(Mark One) | |
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended March 31, 2016 | |
OR | |
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For transition period from to | |
Commission File Number 001-36773 |
Delaware (State or other jurisdiction of incorporation or organization) | 47-2509828 (I.R.S. Employer Identification Number) | ||
2900 University Blvd Ames, IA 50010 (888) 275-3125 | |||
(Address of principal executive offices and zip code) | |||
(888) 275-3125 | |||
(Registrant's telephone number, including area code) | |||
___________________________________ |
Large accelerated filer o | Accelerated filer ý |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Page | |||
WORKIVA INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) | |||||||
As of March 31, 2016 | As of December 31, 2015 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 43,226 | $ | 58,750 | |||
Marketable securities | 12,665 | 17,420 | |||||
Accounts receivable, net of allowance for doubtful accounts of $837 and $713 at March 31, 2016 and December 31, 2015, respectively | 16,470 | 15,647 | |||||
Deferred commissions | 1,383 | 1,368 | |||||
Other receivables | 1,042 | 818 | |||||
Prepaid expenses and other current assets | 4,063 | 3,875 | |||||
Total current assets | 78,849 | 97,878 | |||||
Property and equipment, net | 43,747 | 44,410 | |||||
Intangible assets, net | 936 | 896 | |||||
Other assets | 774 | 711 | |||||
Total assets | $ | 124,306 | $ | 143,895 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 4,156 | $ | 5,138 | |||
Accrued expenses and other current liabilities | 14,578 | 20,394 | |||||
Deferred revenue | 53,101 | 55,741 | |||||
Deferred government grant obligation | 1,023 | 985 | |||||
Current portion of capital lease and financing obligations | 1,732 | 1,808 | |||||
Current portion of long-term debt | 18 | 18 | |||||
Total current liabilities | 74,608 | 84,084 | |||||
Deferred revenue | 7,138 | 7,597 | |||||
Deferred government grant obligation | 1,708 | 1,996 | |||||
Other long-term liabilities | 3,491 | 3,343 | |||||
Capital lease and financing obligations | 20,727 | 21,083 | |||||
Long-term debt | 73 | 73 | |||||
Total liabilities | 107,745 | 118,176 | |||||
Stockholders’ equity | |||||||
Class A common stock, $0.001 par value per share, 1,000,000,000 shares authorized, 29,051,970 and 29,014,665 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 29 | 29 | |||||
Class B common stock, $0.001 par value per share, 500,000,000 shares authorized, 11,909,784 and 11,933,784 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 12 | 12 | |||||
Preferred stock, $0.001 par value per share, 100,000,000 shares authorized, no shares issued and outstanding | — | — | |||||
Additional paid-in-capital | 205,284 | 202,371 | |||||
Accumulated deficit | (188,979 | ) | (176,934 | ) | |||
Accumulated other comprehensive income | 215 | 241 | |||||
Total stockholders’ equity | 16,561 | 25,719 | |||||
Total liabilities and stockholders’ equity | $ | 124,306 | $ | 143,895 |
WORKIVA INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited) | |||||||
Three months ended March 31, | |||||||
2016 | 2015 | ||||||
Revenue | |||||||
Subscription and support | $ | 33,585 | $ | 26,269 | |||
Professional services | 10,966 | 8,885 | |||||
Total revenue | 44,551 | 35,154 | |||||
Cost of revenue | |||||||
Subscription and support | 6,918 | 5,885 | |||||
Professional services | 6,188 | 3,777 | |||||
Total cost of revenue | 13,106 | 9,662 | |||||
Gross profit | 31,445 | 25,492 | |||||
Operating expenses | |||||||
Research and development | 14,516 | 12,008 | |||||
Sales and marketing | 20,088 | 13,705 | |||||
General and administrative | 8,953 | 6,734 | |||||
Total operating expenses | 43,557 | 32,447 | |||||
Loss from operations | (12,112 | ) | (6,955 | ) | |||
Interest expense | (490 | ) | (510 | ) | |||
Other income and (expense), net | 576 | (66 | ) | ||||
Loss before provision for income taxes | (12,026 | ) | (7,531 | ) | |||
Provision (benefit) for income taxes | 19 | (84 | ) | ||||
Net loss | $ | (12,045 | ) | $ | (7,447 | ) | |
Net loss per common share: | |||||||
Basic and diluted | $ | (0.30 | ) | $ | (0.19 | ) | |
Weighted average common shares outstanding - basic and diluted | 40,451,668 | 39,593,700 |
WORKIVA INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) (unaudited) | |||||||
Three months ended March 31, | |||||||
2016 | 2015 | ||||||
Net loss | $ | (12,045 | ) | $ | (7,447 | ) | |
Other comprehensive (loss) income, net of tax | |||||||
Foreign currency translation adjustment, net of income tax expense of $0 and $60 for the three months ended March 31, 2016 and 2015, respectively | (101 | ) | 69 | ||||
Unrealized gain on available-for-sale securities, net of income tax expense of $0 for both of the three months ended March 31, 2016 and 2015 | 75 | — | |||||
Other comprehensive (loss) income, net of tax | (26 | ) | 69 | ||||
Comprehensive loss | $ | (12,071 | ) | $ | (7,378 | ) |
WORKIVA INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) | |||||||
Three months ended March 31, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (12,045 | ) | $ | (7,447 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities | |||||||
Depreciation and amortization | 997 | 1,169 | |||||
Stock-based compensation expense | 3,390 | 2,174 | |||||
Provision for doubtful accounts | 122 | 74 | |||||
Realized gain on sale of available-for-sale securities | (2 | ) | — | ||||
Amortization (accretion) of premiums and discounts on marketable securities, net | 39 | — | |||||
Recognition of deferred government grant obligation | (433 | ) | (66 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (881 | ) | (911 | ) | |||
Deferred commissions | (12 | ) | 145 | ||||
Other receivables | (224 | ) | (188 | ) | |||
Prepaid expenses and other | (186 | ) | 144 | ||||
Other assets | (63 | ) | 56 | ||||
Accounts payable | (696 | ) | 157 | ||||
Deferred revenue | (3,215 | ) | (672 | ) | |||
Accrued expenses and other liabilities | (5,869 | ) | (3,892 | ) | |||
Change in restricted cash | — | 28 | |||||
Net cash used in operating activities | (19,078 | ) | (9,229 | ) | |||
Cash flows from investing activities | |||||||
Purchase of property and equipment | (412 | ) | (871 | ) | |||
Sale of marketable securities | 4,793 | — | |||||
