- Increased Q2 2024 Subscription & Support Revenue by 18%
over Q2 2023
- Total revenue of $178 million in Q2 2024, representing 15%
year-over-year growth
- Achieved 31% YOY Growth of Customers with Annual Contract Value
Over $300K
- Announced inaugural $100 million share repurchase program
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, 2024.
"In Q2, we saw a healthy improvement in the buying environment
marked by broad-based demand across our entire solution portfolio,"
said Julie Iskow, President & Chief Executive Officer. "This
demand was driven by a number of multi-solution and large contract
platform deals. Whether from new logos or account expansions, we’re
encouraged by our win rates, our deal sizes, and our platform
wins."
"Q2 was a good quarter with 18% growth in subscription revenue
and a 150 basis point year over year improvement in GAAP operating
margin, which equated to a 240 basis point improvement on a
Non-GAAP basis," said Jill Klindt, Chief Financial Officer. "Our
strong first half performance along with improved sales momentum
gives us the confidence to raise our full year total revenue
guidance range to $727 million to $729 million."
Second Quarter 2024 Financial
Results
- Revenue: Total revenue for the second quarter of 2024
reached $178 million, an increase of 15% from $155 million in the
second quarter of 2023. Subscription and support revenue
contributed $161 million, up 18% versus the second quarter of 2023.
Professional services revenue was $17 million, down 8% from the
second quarter of 2023.
- Gross Profit: GAAP gross profit for the second quarter
of 2024 was $136 million compared with $116 million in the same
quarter of 2023. GAAP gross margin was 76.8% versus 74.5% in the
second quarter of 2023. Non-GAAP gross profit for the second
quarter of 2024 was $139 million, an increase of 18% compared with
the prior year's second quarter, and non-GAAP gross margin was
78.3% compared to 75.9% in the second quarter of 2023.
- Results from Operations: GAAP loss from operations for
the second quarter of 2024 was $23 million, relatively flat
compared to the same quarter in the prior year. Non-GAAP income
from operations was $4 million compared with a non-GAAP loss from
operations of $1 million in the second quarter of 2023.
- GAAP Net Loss: GAAP net loss for the second quarter of
2024 was $18 million compared with a net loss of $21 million for
the prior year's second quarter. GAAP net loss per basic and
diluted share was $0.32 compared with a net loss per basic and
diluted share of $0.39 in the second quarter of 2023.
- Non-GAAP Net Income: Non-GAAP net income for the second
quarter of 2024 was $9 million compared with net income of $1
million in the prior year's second quarter. Non-GAAP net income per
basic share and diluted share was $0.17 and $0.16, respectively,
compared with net income per basic share and diluted share of $0.02
in the second quarter of 2023.
- Liquidity: As of June 30, 2024, Workiva had cash, cash
equivalents, and marketable securities totaling $741 million,
compared with $814 million as of December 31, 2023. Workiva had $71
million aggregate principal amount of 1.125% convertible senior
notes due in 2026, $702 million aggregate principal amount of
1.250% convertible senior notes due in 2028 and $14 million of
finance lease obligations outstanding as of June 30, 2024.
Key Metrics and Recent Business
Highlights
- Workiva Announces Share Repurchase Program: Workiva
announced that its Board of Directors has authorized the repurchase
of up to $100 million of its Class A common stock.
- Customers: Workiva had 6,147 customers as of June 30,
2024, a net increase of 287 customers from June 30, 2023.
- Revenue Retention Rate: As of June 30, 2024, 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 June 30, 2024, Workiva had 1,768
customers with an annual contract value (“ACV”) of more than
$100,000, up 20% from 1,470 customers at June 30, 2023. Workiva had
1,015 customers with an ACV of more than $150,000, up 23% from 823
customers in the second quarter of 2023. Workiva had 356 customers
with an ACV of more than $300,000, up 31% from 272 customers in the
second quarter of 2023.
Financial Outlook
As of August 1, 2024, Workiva is providing guidance as
follows:
Third Quarter 2024 Guidance:
- Total revenue is expected to be in the range of $182 million to
$183 million.
- GAAP loss from operations is expected to be in the range of $22
million to $21 million.
- Non-GAAP income from operations is expected to be in the range
of $6.5 million to $7.5 million.
- GAAP net loss per basic share is expected to be in the range of
$0.29 to $0.27.
- Non-GAAP net income per basic share is expected to be in the
range of $0.22 to $0.24.
- Net income (loss) per basic share is based on 55.4 million
weighted-average shares outstanding.
Full Year 2024 Guidance:
- Total revenue is expected to be in the range of $727 million to
$729 million.
- GAAP loss from operations is expected to be in the range of $81
million to $79 million.
