8-K
Workiva Inc (WK)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-K
___________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
August 9, 2022
Date of Report (date of earliest event reported)
___________________________________
WORKIVA INC.
(Exact name of registrant as specified in its charter)
___________________________________
| Delaware<br><br>(State or other jurisdiction of incorporation or organization) | 001-36773<br><br>(Commission File Number) | 47-2509828<br><br>(I.R.S. Employer Identification Number) |
|---|---|---|
| 2900 University Blvd<br><br>Ames, IA 50010<br><br>(888) 275-3125 | ||
| (Address of principal executive offices and zip code) | ||
| (888) 275-3125 | ||
| (Registrant's telephone number, including area code) | ||
| ___________________________________ |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | 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)) | |
| Securities registered pursuant to Section 12(b) of the Act: | ||
| --- | --- | --- |
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Class A common stock, par value $.001 | WK | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Section 2 - Financial Information
Item 2.02 - Results of Operations and Financial Condition
On August 9, 2022, Workiva Inc. ("Workiva") issued a press release announcing its results for the quarter ended June 30, 2022. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.
The information in this current report on Form 8-K and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Section 9 - Financial Statements and Exhibits
Item 9.01 - Financial Statements and Exhibits
(d): The following exhibits are being filed herewith:
| Exhibit<br><br>Number | Description |
|---|---|
| 99.1 | Press Release entitled "Workiva Inc. Announces Second Quarter 2022 Financial Results" dated August 9, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on this 9th day of August, 2022.
| WORKIVA INC. | |
|---|---|
| By: | /s/ Jill Klindt |
| Name: | Jill Klindt |
| Title: | Senior Vice President, Chief Financial Officer, Chief Accounting Officer and Treasurer |
Document
Workiva Inc. Announces Second Quarter 2022 Financial Results
•Increased Q2 2022 Subscription & Support Revenue by 24.3% over Q2 2021
•Generated Total Q2 2022 Revenue of $131.5 Million, up 24.6% over Q2 2021
•Achieved 28.4% YOY Growth of Customers with Annual Contract Value Over $150K
AMES, Iowa - August 9, 2022 – Workiva Inc. (NYSE:WK), the company powering transparent reporting for a better world, today announced financial results for its second quarter ended June 30, 2022.
"Our second quarter subscription & support and total revenue exceeded market expectations and we once again beat the high end of our guidance in revenue and operating results," said Marty Vanderploeg, Chief Executive Officer. "We added 123 net new logos for the Workiva platform, saw a 28% YOY increase in the number of customers with contract values over $150k, and achieved our highest revenue retention rate of 97.9%."
"We believe that the demand for regulatory software is consistent and durable. For the back half of 2022, we are maintaining our investment in our platform, purpose-built solutions, and talent in order to accelerate our growth and capture more of our large and relatively unaddressed TAM. However, we intend to balance this investment with a more prudent approach to our second half outlook," Vanderploeg added.
"We have increased our focus on operating leverage and have slowed the hiring plans for parts of our core business for the remainder of 2022. The balance between growth and operating leverage should lead to future margin improvement and we believe it will return Workiva to a quarterly operating profit on a Non-GAAP basis in the latter half of 2023," said Jill Klindt, Chief Financial Officer. "It is still early days in Workiva's growth story as we continue to capture more of the large and expanding business reporting market. We remain committed to strong, durable growth as we build Workiva into a billion dollar revenue company."
Second Quarter 2022 Financial Highlights
•Revenue: Total revenue for the second quarter of 2022 reached $131.5 million, an increase of 24.6% from $105.6 million in the second quarter of 2021. Subscription and support revenue contributed $113.4 million, up 24.3% versus the second quarter of 2021. Professional services revenue was $18.2 million, an increase of 26.5% compared to the same quarter in the prior year.
