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)) |
Exhibit Number | Description | |
99.1 | ||
WORKIVA INC. | |
By: | /s/ J. Stuart Miller |
Name: | J. Stuart Miller |
Title: | Executive Vice President and Chief Financial Officer |
• | Revenue: Total revenue for the quarter ended September 30, 2017 reached $52.1 million, an increase of 16.5% from $44.7 million in the third quarter of 2016. Subscription and support revenue contributed $43.2 million, up 19.3% versus results in the third quarter of 2016. Professional services revenue was $8.9 million, an increase of 4.5% compared to the same quarter in the prior year. |
• | Gross Profit: GAAP gross profit for the quarter ended September 30, 2017 was $36.4 million compared with $32.0 million in the same quarter of the prior year. GAAP gross margin was 69.9% in the third quarter of 2017 versus 71.5% in the third quarter of 2016. Non-GAAP gross profit for the quarter ended September 30, 2017 was $36.7 million, an increase of 14.1% compared with the prior year's third quarter, and non-GAAP gross margin was 70.6% compared to 72.0% in the third quarter of 2016. |
• | Loss from Operations: GAAP loss from operations for the quarter ended September 30, 2017 was $13.8 million compared with a loss of $12.7 million in the prior year's third quarter. Non-GAAP loss from operations for the quarter ended September 30, 2017 was $9.1 million, compared with non-GAAP loss from operations of $9.1 million in the third quarter of 2016. Non-GAAP loss from operations as a percentage of revenue improved 280 basis points for the quarter ended September 30, 2017 compared to the third quarter of 2016. |
• | Net Loss: GAAP net loss for the quarter ended September 30, 2017 was $14.1 million compared with a net loss of $12.9 million for the prior year's third quarter. GAAP net loss per basic and diluted share for the quarter ended September 30, 2017 was $0.34, based on 41.8 million weighted-average shares outstanding, compared with a net loss per basic and diluted share of $0.32, based on 40.8 million weighted-average shares outstanding in the third quarter of 2016. |
• | Non-GAAP net loss for the quarter ended September 30, 2017 was $9.4 million compared with a net loss of $9.2 million in the prior year's third quarter. Non-GAAP net loss per basic and diluted share for the quarter ended September 30, 2017 was $0.23, based on 41.8 million weighted-average shares outstanding, compared with a net loss per basic and diluted share of $0.23, based on 40.8 million weighted-average shares outstanding in the third quarter of 2016. |
• | Customers: Workiva had 2,991 customers as of September 30, 2017, a net increase of 295 customers from September 30, 2016. |
• | Revenue Retention Rate: As of September 30, 2017, Workiva's revenue retention rate (excluding add-on revenue) was 96.5%, and the revenue retention rate including add-on revenue was 108.6%. 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 $53.0 million to $53.4 million. |
• | GAAP loss from operations is expected to be in the range of $15.6 million to $16.0 million. |
• | Non-GAAP loss from operations is expected to be in the range of $8.8 million to $9.2 million. |
• | GAAP net loss per basic and diluted share is expected to be in the range of $0.38 to $0.39. |
• | Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.22 to $0.23. |
• | Net loss per basic and diluted share is based on 42.0 million weighted-average shares outstanding. |
• | Total revenue is expected to be in the range of $206.4 million to $206.8 million. |
• | GAAP loss from operations is expected to be in the range of $45.2 million to $45.6 million. |
• | Non-GAAP loss from operations is expected to be in the range of $25.2 million to $25.6 million. |
• | GAAP net loss per basic and diluted share is expected to be in the range of $1.11 to $1.12. |
• | Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.63 to $0.64. |