- Non-GAAP income from operations is expected to be in the range
of $29 million to $31 million.
- GAAP net loss per basic share is expected to be in the range of
$1.05 to $1.01.
- Non-GAAP net income per basic share is expected to be in the
range of $0.94 to $0.98.
- Net income (loss) per basic share is based on 55.3 million
weighted-average shares outstanding.
Share Repurchase Authorization
Workiva's Board of Directors has authorized a stock repurchase
program of up to $100 million of Workiva's outstanding Class A
common stock. The program has no minimum purchase commitment and no
mandated end date. The repurchase is expected to be executed,
subject to general business and market conditions and other
investment opportunities, through open market purchases, block
trades, and/or privately negotiated trades pursuant to 10b5-1 plans
and other transactions in accordance with applicable securities
laws. The timing and the amount of any repurchased common stock
will be determined by Workiva's management based on its evaluation
of market conditions and other factors. The repurchase program does
not obligate Workiva to acquire any particular amount of Class A
common stock and the repurchase program may be suspended or
discontinued at any time at Workiva's discretion without prior
notice. When shares are repurchased, they will be immediately
retired by the Company.
Quarterly Conference
Call
Workiva will host a webcast today at 5:00 p.m. ET to review the
Company’s financial results for the second quarter 2024, in
addition to discussing the Company’s outlook for the third quarter
and full year 2024, and an update to the Company's long term
financial model. The webcast will be available on
https://investor.workiva.com/news-events/events. An archived
webcast 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.
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.
Forward-Looking
Statements
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,
2024
2023
2024
2023
(unaudited)
Revenue
Subscription and support
$
160,735
$
136,772
$
315,714
$
266,436
Professional services
16,768
18,250
37,456
38,775
Total revenue
177,503
155,022
353,170
305,211
Cost of revenue
Subscription and support (1)
27,945
25,083
55,872
49,216
Professional services (1)
13,227
14,421
26,823
28,806
Total cost of revenue
41,172
39,504
82,695
78,022
Gross profit
136,331
115,518
270,475
227,189
Operating expenses
Research and development (1)
48,408
42,697
93,903
88,488
Sales and marketing (1)
84,697
71,882
167,330
142,592
General and administrative (1)
26,375
23,627
50,674
65,638
Total operating expenses
159,480
138,206
311,907
296,718
Loss from operations
(23,149
)
(22,688
)
(41,432
)
(69,529
)
Interest income
10,336
4,535
20,791
8,252
Interest expense
(3,237
)
(1,499
)
(6,469
)
(3,000
)
Other (expense) and income, net
(45
)
(439
)
41
(1,379
)
Loss before provision for income taxes
(16,095
)
(20,091
)
(27,069
)
(65,656
)
Provision for income taxes
1,453
819
2,166
1,404
Net loss
$
(17,548
)
$
(20,910
)
$
(29,235
)
$
(67,060
)
Net loss per common share:
Basic and diluted
$
(0.32
)
$
(0.39
)
$
(0.53
)
$
(1.25
)
Weighted-average common shares outstanding
- basic and diluted
55,177,162
54,009,963
55,046,507
53,850,986
(1) Includes stock-based compensation expense as follows:
Three months ended June
30,
Six months ended June
30,
2024
2023
2024
2023
(unaudited)
Cost of revenue
Subscription and support
$
1,943
$
1,413
$
3,544
$
2,485
Professional services
763
667
1,490
1,300
Operating expenses
Research and development
5,152
4,825
9,793
9,522
Sales and marketing
8,490
6,703
16,528
13,661
General and administrative
9,054
7,002
17,054
31,684
WORKIVA INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands)
June 30, 2024
December 31, 2023
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
267,897
$
256,100
Marketable securities
472,956
557,622
Accounts receivable, net
121,359
125,193
Deferred costs
41,994
39,023
Other receivables
6,877
7,367
Prepaid expenses and other
21,307
23,631
Total current assets
932,390
1,008,936
Property and equipment, net
22,268
24,282
Operating lease right-of-use assets