•Gross Profit: GAAP gross profit for the second quarter of 2022 was $99.3 million compared with $81.0 million in the same quarter of 2021. GAAP gross margin was 75.5% versus 76.7% in the second quarter of 2021. Non-GAAP gross profit for the second quarter of 2022 was $100.8 million, an increase of 22.9% compared with the prior year's second quarter, and non-GAAP gross margin was 76.6% compared to 77.7% in the second quarter of 2021.
•Results from Operations: GAAP loss from operations for the second quarter of 2022 was $28.2 million compared with a loss of $5.7 million in the prior year's second quarter. Non-GAAP loss from operations was $8.3 million, compared with non-GAAP income from operations of $5.3 million in the second quarter of 2021.
•GAAP Net Loss: GAAP net loss for the second quarter of 2022 was $28.9 million compared with a net loss of $9.5 million for the prior year's second quarter. GAAP net loss per basic and diluted share was $0.55 compared with a net loss per basic and diluted share of $0.19 in the second quarter of 2021.
•Non-GAAP Net Loss/Income: Non-GAAP net loss for the second quarter of 2022 was $9.0 million compared with net income of $3.8 million in the prior year's second quarter. Non-GAAP net loss per basic
and diluted share was $0.17, compared with net income per basic and diluted share of $0.07 in the second quarter of 2021.
•Liquidity: As of June 30, 2022, Workiva had cash, cash equivalents, and marketable securities totaling $429.0 million, compared with $530.4 million as of December 31, 2021. Workiva had $345.0 million aggregate principal amount of 1.125% convertible senior notes due in 2026 and $15.8 million of finance lease obligations outstanding as of June 30, 2022.
Key Metrics and Recent Business Highlights
•Customers: Workiva had 5,381 customers as of June 30, 2022, including approximately 850 ParsePort ESEF customers, a net increase of 1,432 customers from June 30, 2021.
•Revenue Retention Rate: As of June 30, 2022, Workiva's revenue retention rate (excluding add-on revenue) was 97.9%, and the revenue retention rate including add-on revenue was 108.0%. Add-on revenue includes changes in both solutions and pricing for existing customers.
•Large Contracts: As of June 30, 2022, Workiva had 1,186 customers with an annual contract value (“ACV”) of more than $100,000, up 25% from 952 customers at June 30, 2021. Workiva had 642 customers with an ACV of more than $150,000, up 28% from 500 customers in the second quarter of 2021. Workiva had 194 customers with an ACV of more than $300,000, up 22% from 159 customers in the second quarter of 2021.
•On April 1, 2022, Workiva acquired all of the issued and outstanding equity interests in Denmark-based ParsePort ApS (“ParsePort”), a leading solution provider for the European Single Electronic Format (“ESEF”) financial reporting mandate, which complements Workiva's cloud platform.
Financial Outlook
As of August 9, 2022, Workiva is providing updated guidance as follows:
Third Quarter 2022 Guidance:
•Total revenue is expected to be in the range of $132.0 million to $133.0 million.
•GAAP loss from operations is expected to be in the range of $33.5 million to $32.5 million.
•Non-GAAP loss from operations is expected to be in the range of $13.0 million to $12.0 million.
•GAAP net loss per basic share is expected to be in the range of $0.66 to $0.64.
•Non-GAAP net loss per basic share is expected to be in the range of $0.27 to $0.25.
•Net loss per basic share is based on 53.1 million weighted-average shares outstanding.
Full Year 2022 Guidance:
•Total revenue is expected to be in the range of $534.0 million to $536.0 million.
•GAAP loss from operations is expected to be in the range of $103.5 million to $101.5 million.
•Non-GAAP loss from operations is expected to be in the range of $27.0 million to $25.0 million.
•GAAP net loss per basic share is expected to be in the range of $2.02 to $1.98.
•Non-GAAP net loss per basic share is expected to be in the range of $0.57 to $0.53.
•Net loss per basic share is based on 53.0 million weighted-average shares outstanding.
