Workiva Announces First Quarter 2019 Financial Results

Q1 Subscription and Support Revenue of $56.1 Million, up 20.8% from Q1 2018

Q1 Total Revenue of $70.0 Million, up 16.8% from Q1 2018

AMES, Iowa - May 1, 2019 — Workiva (NYSE:WK), the leading cloud provider of connected data, reporting and compliance solutions, today announced financial results for its first quarter ended March 31, 2019.

"We once again posted strong results for the first quarter of 2019,” said Marty Vanderploeg, Chief Executive Officer of Workiva. "We exceeded quarterly guidance for revenue and operating results, and we are raising our full year 2019 revenue guidance."

"While we are pleased with our progress on operating margin, accelerating growth in subscription revenue remains our number one priority from a financial perspective," said Stuart Miller, Chief Financial Officer of Workiva. "We plan to increase hiring in areas where we see the most opportunities for revenue growth."

"Over the next few quarters, we plan to focus our investments on building more data integrations, expanding in Europe and increasing Wdesk use for integrated risk and global statutory reporting," said Vanderploeg. "As we expand our global footprint, it is essential that Wdesk is tightly integrated with our customers' systems of record and other core enterprise applications."

"Improvement in operating cash flow remains our second highest financial priority," said Miller. "Even with our targeted new investments, we expect operating cash flow to improve significantly in 2019 as compared to 2018."


First Quarter 2019 Financial Highlights

  • Revenue: Total revenue for the first quarter of 2019 reached $70.0 million, an increase of 16.8% from $59.9 million in the first quarter of 2018. Subscription and support revenue contributed $56.1 million, up 20.8% versus the first quarter of 2018. Professional services revenue was $13.8 million, an increase of 3.0% compared to the same quarter in the prior year.
  • Gross Profit: GAAP gross profit for the first quarter of 2019 was $50.4 million compared with $43.4 million in the same quarter of 2018. GAAP gross margin was 72.1% versus 72.4% in the first quarter of 2018. Non-GAAP gross profit for the first quarter of 2019 was $51.2 million, an increase of 17.1% compared with the prior year's first quarter, and non-GAAP gross margin was 73.2% compared to 73.0% in the first quarter of 2018.
  • Loss from Operations: GAAP loss from operations for the first quarter of 2019 was $7.3 million compared with a loss of $9.5 million in the prior year's first quarter. Non-GAAP income from operations was $0.9 million, compared with non-GAAP loss from operations of $3.6 million in the first quarter of 2018.
  • Net Loss: GAAP net loss for the first quarter of 2019 was $7.5 million compared with a net loss of $9.6 million for the prior year's first quarter. GAAP net loss per basic and diluted share was $0.17 compared with a net loss per basic and diluted share of $0.22 in the first quarter of 2018.
  • Non-GAAP net income for the first quarter of 2019 was $0.7 million compared with a net loss of $3.7 million in the prior year's first quarter. Non-GAAP net income per basic and diluted share was $0.02 and $0.01, respectively, compared with a net loss per basic and diluted share of $0.09 in the first quarter of 2018.
  • Balance Sheet: As of March 31, 2019, Workiva had cash, cash equivalents and marketable securities totaling $114.4 million, compared with $98.3 million as of December 31, 2018. Financing obligations totaled $18.1 million as of March 31, 2019.

  • Key Metrics and Non-financial Highlights

  • Customers: Workiva had 3,366 customers as of March 31, 2019, a net increase of 247 customers from March 31, 2018.
  • Revenue Retention Rate: As of March 31, 2019, Workiva's revenue retention rate (excluding add-on revenue) was 95.7%, and the revenue retention rate including add-on revenue was 110.7%. Add-on revenue includes changes for existing customers in new solutions, new seats and pricing.
  • Large Contracts: As of March 31, 2019, Workiva had 493 customers with an annual contract value (ACV) of more than $100,000, up 47.2% from 335 customers at March 31, 2018. Workiva had 207 customers with an ACV of more than $150,000, up 37.1% from 151 customers in the first quarter of 2018.
  • New Offices in Frankfurt and Paris: Workiva opened new offices in Germany and France to attract and support customers in those countries.

