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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Workiva Inc | NYSE:WK | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 72.45 | 0 | 09:09:39 |
Workiva Inc. (NYSE:WK), the company that simplifies complex work, today announced financial results for its third quarter ended September 30, 2021.
"Workiva delivered another strong quarter, beating third quarter guidance for revenue and operating results," said Marty Vanderploeg, Chief Executive Officer. "We achieved 30.4% organic growth in subscription & support revenue, and 27.9% in total revenue."
"We continue to build on our market leadership and the increased demand for financial and ESG reporting solutions that drive digital transformations," Vanderploeg added.
"Due to our continued outperformance, we are raising our full-year guidance," said Jill Klindt, Chief Financial Officer. "We now expect total revenue to range from $439 million to $440 million, and non-GAAP operating income to range from $15 million to $16 million."
Third Quarter 2021 Financial Highlights
Key Metrics and Recent Business Highlights
Financial Outlook
As of November 3, 2021, Workiva is providing guidance as follows:
Fourth Quarter 2021 Guidance:
Full Year 2021 Guidance:
Workiva has factored into its guidance the expected impacts of COVID-19 on its business and results of operations based on currently available information. Significant variation from these assumptions could cause the company to change its guidance, and it undertakes no obligation to update its assumptions, expectations or guidance. These statements are forward-looking, and actual results may differ materially, as further discussed below under the heading "Safe Harbor Statement".
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 third quarter, in addition to discussing the Company’s outlook for the fourth quarter and full year 2021. To access this call, dial 833-968-1977 (U.S. domestic) or 647-689-6649 (international). The conference ID is 8009407. 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 November 10, 2021, at 800-585-8367 (U.S. domestic) or 416-621-4642 (international). The replay pass code is 8009407. 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) simplifies complex work for thousands of organizations worldwide. Customers trust Workiva’s open, intelligent and intuitive platform to connect data, documents and teams. The results: more efficiency, greater transparency and less risk. Learn more at 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
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 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, amortization expense for acquisition-related intangible assets, and non-cash interest expense related to our convertible senior notes 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. 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 September 30,
Nine months ended September 30,
2021
2020
2021
2020
(unaudited)
Revenue
Subscription and support
$
98,912
$
75,850
$
275,053
$
214,907
Professional services
13,781
12,249
47,449
42,853
Total revenue
112,693
88,099
322,502
257,760
Cost of revenue
Subscription and support (1)
15,606
12,013
42,906
36,264
Professional services (1)
10,799
9,873
31,766
30,262
Total cost of revenue
26,405
21,886
74,672
66,526
Gross profit
86,288
66,213
247,830
191,234
Operating expenses
Research and development (1)
29,841
23,956
84,305
70,458
Sales and marketing (1)
46,026
35,487
128,586
106,874
General and administrative (1)
18,390
13,642
52,795
46,564
Total operating expenses
94,257
73,085
265,686
223,896
Loss from operations
(7,969
)
(6,872
)
(17,856
)
(32,662
)
Interest income
219
471
834
2,832
Interest expense
(3,508
)
(3,500
)
(10,495
)
(10,467
)
Other income (expense), net
3,805
(387
)
3,265
263
Loss before (benefit) provision for income taxes
(7,453
)
(10,288
)
(24,252
)
(40,034
)
(Benefit) provision for income taxes
(885
)
67
(846
)
351
Net loss
$
(6,568
)
$
(10,355
)
$
(23,406
)
$
(40,385
)
Net loss per common share:
Basic and diluted
$
(0.13
)
$
(0.21
)
$
(0.46
)
$
(0.84
)
Weighted-average common shares outstanding - basic and diluted
51,441,688
48,840,131
50,921,612
48,188,183
(1) Includes stock-based compensation expense as follows:
Three months ended September 30,
Nine months ended September 30,
2021
2020
2021
2020
(unaudited)
Cost of revenue
Subscription and support
$
731
$
426
$
1,824
$
1,293
Professional services
407
272
1,183
1,062
Operating expenses
Research and development
2,347
2,167
7,195
5,790
Sales and marketing
4,095
2,687
10,481
8,367