• | Net loss per basic and diluted share is based on 41.6 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, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | |||||||||||||||
Subscription and support | $ | 43,214 | $ | 36,237 | $ | 123,734 | $ | 104,791 | |||||||
Professional services | 8,854 | 8,473 | 29,629 | 27,481 | |||||||||||
Total revenue | 52,068 | 44,710 | 153,363 | 132,272 | |||||||||||
Cost of revenue | |||||||||||||||
Subscription and support (1) | 8,472 | 6,694 | 23,867 | 20,651 | |||||||||||
Professional services (1) | 7,180 | 6,040 | 20,289 | 17,766 | |||||||||||
Total cost of revenue | 15,652 | 12,734 | 44,156 | 38,417 | |||||||||||
Gross profit | 36,416 | 31,976 | 109,207 | 93,855 | |||||||||||
Operating expenses | |||||||||||||||
Research and development (1) | 17,527 | 14,342 | 49,302 | 42,905 | |||||||||||
Sales and marketing (1) | 23,712 | 22,354 | 62,212 | 62,270 | |||||||||||
General and administrative (1) | 8,959 | 8,015 | 27,323 | 24,850 | |||||||||||
Total operating expenses | 50,198 | 44,711 | 138,837 | 130,025 | |||||||||||
Loss from operations | (13,782 | ) | (12,735 | ) | (29,630 | ) | (36,170 | ) | |||||||
Interest expense | (464 | ) | (462 | ) | (1,394 | ) | (1,420 | ) | |||||||
Other income, net | 198 | 298 | 986 | 1,152 | |||||||||||
Loss before provision (benefit) for income taxes | (14,048 | ) | (12,899 | ) | (30,038 | ) | (36,438 | ) | |||||||
Provision (benefit) for income taxes | 25 | (8 | ) | 67 | 23 | ||||||||||
Net loss | $ | (14,073 | ) | $ | (12,891 | ) | $ | (30,105 | ) | $ | (36,461 | ) | |||
Net loss per common share: | |||||||||||||||
Basic and diluted | $ | (0.34 | ) | $ | (0.32 | ) | $ | (0.73 | ) | $ | (0.90 | ) | |||
Weighted-average common shares outstanding - basic and diluted | 41,815,139 | 40,762,960 | 41,453,736 | 40,603,430 |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Cost of revenue | |||||||||||||||
Subscription and support | $ | 204 | $ | 122 | $ | 522 | $ | 365 | |||||||
Professional services | 129 | 100 | 329 | 315 | |||||||||||
Operating expenses | |||||||||||||||
Research and development | 601 | 594 | 1,566 | 1,787 | |||||||||||
Sales and marketing | 788 | 567 | 2,141 | 1,471 | |||||||||||
General and administrative | 2,942 | 2,287 | 8,642 | 6,624 |
WORKIVA INC. CONSOLIDATED BALANCE SHEETS (in thousands) | |||||||
September 30, 2017 | December 31, 2016 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 62,718 | $ | 51,281 | |||
Marketable securities | 15,033 | 11,435 | |||||
Accounts receivable, net | 24,283 | 22,535 | |||||
Deferred commissions | 2,208 | 1,864 | |||||
Other receivables | 1,109 | 1,545 | |||||
Prepaid expenses | 6,298 | 9,382 | |||||
Total current assets | 111,649 | 98,042 | |||||
Property and equipment, net | 41,300 | 42,590 | |||||
Intangible assets, net | 1,088 | 1,012 | |||||
Other assets | 1,553 | 1,499 | |||||
Total assets | $ | 155,590 | $ | 143,143 | |||
Liabilities and Stockholders’ Deficit | |||||||
Current liabilities | |||||||
Accounts payable | $ | 1,861 | $ | 849 | |||
Accrued expenses and other current liabilities | 20,771 | 20,695 | |||||
Deferred revenue | 99,149 | 76,016 | |||||
Deferred government grant obligation | 813 | 1,022 | |||||
Current portion of capital lease and financing obligations | 1,184 | 1,285 | |||||
Current portion of long-term debt | — | 20 | |||||
Total current liabilities | 123,778 | 99,887 | |||||
Deferred revenue | 23,278 | 21,485 | |||||
Deferred government grant obligation | 289 | 1,000 | |||||
Other long-term liabilities | 4,008 | 4,100 | |||||
Capital lease and financing obligations | 18,709 | 19,743 | |||||
Long-term debt | — | 53 | |||||
Total liabilities | 170,062 | 146,268 | |||||
Stockholders’ deficit | |||||||
Common stock | 42 | 41 | |||||
Additional paid-in-capital | 236,386 | 217,454 | |||||
Accumulated deficit | (251,016 | ) | (220,911 | ) | |||
Accumulated other comprehensive income | 116 | 291 | |||||
