Delaware (State or other jurisdiction of incorporation or organization) | 001-36773 (Commission File Number) | 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) | ||
___________________________________ |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Press Release entitled "Workiva Announces Third Quarter 2016 Financial Results" dated November 9, 2016 |
WORKIVA INC. | |
By: | /s/ J. Stuart Miller |
Name: | J. Stuart Miller |
Title: | Executive Vice President, Treasurer and Chief Financial Officer |
Exhibit Number | Description | |
99.1 | Press Release entitled "Workiva Announces Third Quarter 2016 Financial Results" dated November 9, 2016 | |
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• | Revenue: Total revenue for the quarter ended September 30, 2016 was $44.7 million, an increase of 23.3% from $36.3 million in the third quarter of 2015. Subscription and support revenue was $36.2 million, an increase of 21.5% versus results in the third quarter of 2015. Professional services revenue was $8.5 million, an increase of 31.7% compared to the same quarter in the prior year. |
• | Gross Profit: GAAP gross profit for the quarter ended September 30, 2016 was $32.0 million compared with $26.5 million in the same quarter of the prior year. GAAP gross margin was 71.5% in the third quarter of 2016 versus 73.0% in the third quarter of 2015. Non-GAAP gross profit for the quarter ended September 30, 2016 was $32.2 million, an increase of 20.7% compared with the prior year's third quarter, and non-GAAP gross margin was 72.0% compared to 73.5% in the third quarter of 2015. |
• | Loss from Operations: GAAP loss from operations for the quarter ended September 30, 2016 was $12.7 million compared with a loss of $14.3 million in the prior year's third quarter. Non-GAAP loss from operations for the quarter ended September 30, 2016 was $9.1 million, compared with non-GAAP loss from operations of $11.2 million in the third quarter of 2015. Non-GAAP loss from operations as a percentage of revenue improved 1,070 basis points for the quarter ended September 30, 2016 compared to the third quarter of 2015. |
• | Net Loss: GAAP net loss for the quarter ended September 30, 2016 was $12.9 million compared with a net loss of $14.6 million for the prior year's third quarter. GAAP net loss per basic and diluted share for the quarter ended September 30, 2016 was $0.32, based on 40.8 million weighted-average shares outstanding, compared with a net loss per basic and diluted share of $0.37, based on 40.0 million weighted-average shares outstanding in the third quarter of 2015. |
• | Non-GAAP net loss for the quarter ended September 30, 2016 was $9.2 million compared with a net loss of $11.5 million in the prior year's third quarter. Non-GAAP net loss per basic and diluted share for the quarter |
• | Customers: Workiva had 2,696 customers as of September 30, 2016, a net increase of 228 customers from September 30, 2015. |
• | Revenue Retention Rate: As of September 30, 2016, Workiva's revenue retention rate (excluding add-on revenue) was 95.0%, and the revenue retention rate including add-on revenue was 108.7%. Add-on revenue includes the change in both seats purchased and seat pricing for existing customers. |