  • Financial Outlook

    As of May 1, 2019, Workiva is providing guidance for its second quarter 2019 and full year 2019 as follows:


    Second Quarter 2019 Guidance:

  • Total revenue is expected to be in the range of $68.6 million to $69.1 million.
  • GAAP loss from operations is expected to be in the range of $13.1 million to $13.6 million.
  • Non-GAAP loss from operations is expected to be in the range of $4.2 million to $4.7 million.
  • GAAP net loss per basic and diluted share is expected to be in the range of $0.29 to $0.30.
  • Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.10 to $0.11.
  • Net loss per basic and diluted share is based on 46.1 million weighted-average shares outstanding.

  • Full Year 2019 Guidance:

  • Total revenue is expected to be in the range of $284.0 million to $286.0 million.
  • GAAP loss from operations is expected to be in the range of $50.0 million to $52.0 million.
  • Non-GAAP loss from operations is expected to be in the range of $15.0 million to $17.0 million.
  • GAAP net loss per basic and diluted share is expected to be in the range of $1.09 to $1.13.
  • Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.34 to $0.38.
  • Net loss per basic and diluted share is based on 46.3 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 2019, in addition to discussing the Company’s outlook for the second quarter and full year 2019. To access this call, dial 833-287-0800 (domestic) or 647-689-4434 (international). The conference ID is 8385167. 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 8, 2019 at 800-585-8367 (domestic) or 416-621-4642 (international). The replay pass code is 8385167. 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, the leading cloud provider of connected data, reporting and compliance solutions, is used by thousands of enterprises across 180 countries, including more than 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.

  • Request a Workiva demo: www.workiva.com/request-demo
  • 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. 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 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, 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. 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.


    For the latest information and news, visit The Workiva Newsroom.




    WORKIVA INC.

    CONSOLIDATED STATEMENTS OF OPERATIONS
    (in thousands, except share and per share amounts) 
    Three months ended March 31, 
    2019 2018
    (unaudited)
    Revenue 
    Subscription and support $ 56,123  $ 46,470 
    Professional services 13,840  13,436 
    Total revenue  69,963  59,906 
    Cost of revenue 
    Subscription and support (1)
    9,809  8,802 
    Professional services (1)
    9,727  7,709 
    Total cost of revenue  19,536  16,511 
    Gross profit  50,427  43,395 
    Operating expenses 
    Research and development (1)
    22,011  20,127 
    Sales and marketing (1)
    25,365  21,006 
    General and administrative (1)
    10,383  11,768 
    Total operating expenses  57,759  52,901 
    Loss from operations  (7,332) (9,506)
    Interest expense  (440) (450)
    Other income, net  320  343 
    Loss before provision for income taxes  (7,452) (9,613)
    Provision for income taxes  11 
    Net loss  $ (7,463) $ (9,618)
    Net loss per common share: 
    Basic and diluted $ (0.17) $ (0.22)
    Weighted-average common shares outstanding - basic and diluted 45,229,279  42,858,756 

    (1) Includes stock-based compensation expense as follows:
    Three months ended March 31, 
    2019 2018
    (unaudited)
    Cost of revenue 
    Subscription and support $ 357  $ 171 
    Professional services 409  150 
    Operating expenses 
    Research and development 1,900  1,021 
    Sales and marketing 1,964  1,113 
    General and administrative 3,563  3,450 




    WORKIVA INC.

