- Increased Q1 2023 Subscription & Support Revenue by 21%
over Q1 2022
- Generated Total Q1 2023 Revenue of $150.2 Million, up 16% over
Q1 2022
- Achieved 24% 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 first quarter ended March 31, 2023.
"The Workiva team delivered a solid quarter and continued to
execute at a high level, resulting in subscription revenue growth
of 21%," said Julie Iskow, President & Chief Executive Officer.
"Accelerating subscription growth drove revenue above the high end
of our first quarter guidance and contributed to our beat at the
high end of our operating results guidance by $3.7 million."
"Our focus on multi-solution deals and account expansions led to
the increase in the number of larger subscription contracts. In the
first quarter, contracts valued at over $100K, $150K, and $300K per
year were up 21%, 24%, and 33%, respectively from the first quarter
of 2022," said Jill Klindt, Chief Financial Officer. "Additionally,
our subscription and support revenue retention rate remained
best-in-class at 98% for the first quarter of 2023."
"We continued to see healthy market demand for our platform and
best-of-breed solutions, even in an uncertain macro environment,"
said Iskow. "We believe this is a result of the rapidly evolving
market trend of increased stakeholder scrutiny of both financial
data and non-financial data, which has made our product offerings
more relevant than ever."
First Quarter 2023 Financial
Highlights
- Revenue: Total revenue for the first quarter of 2023
reached $150.2 million, an increase of 16% from $129.7 million in
the first quarter of 2022. Subscription and support revenue
contributed $129.7 million, up 21% versus the first quarter of
2022. Professional services revenue was $20.5 million, a decrease
of 9% compared to the same quarter in the prior year.
- Gross Profit: GAAP gross profit for the first quarter of
2023 was $111.7 million compared with $98.8 million in the same
quarter of 2022. GAAP gross margin was 74.3% versus 76.2% in the
first quarter of 2022. Non-GAAP gross profit for the first quarter
of 2023 was $113.4 million, an increase of 13.3% compared with the
prior year's first quarter, and non-GAAP gross margin was 75.5%
compared to 77.1% in the first quarter of 2022.
- Loss from Operations: GAAP loss from operations for the
first quarter of 2023 was $46.8 million compared with a loss of
$17.2 million in the prior year's first quarter. Non-GAAP loss from
operations was $7.3 million compared with a loss of $1.2 million in
the first quarter of 2022.
- GAAP Net Loss: GAAP net loss for the first quarter of
2023 was $46.2 million compared with a net loss of $18.5 million
for the prior year's first quarter. GAAP net loss per basic and
diluted share was $0.86 compared with a net loss per basic and
diluted share of $0.35 in the first quarter of 2022.
- Non-GAAP Net Loss: Non-GAAP net loss for the first
quarter of 2023 was $6.6 million compared with a loss of $2.5
million in the prior year's first quarter. Non-GAAP net loss per
basic and diluted share was $0.12 compared with a net loss per
basic and diluted share of $0.05 in the first quarter of 2022.
- Liquidity: As of March 31, 2023, Workiva had cash, cash
equivalents, and marketable securities totaling $439.8 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 $15.0 million of finance lease
obligations outstanding as of March 31, 2023.
Key Metrics and Recent Business
Highlights
- Customers: Workiva had 5,754 customers as of March 31,
2023, including 919 ParsePort ESEF customers, a net increase of
1,346 customers from March 31, 2022.
- Revenue Retention Rate: As of March 31, 2023, Workiva's
revenue retention rate (excluding add-on revenue) was 98%, and the
revenue retention rate including add-on revenue was 109%. Add-on
revenue includes changes in both solutions and pricing for existing
customers.
- Large Contracts: As of March 31, 2023, Workiva had 1,363
customers with an annual contract value (“ACV”) of more than
$100,000, up 21% from 1,124 customers at March 31, 2022. Workiva
had 746 customers with an ACV of more than $150,000, up 24% from
603 customers in the first quarter of 2022. Workiva had 247
customers with an ACV of more than $300,000, up 33% from 186
customers in the first quarter of 2022.
Financial Outlook
As of May 2, 2023, Workiva is providing guidance as follows:
Second Quarter 2023 Guidance:
- Total revenue is expected to be in the range of $153.0 million
to $154.0 million.
- GAAP loss from operations is expected to be in the range of
$27.0 million to $26.0 million.
- Non-GAAP loss from operations is expected to be in the range of
$5.0 million to $4.0 million.
- GAAP net loss per basic share is expected to be in the range of
$0.50 to $0.48.
- Non-GAAP net loss per basic share is expected to be in the
range of $0.09 to $0.07.
- Net loss per basic share is based on 53.8 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
$113.0 million to $111.0 million.
