EX-99.1 2 q22021exhibit991.htm EX-99.1 Document

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Workiva Inc. Announces Second Quarter 2021 Financial Results
•Increased Q2 2021 Subscription & Support Revenue by 29.0% over Q2 2020
•Generated Total Q2 2021 Revenue of $105.6 Million, up 25.9% over Q2 2020
•Achieved 46% YOY Growth of Customers with Annual Contract Value Over $150K
•Raises Full-Year 2021 Revenue Guidance

AMES, Iowa - August 3, 2021 – Workiva Inc. (NYSE:WK), the company that simplifies complex work, today announced financial results for its second quarter ended June 30, 2021.
"Our results continue to build on our market leadership and the increased demand for regulatory reporting and fit-for-purpose solutions to support digital transformations," said Marty Vanderploeg, Chief Executive Officer. "Our strong bookings from existing customers reflect our enhanced ability to cross-sell multiple solutions."
"The entire Workiva team is focused on growing the business through new logos, maintaining high customer retention, and account expansion," Vanderploeg added.
"We beat guidance for revenue and operating results," said Jill Klindt, Chief Financial Officer. "Due to continued broad-based demand and the resulting top-line growth, we are raising our full-year revenue guidance range to $430 million to $432 million."
Second Quarter 2021 Financial Highlights
•Revenue: Total revenue for the second quarter of 2021 reached $105.6 million, an increase of 25.9% from $83.9 million in the second quarter of 2020. Subscription and support revenue contributed $91.2 million, up 29.0% versus the second quarter of 2020. Professional services revenue was $14.4 million, an increase of 9.3% compared to the same quarter in the prior year.
•Gross Profit: GAAP gross profit for the second quarter of 2021 was $81.0 million compared with $61.6 million in the same quarter of 2020. GAAP gross margin was 76.7% versus 73.5% in the second quarter of 2020. Non-GAAP gross profit for the second quarter of 2021 was $82.0 million, an increase of 31.4% compared with the prior year's second quarter, and non-GAAP gross margin was 77.7% compared to 74.4% in the second quarter of 2020.
•Results from Operations: GAAP loss from operations for the second quarter of 2021 was $5.7 million compared with a loss of $16.7 million in the prior year's second quarter. Non-GAAP income from operations was $5.3 million, compared with non-GAAP loss from operations of $1.8 million in the second quarter of 2020.
•GAAP Net Loss: GAAP net loss for the second quarter of 2021 was $9.5 million compared with a net loss of $19.6 million for the prior year's second quarter. GAAP net loss per basic and diluted share was $0.19 compared with a net loss per basic and diluted share of $0.41 in the second quarter of 2020.
•Non-GAAP Net Income/Loss: Non-GAAP net income for the second quarter of 2021 was $3.8 million compared with net loss of $2.5 million in the prior year's second quarter. Non-GAAP net income per basic and diluted share was $0.07, compared with net loss per basic and diluted share of $0.05 in the second quarter of 2020.
•Liquidity: As of June 30, 2021, Workiva had cash, cash equivalents and marketable securities totaling $551.6 million, compared with $530.0 million as of December 31, 2020. Workiva had $345.0 million
aggregate principal amount of 1.125% convertible senior notes due in 2026 and $17.5 million of finance lease obligations outstanding as of June 30, 2021.
Key Metrics and Recent Business Highlights
•Customers: Workiva had 3,949 customers as of June 30, 2021, a net increase of 437 customers from June 30, 2020.
•Revenue Retention Rate: As of June 30, 2021, Workiva's revenue retention rate (excluding add-on revenue) was 96.0%, and the revenue retention rate including add-on revenue was 111.6%. Add-on revenue includes changes in both solutions and pricing for existing customers.
•Large Contracts: As of June 30, 2021, Workiva had 952 customers with an annual contract value (ACV) of more than $100,000, up 33% from 716 customers at June 30, 2020. Workiva had 500 customers with an ACV of more than $150,000, up 46% from 342 customers in the second quarter of 2020.
•On July 30, 2021, we acquired all of the equity interest in OneCloud, Inc., an integration platform as a service (iPaaS) company, in order to extend our integration and data preparation capabilities.
Financial Outlook
As of August 3, 2021, Workiva is providing guidance as follows:
Third Quarter 2021 Guidance:
•Total revenue is expected to be in the range of $108.0 million to $109.0 million.
•GAAP loss from operations is expected to be in the range of $17.6 million to $16.6 million.
•Non-GAAP loss from operations is expected to be in the range of $5.5 million to $4.5 million.
•GAAP net loss per basic and diluted share is expected to be in the range of $0.40 to $0.38.
•Non-GAAP net loss per basic share is expected to be in the range of $0.12 to $0.10.
•Net loss per basic share is based on 51.5 million weighted-average shares outstanding.
Full Year 2021 Guidance:
•Total revenue is expected to be in the range of $430.0 million to $432.0 million.
•GAAP loss from operations is expected to be in the range of $47.7 million to $45.7 million.
•Non-GAAP income from operations is expected to be in the range of break-even to $2.0 million.
•GAAP net loss per basic and diluted share is expected to be in the range of $1.19 to $1.15.
•Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.08 to $0.04.
•Net income (loss) per basic and diluted share is based on 51.2 million weighted-average shares outstanding.
Workiva has factored into its guidance the expected impacts of COVID-19 on its business and results of operations based on currently available information. Significant variation from these assumptions could cause the company to change its guidance, and it undertakes no obligation to update its assumptions, expectations or guidance. These statements are forward-looking, and actual results may differ materially, as further discussed below under the heading "Safe Harbor Statement".
Quarterly Conference Call
Workiva will host a conference call today at 5:00 p.m. ET to review the Company’s financial results for the second quarter, in addition to discussing the Company’s outlook for the third quarter and full year 2021. To access this call, dial 833-968-1977 (U.S. domestic) or 647-689-6649 (international). The conference ID is 1817158. A live webcast of the conference call will be accessible in the "Investor Relations" section of Workiva’s website at www.workiva.com. A replay of this conference call can also be accessed through August 10, 2021, at 800-585-8367 (U.S. domestic) or 416-621-4642 (international). The replay pass code is 1817158. An archived webcast of this conference call will also be available an hour after the completion of the call in the "Investor Relations" section of the Company’s website at www.workiva.com.