• | Total revenue is expected to be in the range of $45.2 million to $45.7 million. |
• | GAAP loss from operations is expected to be in the range of $11.8 million to $12.3 million. |
• | Non-GAAP loss from operations is expected to be in the range of $8.0 million to $8.5 million. |
• | GAAP net loss per basic and diluted share is expected to be in the range of $0.30 to $0.31. |
• | Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.20 to $0.21. |
• | Net loss per basic and diluted share is based on 41.0 million weighted-average shares outstanding. |
• | Total revenue is expected to be in the range of $177.5 million to $178.0 million. |
• | GAAP loss from operations is expected to be in the range of $48.0 million to $48.5 million. |
• | Non-GAAP loss from operations is expected to be in the range of $33.6 million to $34.1 million. |
• | GAAP net loss per basic and diluted share is expected to be in the range of $1.19 to $1.20. |
• | Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.84 to $0.85. |
• | Net loss per basic and diluted share is based on 40.7 million weighted-average shares outstanding. |
Investor Contact: | Media Contact: | |||
Adam Rogers | Kevin McCarthy | |||
Workiva Inc. | Workiva Inc. | |||
investor@workiva.com | press@workiva.com | |||
(515) 663-4493 | (515) 663-4471 |
WORKIVA INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | |||||||||||||||
Subscription and support | $ | 36,237 | $ | 29,832 | $ | 104,791 | $ | 84,186 | |||||||
Professional services | 8,473 | 6,436 | 27,481 | 21,204 | |||||||||||
Total revenue | 44,710 | 36,268 | 132,272 | 105,390 | |||||||||||
Cost of revenue | |||||||||||||||
Subscription and support (1) | 6,694 | 5,319 | 20,651 | 16,768 | |||||||||||
Professional services (1) | 6,040 | 4,457 | 17,766 | 12,423 | |||||||||||
Total cost of revenue | 12,734 | 9,776 | 38,417 | 29,191 | |||||||||||
Gross profit | 31,976 | 26,492 | 93,855 | 76,199 | |||||||||||
Operating expenses | |||||||||||||||
Research and development (1) | 14,342 | 12,766 | 42,905 | 36,970 | |||||||||||
Sales and marketing (1) | 22,354 | 20,903 | 62,270 | 50,937 | |||||||||||
General and administrative (1) | 8,015 | 7,153 | 24,850 | 20,178 | |||||||||||
Total operating expenses | 44,711 | 40,822 | 130,025 | 108,085 | |||||||||||
Loss from operations | (12,735 | ) | (14,330 | ) | (36,170 | ) | (31,886 | ) | |||||||
Interest expense | (462 | ) | (494 | ) | (1,420 | ) | (1,517 | ) | |||||||
Other income and (expense), net | 298 | 163 | 1,152 | 288 | |||||||||||
Loss before provision for income taxes | (12,899 | ) | (14,661 | ) | (36,438 | ) | (33,115 | ) | |||||||
Provision for income taxes | (8 | ) | (31 | ) | 23 | (9 | ) | ||||||||
Net loss | $ | (12,891 | ) | $ | (14,630 | ) | $ | (36,461 | ) | $ | (33,106 | ) | |||
Net loss per common share: | |||||||||||||||
Basic and diluted | $ | (0.32 | ) | $ | (0.37 | ) | $ | (0.90 | ) | $ | (0.83 | ) | |||
Weighted average common shares outstanding - basic and diluted | 40,762,960 | 39,980,308 | 40,603,430 | 39,735,393 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Cost of revenue | |||||||||||||||
Subscription and support | $ | 122 | $ | 92 | $ | 365 | $ | 275 | |||||||
Professional services | 100 | 90 | 315 | 251 | |||||||||||
Operating expenses | |||||||||||||||
Research and development | 594 | 586 | 1,787 | 1,289 | |||||||||||