Purchase of intangible assets | (55 | ) | (83 | ) | |||
Net cash provided by (used in) investing activities | 4,326 | (954 | ) | ||||
Cash flows from financing activities | |||||||
Payment of equity issuance costs | — | (1,073 | ) | ||||
Proceeds from option exercises | 284 | 80 | |||||
Taxes paid related to net share settlements of stock-based compensation awards | (761 | ) | — | ||||
Changes in restricted cash | — | 300 | |||||
Repayment of other long-term debt | — | (25 | ) | ||||
Principal payments on capital lease and financing obligations | (432 | ) | (678 | ) | |||
Proceeds from government grants | 183 | 313 | |||||
Net cash used in financing activities | (726 | ) | (1,083 | ) | |||
Effect of foreign exchange rates on cash | (46 | ) | 28 | ||||
Net decrease in cash and cash equivalents | (15,524 | ) | (11,238 | ) | |||
Cash and cash equivalents at beginning of period | 58,750 | 101,131 | |||||
Cash and cash equivalents at end of period | $ | 43,226 | $ | 89,893 | |||
Supplemental cash flow disclosure | |||||||
Cash paid for interest | $ | 322 | $ | 423 | |||
Cash paid for income taxes, net of refunds | $ | 8 | $ | — | |||
Supplemental disclosure of noncash investing and financing activities | |||||||
Fixed assets acquired through capital lease arrangements | $ | — | $ | 184 | |||
Allowance for tenant improvements | $ | 186 | $ | 698 | |||
Accrued distributions to members | $ | — | $ | 60 | |||
Purchases of property and equipment, accrued but not paid | $ | 65 | $ | — |
March 31, 2016 | December 31, 2015 | ||||||
Accrued vacation | $ | 4,161 | $ | 3,604 | |||
Accrued commissions | 2,497 | 2,470 | |||||
Accrued bonuses | 2,900 | 9,598 | |||||
Estimated health insurance claims | 1,492 | 900 | |||||
Accrued other liabilities | 3,528 | 3,822 | |||||
$ | 14,578 | $ | 20,394 |
Three months ended March 31, | |||||||
2016 | 2015 | ||||||
Interest income | $ | 83 | $ | 15 | |||
Income from training reimbursement program | 433 | 66 | |||||
Other | 60 | (147 | ) | ||||
$ | 576 | $ | (66 | ) |
Amortized Cost | Unrealized Gains | Unrealized Losses | Aggregate Fair Value | ||||||||||||
U.S. treasury debt securities | $ | 4,008 | $ | 2 | $ | (3 | ) | $ | 4,007 | ||||||
U.S. corporate debt securities | 8,645 | 19 | (6 | ) | 8,658 | ||||||||||
Money market funds | 37,419 | — | — | 37,419 | |||||||||||
$ | 50,072 | $ | 21 | $ | (9 | ) | $ | 50,084 | |||||||
Included in cash and cash equivalents | $ | 37,419 | $ | — | $ | — | $ | 37,419 | |||||||
Included in marketable securities | $ | 12,653 | $ | 21 | $ | (9 | ) | $ | 12,665 |
Amortized Cost | Unrealized Gains | Unrealized Losses | Aggregate Fair Value | ||||||||||||
U.S. treasury debt securities | $ | 4,805 | $ | — | $ | (31 | ) | $ | 4,774 | ||||||
U.S. corporate debt securities | 12,679 | 1 | (34 | ) | 12,646 | ||||||||||
Money market funds | 53,365 | — | — | 53,365 | |||||||||||
$ | 70,849 | $ | 1 | $ | (65 | ) | $ | 70,785 | |||||||
Included in cash and cash equivalents | $ | 53,365 | $ | — | $ | — | $ | 53,365 | |||||||
Included in marketable securities | $ | 17,484 | $ | 1 | $ | (65 | ) | $ | 17,420 |
As of March 31, 2016 | |||||||||||||||
Less than 12 months | 12 months or greater | ||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||
U.S. treasury debt securities | $ | 2,407 | $ | (3 | ) | $ | — | $ | — | ||||||
U.S. corporate debt securities | 2,503 | (6 | ) | — | — | ||||||||||
Total | $ | 4,910 | $ | (9 | ) | $ | — | $ | — |
Level 1 - | Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. |
Level 2 - | Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. |
Level 3 - | Inputs are unobservable inputs based on our assumptions. |
Fair Value Measurements as of March 31, 2016 | Fair Value Measurements as of December 31, 2015 | |||||||||||||||||||||||
Description | Total | Level 1 | Level 2 | Total | Level 1 | Level 2 | ||||||||||||||||||
Money market funds | $ | 37,419 | $ | 37,419 | $ | — | $ | 53,365 | $ | 53,365 | $ | — | ||||||||||||
U.S. treasury debt securities | 4,007 | — | 4,007 | 4,774 | — | 4,774 | ||||||||||||||||||
U.S. corporate debt securities | 8,658 | — | 8,658 | 12,646 | — | 12,646 | ||||||||||||||||||
$ | 50,084 | $ | 37,419 | $ | 12,665 | $ | 70,785 | $ | 53,365 | $ | 17,420 | |||||||||||||
Included in cash and cash equivalents | $ | 37,419 | $ | 53,365 | ||||||||||||||||||||
Included in marketable securities | $ | 12,665 | $ | 17,420 |
Operating Leases | ||||
Remainder of 2016 | $ | 2,302 | ||
2017 | 3,304 | |||
2018 | 3,164 | |||
2019 | 2,482 | |||
2020 | 2,163 | |||
Thereafter | 10,101 | |||
Total minimum lease payments | $ | 23,516 |
Three months ended March 31, | |||||||
2016 | 2015 | ||||||
Cost of revenue | |||||||
Subscription and support | $ | 118 | $ | 96 | |||
Professional services | 122 | 72 | |||||
Operating expenses | |||||||
Research and development | 584 | 334 | |||||
Sales and marketing | 455 | 350 | |||||
General and administrative | 2,111 | 1,322 | |||||
Total | $ | 3,390 | $ | 2,174 |
Three months ended March 31, | |||
2016 | 2015 | ||
Expected term (in years) | 6.0 - 6.1 | 6.1 | |
Risk-free interest rate | 1.48% - 1.90% | 1.35% - 1.74% | |
Expected volatility | 44.96% - 45.29% | 42.35% - 44.08% | |
Forfeiture rate | 0% - 4.80% | 5.12% - 5.21% |
Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||
(in thousands) | ||||||||||||
Outstanding at December 31, 2015 | 6,969,133 | $ | 11.37 | 7.7 | $ | 43,287 | ||||||
Granted | 634,619 | 15.06 | ||||||||||
Forfeited | 28,515 | 14.52 | ||||||||||
Exercised | 74,621 | 3.80 | ||||||||||
Outstanding at March 31, 2016 | 7,500,616 | $ | 11.75 | 7.6 | $ | 17,721 | ||||||
Exercisable at March 31, 2016 | 3,613,938 | $ | 8.40 | 6.3 | $ | 17,337 |
Number of Shares | Weighted- Average Grant Date Fair Value | Aggregate Intrinsic Value | ||||||||
(in thousands) | ||||||||||
Outstanding at December 31, 2015 | 600,025 | $ | 13.38 | $ | 10,542 | |||||
Granted | 311,612 | 15.55 | ||||||||
Forfeited | — | — | ||||||||
Vested | (176,665 | ) | 13.40 | |||||||
Outstanding at March 31, 2016 | 734,972 | $ | 14.29 | $ | 8,562 |
Three months ended | |||||||||||||||
March 31, 2016 | March 31, 2015 | ||||||||||||||
Class A | Class B | Class A | Class B | ||||||||||||
Numerator | |||||||||||||||
Net loss | $ | (8,496 | ) | $ | (3,549 | ) | $ | (5,110 | ) | $ | (2,337 | ) | |||
Denominator | |||||||||||||||