Total stockholders’ deficit | (14,472 | ) | (3,125 | ) | |||
Total liabilities and stockholders’ deficit | $ | 155,590 | $ | 143,143 |
WORKIVA INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Cash flows from operating activities | |||||||||||||||
Net loss | $ | (14,073 | ) | $ | (12,891 | ) | $ | (30,105 | ) | $ | (36,461 | ) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | |||||||||||||||
Depreciation and amortization | 854 | 944 | 2,612 | 2,916 | |||||||||||
Stock-based compensation expense | 4,664 | 3,670 | 13,200 | 10,562 | |||||||||||
(Recovery of) provision for doubtful accounts | (691 | ) | (92 | ) | (259 | ) | 78 | ||||||||
Realized gain on sale of available-for-sale securities, net | — | — | — | (6 | ) | ||||||||||
Amortization of premiums and discounts on marketable securities, net | 24 | 36 | 83 | 111 | |||||||||||
Recognition of deferred government grant obligation | (207 | ) | (247 | ) | (943 | ) | (910 | ) | |||||||
Deferred income tax | — | 5 | — | (7 | ) | ||||||||||
Changes in assets and liabilities: | |||||||||||||||
Accounts receivable | (757 | ) | (4,009 | ) | (1,299 | ) | (6,734 | ) | |||||||
Deferred commissions | (179 | ) | (135 | ) | (330 | ) | (264 | ) | |||||||
Other receivables | 468 | (365 | ) | 443 | (447 | ) | |||||||||
Prepaid expenses | 5,123 | 415 | 3,097 | (1,098 | ) | ||||||||||
Other assets | (87 | ) | (455 | ) | (74 | ) | (841 | ) | |||||||
Accounts payable | 669 | 279 | 1,008 | 380 | |||||||||||
Deferred revenue | 5,904 | 13,228 | 24,398 | 15,412 | |||||||||||
Accrued expenses and other liabilities | 3,474 | 2,410 | (83 | ) | (3,012 | ) | |||||||||
Net cash provided by (used in) operating activities | 5,186 | 2,793 | 11,748 | (20,321 | ) | ||||||||||
Cash flows from investing activities | |||||||||||||||
Purchase of property and equipment | (987 | ) | (91 | ) | (1,134 | ) | (1,100 | ) | |||||||
Purchase of marketable securities | (5,017 | ) | — | (11,367 | ) | (802 | ) | ||||||||
Maturities of marketable securities | 2,830 | — | 7,681 | — | |||||||||||
Sale of marketable securities | — | — | — | 7,197 | |||||||||||
Purchase of intangible assets | (55 | ) | (38 | ) | (144 | ) | (152 | ) | |||||||
Net cash (used in) provided by investing activities | (3,229 | ) | (129 | ) | (4,964 | ) | 5,143 | ||||||||
Cash flows from financing activities | |||||||||||||||
Proceeds from option exercises | 1,154 | 840 | 6,669 | 1,360 | |||||||||||
Taxes paid related to net share settlements of stock-based compensation awards | — | — | (936 | ) | (761 | ) | |||||||||
Repayment of other long-term debt | (53 | ) | — | (73 | ) | (18 | ) | ||||||||
Principal payments on capital lease and financing obligations | (348 | ) | (538 | ) | (1,135 | ) | (1,446 | ) | |||||||
Proceeds from government grants | — | — | 22 | 183 | |||||||||||
Payments of issuance costs on line of credit | (71 | ) | — | (81 | ) | (33 | ) | ||||||||
Net cash provided by (used in) financing activities | 682 | 302 | 4,466 | (715 | ) | ||||||||||
Effect of foreign exchange rates on cash | 93 | (9 | ) | 187 | (15 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | 2,732 | 2,957 | 11,437 | (15,908 | ) | ||||||||||
Cash and cash equivalents at beginning of period | 59,986 | 39,885 | 51,281 | 58,750 | |||||||||||
Cash and cash equivalents at end of period | $ | 62,718 | $ | 42,842 | $ | 62,718 | $ | 42,842 |
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, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Gross profit, subscription and support | $ | 34,742 | $ | 29,543 | $ | 99,867 | $ | 84,140 | |||||||
Add back: Stock-based compensation | 204 | 122 | 522 | 365 | |||||||||||
Gross profit, subscription and support, non-GAAP | $ | 34,946 | $ | 29,665 | $ | 100,389 | $ | 84,505 | |||||||
As a percentage of subscription and support revenue, non-GAAP | 80.9 | % | 81.9 | % | 81.1 | % | 80.6 | % | |||||||