Quarterly Conference Call
Workiva will host a conference call today at 5:00 p.m. ET to review the Company’s financial results for the second quarter 2022, in addition to discussing the Company’s outlook for the third quarter and full year 2022. To access this call, dial 888-330-2469 (U.S. domestic) or 240-789-2740 (international). The conference ID is 8736384. 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 16, 2022, at 800-770-2030 (U.S. domestic) or 647-362-9199 (international). The replay pass code is 8736384. 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) is on a mission to power transparent reporting for a better world. We build and deliver the world’s leading regulatory, financial, and ESG reporting solutions to meet stakeholder demands for action, transparency, and disclosure of financial and non-financial data. Our cloud-based platform simplifies the most complex reporting and disclosure challenges by streamlining processes, connecting data and teams, and ensuring consistency. Learn more at workiva.com.
Follow Workiva on LinkedIn: www.linkedin.com/company/workiva
Like Workiva on Facebook: www.facebook.com/workiva
Follow Workiva on Twitter: www.twitter.com/workiva
Non-GAAP Financial Measures
The non-GAAP adjustments referenced herein relate to the exclusion of stock-based compensation and amortization of acquisition-related intangible assets. 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 and amortization expense for acquisition-related intangible assets from loss from operations. Non-GAAP net income (loss) is calculated by excluding stock-based compensation expense, net of tax, and amortization expense for acquisition-related intangible assets. 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. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of its related amortization can vary significantly and are unique to each acquisition and thus we do not believe it is reflective of ongoing operations. 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.
| ### | ||||||||
|---|---|---|---|---|---|---|---|---|
| Investor Contact: | Media Contact: | |||||||
| Mike Rost | Darcie Brossart | |||||||
| Workiva Inc. | Workiva Inc. | |||||||
| investor@workiva.com | press@workiva.com | |||||||
| (515) 663-4493 | (515) 663-4471 | |||||||
| WORKIVA INC.<br><br>CONSOLIDATED STATEMENTS OF OPERATIONS<br>(in thousands, except share and per share amounts) | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three months ended June 30, | Six months ended June 30, | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| (unaudited) | ||||||||
| Revenue | ||||||||
| Subscription and support | $ | 113,353 | $ | 91,205 | $ | 220,473 | $ | 176,141 |
| Professional services | 18,196 | 14,382 | 40,750 | 33,668 | ||||
| Total revenue | 131,549 | 105,587 | 261,223 | 209,809 | ||||
| Cost of revenue | ||||||||
| Subscription and support (1) | 18,915 | 14,098 | 37,448 | 27,300 | ||||
| Professional services (1) | 13,322 | 10,493 | 25,662 | 20,967 | ||||
| Total cost of revenue | 32,237 | 24,591 | 63,110 | 48,267 | ||||
| Gross profit | 99,312 | 80,996 | 198,113 | 161,542 | ||||
| Operating expenses | ||||||||
| Research and development (1) | 39,177 | 27,830 | 75,061 | 54,464 | ||||
| Sales and marketing (1) | 64,219 | 41,525 | 120,319 | 82,560 | ||||
