We build and deliver the world’s
leading cloud platform for assured, integrated reporting to meet
stakeholder demands for action, transparency, and disclosure of
financial and non-financial data. Workiva offers the only unified
SaaS platform that brings customers’ financial reporting,
Environmental, Social, and Governance (ESG), and Governance, Risk,
and Compliance (GRC) together in a controlled, secure, audit-ready
platform. Our platform simplifies the most complex reporting and
disclosure challenges by streamlining processes, connecting data
and teams, and ensuring consistency. Learn more at workiva.com.
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
Non-GAAP Financial
Measures
The non-GAAP adjustments referenced herein relate to the
exclusion of stock-based compensation and amortization of
acquisition-related intangible assets. 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 income (loss) from operations, non-GAAP net income
(loss) and non-GAAP net income (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 income (loss) from
operations is calculated by excluding stock-based compensation
expense and amortization expense for acquisition-related intangible
assets from loss from operations. Non-GAAP net income (loss) is
calculated by excluding stock-based compensation expense, net of
tax and amortization expense for acquisition-related intangible
assets from net loss. Non-GAAP net income (loss) per share is
calculated by dividing non-GAAP net income (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.
For business combinations, we generally allocate a portion of the
purchase price to intangible assets. The amount of the allocation
is based on estimates and assumptions made by management and is
subject to amortization. The amount of purchase price allocated to
intangible assets and the term of its related amortization can vary
significantly and are unique to each acquisition and thus we do not
believe it is reflective of ongoing operations. 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 June
30,
Six months ended June
30,
2023
2022
2023
2022
(unaudited)
Revenue
Subscription and support
$
136,772
$
113,353
$
266,436
$
220,473
Professional services
18,250
18,196
38,775
40,750
Total revenue
155,022
131,549
305,211
261,223
Cost of revenue
Subscription and support (1)
25,083
18,915
49,216
37,448
Professional services (1)
14,421
13,322
28,806
25,662
Total cost of revenue
39,504
32,237
78,022
63,110
Gross profit
115,518
99,312
227,189
198,113
Operating expenses
Research and development (1)
42,697
39,177
88,488
75,061
Sales and marketing (1)
71,882
64,219
142,592
120,319
General and administrative (1)
23,627
24,108
65,638
48,102
Total operating expenses
138,206
127,504
296,718
243,482
Loss from operations
(22,688
)
(28,192
)
(69,529
)
(45,369
)
Interest income
4,535
605
8,252
885
Interest expense
(1,499
)
(1,512
)
(3,000
)
(3,030
)
Other (expense) and income, net
(439
)
668
(1,379
)
503
Loss before provision for income taxes
(20,091
)
(28,431
)
(65,656
)
(47,011
)
Provision for income taxes
819
430
1,404
343
Net loss
$
(20,910
)
$
(28,861
)
$
(67,060
)
$
(47,354
)
Net loss per common share:
Basic and diluted
$
(0.39
)
$
(0.55
)
$
(1.25
)
$
(0.90
)
Weighted-average common shares outstanding
- basic and diluted
54,009,963
52,850,470
53,850,986
52,724,051
(1)
Includes stock-based compensation expense
as follows:
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
(unaudited)
Cost of revenue
Subscription and support
$
1,413
$
912
$
2,485
$
1,702
Professional services
667
593
1,300
1,045
Operating expenses
Research and development
4,825
3,148
9,522
5,873
Sales and marketing
6,703
5,646
13,661
9,731
General and administrative
7,002
8,148
31,684
15,405
WORKIVA INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands)
June 30, 2023
December 31, 2022