Sales and marketing | 567 | 461 | 1,471 | 1,243 | |||||||||||
General and administrative | 2,287 | 1,853 | 6,624 | 4,818 |
WORKIVA INC. UNAUDITED CONSOLIDATED BALANCE SHEETS (in thousands) | |||||||
September 30, 2016 | December 31, 2015 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 42,842 | $ | 58,750 | |||
Marketable securities | 10,995 | 17,420 | |||||
Accounts receivable, net | 22,353 | 15,647 | |||||
Deferred commissions | 1,634 | 1,368 | |||||
Other receivables | 1,261 | 818 | |||||
Prepaid expenses and other current assets | 4,972 | 3,875 | |||||
Total current assets | 84,057 | 97,878 | |||||
Property and equipment, net | 43,287 | 44,410 | |||||
Intangible assets, net | 995 | 896 | |||||
Other assets | 1,583 | 711 | |||||
Total assets | $ | 129,922 | $ | 143,895 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 5,637 | $ | 5,138 | |||
Accrued expenses and other current liabilities | 17,177 | 20,394 | |||||
Deferred revenue | 63,629 | 55,741 | |||||
Deferred government grant obligation | 1,164 | 985 | |||||
Current portion of capital lease and financing obligations | 1,432 | 1,808 | |||||
Current portion of long-term debt | 20 | 18 | |||||
Total current liabilities | 89,059 | 84,084 | |||||
Deferred revenue | 15,216 | 7,597 | |||||
Deferred government grant obligation | 1,089 | 1,996 | |||||
Other long-term liabilities | 4,064 | 3,343 | |||||
Capital lease and financing obligations | 20,013 | 21,083 | |||||
Long-term debt | 53 | 73 | |||||
Total liabilities | 129,494 | 118,176 | |||||
Stockholders’ equity | |||||||
Common stock | 41 | 41 | |||||
Additional paid-in-capital | 213,532 | 202,371 | |||||
Accumulated deficit | (213,395 | ) | (176,934 | ) | |||
Accumulated other comprehensive income | 250 | 241 | |||||
Total stockholders’ equity | 428 | 25,719 | |||||
Total liabilities and stockholders’ equity | $ | 129,922 | $ | 143,895 |
WORKIVA INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Cash flows from operating activities | |||||||||||||||
Net loss | $ | (12,891 | ) | $ | (14,630 | ) | $ | (36,461 | ) | $ | (33,106 | ) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | |||||||||||||||
Depreciation and amortization | 944 | 1,058 | 2,916 | 3,354 | |||||||||||
Stock-based compensation expense | 3,670 | 3,082 | 10,562 | 7,876 | |||||||||||
(Recovery of) provision for doubtful accounts | (92 | ) | 222 | 78 | 348 | ||||||||||
Realized gain on sale of available-for-sale securities | — | (7 | ) | (6 | ) | (7 | ) | ||||||||
Amortization (accretion) of premiums and discounts on marketable securities, net | 36 | 32 | 111 | 32 | |||||||||||
Recognition of deferred government grant obligation | (247 | ) | (236 | ) | (910 | ) | (508 | ) | |||||||
Deferred income tax | 5 | — | (7 | ) | — | ||||||||||
Changes in assets and liabilities: | |||||||||||||||
Accounts receivable | (4,009 | ) | 47 | (6,734 | ) | (1,448 | ) | ||||||||
Deferred commissions | (135 | ) | (217 | ) | (264 | ) | (104 | ) | |||||||
Other receivables | (365 | ) | (44 | ) | (447 | ) | (656 | ) | |||||||
Prepaid expenses and other | 415 | (218 | ) | (1,098 | ) | (139 | ) | ||||||||
Other assets | (455 | ) | 72 | (841 | ) | 166 | |||||||||
Accounts payable | 279 | 857 | 380 | 2,276 | |||||||||||
Deferred revenue | 13,228 | 1,686 | 15,412 | 3,528 | |||||||||||