Gross profit, professional services | $ | 1,674 | $ | 2,433 | $ | 9,340 | $ | 9,715 | |||||||
Add back: Stock-based compensation | 129 | 100 | 329 | 315 | |||||||||||
Gross profit, professional services, non-GAAP | $ | 1,803 | $ | 2,533 | $ | 9,669 | $ | 10,030 | |||||||
As a percentage of professional services revenue, non-GAAP | 20.4 | % | 29.9 | % | 32.6 | % | 36.5 | % | |||||||
Gross profit, as reported | $ | 36,416 | $ | 31,976 | $ | 109,207 | $ | 93,855 | |||||||
Add back: Stock-based compensation | 333 | 222 | 851 | 680 | |||||||||||
Gross profit, non-GAAP | $ | 36,749 | $ | 32,198 | $ | 110,058 | $ | 94,535 | |||||||
As percentage of revenue, non-GAAP | 70.6 | % | 72.0 | % | 71.8 | % | 71.5 | % | |||||||
Research and development, as reported | $ | 17,527 | $ | 14,342 | $ | 49,302 | $ | 42,905 | |||||||
Less: Stock-based compensation | 601 | 594 | 1,566 | 1,787 | |||||||||||
Research and development, non-GAAP | $ | 16,926 | $ | 13,748 | $ | 47,736 | $ | 41,118 | |||||||
As percentage of revenue, non-GAAP | 32.5 | % | 30.7 | % | 31.1 | % | 31.1 | % | |||||||
Sales and marketing, as reported | $ | 23,712 | $ | 22,354 | $ | 62,212 | $ | 62,270 | |||||||
Less: Stock-based compensation | 788 | 567 | 2,141 | 1,471 | |||||||||||
Sales and marketing, non-GAAP | $ | 22,924 | $ | 21,787 | $ | 60,071 | $ | 60,799 | |||||||
As percentage of revenue, non-GAAP | 44.0 | % | 48.7 | % | 39.2 | % | 46.0 | % | |||||||
General and administrative, as reported | $ | 8,959 | $ | 8,015 | $ | 27,323 | $ | 24,850 | |||||||
Less: Stock-based compensation | 2,942 | 2,287 | 8,642 | 6,624 | |||||||||||
General and administrative, non-GAAP | $ | 6,017 | $ | 5,728 | $ | 18,681 | $ | 18,226 | |||||||
As percentage of revenue, non-GAAP | 11.6 | % | 12.8 | % | 12.2 | % | 13.8 | % | |||||||
Loss from operations | $ | (13,782 | ) | $ | (12,735 | ) | $ | (29,630 | ) | $ | (36,170 | ) | |||
Add back: Stock-based compensation | 4,664 | 3,670 | 13,200 | 10,562 | |||||||||||
Loss from operations, non-GAAP | $ | (9,118 | ) | $ | (9,065 | ) | $ | (16,430 | ) | $ | (25,608 | ) | |||
As percentage of revenue, non-GAAP | (17.5 | )% | (20.3 | )% | (10.7 | )% | (19.4 | )% | |||||||
Net loss | $ | (14,073 | ) | $ | (12,891 | ) | $ | (30,105 | ) | $ | (36,461 | ) | |||
Add back: Stock-based compensation | 4,664 | 3,670 | 13,200 | 10,562 | |||||||||||
Net loss, non-GAAP | $ | (9,409 | ) | $ | (9,221 | ) | $ | (16,905 | ) | $ | (25,899 | ) | |||
As percentage of revenue, non-GAAP | (18.1 | )% | (20.6 | )% | (11.0 | )% | (19.6 | )% | |||||||
Net loss per basic and diluted share: | $ | (0.34 | ) | $ | (0.32 | ) | $ | (0.73 | ) | $ | (0.90 | ) | |||
Add back: Stock-based compensation | 0.11 | 0.09 | 0.32 | 0.26 | |||||||||||
Net loss per basic and diluted share, non-GAAP | $ | (0.23 | ) | $ | (0.23 | ) | $ | (0.41 | ) | $ | (0.64 | ) | |||
Weighted-average common shares outstanding - basic and diluted, non-GAAP | 41,815,139 | 40,762,960 | 41,453,736 | 40,603,430 |
TABLE II WORKIVA INC. RECONCILIATION OF NON-GAAP GUIDANCE (in thousands, except share and per share data) | |||||||||||||||
Three months ending December 31, 2017 | Year ending December 31, 2017 | ||||||||||||||
Loss from operations, GAAP range | $ | (15,600 | ) | - | $ | (16,000 | ) | $ | (45,200 | ) | - | $ | (45,600 | ) | |
Add back: Stock-based compensation | 6,800 | 6,800 | 20,000 | 20,000 | |||||||||||
Loss from operations, non-GAAP range | $ | (8,800 | ) | - | $ | (9,200 | ) | $ | (25,200 | ) | - | $ | (25,600 | ) | |
Net loss per share, GAAP range | $ | (0.38 | ) | - | $ | (0.39 | ) | $ | (1.11 | ) | - | $ | (1.12 | ) | |
Add back: Stock-based compensation | 0.16 | 0.16 | 0.48 | 0.48 | |||||||||||
Net loss per share, non-GAAP range | $ | (0.22 | ) | - | $ | (0.23 | ) | $ | (0.63 | ) | - | $ | (0.64 | ) | |
Weighted-average common shares outstanding - basic and diluted | 42,000,000 | 42,000,000 | 41,600,000 | 41,600,000 |
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