| General and administrative (1) | 24,108 | 17,384 | 48,102 | 34,405 | ||||
| Total operating expenses | 127,504 | 86,739 | 243,482 | 171,429 | ||||
| Loss from operations | (28,192) | (5,743) | (45,369) | (9,887) | ||||
| Interest income | 605 | 255 | 885 | 615 | ||||
| Interest expense | (1,512) | (3,502) | (3,030) | (6,987) | ||||
| Other income (expense), net | 668 | (156) | 503 | (540) | ||||
| Loss before provision for income taxes | (28,431) | (9,146) | (47,011) | (16,799) | ||||
| Provision for income taxes | 430 | 368 | 343 | 39 | ||||
| Net loss | $ | (28,861) | $ | (9,514) | $ | (47,354) | $ | (16,838) |
| Net loss per common share: | ||||||||
| Basic and diluted | $ | (0.55) | $ | (0.19) | $ | (0.90) | $ | (0.33) |
| Weighted-average common shares outstanding - basic and diluted | 52,850,470 | 51,065,867 | 52,724,051 | 50,657,264 |
(1) Includes stock-based compensation expense as follows:
| Three months ended June 30, | Six months ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (unaudited) | ||||||||||||
| Cost of revenue | ||||||||||||
| Subscription and support | $ | 912 | $ | 597 | $ | 1,702 | $ | 1,093 | ||||
| Professional services | 593 | 409 | 1,045 | 776 | ||||||||
| Operating expenses | ||||||||||||
| Research and development | 3,148 | 2,417 | 5,873 | 4,848 | ||||||||
| Sales and marketing | 5,646 | 2,837 | 9,731 | 6,386 | ||||||||
| General and administrative | 8,148 | 4,792 | 15,405 | 9,572 | ||||||||
| WORKIVA INC.<br><br>CONSOLIDATED BALANCE SHEETS<br>(in thousands) | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| June 30, 2022 | December 31, 2021 | |||||||||||
| (unaudited) | ||||||||||||
| Assets | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 226,253 | $ | 300,386 | ||||||||
| Marketable securities | 202,712 | 230,060 | ||||||||||
| Accounts receivable, net | 75,607 | 76,848 | ||||||||||
| Deferred costs | 29,992 | 31,152 | ||||||||||
| Other receivables | 2,949 | 3,538 | ||||||||||
| Prepaid expenses and other | 17,776 | 15,108 | ||||||||||
| Total current assets | 555,289 | 657,092 | ||||||||||
| Property and equipment, net | 27,331 | 28,821 | ||||||||||
| Operating lease right-of-use assets | 15,049 | 17,760 | ||||||||||
| Deferred costs, non-current | 34,826 | 33,091 | ||||||||||
| Goodwill | 109,040 | 34,556 | ||||||||||
| Intangible assets, net | 30,162 | 10,434 | ||||||||||
| Other assets | 5,061 | 5,005 | ||||||||||
| Total assets | $ | 776,758 | $ | 786,759 | ||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable | $ | 5,797 | $ | 4,114 | ||||||||
| Accrued expenses and other current liabilities | 85,863 | 84,126 | ||||||||||
| Deferred revenue | 272,731 | 258,023 | ||||||||||
| Convertible senior notes, current | — | 298,661 | ||||||||||
| Finance lease obligations | 936 | 1,575 | ||||||||||
| Total current liabilities | 365,327 | 646,499 | ||||||||||
| Convertible senior notes, non-current | 339,608 | — | ||||||||||
| Deferred revenue, non-current | 34,063 | 34,181 | ||||||||||
| Other long-term liabilities | 1,380 | 1,605 | ||||||||||
| Operating lease liabilities, non-current | 13,688 | 16,408 | ||||||||||
| Finance lease obligations, non-current | 14,838 | 15,087 | ||||||||||
| Total liabilities | 768,904 | 713,780 | ||||||||||
| Stockholders’ equity | ||||||||||||
| Common stock | 52 | 51 | ||||||||||