Weighted-average common shares outstanding - basic and diluted | 28,534,236 | 11,917,432 | 27,166,753 | 12,426,947 | |||||||||||
Basic and diluted net loss per share | $ | (0.30 | ) | $ | (0.30 | ) | $ | (0.19 | ) | $ | (0.19 | ) |
As of | |||||
March 31, 2016 | March 31, 2015 | ||||
Shares subject to outstanding common stock options | 7,500,616 | 6,091,831 | |||
Shares subject to unvested restricted stock awards | 423,360 | 584,350 |
Three months ended March 31, | |||||||
2016 | 2015 | ||||||
(dollars in thousands) | |||||||
Financial metrics | |||||||
Total revenue | $ | 44,551 | $ | 35,154 | |||
Percentage increase in total revenue | 26.7 | % | 25.0 | % | |||
Subscription and support revenue | $ | 33,585 | $ | 26,269 | |||
Percentage increase in subscription and support revenue | 27.9 | % | 27.2 | % | |||
Subscription and support as a percent of total revenue | 75.4 | % | 74.7 | % |
As of March 31, | |||
2016 | 2015 | ||
Operating metrics | |||
Number of customers | 2,557 | 2,290 | |
Subscription and support revenue retention rate | 96.1% | 95.9% | |
Subscription and support revenue retention rate including add-ons | 112.1% | 105.8% |
Three months ended March 31, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Revenue | |||||||
Subscription and support | $ | 33,585 | $ | 26,269 | |||
Professional services | 10,966 | 8,885 | |||||
Total revenue | 44,551 | 35,154 | |||||
Cost of revenue | |||||||
Subscription and support(1) | 6,918 | 5,885 | |||||
Professional services(1) | 6,188 | 3,777 | |||||
Total cost of revenue | 13,106 | 9,662 | |||||
Gross profit | 31,445 | 25,492 | |||||
Operating expenses | |||||||
Research and development(1) | 14,516 | 12,008 | |||||
Sales and marketing(1) | 20,088 | 13,705 | |||||
General and administrative(1) | 8,953 | 6,734 | |||||
Total operating expenses | 43,557 | 32,447 | |||||
Loss from operations | (12,112 | ) | (6,955 | ) | |||
Interest expense | (490 | ) | (510 | ) | |||
Other income and (expense), net | 576 | (66 | ) | ||||
Loss before provision for income taxes | (12,026 | ) | (7,531 | ) | |||
Provision (benefit) for income taxes | 19 | (84 | ) | ||||
Net loss | $ | (12,045 | ) | $ | (7,447 | ) |
Three months ended March 31, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Cost of revenue | |||||||
Subscription and support | $ | 118 | $ | 96 | |||
Professional services | 122 | 72 | |||||
Operating expenses | |||||||
Research and development | 584 | 334 | |||||
Sales and marketing | 455 | 350 | |||||
General and administrative | 2,111 | 1,322 | |||||
Total stock-based compensation expense | $ | 3,390 | $ | 2,174 |
Three months ended March 31, | |||||
2016 | 2015 | ||||
Revenue | |||||
Subscription and support | 75.4 | % | 74.7 | % | |
Professional services | 24.6 | 25.3 | |||
Total revenue | 100.0 | 100.0 | |||
Cost of revenue | |||||
Subscription and support | 15.5 | 16.7 | |||
Professional services | 13.9 | 10.7 | |||
Total cost of revenue | 29.4 | 27.4 | |||
Gross profit | 70.6 | 72.6 | |||
Operating expenses | |||||
Research and development | 32.6 | 34.2 | |||
Sales and marketing | 45.1 | 39.0 | |||
General and administrative | 20.1 | 19.2 | |||
Total operating expenses | 97.8 | 92.4 | |||
Loss from operations | (27.2 | ) | (19.8 | ) | |
Interest expense | (1.1 | ) | (1.5 | ) | |
Other income and (expense), net | 1.3 | (0.2 | ) | ||
Loss before provision for income taxes | (27.0 | ) | (21.5 | ) | |
Provision (benefit) for income taxes | — | (0.2 | ) | ||
Net loss | (27.0 | )% | (21.3 | )% |
Three months ended March 31, | |||||||||
2016 | 2015 | % Change | |||||||
(dollars in thousands) | |||||||||
Revenue | |||||||||
Subscription and support | $ | 33,585 | $ | 26,269 | 27.9% | ||||
Professional services | 10,966 | 8,885 | 23.4% | ||||||
Total revenue | $ | 44,551 | $ | 35,154 | 26.7% |
Three months ended March 31, | |||||||||
2016 | 2015 | % Change | |||||||
(dollars in thousands) | |||||||||
Cost of revenue | |||||||||
Subscription and support | $ | 6,918 | $ | 5,885 | 17.6% | ||||
Professional services | 6,188 | 3,777 | 63.8% | ||||||
Total cost of revenue | $ | 13,106 | $ | 9,662 | 35.6% |
Three months ended March 31, | |||||||||
2016 | 2015 | % Change | |||||||
(dollars in thousands) | |||||||||
Operating expenses | |||||||||
Research and development | $ | 14,516 | $ | 12,008 | 20.9% | ||||
Sales and marketing | 20,088 | 13,705 | 46.6% | ||||||
General and administrative | 8,953 | 6,734 | 33.0% | ||||||
Total operating expenses | $ | 43,557 | $ | 32,447 | 34.2% |
Three months ended March 31, | |||||||
2016 | 2015 | ||||||
(dollars in thousands) | |||||||
Interest expense | $ | (490 | ) | $ | (510 | ) | |
Other income and (expense), net | 576 | (66 | ) |
Three months ended March 31, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Cash flow used in operating activities | $ | (19,078 | ) | $ | (9,229 | ) | |
Cash flow provided by (used in) investing activities | 4,326 | (954 | ) | ||||
Cash flow used in financing activities | (726 | ) | (1,083 | ) | |||
Net decrease in cash and equivalents, net of impact on exchange rates | $ | (15,524 | ) | $ | (11,238 | ) |
Payments due by period | ||||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Operating lease obligations relating to office facilities | $ | 23,516 | $ | 3,146 | $ | 6,288 | $ | 4,497 | $ | 9,585 |
Date | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under Program | |||||||||
January 2016 | — | — | — | — | |||||||||
February 2016 | 61,316 | $ | 12.41 | — | — | ||||||||
March 2016 | — | — | — | — | |||||||||
Total | 61,316 | $ | 12.41 | — | — |
WORKIVA INC. | |
By: | /s/ Matthew M. Rizai, Ph.D. |
Name: | Matthew M. Rizai, Ph.D. |
Title: | Chairman and Chief Executive Officer |
By: | /s/ J. Stuart Miller |
Name: | J. Stuart Miller |
Title: | Executive Vice President, Treasurer and Chief Financial Officer |
By: | /s/ Jill Klindt |
Name: | Jill Klindt |
Title: | Vice President and Chief Accounting Officer |
Exhibit Number | Description | |
10.1 | Workiva Inc. Nonqualified Deferred Compensation Plan effective as of January 14, 2016, incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 15, 2016. | |
10.2 | Form of Workiva Inc. Restricted Stock Unit Agreement for service-vesting restricted stock units under the Workiva Inc. 2014 Equity Incentive Plan, incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 15, 2016. | |