About Workiva
Workiva Inc. (NYSE: WK) simplifies complex work for thousands of organizations worldwide. Customers trust Workiva’s open, intelligent and intuitive platform to connect data, documents and teams. The results: more efficiency, greater transparency and less risk. Learn more at workiva.com.

Read the Workiva blog: www.workiva.com/blog
Follow Workiva on LinkedIn: www.linkedin.com/company/workiva
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Follow Workiva on Twitter: www.twitter.com/workiva

Non-GAAP Financial Measures
The non-GAAP adjustments referenced herein relate to the exclusion of stock-based compensation and non-cash interest expense. A reconciliation of GAAP to non-GAAP historical financial measures has been provided in Table I at the end of this press release. A reconciliation of GAAP to non-GAAP guidance has been provided in Table II at the end of this press release.
Workiva believes that the use of non-GAAP gross profit and gross margin, non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (loss) per share is helpful to its investors. These measures, which are referred to as non-GAAP financial measures, are not prepared in accordance with generally accepted accounting principles in the United States, or GAAP. Non-GAAP gross profit is calculated by excluding stock-based compensation expense attributable to cost of revenues from gross profit. Non-GAAP gross margin is the ratio calculated by dividing non-GAAP gross profit by revenues. Non-GAAP income (loss) from operations is calculated by excluding stock-based compensation expense from loss from operations. Non-GAAP net income (loss) is calculated by excluding stock-based compensation expense, net of tax, and non-cash interest expense related to our convertible senior notes from net loss. Non-GAAP net income (loss) per share is calculated by dividing non-GAAP net income (loss) by the weighted- average shares outstanding as presented in the calculation of GAAP net loss per share. Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash expenses, Workiva believes that providing non-GAAP financial measures that exclude stock-based compensation expense allows for more meaningful comparisons between its operating results from period to period. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be accounted for as separate liability and equity components in a manner that reflects our non-convertible debt borrowing rate. This results in the debt component being treated as though it was issued at a discount, with the debt discount being accreted as additional non-cash interest expense over the term of the notes using the effective interest method. As a result, we believe that excluding this non-cash interest expense attributable to the debt discount in calculating our non-GAAP measures is useful because this interest expense does not represent a cash outflow and is not indicative of our ongoing operational performance. Workiva’s management uses these non-GAAP financial measures as tools for financial and operational decision making and for evaluating Workiva’s own operating results over different periods of time.

Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in Workiva’s industry, as other companies in the industry may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Workiva’s reported financial results. Further, stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in Workiva’s business and an important part of the compensation provided to its employees. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Investors should review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate Workiva’s business.

Safe Harbor Statement
Certain statements in this press release are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or the Company’s future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In particular, statements about the Company’s expectations, beliefs, plans, objectives, assumptions, future events or future performance contained in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential," "outlook," "guidance" or the negative of those terms or other comparable terminology.

Please see the Company’s documents filed or to be filed with the Securities and Exchange Commission, including the Company’s annual reports filed on Form 10-K and quarterly reports on Form 10-Q, and any amendments thereto for a discussion of certain important risk factors that relate to forward-looking statements contained in this report. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company’s control. These and other important factors may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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Investor Contact:
Media Contact:
Adam Terese
Kevin McCarthy
Workiva Inc.
Workiva Inc.
investor@workiva.com
press@workiva.com
(515) 663-4493
(515) 663-4471

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WORKIVA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
Three months ended June 30,Six months ended June 30,
2021202020212020
(unaudited)
Revenue
Subscription and support$91,205 $70,696 $176,141 $139,057 
Professional services14,382 13,164 33,668 30,604 
Total revenue105,587 83,860 209,809 169,661 
Cost of revenue
Subscription and support (1)
14,098 12,098 27,300 24,251 
Professional services (1)
10,493 10,146 20,967 20,389 
Total cost of revenue24,591 22,244 48,267 44,640 
Gross profit80,996 61,616 161,542 125,021 
Operating expenses
Research and development (1)
27,830 23,508 54,464 46,502 
Sales and marketing (1)
41,525 35,270 82,560 71,387 
General and administrative (1)
17,384 19,553 34,405 32,922 
Total operating expenses86,739 78,331 171,429 150,811 
Loss from operations(5,743)(16,715)(9,887)(25,790)
Interest income255 655 615 2,361 
Interest expense(3,502)(3,489)(6,987)(6,967)
Other (expense) income, net(156)(68)(540)650 
Loss before provision (benefit) for income taxes(9,146)(19,617)(16,799)(29,746)
Provision (benefit) for income taxes368 (5)39 284 
Net loss$(9,514)$(19,612)$(16,838)$(30,030)
Net loss per common share:
Basic and diluted$(0.19)$(0.41)$(0.33)$(0.63)
Weighted-average common shares outstanding - basic and diluted51,065,867 48,171,552 50,657,264 47,858,628 

(1) Includes stock-based compensation expense as follows:
Three months ended June 30,Six months ended June 30,
2021202020212020
(unaudited)
Cost of revenue
Subscription and support$597 $436 $1,093 $867 
Professional services409 365 776 790 
Operating expenses
Research and development2,417 2,040 4,848 3,623 
Sales and marketing2,837 2,944 6,386 5,680 
General and administrative4,792 9,109 9,572 13,870 

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WORKIVA INC.

CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, 2021December 31, 2020
(unaudited)
Assets
Current assets
Cash and cash equivalents$322,194 $322,831 
Marketable securities229,419 207,207 
Accounts receivable, net65,908 68,922 
Deferred costs26,646 21,923 
Other receivables2,750 3,155 
Prepaid expenses and other12,045 9,047 
Total current assets658,962 633,085 
Property and equipment, net28,922 29,365 
Operating lease right-of-use assets15,558 15,844 
Deferred costs, non-current28,797 23,421 
Intangible assets, net1,516 1,583 
Other assets5,127 3,708 
Total assets$738,882 $707,006 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$3,704 $2,843 
Accrued expenses and other current liabilities76,682 68,256 
Deferred revenue224,952 208,990 
Finance lease obligations1,752 1,705 
Total current liabilities307,090 281,794 
Convertible senior notes, net294,040 289,490 
Deferred revenue, non-current32,219 35,894 
Other long-term liabilities1,338 1,680 
Operating lease liabilities, non-current16,355 17,209 
Finance lease obligations, non-current15,774 16,662 
Total liabilities666,816 642,729 
Stockholders’ equity
Common stock50 49 
Additional paid-in-capital503,350 478,698 
Accumulated deficit(431,538)(414,700)
Accumulated other comprehensive income204 230 
Total stockholders’ equity72,066 64,277 
Total liabilities and stockholders’ equity$738,882 $707,006 