- Non-GAAP loss from operations is expected to be in the range of
$7.0 million to $5.0 million.
- GAAP net loss per basic share is expected to be in the range of
$2.09 to $2.05.
- Non-GAAP net loss per basic share is expected to be in the
range of $0.13 to $0.09.
- Net loss per basic 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 first quarter 2023,
in addition to discussing the Company’s outlook for the second
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 May 9, 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 March
31,
2023
2022
(unaudited)
Revenue
Subscription and support
$
129,664
$
107,120
Professional services
20,525
22,554
Total revenue
150,189
129,674
Cost of revenue
Subscription and support (1)
24,133
18,533
Professional services (1)
14,385
12,340
Total cost of revenue
38,518
30,873
Gross profit
111,671
98,801
Operating expenses
Research and development (1)
45,791
35,884
Sales and marketing (1)
70,710
56,100
General and administrative (1)
42,011
23,994
Total operating expenses
158,512
115,978
Loss from operations
(46,841
)
(17,177
)
Interest income
3,717
280
Interest expense
(1,501
)
(1,518
)
Other expense, net
(940
)
(165
)
Loss before provision (benefit) for income
taxes
(45,565
)
(18,580
)
Provision (benefit) for income taxes
585
(87
)
Net loss
$
(46,150
)
$
(18,493
)
Net loss per common share:
Basic and diluted
$
(0.86
)
$
(0.35
)
Weighted-average common shares outstanding
- basic and diluted
53,690,242
52,596,228
(1) Includes stock-based compensation
expense as follows:
Three months ended March
31,
2023
2022
(unaudited)
Cost of revenue
Subscription and support
$
1,072
$
790
Professional services
633
452
Operating expenses
Research and development
4,697
2,725
Sales and marketing
6,958
4,085
General and administrative
24,682
7,257
WORKIVA INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands)
March 31, 2023
December 31, 2022
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
195,485
$
240,197
Marketable securities
244,338
190,595
Accounts receivable, net
77,151
106,316
Deferred costs
39,668
38,350
Other receivables
5,086
6,674
Prepaid expenses and other
23,713
17,957
Total current assets
585,441
600,089
Property and equipment, net
26,049
27,096
Operating lease right-of-use assets
12,714
13,932
Deferred costs, non-current
30,819
33,682
Goodwill
110,997
109,740
Intangible assets, net
27,111
28,234
Other assets
6,943
6,847
Total assets
$
800,074
$
819,620
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable
$
6,394
$
6,174
Accrued expenses and other current
liabilities
79,342
83,999
Deferred revenue
309,781
316,263
Finance lease obligations
511
504
Total current liabilities
396,028
406,940
Convertible senior notes, non-current
340,582
340,257
Deferred revenue, non-current
35,601
38,237
Other long-term liabilities
1,533
1,518
Operating lease liabilities,
non-current
10,948
12,102
Finance lease obligations, non-current
14,452
14,583
Total liabilities
799,144
813,637
Stockholders’ equity
Common stock
53
53
Additional paid-in-capital
575,549
537,732
Accumulated deficit
(571,266
)
(525,116
)
Accumulated other comprehensive loss
(3,406
)
(6,686
)
Total stockholders’ equity
930
5,983
Total liabilities and stockholders’
equity
$
800,074
$
819,620
WORKIVA INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
Three months ended March
31,
2023
2022
(unaudited)
Cash flows from operating
activities
Net loss
$
(46,150
)
$
(18,493
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
2,800
1,959
Stock-based compensation expense
38,042
15,309
Provision for (recovery of) doubtful
accounts
106
(29
)
Realized loss on sale of
available-for-sale securities, net
561
—
(Accretion) amortization of premiums and
discounts on marketable securities, net
(1,028
)
660
Amortization of issuance costs and debt
discount
325
324
Deferred income tax
(10
)
(211
)
Changes in assets and liabilities:
Accounts receivable
29,363
6,581
Deferred costs
1,770
1,444
Operating lease right-of-use asset
1,295
1,301
Other receivables
95
180
Prepaid expenses
(5,732
)
(1,132
)
Other assets
(74
)
23
Accounts payable
207
4,364
Deferred revenue
(9,955
)
606
Operating lease liability
(1,172
)
(1,342
)
Accrued expenses and other liabilities
(4,880
)
(12,481
)
Net cash provided by (used in) operating
activities
5,563
(937
)
Cash flows from investing
activities
Purchase of property and equipment
(198
)
(532
)
Purchase of marketable securities
(125,815
)
(34,148
)
Sale of marketable securities
43,713
14,981
Maturities of marketable securities
31,905
26,250
Purchase of intangible assets
(79
)
(40
)
Net cash (used in) provided by investing
activities
(50,474
)
6,511
Cash flows from financing
activities
Proceeds from option exercises
1,457
825
Taxes paid related to net share
settlements of stock-based compensation awards
(7,228
)
(8,570
)
Proceeds from shares issued in connection
with employee stock purchase plan
5,546
5,218
Principal payments on finance lease
obligations
(124
)
(442
)
Net cash used in financing activities
(349
)
(2,969
)
Effect of foreign exchange rates on
cash
548
85
Net (decrease) increase in cash and cash
equivalents
(44,712
)
2,690
Cash and cash equivalents at beginning of
period
240,197
300,386
Cash and cash equivalents at end of
period
$
195,485
$
303,076
TABLE I
WORKIVA INC.