10.3 | Form of Workiva Inc. Restricted Stock Unit Agreement for service-vesting restricted stock units issuable to non-employee directors under the Workiva Inc. 2014 Equity Incentive Plan. | |
31.1 | Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |
Grant Number |
Vesting Schedule | Subject to the Plan and the Restricted Stock Unit Agreement, this RSU shall vest in accordance with the following schedule, provided you have not experienced a Termination of Service prior to any vesting date: |
Vesting Date(s) | Number or Percentage of Shares that Vest |
One-year anniversary of the Grant Date | 100% |
Date: May 4, 2016 | /s/ Matthew M. Rizai, Ph.D. Matthew M. Rizai, Ph.D. Chairman and Chief Executive Officer (Principal Executive Officer) |
Date: May 4, 2016 | /s/ J. Stuart Miller J. Stuart Miller Executive Vice President, Treasurer and Chief Financial Officer (Principal Financial Officer) |
1. | the Quarterly Report on Form 10-Q of the Company for the period ending March 31, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Date: May 4, 2016 | /s/ Matthew M. Rizai, Ph.D. Matthew M. Rizai, Ph.D. Chairman and Chief Executive Officer (Principal Executive Officer) |
1. | the Quarterly Report on Form 10-Q of the Company for the period ending March 31, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Date: May 4, 2016 | /s/ J. Stuart Miller J. Stuart Miller Executive Vice President, Treasurer and Chief Financial Officer (Principal Financial Officer) |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
May. 02, 2016 |
|
Entity Information [Line Items] | ||
Entity Registrant Name | WORKIVA INC | |
Entity Central Index Key | 0001445305 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2016 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 29,059,228 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 11,909,784 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Allowance for doubtful accounts | $ 837 | $ 713 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 29,051,970 | 29,014,665 |
Common stock, shares outstanding | 29,051,970 | 29,014,665 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 11,909,784 | 11,933,784 |
Common stock, shares outstanding | 11,909,784 | 11,933,784 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Revenue | ||
Subscription and support | $ 33,585 | $ 26,269 |
Professional services | 10,966 | 8,885 |
Total revenue | 44,551 | 35,154 |
Cost of revenue | ||
Subscription and support | 6,918 | 5,885 |
Professional services | 6,188 | 3,777 |
Total cost of revenue | 13,106 | 9,662 |
Gross profit | 31,445 | 25,492 |
Operating expenses | ||
Research and development | 14,516 | 12,008 |
Sales and marketing | 20,088 | 13,705 |
General and administrative | 8,953 | 6,734 |
Total operating expenses | 43,557 | 32,447 |
Loss from operations | (12,112) | (6,955) |
Interest expense | (490) | (510) |
Other income and (expense), net | 576 | (66) |
Loss before provision for income taxes | (12,026) | (7,531) |
Provision (benefit) for income taxes | 19 | (84) |
Net loss | $ (12,045) | $ (7,447) |
Net loss per common share: | ||
Basic and diluted (in dollars per share) | $ (0.30) | $ (0.19) |
Weighted average common shares outstanding - basic and diluted (in shares) | 40,451,668 | 39,593,700 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (12,045) | $ (7,447) |
Other comprehensive (loss) income, net of tax | ||
Foreign currency translation adjustment, net of income tax expense of $0 and $60 for the three months ended March 31, 2016 and 2015, respectively | (101) | 69 |
Unrealized gain on available-for-sale securities, net of income tax expense of $0 for both of the three months ended March 31, 2016 and 2015 | 75 | 0 |
Other comprehensive (loss) income, net of tax | (26) | 69 |
Comprehensive loss | $ (12,071) | $ (7,378) |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustment, tax | $ 0 | $ 60 |
Unrealized gain on available-for-sale securities, tax | $ 0 | $ 0 |
Organization and Significant Accounting Policies |
3 Months Ended |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Significant Accounting Policies | Organization and Significant Accounting Policies Organization Workiva Inc., a Delaware corporation, and its wholly-owned subsidiaries created Wdesk, a cloud-based platform for enterprises to collect, link, report and analyze business data with control and accountability. The Wdesk proprietary word processing, spreadsheet and presentation applications are integrated and built upon a data management engine, offering synchronized data, controlled collaboration, granular permissions and a full audit trail. We offer our customers solutions in the areas of compliance, risk, finance, accounting, and audit management. Our operational headquarters are located in Ames, Iowa, with additional offices located in the United States, Europe and Canada. Basis of Presentation and Principles of Consolidation The financial information presented in the accompanying unaudited condensed consolidated financial statements has been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, the financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet data as of December 31, 2015 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The condensed consolidated financial information should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC on March 1, 2016. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of our financial position and results of operations. The operating results for the three months ended March 31, 2016 are not necessarily indicative of the results expected for the full year ending December 31, 2016. The unaudited condensed consolidated financial statements include the accounts of Workiva Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and various other assumptions believed to be reasonable. These estimates include, but are not limited to, the determination of the relative selling prices of our services, health insurance claims incurred but not yet reported, collectability of accounts receivable, valuation of available-for-sale marketable securities, useful lives of intangible assets and property and equipment, income taxes and certain assumptions used in the valuation of equity awards. While these estimates are based on our best knowledge of current events and actions that may affect us in the future, actual results may differ materially from these estimates. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance codified in ASC 606, Revenue Recognition - Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition. In August 2015, the FASB approved the deferral of the effective date of the standard by one year. The new guidance is effective for our fiscal year beginning January 1, 2018 instead of January 1, 2017 and permits the use of either a full retrospective or modified retrospective transition method. Entities are permitted to adopt the guidance in accordance with the original effective date if they choose. We have not determined our transition method, and we are currently evaluating the impact the provisions of ASC 606 will have on our consolidated financial statements and whether we will adopt the guidance early. In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. The amendment was effective for interim and annual periods beginning after December 15, 2015 with early adoption permitted. Effective January 1, 2016, we adopted this standard prospectively. The adoption did not have a material impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The standard requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. The standard became effective for interim and annual periods beginning after December 15, 2015. Effective January 1, 2016, we adopted this standard. The adoption did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued guidance codified in ASC 842, Leases, which supersedes the guidance in former ASC 840, Leases, to increase transparency and comparability among organizations by requiring recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. The standard will become effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be adopted at the earliest period presented using a modified retrospective approach. We are currently evaluating the impact the provisions will have on our consolidated financial statements and whether we will adopt the guidance early. In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Under this ASU, entities are permitted to make an accounting policy election to either estimate forfeitures on share-based payment awards, as required by current guidance, or to recognize forfeitures as they occur. We will be required to make this election at the entity level using a modified retrospective transition method, with a cumulative-effect adjustment to the accumulated deficit. The guidance will be effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact this provision will have on our consolidated financial statements and whether we will adopt the guidance early. The remaining provisions of ASU 2016-09 are not expected to have a material impact on our consolidated financial statements. |
Supplemental Consolidated Balance Sheet and Statement of Operations Information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Consolidated Balance Sheet and Statement of Operations Information | Supplemental Consolidated Balance Sheet and Statement of Operations Information Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of (in thousands):
Other Income and (Expense), net Other income and (expense), net for the three months ended March 31, 2016 and 2015 consisted of (in thousands):
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Marketable Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | Marketable Securities At March 31, 2016, marketable securities consisted of the following (in thousands):
At December 31, 2015, marketable securities consisted of the following (in thousands):
The following table presents gross unrealized losses and fair values for those marketable securities that were in an unrealized loss position as of March 31, 2016, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands):
We do not believe any of the unrealized losses represented an other-than-temporary impairment based on our evaluation of available evidence, which includes our intent as of March 31, 2016 to hold these investments until the cost basis is recovered. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements We determine the fair values of our financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:
Financial Assets Cash equivalents primarily consist of AAA-rated money market funds with overnight liquidity and no stated maturities. We classified cash equivalents as Level 1 due to the short-term nature of these instruments and measured the fair value based on quoted prices in active markets for identical assets. When available, our marketable securities are valued using quoted prices for identical instruments in active markets. If we are unable to value our marketable securities using quoted prices for identical instruments in active markets, we value our investments using broker reports that utilize quoted market prices for comparable instruments. We validate, on a sample basis, the derived prices provided by the brokers by comparing their assessment of the fair values of our investments against the fair values of the portfolio balances of another third-party professional pricing service. As of March 31, 2016, all of our marketable securities were valued using quoted prices for comparable instruments in active markets and are classified as Level 2. Based on our valuation of our money market funds and marketable securities, we concluded that they are classified in either Level 1 or Level 2 and we have no financial assets measured using Level 3 inputs. The following table presents information about our assets that are measured at fair value on a recurring basis using the above input categories (in thousands):
Other Fair Value Measurements At March 31, 2016, the fair value of our debt obligations approximated the carrying amount of $91,000. The estimated fair value was based in part on our consideration of incremental borrowing rates for similar types of borrowing arrangements. We have classified the fair value of our debt obligations as Level 3 due to the lack of relevant observable market data over fair value inputs. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Lease Commitments As of March 31, 2016, future estimated minimum lease payments under non-cancelable operating leases were as follows (in thousands):