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WORKIVA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three months ended June 30,Six months ended June 30,
2021202020212020
(unaudited)
Cash flows from operating activities
Net loss$(9,514)$(19,612)$(16,838)$(30,030)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization1,097 1,052 2,151 2,115 
Stock-based compensation expense11,052 14,894 22,675 24,830 
Provision for (recovery of) doubtful accounts17 319 (101)359 
Amortization of premiums and discounts on marketable securities, net763 112 1,388 213 
Amortization of debt discount and issuance costs2,284 2,213 4,550 4,410 
Deferred income tax362 (131)16 (131)
Changes in assets and liabilities:
Accounts receivable(12,106)3,847 3,159 18,112 
Deferred costs(9,018)(2,166)(10,077)(1,563)
Operating lease right-of-use asset977 875 1,921 1,973 
Other receivables585 58 424 (195)
Prepaid expenses722 (890)(3,025)(2,845)
Other assets(110)(609)(683)(683)
Accounts payable(1,172)(1,692)736 (3,074)
Deferred revenue11,900 (3,640)12,079 (4,868)
Operating lease liability(1,202)(1,178)(2,278)(2,323)
Accrued expenses and other liabilities16,123 13,737 8,166 5,716 
Net cash provided by operating activities12,760 7,189 24,263 12,016 
Cash flows from investing activities
Purchase of property and equipment(811)(696)(1,660)(1,384)
Purchase of marketable securities(51,217)(16,457)(94,872)(37,289)
Sale of marketable securities250 — 250 11,423 
Maturities of marketable securities30,206 13,062 70,792 26,037 
Purchase of intangible assets(52)(74)(123)(151)
Other(750)— (750)— 
Net cash used in investing activities(22,374)(4,165)(26,363)(1,364)
Cash flows from financing activities
Proceeds from option exercises1,480 6,664 5,618 9,458 
Taxes paid related to net share settlements of stock-based compensation awards(731)(732)(7,877)(2,111)
Proceeds from shares issued in connection with employee stock purchase plan— — 4,237 3,660 
Principal payments on finance lease obligations(424)(404)(841)(802)
Net cash provided by financing activities325 5,528 1,137 10,205 
Effect of foreign exchange rates on cash310 135 326 (478)
Net (decrease) increase in cash and cash equivalents(8,979)8,687 (637)20,379 
Cash and cash equivalents at beginning of period331,173 393,434 322,831 381,742 
Cash and cash equivalents at end of period$322,194 $402,121 $322,194 $402,121 
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TABLE I
WORKIVA INC.
RECONCILIATION OF NON-GAAP INFORMATION
(in thousands, except share and per share)
Three months ended June 30,Six months ended June 30,
2021202020212020
Gross profit, subscription and support$77,107 $58,598 $148,841 $114,806 
Add back: Stock-based compensation597 436 1,093 867 
Gross profit, subscription and support, non-GAAP$77,704 $59,034 $149,934 $115,673 
As a percentage of subscription and support revenue, non-GAAP85.2 %83.5 %85.1 %83.2 %
Gross profit, professional services$3,889 $3,018 $12,701 $10,215 
Add back: Stock-based compensation409 365 776 790 
Gross profit, professional services, non-GAAP$4,298 $3,383 $13,477 $11,005 
As a percentage of professional services revenue, non-GAAP29.9 %25.7 %40.0 %36.0 %
Gross profit$80,996 $61,616 $161,542 $125,021 
Add back: Stock-based compensation1,006 801 1,869 1,657 
Gross profit, non-GAAP$82,002 $62,417 $163,411 $126,678 
As percentage of revenue, non-GAAP77.7 %74.4 %77.9 %74.7 %