General and administrative
5,107
5,049
14,679
18,919
WORKIVA INC. CONSOLIDATED BALANCE SHEETS (in thousands)
September 30, 2021
December 31, 2020
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
291,125
$
322,831
Marketable securities
231,224
207,207
Accounts receivable, net
64,099
68,922
Deferred costs
28,021
21,923
Other receivables
3,354
3,155
Prepaid expenses and other
13,092
9,047
Total current assets
630,915
633,085
Property and equipment, net
28,490
29,365
Operating lease right-of-use assets
14,536
15,844
Deferred costs, non-current
29,234
23,421
Goodwill
34,279
—
Intangible assets, net
8,193
1,583
Other assets
4,568
3,708
Total assets
$
750,215
$
707,006
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable
$
4,018
$
2,843
Accrued expenses and other current liabilities
78,799
68,256
Deferred revenue
235,754
208,990
Convertible senior notes, current
296,341
—
Finance lease obligations
1,776
1,705
Total current liabilities
616,688
281,794
Convertible senior notes, net
—
289,490
Deferred revenue, non-current
31,463
35,894
Other long-term liabilities
1,335
1,680
Operating lease liabilities, non-current
15,231
17,209
Finance lease obligations, non-current
15,320
16,662
Total liabilities
680,037
642,729
Stockholders’ equity
Common stock
51
49
Additional paid-in-capital
508,025
478,698
Accumulated deficit
(438,106
)
(414,700
)
Accumulated other comprehensive income
208
230
Total stockholders’ equity
70,178
64,277
Total liabilities and stockholders’ equity
$
750,215
$
707,006
WORKIVA INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Three months ended September 30,
Nine months ended September 30,
2021
2020
2021
2020
(unaudited)
Cash flows from operating activities
Net loss
$
(6,568
)
$
(10,355
)
$
(23,406
)
$
(40,385
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
1,429
1,080
3,580
3,195
Stock-based compensation expense
12,687
10,601
35,362
35,431
Recovery of doubtful accounts
(61
)
(550
)
(162
)
(191
)
Amortization of premiums and discounts on marketable securities, net
811
106
2,199
319
Gain on settlement of equity securities
(3,698
)
—
(3,698
)
—
Amortization of debt discount and issuance costs
2,301
2,231
6,851
6,641
Deferred income tax
(930
)
63
(914
)
(68
)
Changes in assets and liabilities:
Accounts receivable
2,074
(13,307
)
5,233
4,805
Deferred costs
(2,027
)
(4,818
)
(12,104
)
(6,381
)
Operating lease right-of-use asset
985
1,019
2,906
2,992
Other receivables
(628
)
224
(204
)
29
Prepaid expenses
(1,024
)
(211
)
(4,049
)
(3,056
)
Other assets
(514
)
83
(1,197
)
(600
)
Accounts payable
478
(181
)
1,214
(3,255
)
Deferred revenue
9,949
16,182
22,028
11,314
Operating lease liability
(1,112
)
(1,115
)
(3,390
)
(3,438
)
Accrued expenses and other liabilities
2,161
6,822
10,327
12,538
Net cash provided by operating activities
16,313
7,874
40,576
19,890
Cash flows from investing activities
Purchase of property and equipment
(771
)
(379
)
(2,431
)
(1,763
)
Purchase of marketable securities
(48,213
)
(7,980
)
(143,085
)
(45,269
)
Sale of marketable securities
—
—
250
11,423
Maturities of marketable securities
45,579
16,300
116,371
42,337
Business combinations, net of cash acquired
(35,067
)
—
(35,067
)
—
Purchase of intangible assets
(64
)
(102
)
(187
)
(253
)
Other investments
—
—
(750
)
—
Net cash (used in) provided by investing activities
(38,536
)
7,839
(64,899
)
6,475
Cash flows from financing activities
Proceeds from option exercises
3,174
4,795
8,792
14,253
Taxes paid related to net share settlements of stock-based compensation awards
(15,809
)
—
(23,686
)
(2,111
)
Proceeds from shares issued in connection with employee stock purchase plan
4,624
3,567
8,861
7,227
Principal payments on finance lease obligations
(430
)
(410
)
(1,271
)
(1,212
)
Net cash (used in) provided by financing activities
(8,441
)
7,952
(7,304
)
18,157
Effect of foreign exchange rates on cash
(405
)
346
(79
)
(132
)
Net (decrease) increase in cash and cash equivalents
(31,069
)
24,011
(31,706
)
44,390
Cash and cash equivalents at beginning of period
322,194
402,121
322,831
381,742
Cash and cash equivalents at end of period
$
291,125
$
426,132
$
291,125
$
426,132
TABLE I WORKIVA INC. RECONCILIATION OF NON-GAAP INFORMATION (in thousands, except share and per share)
Three months ended September 30,
Nine months ended September 30,
2021
2020
2021
2020
Gross profit, subscription and support
$
83,306
$
63,837
$
232,147
$
178,643
Add back: Stock-based compensation
731
426
1,824
1,293
Gross profit, subscription and support, non-GAAP
$
84,037
$
64,263
$
233,971
$
179,936
As a percentage of subscription and support revenue, non-GAAP
85.0
%
84.7