Accrued expenses and other liabilities | 2,410 | 3,578 | (3,012 | ) | 1,732 | ||||||||||
Change in restricted cash | — | — | — | 101 | |||||||||||
Net cash provided by (used in) operating activities | 2,793 | (4,718 | ) | (20,321 | ) | (16,555 | ) | ||||||||
Cash flows from investing activities | |||||||||||||||
Purchase of property and equipment | (91 | ) | (629 | ) | (1,100 | ) | (1,659 | ) | |||||||
Purchase of marketable securities | — | (15,692 | ) | (802 | ) | (15,692 | ) | ||||||||
Sale of marketable securities | — | 3,012 | 7,197 | 3,012 | |||||||||||
Purchase of intangible assets | (38 | ) | (66 | ) | (152 | ) | (344 | ) | |||||||
Net cash (used in) provided by investing activities | (129 | ) | (13,375 | ) | 5,143 | (14,683 | ) | ||||||||
Cash flows from financing activities | |||||||||||||||
Payment of equity issuance costs | — | — | — | (1,346 | ) | ||||||||||
Proceeds from option exercises | 840 | 1,062 | 1,360 | 1,495 | |||||||||||
Taxes paid related to net share settlements of stock-based compensation awards | — | — | (761 | ) | — | ||||||||||
Changes in restricted cash | — | — | — | 300 | |||||||||||
Repayment of other long-term debt | — | (17 | ) | (18 | ) | (84 | ) | ||||||||
Principal payments on capital lease and financing obligations | (538 | ) | (522 | ) | (1,446 | ) | (1,683 | ) | |||||||
Distributions to members | — | — | — | (35 | ) | ||||||||||
Proceeds from government grants | — | 235 | 183 | 548 | |||||||||||
Payments of issuance costs on line of credit | — | — | (33 | ) | — | ||||||||||
Net cash provided by (used in) financing activities | 302 | 758 | (715 | ) | (805 | ) | |||||||||
Effect of foreign exchange rates on cash | (9 | ) | (3 | ) | (15 | ) | 6 | ||||||||
Net increase (decrease) in cash and cash equivalents | 2,957 | (17,338 | ) | (15,908 | ) | (32,037 | ) | ||||||||
Cash and cash equivalents at beginning of period | 39,885 | 86,432 | 58,750 | 101,131 | |||||||||||
Cash and cash equivalents at end of period | $ | 42,842 | $ | 69,094 | $ | 42,842 | $ | 69,094 |
TABLE I WORKIVA INC. RECONCILIATION OF NON-GAAP INFORMATION (in thousands, except share and per share) | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Gross profit, subscription and support | $ | 29,543 | $ | 24,513 | $ | 84,140 | $ | 67,418 | |||||||
Add back: Stock-based compensation | 122 | 92 | 365 | 275 | |||||||||||
Gross profit, subscription and support, non-GAAP | $ | 29,665 | $ | 24,605 | $ | 84,505 | $ | 67,693 | |||||||
As a percentage of subscription and support revenue, non-GAAP | 81.9 | % | 82.5 | % | 80.6 | % | 80.4 | % | |||||||
Gross profit, professional services | $ | 2,433 | $ | 1,979 | $ | 9,715 | $ | 8,781 | |||||||
Add back: Stock-based compensation | 100 | 90 | 315 | 251 | |||||||||||
Gross profit, professional services, non-GAAP | $ | 2,533 | $ | 2,069 | $ | 10,030 | $ | 9,032 | |||||||
As a percentage of professional services revenue, non-GAAP | 29.9 | % | 32.1 | % | 36.5 | % | 42.6 | % | |||||||
Gross profit, as reported | $ | 31,976 | $ | 26,492 | $ | 93,855 | $ | 76,199 | |||||||
Add back: Stock-based compensation | 222 | 182 | 680 | 526 | |||||||||||
Gross profit, non-GAAP | $ | 32,198 | $ | 26,674 | $ | 94,535 | $ | 76,725 | |||||||