| Additional paid-in-capital | 498,115 | 525,646 | ||||||||||
| Accumulated deficit | (481,523) | (452,430) | ||||||||||
| Accumulated other comprehensive (loss) income | (8,790) | (288) | ||||||||||
| Total stockholders’ equity | 7,854 | 72,979 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 776,758 | $ | 786,759 | ||||||||
| WORKIVA INC.<br><br>CONSOLIDATED STATEMENTS OF CASH FLOWS<br>(in thousands) | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (unaudited) | ||||||||||||
| Cash flows from operating activities | ||||||||||||
| Net loss | $ | (28,861) | $ | (9,514) | $ | (47,354) | $ | (16,838) | ||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 2,725 | 1,097 | 4,684 | 2,151 | ||||||||
| Stock-based compensation expense | 18,447 | 11,052 | 33,756 | 22,675 | ||||||||
| Provision for (recovery of) doubtful accounts | 20 | 17 | (9) | (101) | ||||||||
| Amortization of premiums and discounts on marketable securities, net | 453 | 763 | 1,113 | 1,388 | ||||||||
| Amortization of issuance costs and debt discount | 324 | 2,284 | 648 | 4,550 | ||||||||
| Deferred income tax | 63 | 362 | (148) | 16 | ||||||||
| Changes in assets and liabilities: | ||||||||||||
| Accounts receivable | (4,844) | (12,106) | 1,737 | 3,159 | ||||||||
| Deferred costs | (2,734) | (9,018) | (1,290) | (10,077) | ||||||||
| Operating lease right-of-use asset | 1,307 | 977 | 2,608 | 1,921 | ||||||||
| Other receivables | 385 | 585 | 565 | 424 | ||||||||
| Prepaid expenses | (1,591) | 722 | (2,723) | (3,025) | ||||||||
| Other assets | 12 | (110) | 35 | (683) | ||||||||
| Accounts payable | (2,300) | (1,172) | 2,064 | 736 | ||||||||
| Deferred revenue | 13,192 | 11,900 | 13,798 | 12,079 | ||||||||
| Operating lease liability | (1,302) | (1,202) | (2,644) | (2,278) | ||||||||
| Accrued expenses and other liabilities | 13,388 | 16,123 | 907 | 8,166 | ||||||||
| Net cash provided by operating activities | 8,684 | 12,760 | 7,747 | 24,263 | ||||||||
| Cash flows from investing activities | ||||||||||||
| Purchase of property and equipment | (671) | (811) | (1,203) | (1,660) | ||||||||
| Purchase of marketable securities | (23,798) | (51,217) | (57,946) | (94,872) | ||||||||
| Sale of marketable securities | — | 250 | 14,981 | 250 | ||||||||
| Maturities of marketable securities | 40,536 | 30,206 | 66,786 | 70,792 | ||||||||
| Acquisitions, net of cash acquired | (99,186) | — | (99,186) | — | ||||||||
| Purchase of intangible assets | (6) | (52) | (46) | (123) | ||||||||
| Other investments | — | (750) | — | (750) | ||||||||
| Net cash used in investing activities | (83,125) | (22,374) | (76,614) | (26,363) | ||||||||
| Cash flows from financing activities | ||||||||||||
| Proceeds from option exercises | 1,145 | 1,480 | 1,970 | 5,618 | ||||||||
| Taxes paid related to net share settlements of stock-based compensation awards | (1,344) | (731) | (9,914) | (7,877) | ||||||||
| Proceeds from shares issued in connection with employee stock purchase plan | — | — | 5,218 | 4,237 | ||||||||
| Principal payments on finance lease obligations | (446) | (424) | (888) | (841) | ||||||||
| Net cash (used in) provided by financing activities | (645) | 325 | (3,614) | 1,137 | ||||||||
| Effect of foreign exchange rates on cash | (1,737) | 310 | (1,652) | 326 | ||||||||
| Net decrease in cash and cash equivalents | (76,823) | (8,979) | (74,133) | (637) | ||||||||