10,535
12,642
Deferred costs, non-current
40,169
33,346
Goodwill
199,202
112,097
Intangible assets, net
31,533
22,892
Other assets
6,592
4,665
Total assets
$
1,242,689
$
1,218,860
Liabilities and Stockholders’
Deficit
Current liabilities
Accounts payable
$
8,229
$
5,204
Accrued expenses and other current
liabilities
113,339
97,921
Deferred revenue
384,105
380,843
Finance lease obligations
547
532
Total current liabilities
506,220
484,500
Convertible senior notes, non-current
763,672
762,455
Deferred revenue, non-current
27,694
36,177
Other long-term liabilities
221
178
Operating lease liabilities,
non-current
8,856
10,890
Finance lease obligations, non-current
13,773
14,050
Total liabilities
1,320,436
1,308,250
Stockholders’ deficit
Common stock
55
54
Additional paid-in-capital
608,804
562,942
Accumulated deficit
(681,876
)
(652,641
)
Accumulated other comprehensive (loss)
income
(4,730
)
255
Total stockholders’ deficit
(77,747
)
(89,390
)
Total liabilities and stockholders’
deficit
$
1,242,689
$
1,218,860
WORKIVA INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
Three months ended June
30,
Six months ended June
30,
2024
2023
2024
2023
(unaudited)
Cash flows from operating
activities
Net loss
$
(17,548
)
$
(20,910
)
$
(29,235
)
$
(67,060
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization
2,564
2,867
5,086
5,667
Stock-based compensation expense
25,402
20,610
48,409
58,652
Provision for (recovery of) doubtful
accounts
20
(57
)
(103
)
49
Realized loss on sale of
available-for-sale securities, net
—
147
—
708
Amortization of premiums and discounts on
marketable securities, net
(3,156
)
(1,572
)
(6,905
)
(2,600
)
Amortization of issuance costs and debt
discount
609
325
1,217
650
Deferred income tax
4
7
(291
)
(3
)
Changes in assets and liabilities:
Accounts receivable
(33,267
)
(6,886
)
3,680
22,477
Deferred costs
(11,599
)
1,362
(10,194
)
3,132
Operating lease right-of-use asset
1,172
1,268
2,598
2,563
Other receivables
4,347
(381
)
4,541
(286
)
Prepaid expenses
4,693
(1,705
)
2,420
(7,437
)
Other assets
(565
)
510
(1,655
)
436
Accounts payable
(1,884
)
(1,088
)
2,842
(881
)
Deferred revenue
13,079
21,060
(4,447
)
11,105
Operating lease liability
(966
)
(1,207
)
(1,953
)
(2,379
)
Accrued expenses and other liabilities
17,081
11,629
8,820
6,749
Net cash (used in) provided by operating
activities
(14
)
25,979
24,830
31,542
Cash flows from investing
activities
Purchase of property and equipment
(108
)
(639
)
(311
)
(837
)
Purchase of marketable securities
(34,986
)
(51,204
)
(151,553
)
(177,019
)
Sale of marketable securities
—
21,339
4,609
65,052
Maturities of marketable securities
107,100
8,000
236,740
39,905
Acquisitions, net of cash acquired
(98,280
)
—
(98,280
)
—
Purchase of intangible assets
(41
)
(40
)
(72
)
(119
)
Net cash used in investing activities
(26,315
)
(22,544
)
(8,867
)
(73,018
)
Cash flows from financing
activities
Proceeds from option exercises
290
747
592
2,204
Taxes paid related to net share
settlements of stock-based compensation awards
(1,640
)
(1,212
)
(10,251
)
(8,440
)
Proceeds from shares issued in connection
with employee stock purchase plan
—
—
7,113
5,546
Principal payments on finance lease
obligations
(132
)
(125
)
(261
)
(249
)
Net cash used in financing activities
(1,482
)
(590
)
(2,807
)
(939
)
Effect of foreign exchange rates on
cash
(358
)
609
(1,465
)
1,157
Net (decrease) increase in cash and cash
equivalents
(28,169
)
3,454
11,691
(41,258
)
Cash, cash equivalents and restricted cash
at beginning of period
296,581
195,485
256,721
240,197
Cash, cash equivalents and restricted cash
at end of period
$
268,412
$
198,939
$
268,412
$
198,939
Three months ended June
30,
Six months ended June
30,
2024
2023
2024
2023
Reconciliation of cash, cash
equivalents, and restricted cash to the consolidated balance
sheets
Cash and cash equivalents at end of
period
$
267,897
$
198,939
$
267,897
$
198,939
Restricted cash included within prepaid
expenses and other at end of period
515
—
515
—
Total cash, cash equivalents, and
restricted cash at end of period shown in the consolidated