RECONCILIATION OF NON-GAAP
INFORMATION
(in thousands, except share
and per share)
Three months ended March
31,
2023
2022
Gross profit, subscription and support
$
105,531
$
88,587
Add back: Stock-based compensation
1,072
790
Gross profit, subscription and support,
non-GAAP
$
106,603
$
89,377
Gross profit, professional services
$
6,140
$
10,214
Add back: Stock-based compensation
633
452
Gross profit, professional services,
non-GAAP
$
6,773
$
10,666
Gross profit
$
111,671
$
98,801
Add back: Stock-based compensation
1,705
1,242
Gross profit, non-GAAP
$
113,376
$
100,043
Cost of revenue, subscription and
support
$
24,133
$
18,533
Less: Stock-based compensation
1,072
790
Cost of revenue, subscription and support,
non-GAAP
$
23,061
$
17,743
Cost of revenue, professional services
$
14,385
$
12,340
Less: Stock-based compensation
633
452
Cost of revenue, professional services,
non-GAAP
$
13,752
$
11,888
Research and development
$
45,791
$
35,884
Less: Stock-based compensation
4,697
2,725
Less: Amortization of acquisition-related
intangibles
886
495
Research and development, non-GAAP
$
40,208
$
32,664
Sales and marketing
$
70,710
$
56,100
Less: Stock-based compensation
6,958
4,085
Less: Amortization of acquisition-related
intangibles
601
200
Sales and marketing, non-GAAP
$
63,151
$
51,815
General and administrative
$
42,011
$
23,994
Less: Stock-based compensation
24,682
7,257
General and administrative, non-GAAP
$
17,329
$
16,737
Loss from operations
$
(46,841
)
$
(17,177
)
Add back: Stock-based compensation
38,042
15,309
Add back: Amortization of
acquisition-related intangibles
1,487
695
Loss from operations, non-GAAP
$
(7,312
)
$
(1,173
)
Net loss
$
(46,150
)
$
(18,493
)
Add back: Stock-based compensation
38,042
15,309
Add back: Amortization of
acquisition-related intangibles
1,487
695
Net loss, non-GAAP
$
(6,621
)
$
(2,489
)
Net loss per basic and diluted share:
$
(0.86
)
$
(0.35
)
Add back: Stock-based compensation
0.71
0.29
Add back: Amortization of
acquisition-related intangibles
0.03
0.01
Net loss per basic share, non-GAAP
$
(0.12
)
$
(0.05
)
Net loss per diluted share, non-GAAP
$
(0.12
)
$
(0.05
)
Weighted-average common shares outstanding
- basic, non-GAAP
53,690,242
52,596,228
Weighted-average common shares outstanding
- diluted, non-GAAP
53,690,242
52,596,228
TABLE II
WORKIVA INC.
RECONCILIATION OF NON-GAAP
GUIDANCE
(in thousands, except share
and per share data)
Three months ending June 30,
2023
Year ending December 31,
2023
Loss from operations, GAAP range
$
(27,000
)
-
$
(26,000
)
$
(113,000
)
-
$
(111,000
)
Add back: Stock-based compensation
20,500
20,500
100,200
100,200
Add back: Amortization of
acquisition-related intangibles
1,500
1,500
5,800
5,800
Net loss from operations, non-GAAP
range
$
(5,000
)
-
$
(4,000
)
$
(7,000
)
-
$
(5,000
)
Net loss per share, GAAP range
$
(0.50
)
-
$
(0.48
)
$
(2.09
)
-
$
(2.05
)
Add back: Stock-based compensation
0.38
0.38
1.85
1.85
Add back: Amortization of
acquisition-related intangibles
0.03
0.03
0.11
0.11
Net loss per share, non-GAAP range
$
(0.09
)
-
$
(0.07
)
$
(0.13
)
-
$
(0.09
)
Weighted-average common shares outstanding
- basic
53,800,000
53,800,000
54,000,000
54,000,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230502005478/en/
Investor Contact: Mike Rost Workiva Inc.
investor@workiva.com
Media Contact: Darcie Brossart Workiva Inc.
press@workiva.com
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