%
85.1
%
83.7
%
Gross profit, professional services
$
2,982
$
2,376
$
15,683
$
12,591
Add back: Stock-based compensation
407
272
1,183
1,062
Gross profit, professional services, non-GAAP
$
3,389
$
2,648
$
16,866
$
13,653
As a percentage of professional services revenue, non-GAAP
24.6
%
21.6
%
35.5
%
31.9
%
Gross profit
$
86,288
$
66,213
$
247,830
$
191,234
Add back: Stock-based compensation
1,138
698
3,007
2,355
Gross profit, non-GAAP
$
87,426
$
66,911
$
250,837
$
193,589
As percentage of revenue, non-GAAP
77.6
%
75.9
%
77.8
%
75.1
%
Cost of revenue, subscription and support
$
15,606
$
12,013
$
42,906
$
36,264
Less: Stock-based compensation
731
426
1,824
1,293
Cost of revenue, subscription and support, non-GAAP
$
14,875
$
11,587
$
41,082
$
34,971
As percentage of revenue, non-GAAP
13.2
%
13.2
%
12.7
%
13.6
%
Cost of revenue, professional services
$
10,799
$
9,873
$
31,766
$
30,262
Less: Stock-based compensation
407
272
1,183
1,062
Cost of revenue, professional services, non-GAAP
$
10,392
$
9,601
$
30,583
$
29,200
As percentage of revenue, non-GAAP
9.2
%
10.9
%
9.5
%
11.3
%
Research and development
$
29,841
$
23,956
$
84,305
$
70,458
Less: Stock-based compensation
2,347
2,167
7,195
5,790
Less: Amortization of acquisition-related intangibles
275
—
275
—
Research and development, non-GAAP
$
27,219
$
21,789
$
76,835
$
64,668
As percentage of revenue, non-GAAP
24.2
%
24.7
%
23.8
%
25.1
%
Sales and marketing
$
46,026
$
35,487
$
128,586
$
106,874
Less: Stock-based compensation
4,095
2,687
10,481
8,367
Less: Amortization of acquisition-related intangibles
13
—
13
—
Sales and marketing, non-GAAP
$
41,918
$
32,800
$
118,092
$
98,507
As percentage of revenue, non-GAAP
37.2
%
37.2
%
36.6
%
38.2
%
General and administrative
$
18,390
$
13,642
$
52,795
$
46,564
Less: Stock-based compensation
5,107
5,049
14,679
18,919
General and administrative, non-GAAP
$
13,283
$
8,593
$
38,116
$
27,645
As percentage of revenue, non-GAAP
11.8
%
9.8
%
11.8
%
10.7
%
Loss from operations
$
(7,969
)
$
(6,872
)
$
(17,856
)
$
(32,662
)
Add back: Stock-based compensation
12,687
10,601
35,362
35,431
Add back: Amortization of acquisition-related intangibles
288
—
288
—
Income from operations, non-GAAP
$
5,006
$
3,729
$
17,794
$
2,769
As percentage of revenue, non-GAAP
4.4
%
4.2
%
5.5
%
1.1
%
Net loss
$
(6,568
)
$
(10,355
)
$
(23,406
)
$
(40,385
)
Add back: Stock-based compensation
12,687
10,601
35,362
35,431
Add back: Amortization of acquisition-related intangibles
288
—
288
—
Add back: Non-cash interest expense related to convertible senior notes
2,301
2,231
6,851
6,641
Net income, non-GAAP
$
8,708
$
2,477
$
19,095
$
1,687
As percentage of revenue, non-GAAP
7.7
%
2.8
%
5.9
%
0.7
%
Net loss per basic and diluted share:
$
(0.13
)
$
(0.21
)
$
(0.46
)
$
(0.84
)
Add back: Stock-based compensation
0.25
0.21
0.69
0.74
Add back: Amortization of acquisition-related intangibles
0.01
—
0.01
—
Add back: Non-cash interest expense related to convertible senior notes
0.04
0.05
0.13
0.14
Net income per basic share, non-GAAP
$
0.17
$
0.05
$
0.37
$
0.04
Net income per diluted share, non-GAAP
$
0.15
$
0.05
$
0.34
$
0.03
Weighted-average common shares outstanding - basic, non-GAAP
51,441,688
48,840,131
50,921,612
48,188,183
Weighted-average common shares outstanding - diluted, non-GAAP
56,563,730
53,209,214
55,687,528
52,417,046
TABLE II WORKIVA INC. RECONCILIATION OF NON-GAAP GUIDANCE (in thousands, except share and per share data)
Three months ending December 31, 2021
Year ending December 31, 2021
Loss from operations, GAAP range
$
(15,611
)
-
$
(14,611
)
$
(33,467
)
-
$
(32,467
)
Add back: Stock-based compensation
12,384
12,384
47,746
47,746
Add back: Amortization of acquisition-related intangibles
433
433
721
721
Net (loss) income from operations, non-GAAP range
$
(2,794
)
-
$
(1,794
)
$
15,000
-
$
16,000
Net loss per share, GAAP range
$
(0.37
)
-
$
(0.35
)
$
(0.83
)
-
$
(0.81
)
Add back: Stock-based compensation
0.24
0.24
0.93
0.93
Add back: Amortization of acquisition-related intangibles
0.01
0.01
0.01
0.01
Add back: Non-cash interest expense related to convertible senior notes
0.05
0.05
0.19
0.19
Net (loss) income per share, non-GAAP range
$
(0.07
)
-
$
(0.05
)
$
0.30
-
$
0.32
Weighted-average common shares outstanding - basic
51,700,000
51,700,000
51,100,000
51,100,000
View source version on businesswire.com: https://www.businesswire.com/news/home/20211103005827/en/
Investor Contact: Adam Terese Workiva Inc. investor@workiva.com (515) 663-4493
Media Contact: Kevin McCarthy Workiva Inc. press@workiva.com (515) 663-4471
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