| Cash and cash equivalents at beginning of period | 303,076 | 331,173 | 300,386 | 322,831 | ||||||||
| Cash and cash equivalents at end of period | $ | 226,253 | $ | 322,194 | $ | 226,253 | $ | 322,194 | ||||
| TABLE I<br>WORKIVA INC.<br>RECONCILIATION OF NON-GAAP INFORMATION<br>(in thousands, except share and per share) | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Gross profit, subscription and support | $ | 94,438 | $ | 77,107 | $ | 183,025 | $ | 148,841 | ||||
| Add back: Stock-based compensation | 912 | 597 | 1,702 | 1,093 | ||||||||
| Gross profit, subscription and support, non-GAAP | $ | 95,350 | $ | 77,704 | $ | 184,727 | $ | 149,934 | ||||
| As a percentage of subscription and support revenue, non-GAAP | 84.1 | % | 85.2 | % | 83.8 | % | 85.1 | % | ||||
| Gross profit, professional services | $ | 4,874 | $ | 3,889 | $ | 15,088 | $ | 12,701 | ||||
| Add back: Stock-based compensation | 593 | 409 | 1,045 | 776 | ||||||||
| Gross profit, professional services, non-GAAP | $ | 5,467 | $ | 4,298 | $ | 16,133 | $ | 13,477 | ||||
| As a percentage of professional services revenue, non-GAAP | 30.0 | % | 29.9 | % | 39.6 | % | 40.0 | % | ||||
| Gross profit | $ | 99,312 | $ | 80,996 | $ | 198,113 | $ | 161,542 | ||||
| Add back: Stock-based compensation | 1,505 | 1,006 | 2,747 | 1,869 | ||||||||
| Gross profit, non-GAAP | $ | 100,817 | $ | 82,002 | $ | 200,860 | $ | 163,411 | ||||
| As percentage of revenue, non-GAAP | 76.6 | % | 77.7 | % | 76.9 | % | 77.9 | % | ||||
| Cost of revenue, subscription and support | $ | 18,915 | $ | 14,098 | $ | 37,448 | $ | 27,300 | ||||
| Less: Stock-based compensation | 912 | 597 | 1,702 | 1,093 | ||||||||
| Cost of revenue, subscription and support, non-GAAP | $ | 18,003 | $ | 13,501 | $ | 35,746 | $ | 26,207 | ||||
| As percentage of revenue, non-GAAP | 13.7 | % | 12.8 | % | 13.7 | % | 12.5 | % | ||||
| Cost of revenue, professional services | $ | 13,322 | $ | 10,493 | $ | 25,662 | $ | 20,967 | ||||
| Less: Stock-based compensation | 593 | 409 | 1,045 | 776 | ||||||||
| Cost of revenue, professional services, non-GAAP | $ | 12,729 | $ | 10,084 | $ | 24,617 | $ | 20,191 | ||||
| As percentage of revenue, non-GAAP | 9.7 | % | 9.6 | % | 9.4 | % | 9.6 | % | ||||
| Research and development | $ | 39,177 | $ | 27,830 | $ | 75,061 | $ | 54,464 | ||||
| Less: Stock-based compensation | 3,148 | 2,417 | 5,873 | 4,848 | ||||||||
| Less: Amortization of acquisition-related intangibles | 869 | — | 1,364 | — | ||||||||
| Research and development, non-GAAP | $ | 35,160 | $ | 25,413 | $ | 67,824 | $ | 49,616 | ||||
| As percentage of revenue, non-GAAP | 26.7 | % | 24.1 | % | 26.0 | % | 23.6 | % | ||||
| Sales and marketing | $ | 64,219 | $ | 41,525 | $ | 120,319 | $ | 82,560 | ||||
| Less: Stock-based compensation | 5,646 | 2,837 | 9,731 | 6,386 | ||||||||
| Less: Amortization of acquisition-related intangibles | 586 | — | 786 | — | ||||||||
| Sales and marketing, non-GAAP | $ | 57,987 | $ | 38,688 | $ | 109,802 | $ | 76,174 | ||||
| As percentage of revenue, non-GAAP | 44.1 | % | 36.6 | % | 42.0 | % | 36.3 | % | ||||
| TABLE I<br>WORKIVA INC.<br>RECONCILIATION OF NON-GAAP INFORMATION<br>(in thousands, except share and per share) | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| General and administrative | $ | 24,108 | $ | 17,384 | $ | 48,102 | $ | 34,405 | ||||