    CONSOLIDATED BALANCE SHEETS
    (in thousands) 
    March 31, 2019 December 31, 2018
    (unaudited)
    Assets 
    Current assets
    Cash and cash equivalents $ 78,736  $ 77,584 
    Marketable securities 35,668  20,764 
    Accounts receivable, net 50,560  65,107 
    Deferred commissions 9,500  8,178 
    Other receivables 1,395  1,181 
    Prepaid expenses and other 7,656  4,417 
    Total current assets 183,515  177,231 
    Property and equipment, net 41,049  41,468 
    Operating lease right-of-use assets 17,057  — 
    Deferred commissions, non-current 11,296  10,569 
    Intangible assets, net 1,322  1,266 
    Other assets 2,042  577 
    Total assets $ 256,281  $ 231,111 
    Liabilities and Stockholders’ Equity (Deficit) 
    Current liabilities
    Accounts payable $ 3,182  $ 5,461 
    Accrued expenses and other current liabilities 33,416  36,353 
    Deferred revenue 149,943  148,545 
    Current portion of financing obligations 1,253  1,222 
    Total current liabilities 187,794  191,581 
    Deferred revenue, non-current 25,933  25,171 
    Other long-term liabilities 969  6,891 
    Operating lease liabilities, non-current 20,846  — 
    Financing obligations, non-current 16,883  17,208 
    Total liabilities 252,425  240,851 
    Stockholders’ equity (deficit) 
    Common stock 45  44 
    Additional paid-in-capital 318,151  297,145 
    Accumulated deficit (314,490) (307,027)
    Accumulated other comprehensive income 150  98 
    Total stockholders’ equity (deficit)  3,856  (9,740)
    Total liabilities and stockholders’ equity (deficit)  $ 256,281  $ 231,111 




    WORKIVA INC.

    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands) 
    Three months ended March 31, 
    2019 2018
    (unaudited)
    Cash flows from operating activities 
    Net loss  $ (7,463) $ (9,618)
    Adjustments to reconcile net loss to net cash provided by operating activities: 
    Depreciation and amortization 903  872 
    Stock-based compensation expense 8,193  5,905 
    (Recovery of) provision for doubtful accounts  (187) 44 
    (Accretion) amortization of premiums and discounts on marketable securities, net  (81) 18 
    Deferred income tax (18) — 
    Changes in assets and liabilities:
    Accounts receivable 14,818  6,542 
    Deferred commissions (2,029) (1,649)
    Operating lease right-of-use asset 668  — 
    Other receivables (214) 27 
    Prepaid expenses (3,236) 231 
    Other assets (1,464) (58)
    Accounts payable (1,562) 2,677 
    Deferred revenue 1,987  (2,345)
    Operating lease liability (655) — 
    Accrued expenses and other liabilities (4,541) (863)
    Net cash provided by operating activities  5,119  1,783 
    Cash flows from investing activities 
    Purchase of property and equipment (1,743) (9)
    Purchase of marketable securities (22,155) — 
    Maturities of marketable securities 7,390  500 
    Purchase of intangible assets (84) (64)
    Net cash (used in) provided by investing activities  (16,592) 427 
    Cash flows from financing activities 
    Proceeds from option exercises 11,055  3,075 
    Taxes paid related to net share settlements of stock-based compensation awards (390) (1,342)
    Proceeds from shares issued in connection with employee stock purchase plan 2,149  1,370 
    Principal payments on capital lease and financing obligations (294) (298)
    Net cash provided by financing activities  12,520  2,805 
    Effect of foreign exchange rates on cash  105  (92)
    Net increase in cash and cash equivalents  1,152  4,923 
    Cash and cash equivalents at beginning of period  77,584  60,333 
    Cash and cash equivalents at end of period  $ 78,736  $ 65,256 