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
198,939
$
240,197
Marketable securities
267,312
190,595
Accounts receivable, net
84,272
106,316
Deferred costs
38,471
38,350
Other receivables
5,472
6,674
Prepaid expenses and other
25,419
17,957
Total current assets
619,885
600,089
Property and equipment, net
25,380
27,096
Operating lease right-of-use assets
11,493
13,932
Deferred costs, non-current
30,810
33,682
Goodwill
111,154
109,740
Intangible assets, net
25,643
28,234
Other assets
6,430
6,847
Total assets
$
830,795
$
819,620
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable
$
5,312
$
6,174
Accrued expenses and other current
liabilities
91,118
83,999
Deferred revenue
327,365
316,263
Finance lease obligations
518
504
Total current liabilities
424,313
406,940
Convertible senior notes, non-current
340,907
340,257
Deferred revenue, non-current
39,822
38,237
Other long-term liabilities
1,527
1,518
Operating lease liabilities,
non-current
9,749
12,102
Finance lease obligations, non-current
14,320
14,583
Total liabilities
830,638
813,637
Stockholders’ equity
Common stock
54
53
Additional paid-in-capital
595,693
537,732
Accumulated deficit
(592,176
)
(525,116
)
Accumulated other comprehensive loss
(3,414
)
(6,686
)
Total stockholders’ equity
157
5,983
Total liabilities and stockholders’
equity
$
830,795
$
819,620
WORKIVA INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
(unaudited)
Cash flows from operating
activities
Net loss
$
(20,910
)
$
(28,861
)
$
(67,060
)
$
(47,354
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
2,867
2,725
5,667
4,684
Stock-based compensation expense
20,610
18,447
58,652
33,756
(Recovery of) provision for doubtful
accounts
(57
)
20
49
(9
)
Realized loss on sale of
available-for-sale securities, net
147
—
708
—
(Accretion) amortization of premiums and
discounts on marketable securities, net
(1,572
)
453
(2,600
)
1,113
Amortization of issuance costs and debt
discount
325
324
650
648
Deferred income tax
7
63
(3
)
(148
)
Changes in assets and liabilities:
Accounts receivable
(6,886
)
(4,844
)
22,477
1,737
Deferred costs
1,362
(2,734
)
3,132
(1,290
)
Operating lease right-of-use asset
1,268
1,307
2,563
2,608
Other receivables
(381
)
385
(286
)
565
Prepaid expenses
(1,705
)
(1,591
)
(7,437
)
(2,723
)
Other assets
510
12
436
35
Accounts payable
(1,088
)
(2,300
)
(881
)
2,064
Deferred revenue
21,060
13,192
11,105
13,798
Operating lease liability
(1,207
)
(1,302
)
(2,379
)
(2,644
)
Accrued expenses and other liabilities
11,629
13,388
6,749
907
Net cash provided by operating
activities
25,979
8,684
31,542
7,747
Cash flows from investing
activities
Purchase of property and equipment
(639
)
(671
)
(837
)
(1,203
)
Purchase of marketable securities
(51,204
)
(23,798
)
(177,019
)
(57,946
)
Sale of marketable securities
21,339
—
65,052
14,981
Maturities of marketable securities
8,000
40,536
39,905
66,786
Acquisitions, net of cash acquired
—
(99,186
)
—
(99,186
)
Purchase of intangible assets
(40
)
(6
)
(119
)
(46
)
Net cash used in investing activities
(22,544
)
(83,125
)
(73,018
)
(76,614
)
Cash flows from financing
activities
Proceeds from option exercises
747
1,145
2,204
1,970
Taxes paid related to net share
settlements of stock-based compensation awards
(1,212
)
(1,344
)
(8,440
)
(9,914
)
Proceeds from shares issued in connection
with employee stock purchase plan
—
—
5,546
5,218
Principal payments on finance lease
obligations
(125
)
(446
)
(249
)
(888
)
Net cash used in financing activities
(590
)
(645
)
(939
)
(3,614
)
Effect of foreign exchange rates on
cash
609
(1,737
)
1,157
(1,652
)
Net increase (decrease) in cash and cash
equivalents
3,454
(76,823
)
(41,258
)
(74,133
)
Cash and cash equivalents at beginning of
period
195,485
303,076
240,197
300,386
Cash and cash equivalents at end of
period
$
198,939
$
226,253
$
198,939
$
226,253
TABLE I
WORKIVA INC.