As percentage of revenue, non-GAAP | 72.0 | % | 73.5 | % | 71.5 | % | 72.8 | % | |||||||
Research and development, as reported | $ | 14,342 | $ | 12,766 | $ | 42,905 | $ | 36,970 | |||||||
Less: Stock-based compensation | 594 | 586 | 1,787 | 1,289 | |||||||||||
Research and development, non-GAAP | $ | 13,748 | $ | 12,180 | $ | 41,118 | $ | 35,681 | |||||||
As percentage of revenue, non-GAAP | 30.7 | % | 33.6 | % | 31.1 | % | 33.9 | % | |||||||
Sales and marketing, as reported | $ | 22,354 | $ | 20,903 | $ | 62,270 | $ | 50,937 | |||||||
Less: Stock-based compensation | 567 | 461 | 1,471 | 1,243 | |||||||||||
Sales and marketing, non-GAAP | $ | 21,787 | $ | 20,442 | $ | 60,799 | $ | 49,694 | |||||||
As percentage of revenue, non-GAAP | 48.7 | % | 56.4 | % | 46.0 | % | 47.2 | % | |||||||
General and administrative, as reported | $ | 8,015 | $ | 7,153 | $ | 24,850 | $ | 20,178 | |||||||
Less: Stock-based compensation | 2,287 | 1,853 | 6,624 | 4,818 | |||||||||||
General and administrative, non-GAAP | $ | 5,728 | $ | 5,300 | $ | 18,226 | $ | 15,360 | |||||||
As percentage of revenue, non-GAAP | 12.8 | % | 14.6 | % | 13.8 | % | 14.6 | % | |||||||
Loss from operations | $ | (12,735 | ) | $ | (14,330 | ) | $ | (36,170 | ) | $ | (31,886 | ) | |||
Add back: Stock-based compensation | 3,670 | 3,082 | 10,562 | 7,876 | |||||||||||
Loss from operations, non-GAAP | $ | (9,065 | ) | $ | (11,248 | ) | $ | (25,608 | ) | $ | (24,010 | ) | |||
As percentage of revenue, non-GAAP | (20.3 | )% | (31.0 | )% | (19.4 | )% | (22.8 | )% | |||||||
Net loss | $ | (12,891 | ) | $ | (14,630 | ) | $ | (36,461 | ) | $ | (33,106 | ) | |||
Add back: Stock-based compensation | 3,670 | 3,082 | 10,562 | 7,876 | |||||||||||
Net loss, non-GAAP | $ | (9,221 | ) | $ | (11,548 | ) | $ | (25,899 | ) | $ | (25,230 | ) | |||
As percentage of revenue, non-GAAP | (20.6 | )% | (31.8 | )% | (19.6 | )% | (23.9 | )% | |||||||
Net loss per basic and diluted share: | $ | (0.32 | ) | $ | (0.37 | ) | $ | (0.90 | ) | $ | (0.83 | ) | |||
Add back: Stock-based compensation | 0.09 | 0.08 | 0.26 | 0.20 | |||||||||||
Net loss per basic and diluted share, non-GAAP | $ | (0.23 | ) | $ | (0.29 | ) | $ | (0.64 | ) | $ | (0.63 | ) | |||
Weighted average common shares outstanding - basic and diluted, non-GAAP | 40,762,960 | 39,980,308 | 40,603,430 | 39,735,393 |
TABLE II WORKIVA INC. RECONCILIATION OF NON-GAAP GUIDANCE (in thousands, except share and per share data) | |||||||||||||||
Three months ending December 31, 2016 | Year ending December 31, 2016 | ||||||||||||||
Loss from operations, GAAP range | $ | (11,800 | ) | - | $ | (12,300 | ) | $ | (48,000 | ) | - | $ | (48,500 | ) | |
Add back: Stock-based compensation | 3,800 | 3,800 | 14,400 | 14,400 | |||||||||||
Loss from operations, non-GAAP range | $ | (8,000 | ) | - | $ | (8,500 | ) | $ | (33,600 | ) | - | $ | (34,100 | ) | |
Net loss per share, GAAP range | $ | (0.30 | ) | - | $ | (0.31 | ) | $ | (1.19 | ) | - | $ | (1.20 | ) | |
Add back: Stock-based compensation | 0.10 | 0.10 | 0.35 | 0.35 | |||||||||||
Net loss per share, non-GAAP range | $ | (0.20 | ) | - | $ | (0.21 | ) | $ | (0.84 | ) | - | $ | (0.85 | ) | |
Weighted average common shares outstanding - basic and diluted | 41,000,000 | 41,000,000 | 40,700,000 | 40,700,000 |
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