| Less: Stock-based compensation | 8,148 | 4,792 | 15,405 | 9,572 | ||||||||
| General and administrative, non-GAAP | $ | 15,960 | $ | 12,592 | $ | 32,697 | $ | 24,833 | ||||
| As percentage of revenue, non-GAAP | 12.1 | % | 11.9 | % | 12.5 | % | 11.8 | % | ||||
| Loss from operations | $ | (28,192) | $ | (5,743) | $ | (45,369) | $ | (9,887) | ||||
| Add back: Stock-based compensation | 18,447 | 11,052 | 33,756 | 22,675 | ||||||||
| Add back: Amortization of acquisition-related intangibles | 1,455 | — | 2,150 | — | ||||||||
| (Loss) income from operations, non-GAAP | $ | (8,290) | $ | 5,309 | $ | (9,463) | $ | 12,788 | ||||
| As percentage of revenue, non-GAAP | (6.3) | % | 5.0 | % | (3.6) | % | 6.1 | % | ||||
| Net loss | $ | (28,861) | $ | (9,514) | $ | (47,354) | $ | (16,838) | ||||
| Add back: Stock-based compensation | 18,447 | 11,052 | 33,756 | 22,675 | ||||||||
| Add back: Amortization of acquisition-related intangibles | 1,455 | — | 2,150 | — | ||||||||
| Add back: Non-cash interest expense related to convertible senior notes | — | 2,284 | — | 4,550 | ||||||||
| Net (loss) income, non-GAAP | $ | (8,959) | $ | 3,822 | $ | (11,448) | $ | 10,387 | ||||
| As percentage of revenue, non-GAAP | (6.8) | % | 3.6 | % | (4.4) | % | 5.0 | % | ||||
| Net loss per basic and diluted share: | $ | (0.55) | $ | (0.19) | $ | (0.90) | $ | (0.33) | ||||
| Add back: Stock-based compensation | 0.35 | 0.22 | 0.64 | 0.45 | ||||||||
| Add back: Amortization of acquisition-related intangibles | 0.03 | — | 0.04 | — | ||||||||
| Add back: Non-cash interest expense related to convertible senior notes | — | 0.04 | — | 0.09 | ||||||||
| Net (loss) income per basic share, non-GAAP | $ | (0.17) | $ | 0.07 | $ | (0.22) | $ | 0.21 | ||||
| Net (loss) income per diluted share, non-GAAP | $ | (0.17) | $ | 0.07 | $ | (0.22) | $ | 0.19 | ||||
| Weighted-average common shares outstanding - basic, non-GAAP | 52,850,470 | 51,065,867 | 52,724,051 | 50,657,264 | ||||||||
| Weighted-average common shares outstanding - diluted, non-GAAP | 52,850,470 | 55,064,895 | 52,724,051 | 55,081,027 | ||||||||
| TABLE II<br>WORKIVA INC.<br>RECONCILIATION OF NON-GAAP GUIDANCE<br>(in thousands, except share and per share data) | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| Three months ending September 30, 2022 | Year ending December 31, 2022 | |||||||||||
| Loss from operations, GAAP range | $ | (33,500) | - | $ | (32,500) | $ | (103,500) | - | $ | (101,500) | ||
| Add back: Stock-based compensation | 19,045 | 19,045 | 71,431 | 71,431 | ||||||||
| Add back: Amortization of acquisition-related intangibles | 1,455 | 1,455 | 5,069 | 5,069 | ||||||||
| Net loss from operations, non-GAAP range | $ | (13,000) | - | $ | (12,000) | $ | (27,000) | - | $ | (25,000) | ||
| Net loss per share, GAAP range | $ | (0.66) | - | $ | (0.64) | $ | (2.02) | - | $ | (1.98) | ||
| Add back: Stock-based compensation | 0.36 | 0.36 | 1.35 | 1.35 | ||||||||
| Add back: Amortization of acquisition-related intangibles | 0.03 | 0.03 | 0.10 | 0.10 | ||||||||
| Net loss per share, non-GAAP range | $ | (0.27) | - | $ | (0.25) | $ | (0.57) | - | $ | (0.53) | ||
| Weighted-average common shares outstanding - basic | 53,100,000 | 53,100,000 | 53,000,000 | 53,000,000 |
7