RECONCILIATION OF
NON-GAAP INFORMATION
(in thousands, except
share and per share)
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
Gross profit, subscription and support
$
111,689
$
94,438
$
217,220
$
183,025
Add back: Stock-based compensation
1,413
912
2,485
1,702
Gross profit, subscription and support,
non-GAAP
$
113,102
$
95,350
$
219,705
$
184,727
Gross profit, professional services
$
3,829
$
4,874
$
9,969
$
15,088
Add back: Stock-based compensation
667
593
1,300
1,045
Gross profit, professional services,
non-GAAP
$
4,496
$
5,467
$
11,269
$
16,133
Gross profit
$
115,518
$
99,312
$
227,189
$
198,113
Add back: Stock-based compensation
2,080
1,505
3,785
2,747
Gross profit, non-GAAP
$
117,598
$
100,817
$
230,974
$
200,860
Cost of revenue, subscription and
support
$
25,083
$
18,915
$
49,216
$
37,448
Less: Stock-based compensation
1,413
912
2,485
1,702
Cost of revenue, subscription and support,
non-GAAP
$
23,670
$
18,003
$
46,731
$
35,746
Cost of revenue, professional services
$
14,421
$
13,322
$
28,806
$
25,662
Less: Stock-based compensation
667
593
1,300
1,045
Cost of revenue, professional services,
non-GAAP
$
13,754
$
12,729
$
27,506
$
24,617
Research and development
$
42,697
$
39,177
$
88,488
$
75,061
Less: Stock-based compensation
4,825
3,148
9,522
5,873
Less: Amortization of acquisition-related
intangibles
891
869
1,777
1,364
Research and development, non-GAAP
$
36,981
$
35,160
$
77,189
$
67,824
Sales and marketing
$
71,882
$
64,219
$
142,592
$
120,319
Less: Stock-based compensation
6,703
5,646
13,661
9,731
Less: Amortization of acquisition-related
intangibles
606
586
1,207
786
Sales and marketing, non-GAAP
$
64,573
$
57,987
$
127,724
$
109,802
General and administrative
$
23,627
$
24,108
$
65,638
$
48,102
Less: Stock-based compensation
7,002
8,148
31,684
15,405
General and administrative, non-GAAP
$
16,625
$
15,960
$
33,954
$
32,697
Loss from operations
$
(22,688
)
$
(28,192
)
$
(69,529
)
$
(45,369
)
Add back: Stock-based compensation
20,610
18,447
58,652
33,756
Add back: Amortization of
acquisition-related intangibles
1,497
1,455
2,984
2,150
Loss from operations, non-GAAP
$
(581
)
$
(8,290
)
$
(7,893
)
$
(9,463
)
Net loss
$
(20,910
)
$
(28,861
)
$
(67,060
)
$
(47,354
)
Add back: Stock-based compensation
20,610
18,447
58,652
33,756
Add back: Amortization of
acquisition-related intangibles
1,497
1,455
2,984
2,150
Net income (loss), non-GAAP
$
1,197
$
(8,959
)
$
(5,424
)
$
(11,448
)
Net loss per basic and diluted share:
$
(0.39
)
$
(0.55
)
$
(1.25
)
$
(0.90
)
Add back: Stock-based compensation
0.38
0.35
1.09
0.64
Add back: Amortization of
acquisition-related intangibles
0.03
0.03
0.06
0.04
Net income (loss) per basic share,
non-GAAP
$
0.02
$
(0.17
)
$
(0.10
)
$
(0.22
)
Net income (loss) per diluted share,
non-GAAP
$
0.02
$
(0.17
)
$
(0.10
)
$
(0.22
)
Weighted-average common shares outstanding
- basic, non-GAAP
54,009,963
52,850,470
53,850,986
52,724,051
Weighted-average common shares outstanding
- diluted, non-GAAP
55,793,636
52,850,470
53,850,986
52,724,051
TABLE II
WORKIVA INC.
RECONCILIATION OF
NON-GAAP GUIDANCE
(in thousands, except
share and per share data)
Three months ending September
30, 2023
Year ending December 31,
2023
Loss from operations, GAAP range
$
(24,000
)
-
$
(23,000
)
$
(109,000
)
-
$
(107,000
)
Add back: Stock-based compensation
21,500
21,500
100,100
100,100
Add back: Amortization of
acquisition-related intangibles
1,500
1,500
5,900
5,900
Net loss from operations, non-GAAP
range
$
(1,000
)
-
$
—
$
(3,000
)
-
$
(1,000
)
Net loss per share, GAAP range
$
(0.40
)
-
$
(0.38
)
$
(1.88
)
-
$
(1.85
)
Add back: Stock-based compensation
0.40
0.40
1.86
1.86
Add back: Amortization of
acquisition-related intangibles
0.03
0.03
0.11
0.11
Net income per share, non-GAAP range
$
0.03
-
$
0.05
$
0.09
-
$
0.12
Weighted-average common shares outstanding
- basic
54,100,000
54,100,000
54,000,000
54,000,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803293333/en/
Investor Contact: Mike Rost Workiva Inc.
investor@workiva.com Media Contact: Darcie Brossart Workiva
Inc. press@workiva.com
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