    TABLE I
    WORKIVA INC.
    RECONCILIATION OF NON-GAAP INFORMATION
    (in thousands, except share and per share) 
    Three months ended March 31, 
    2019 2018
    Gross profit, subscription and support  $ 46,314  $ 37,668 
    Add back: Stock-based compensation 357  171 
    Gross profit, subscription and support, non-GAAP  $ 46,671  $ 37,839 
    As a percentage of subscription and support revenue, non-GAAP  83.2  % 81.4  %
    Gross profit, professional services  $ 4,113  $ 5,727 
    Add back: Stock-based compensation 409  150 
    Gross profit, professional services, non-GAAP  $ 4,522  $ 5,877 
    As a percentage of professional services revenue, non-GAAP  32.7  % 43.7  %
    Gross profit  $ 50,427  $ 43,395 
    Add back: Stock-based compensation 766  321 
    Gross profit, non-GAAP  $ 51,193  $ 43,716 
    As percentage of revenue, non-GAAP  73.2  % 73.0  %
    Research and development  $ 22,011  $ 20,127 
    Less: Stock-based compensation 1,900  1,021 
    Research and development, non-GAAP  $ 20,111  $ 19,106 
    As percentage of revenue, non-GAAP  28.7  % 31.9  %
    Sales and marketing  $ 25,365  $ 21,006 
    Less: Stock-based compensation 1,964  1,113 
    Sales and marketing, non-GAAP  $ 23,401  $ 19,893 
    As percentage of revenue, non-GAAP  33.4  % 33.2  %
    General and administrative  $ 10,383  $ 11,768 
    Less: Stock-based compensation 3,563  3,450 
    General and administrative, non-GAAP  $ 6,820  $ 8,318 
    As percentage of revenue, non-GAAP  9.7  % 13.9  %
    Loss from operations  $ (7,332) $ (9,506)
    Add back: Stock-based compensation 8,193  5,905 
    Income (loss) from operations, non-GAAP  $ 861  $ (3,601)
    As percentage of revenue, non-GAAP  1.2  % (6.0) %


    TABLE I
    WORKIVA INC.
    RECONCILIATION OF NON-GAAP INFORMATION
    (in thousands, except share and per share) 
    Three months ended March 31, 
    2019 2018
    Net loss  $ (7,463) $ (9,618)
    Add back: Stock-based compensation 8,193  5,905 
    Net income (loss), non-GAAP  $ 730  $ (3,713)
    As percentage of revenue, non-GAAP  1.0  % (6.2) %
    Net loss per basic and diluted share:  $ (0.17) $ (0.22)
    Add back: Stock-based compensation 0.19  0.13 
    Net income (loss) per basic share, non-GAAP  $ 0.02  $ (0.09)
    Net income (loss) per diluted share, non-GAAP $ 0.01  $ (0.09)
    Weighted-average common shares outstanding - basic, non-GAAP 45,229,279  42,858,756 
    Weighted-average common shares outstanding - diluted, non-GAAP 50,550,143  42,858,756 





    TABLE II
    WORKIVA INC.
    RECONCILIATION OF NON-GAAP GUIDANCE
    (in thousands, except share and per share data) 
    Three months ending
    June 30, 2019
    Year ending
    December 31, 2019
    Loss from operations, GAAP range  $ (13,100) $ (13,600) $ (50,000) $ (52,000)
    Add back: Stock-based compensation
    8,900  8,900  35,000  35,000 
    Loss from operations, non-GAAP range  $ (4,200) $ (4,700) $ (15,000) $ (17,000)
    Net loss per share, GAAP range  $ (0.29) $ (0.30) $ (1.09) $ (1.13)
    Add back: Stock-based compensation
    0.19  0.19  0.75  0.75 
    Net loss per share, non-GAAP range  $ (0.10) $ (0.11) $ (0.34) $ (0.38)
    Weighted-average common shares outstanding - basic and diluted
    46,100,000  46,100,000  46,300,000  46,300,000 


    Investor Relations Contact 
    Adam Rogers
    Workiva Inc.
    investor@workiva.com
    1.515.663.4471
    Media Contact 
    Kevin McCarthy
    Workiva Inc.
    press@workiva.com
    1.515.663.4471