There have been no material changes in our future estimated minimum lease payments under non-cancelable capital and financing leases, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015. Litigation From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of any currently pending legal proceedings to which we are a party will not have a material adverse effect on our business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation We grant stock-based incentive awards to attract, motivate and retain qualified employees, non-employee directors and consultants, and to align their financial interests with those of our stockholders. We utilize stock-based compensation in the form of restricted stock awards, restricted stock units (together, “restricted stock”) and options to purchase Class A common stock. As of March 31, 2016, awards outstanding under the 2009 Plan consisted of stock options, and awards outstanding under the 2014 Plan consisted of stock options, restricted stock awards and restricted stock units. As of March 31, 2016, 746,029 shares of Class A common stock were available for grant under the 2014 Plan. Stock-based compensation expense for the three months ended March 31, 2016 was $2.2 million and $1.1 million for options to purchase Class A common stock and restricted stock, respectively. Stock-based compensation expense for the three months ended March 31, 2015 was $1.6 million and $542,000 for options to purchase Class A common stock and restricted stock, respectively. Stock-based compensation expense associated with stock options and restricted stock was recorded in the following cost and expense categories consistent with the respective employee or service provider’s related cash compensation (in thousands):
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on historical volatilities for publicly traded stock options of comparable companies over the estimated expected life of the options. The expected term represents the period of time the options are expected to be outstanding and is based on the “simplified method.” We use the “simplified method” due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the options. The risk-free interest rate is based on yields on U.S. Treasury STRIPS with a maturity similar to the estimated expected term of the options. The fair value of our stock options was estimated assuming no expected dividends and the following weighted-average assumptions:
Stock Options The following table summarizes the option activity under the Plans for the three months ended March 31, 2016:
Options to purchase Class A common stock generally vest over a three or four-year period and are generally granted for a term of ten years. The total intrinsic value of options exercised during the three months ended March 31, 2016 and 2015 was $648,000 and $114,000, respectively. The weighted-average grant-date fair value of options granted during the three months ended March 31, 2016 and 2015 was $6.75 and $5.50, respectively. The total fair value of options vested during the three months ended March 31, 2016 and 2015 was approximately $1.6 million and $2.2 million, respectively. Total unrecognized compensation expense of $22.5 million related to options will be recognized over a weighted-average period of 2.7 years. Restricted Stock We have granted restricted stock awards and restricted stock units to our executive officers that vest in three equal annual installments from the date of grant and restricted stock awards to non-employee members of our Board of Directors with one-year cliff vesting from the date of grant. The fair value for restricted stock awards and units is calculated based on the stock price on the date of grant. The total fair value of restricted stock awards and units vested during the three months ended March 31, 2016 was approximately $2.4 million. No restricted stock awards or units vested during the three months ended March 31, 2015. The following table summarizes the restricted stock activity under the Plan for the three months ended March 31, 2016:
Compensation expense associated with unvested restricted stock is recognized on a straight-line basis over the vesting period. The expense recognized each period is dependent upon our estimate of the number of shares that will ultimately be issued. At March 31, 2016, there was approximately $9.1 million of total unrecognized compensation expense related to restricted stock, which is expected to be recognized over a weighted-average period of 2.3 years. |
Net Loss Per Share |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss Per Share Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including our outstanding stock options and stock related to unvested restricted stock awards to the extent dilutive. The net loss per share attributable to common stockholders is allocated based on the participation rights of the Class A and Class B common shares as if the loss for the year has been distributed. As the liquidation and dividend rights are identical, the net loss attributable to common stockholders is allocated on a proportionate basis. We consider unvested restricted stock awards granted under the 2014 Equity Incentive Plan to be participating securities because holders of such shares have non-forfeitable dividend rights in the event of our declaration of a dividend for common shares. In future periods to the extent we are profitable, we will subtract earnings allocated to these participating securities from net income to determine net income attributable to common stockholders. A reconciliation of the denominator used in the calculation of basic and diluted loss per share is as follows (in thousands, except share and per share data):
The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share were as follows:
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Organization and Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | The financial information presented in the accompanying unaudited condensed consolidated financial statements has been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, the financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet data as of December 31, 2015 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The condensed consolidated financial information should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC on March 1, 2016. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of our financial position and results of operations. The operating results for the three months ended March 31, 2016 are not necessarily indicative of the results expected for the full year ending December 31, 2016. |