Cost of revenue, subscription and support$14,098 $12,098 $27,300 $24,251 
Less: Stock-based compensation597 436 1,093 867 
Cost of revenue, subscription and support, non-GAAP$13,501 $11,662 $26,207 $23,384 
As percentage of revenue, non-GAAP12.8 %13.9 %12.5 %13.8 %
Cost of revenue, professional services$10,493 $10,146 $20,967 $20,389 
Less: Stock-based compensation409 365 776 790 
Cost of revenue, professional services, non-GAAP$10,084 $9,781 $20,191 $19,599 
As percentage of revenue, non-GAAP9.6 %11.7 %9.6 %11.6 %
Research and development$27,830 $23,508 $54,464 $46,502 
Less: Stock-based compensation2,417 2,040 4,848 3,623 
Research and development, non-GAAP$25,413 $21,468 $49,616 $42,879 
As percentage of revenue, non-GAAP24.1 %25.6 %23.6 %25.3 %
Sales and marketing$41,525 $35,270 $82,560 $71,387 
Less: Stock-based compensation2,837 2,944 6,386 5,680 
Sales and marketing, non-GAAP$38,688 $32,326 $76,174 $65,707 
As percentage of revenue, non-GAAP36.6 %38.5 %36.3 %38.7 %
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TABLE I
WORKIVA INC.
RECONCILIATION OF NON-GAAP INFORMATION
(in thousands, except share and per share)
Three months ended June 30,Six months ended June 30,
2021202020212020
General and administrative$17,384 $19,553 $34,405 $32,922 
Less: Stock-based compensation4,792 9,109 9,572 13,870 
General and administrative, non-GAAP$12,592 $10,444 $24,833 $19,052 
As percentage of revenue, non-GAAP11.9 %12.5 %11.8 %11.2 %
Loss from operations$(5,743)$(16,715)$(9,887)$(25,790)
Add back: Stock-based compensation11,052 14,894 22,675 24,830 
Income from operations, non-GAAP$5,309 $(1,821)$12,788 $(960)
As percentage of revenue, non-GAAP5.0 %(2.2)%6.1 %(0.6)%
Net loss$(9,514)$(19,612)$(16,838)$(30,030)
Add back: Stock-based compensation11,052 14,894 22,675 24,830 
Add back: Non-cash interest expense related to convertible senior notes2,284 2,213 4,550 4,410 
Net income (loss), non-GAAP$3,822 $(2,505)$10,387 $(790)
As percentage of revenue, non-GAAP3.6 %(3.0)%5.0 %(0.5)%
Net loss per basic and diluted share:$(0.19)$(0.41)$(0.33)$(0.63)
Add back: Stock-based compensation0.22 0.31 0.45 0.52 
Add back: Non-cash interest expense related to convertible senior notes0.04 0.05 0.09 0.09 
Net income (loss) per basic share, non-GAAP$0.07 $(0.05)$0.21 $(0.02)
Net income (loss) per diluted share, non-GAAP$0.07 $(0.05)$0.19 $(0.02)
Weighted-average common shares outstanding - basic, non-GAAP51,065,867 48,171,552 50,657,264 47,858,628 
Weighted-average common shares outstanding - diluted, non-GAAP55,064,895 48,171,552 55,081,027 47,858,628 



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TABLE II
WORKIVA INC.
RECONCILIATION OF NON-GAAP GUIDANCE
(in thousands, except share and per share data)
Three months ending September 30, 2021Year ending December 31, 2021
Loss from operations, GAAP range$(17,600)-$(16,600)$(47,700)-$(45,700)
Add back: Stock-based compensation
12,100 12,100 47,700 47,700 
Income (loss) from operations, non-GAAP range$(5,500)-$(4,500)$— -$2,000 
Net loss per share, GAAP range$(0.40)-$(0.38)$(1.19)-$(1.15)
Add back: Stock-based compensation
0.23 0.23 0.93 0.93 
Add back: Non-cash interest expense related to convertible senior notes0.05 0.05 0.18 0.18 
Net loss per share, non-GAAP range$(0.12)-$(0.10)$(0.08)-$(0.04)
Weighted-average common shares outstanding - basic51,500,000 51,500,000 51,200,000 51,200,000 

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