statements of cash flows
$
268,412
$
198,939
$
268,412
$
198,939
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,
2024
2023
2024
2023
Gross profit, subscription and support
$
132,790
$
111,689
$
259,842
$
217,220
Add back: Stock-based compensation
1,943
1,413
3,544
2,485
Gross profit, subscription and support,
non-GAAP
$
134,733
$
113,102
$
263,386
$
219,705
Gross profit, professional services
$
3,541
$
3,829
$
10,633
$
9,969
Add back: Stock-based compensation
763
667
1,490
1,300
Gross profit, professional services,
non-GAAP
$
4,304
$
4,496
$
12,123
$
11,269
Gross profit
$
136,331
$
115,518
$
270,475
$
227,189
Add back: Stock-based compensation
2,706
2,080
5,034
3,785
Gross profit, non-GAAP
$
139,037
$
117,598
$
275,509
$
230,974
Cost of revenue, subscription and
support
$
27,945
$
25,083
$
55,872
$
49,216
Less: Stock-based compensation
1,943
1,413
3,544
2,485
Cost of revenue, subscription and support,
non-GAAP
$
26,002
$
23,670
$
52,328
$
46,731
Cost of revenue, professional services
$
13,227
$
14,421
$
26,823
$
28,806
Less: Stock-based compensation
763
667
1,490
1,300
Cost of revenue, professional services,
non-GAAP
$
12,464
$
13,754
$
25,333
$
27,506
Research and development
$
48,408
$
42,697
$
93,903
$
88,488
Less: Stock-based compensation
5,152
4,825
9,793
9,522
Less: Amortization of acquisition-related
intangibles
962
891
1,852
1,777
Research and development, non-GAAP
$
42,294
$
36,981
$
82,258
$
77,189
Sales and marketing
$
84,697
$
71,882
$
167,330
$
142,592
Less: Stock-based compensation
8,490
6,703
16,528
13,661
Less: Amortization of acquisition-related
intangibles
413
606
825
1,207
Sales and marketing, non-GAAP
$
75,794
$
64,573
$
149,977
$
127,724
General and administrative
$
26,375
$
23,627
$
50,674
$
65,638
Less: Stock-based compensation
9,054
7,002
17,054
31,684
General and administrative, non-GAAP
$
17,321
$
16,625
$
33,620
$
33,954
Loss from operations
$
(23,149
)
$
(22,688
)
$
(41,432
)
$
(69,529
)
Add back: Stock-based compensation
25,402
20,610
48,409
58,652
Add back: Amortization of
acquisition-related intangibles
1,375
1,497
2,677
2,984
Income (loss) from operations,
non-GAAP
$
3,628
$
(581
)
$
9,654
$
(7,893
)
Net loss
$
(17,548
)
$
(20,910
)
$
(29,235
)
$
(67,060
)
Add back: Stock-based compensation
25,402
20,610
48,409
58,652
Add back: Amortization of
acquisition-related intangibles
1,375
1,497
2,677
2,984
Net income (loss), non-GAAP
$
9,229
$
1,197
$
21,851
$
(5,424
)
Net loss per basic and diluted share:
$
(0.32
)
$
(0.39
)
$
(0.53
)
$
(1.25
)
Add back: Stock-based compensation
0.47
0.38
0.88
1.09
Add back: Amortization of
acquisition-related intangibles
0.02
0.03
0.05
0.06
Net income (loss) per basic share,
non-GAAP
$
0.17
$
0.02
$
0.40
$
(0.10
)
Net income (loss) per diluted share,
non-GAAP
$
0.16
$
0.02
$
0.38
$
(0.10
)
Weighted-average common shares outstanding
- basic, non-GAAP
55,177,162
54,009,963
55,046,507
53,850,986
Weighted-average common shares outstanding
- diluted, non-GAAP
56,418,031
55,793,636
57,260,662
53,850,986
TABLE II
WORKIVA INC.
RECONCILIATION OF NON-GAAP
GUIDANCE
(in thousands, except share
and per share data)
Three months ending September
30, 2024
Year ending December 31,
2024
Loss from operations, GAAP range
$
(22,000
)
-
$
(21,000
)
$
(81,000
)
-
$
(79,000
)
Add back: Stock-based compensation
26,600
26,600
103,500
103,500
Add back: Amortization of
acquisition-related intangibles
1,900
1,900
6,500
6,500
Income from operations, non-GAAP range
$
6,500
-
$
7,500
$
29,000
-
$
31,000
Net loss per share, GAAP range
$
(0.29
)
-
$
(0.27
)
$
(1.05
)
-
$
(1.01
)
Add back: Stock-based compensation
0.48
0.48
1.87
1.87
Add back: Amortization of
acquisition-related intangibles
0.03
0.03
0.12
0.12
Net income per share, non-GAAP range
$
0.22
-
$
0.24
$
0.94
-
$
0.98
Weighted-average common shares outstanding
- basic
55,400,000
55,400,000
55,300,000
55,300,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240801537108/en/
Investor Contact: Mike Rost Workiva Inc.
investor@workiva.com
Media Contact: Rotha Brauntz Workiva Inc.
press@workiva.com
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