Use of Estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and various other assumptions believed to be reasonable. These estimates include, but are not limited to, the determination of the relative selling prices of our services, health insurance claims incurred but not yet reported, collectability of accounts receivable, valuation of available-for-sale marketable securities, useful lives of intangible assets and property and equipment, income taxes and certain assumptions used in the valuation of equity awards. While these estimates are based on our best knowledge of current events and actions that may affect us in the future, actual results may differ materially from these estimates. |
New Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance codified in ASC 606, Revenue Recognition - Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition. In August 2015, the FASB approved the deferral of the effective date of the standard by one year. The new guidance is effective for our fiscal year beginning January 1, 2018 instead of January 1, 2017 and permits the use of either a full retrospective or modified retrospective transition method. Entities are permitted to adopt the guidance in accordance with the original effective date if they choose. We have not determined our transition method, and we are currently evaluating the impact the provisions of ASC 606 will have on our consolidated financial statements and whether we will adopt the guidance early. In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. The amendment was effective for interim and annual periods beginning after December 15, 2015 with early adoption permitted. Effective January 1, 2016, we adopted this standard prospectively. The adoption did not have a material impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The standard requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. The standard became effective for interim and annual periods beginning after December 15, 2015. Effective January 1, 2016, we adopted this standard. The adoption did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued guidance codified in ASC 842, Leases, which supersedes the guidance in former ASC 840, Leases, to increase transparency and comparability among organizations by requiring recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. The standard will become effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be adopted at the earliest period presented using a modified retrospective approach. We are currently evaluating the impact the provisions will have on our consolidated financial statements and whether we will adopt the guidance early. In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Under this ASU, entities are permitted to make an accounting policy election to either estimate forfeitures on share-based payment awards, as required by current guidance, or to recognize forfeitures as they occur. We will be required to make this election at the entity level using a modified retrospective transition method, with a cumulative-effect adjustment to the accumulated deficit. The guidance will be effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact this provision will have on our consolidated financial statements and whether we will adopt the guidance early. The remaining provisions of ASU 2016-09 are not expected to have a material impact on our consolidated financial statements. |
Fair Value of Financial Instruments | Cash equivalents primarily consist of AAA-rated money market funds with overnight liquidity and no stated maturities. We classified cash equivalents as Level 1 due to the short-term nature of these instruments and measured the fair value based on quoted prices in active markets for identical assets. When available, our marketable securities are valued using quoted prices for identical instruments in active markets. If we are unable to value our marketable securities using quoted prices for identical instruments in active markets, we value our investments using broker reports that utilize quoted market prices for comparable instruments. We validate, on a sample basis, the derived prices provided by the brokers by comparing their assessment of the fair values of our investments against the fair values of the portfolio balances of another third-party professional pricing service. |
Share-based Compensation | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on historical volatilities for publicly traded stock options of comparable companies over the estimated expected life of the options. The expected term represents the period of time the options are expected to be outstanding and is based on the “simplified method.” We use the “simplified method” due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the options. The risk-free interest rate is based on yields on U.S. Treasury STRIPS with a maturity similar to the estimated expected term of the options. |
Supplemental Consolidated Balance Sheet and Statement of Operations Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of (in thousands):
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Schedule of Other Income and (Expense), net | Other income and (expense), net for the three months ended March 31, 2016 and 2015 consisted of (in thousands):
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Marketable Securities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Securities | At March 31, 2016, marketable securities consisted of the following (in thousands):
At December 31, 2015, marketable securities consisted of the following (in thousands):
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Schedule of Cash and Cash Equivalents | At March 31, 2016, marketable securities consisted of the following (in thousands):
At December 31, 2015, marketable securities consisted of the following (in thousands):
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Schedule of Available-for-sale Securities, Continuous Unrealized Loss Position | The following table presents gross unrealized losses and fair values for those marketable securities that were in an unrealized loss position as of March 31, 2016, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands):
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Fair Value Measurements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Measured on Recurring Basis | The following table presents information about our assets that are measured at fair value on a recurring basis using the above input categories (in thousands):
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments | As of March 31, 2016, future estimated minimum lease payments under non-cancelable operating leases were as follows (in thousands):
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Stock-Based Compensation (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Expense | Stock-based compensation expense associated with stock options and restricted stock was recorded in the following cost and expense categories consistent with the respective employee or service provider’s related cash compensation (in thousands):
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Schedule of Share-based Payment Award, Valuation Assumptions | The fair value of our stock options was estimated assuming no expected dividends and the following weighted-average assumptions:
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Schedule of Stock-Option Activity | The following table summarizes the option activity under the Plans for the three months ended March 31, 2016:
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Schedule of Restricted Stock Activity | The following table summarizes the restricted stock activity under the Plan for the three months ended March 31, 2016:
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Net Loss Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of the denominator used in the calculation of basic and diluted loss per share is as follows (in thousands, except share and per share data):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share were as follows:
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Supplemental Consolidated Balance Sheet and Statement of Operations Information - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Accrued Liabilities and Other Liabilities [Abstract] | ||
Accrued vacation | $ 4,161 | $ 3,604 |
Accrued commissions | 2,497 | 2,470 |
Accrued bonuses | 2,900 | 9,598 |
Estimated health insurance claims | 1,492 | 900 |
Accrued other liabilities | 3,528 | 3,822 |
Accrued expenses and other current liabilities | $ 14,578 | $ 20,394 |
Supplemental Consolidated Balance Sheet and Statement of Operations Information - Other Income and (Expense), Net (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
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Other Nonoperating Income (Expense) [Abstract] | ||
Interest income | $ 83 | $ 15 |
Income from training reimbursement program | 433 | 66 |
Other | 60 | (147) |
Nonoperating income (expense) | $ 576 | $ (66) |
Marketable Securities - Continuous Unrealized Loss Position (Details) $ in Thousands |
Mar. 31, 2016
USD ($)
|
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Fair Value | |
Less than 12 months | $ 4,910 |
12 months or greater | 0 |
Unrealized Loss | |
Less than 12 months | (9) |
12 months or greater | 0 |
U. S. treasury debt securities | |
Fair Value | |
Less than 12 months | 2,407 |
12 months or greater | 0 |
Unrealized Loss | |
Less than 12 months | (3) |
12 months or greater | 0 |
U.S. corporate debt securities | |
Fair Value | |
Less than 12 months | 2,503 |
12 months or greater | 0 |
Unrealized Loss | |
Less than 12 months | (6) |
12 months or greater | $ 0 |
Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands |
Mar. 31, 2016
USD ($)
|
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Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
Remainder of 2016 | $ 2,302 |
2017 | 3,304 |
2018 | 3,164 |
2019 | 2,482 |
2020 | 2,163 |
Thereafter | 10,101 |
Total minimum lease payments | $ 23,516 |
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 3,390 | $ 2,174 |
Employee and Nonemployee Stock Options | Class A Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 2,200 | 1,600 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 1,100 | $ 542 |
2014 Equity Incentive Plan | Class A Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 746,029 |
Stock-Based Compensation - Assumptions (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected term (in years) | 6 years 1 month 6 days | |
Risk-free interest rate, min (as percent) | 1.48% | 1.35% |
Risk-free interest rate, max (as percent) | 1.90% | 1.74% |
Expected volatility, min (as percent) | 44.96% | 42.35% |
Expected volatility, max (as percent) | 45.29% | 44.08% |
Forfeiture rate, min (as percent) | 0.00% | 5.12% |
Forfeiture rate, max (as percent) | 4.80% | 5.21% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected term (in years) | 6 years | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected term (in years) | 6 years 1 month 6 days |
Net Loss Per Share - Earnings Per Share Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Class of Stock [Line Items] | ||
Net loss | $ (12,045) | $ (7,447) |
Weighted average common shares outstanding - basic and diluted (in shares) | 40,451,668 | 39,593,700 |
Basic and diluted net loss per share (in dollars per share) | $ (0.30) | $ (0.19) |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Net loss | $ (8,496) | $ (5,110) |
Weighted average common shares outstanding - basic and diluted (in shares) | 28,534,236 | 27,166,753 |
Basic and diluted net loss per share (in dollars per share) | $ (0.30) | $ (0.19) |
Class B Common Stock | ||
Class of Stock [Line Items] | ||
Net loss | $ (3,549) | $ (2,337) |
Weighted average common shares outstanding - basic and diluted (in shares) | 11,917,432 | 12,426,947 |
Basic and diluted net loss per share (in dollars per share) | $ (0.30) | $ (0.19) |
Net Loss Per Share - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Shares subject to outstanding common stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 7,500,616 | 6,091,831 |
Shares subject to unvested restricted stock awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 423,360 | 584,350 |
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