Workiva Inc. (NYSE:WK), the world’s leading cloud platform for assured integrated reporting, today announced financial results for its second quarter ended June 30, 2024. "In Q2, we saw a healthy im...
NEW YORK: Workiva Inc. (NYSE:WK), the world’s leading cloud platform for assured integrated reporting, today announced financial results for its second quarter ended June 30, 2024.
"In Q2, we saw a healthy improvement in the buying environment marked by broad-based demand across our entire solution portfolio," said Julie Iskow, President & Chief Executive Officer. "This demand was driven by a number of multi-solution and large contract platform deals. Whether from new logos or account expansions, we’re encouraged by our win rates, our deal sizes, and our platform wins."
"Q2 was a good quarter with 18% growth in subscription revenue and a 150 basis point year over year improvement in GAAP operating margin, which equated to a 240 basis point improvement on a Non-GAAP basis," said Jill Klindt, Chief Financial Officer. "Our strong first half performance along with improved sales momentum gives us the confidence to raise our full year total revenue guidance range to $727 million to $729 million."
Second Quarter 2024 Financial Results
Key Metrics and Recent Business Highlights
Financial Outlook
As of August 1, 2024, Workiva is providing guidance as follows:
Third Quarter 2024 Guidance:
Full Year 2024 Guidance:
Share Repurchase Authorization
Workiva's Board of Directors has authorized a stock repurchase program of up to $100 million of Workiva's outstanding Class A common stock. The program has no minimum purchase commitment and no mandated end date. The repurchase is expected to be executed, subject to general business and market conditions and other investment opportunities, through open market purchases, block trades, and/or privately negotiated trades pursuant to 10b5-1 plans and other transactions in accordance with applicable securities laws. The timing and the amount of any repurchased common stock will be determined by Workiva's management based on its evaluation of market conditions and other factors. The repurchase program does not obligate Workiva to acquire any particular amount of Class A common stock and the repurchase program may be suspended or discontinued at any time at Workiva's discretion without prior notice. When shares are repurchased, they will be immediately retired by the Company.
Quarterly Conference Call
Workiva will host a webcast today at 5:00 p.m. ET to review the Company’s financial results for the second quarter 2024, in addition to discussing the Company’s outlook for the third quarter and full year 2024, and an update to the Company's long term financial model. The webcast will be available on https://investor.workiva.com/news-events/events. An archived webcast 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 cloud platform for assured integrated reporting to meet stakeholder demands for action, transparency, and disclosure of financial and non-financial data. Workiva offers the only unified SaaS platform that brings customers’ financial reporting, Environmental, Social, and Governance (ESG), and Governance, Risk, and Compliance (GRC) together in a controlled, secure, audit-ready platform. Our platform simplifies the most complex reporting and disclosure challenges by streamlining processes, connecting data and teams, and ensuring consistency. Learn more at workiva.com.
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 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. 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.
Forward-Looking Statements
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.
WORKIVA INC. | |||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||
| Three months ended June 30, |
| Six months ended June 30, | ||||||||||||
|
| 2024 |
|
|
| 2023 |
|
|
| 2024 |
|
|
| 2023 |
|
| (unaudited) | ||||||||||||||
Revenue |
|
|
|
|
|
|
| ||||||||
Subscription and support | $ | 160,735 |
|
| $ | 136,772 |
|
| $ | 315,714 |
|
| $ | 266,436 |
|
Professional services |
| 16,768 |
|
|
| 18,250 |
|
|
| 37,456 |
|
|
| 38,775 |
|
Total revenue |
| 177,503 |
|
|
| 155,022 |
|
|
| 353,170 |
|
|
| 305,211 |
|
Cost of revenue |
|
|
|
|
|
|
| ||||||||
Subscription and support (1) |
| 27,945 |
|
|
| 25,083 |
|
|
| 55,872 |
|
|
| 49,216 |
|
Professional services (1) |
| 13,227 |
|
|
| 14,421 |
|
|
| 26,823 |
|
|
| 28,806 |
|
Total cost of revenue |
| 41,172 |
|
|
| 39,504 |
|
|
| 82,695 |
|
|
| 78,022 |
|
Gross profit |
| 136,331 |
|
|
| 115,518 |
|
|
| 270,475 |
|
|
| 227,189 |
|
Operating expenses |
|
|
|
|
|
|
| ||||||||
Research and development (1) |
| 48,408 |
|
|
| 42,697 |
|
|
| 93,903 |
|
|
| 88,488 |
|
Sales and marketing (1) |
| 84,697 |
|
|
| 71,882 |
|
|
| 167,330 |
|
|
| 142,592 |
|
General and administrative (1) |
| 26,375 |
|
|
| 23,627 |
|
|
| 50,674 |
|
|
| 65,638 |
|
Total operating expenses |
| 159,480 |
|
|
| 138,206 |
|
|
| 311,907 |
|
|
| 296,718 |
|
Loss from operations |
| (23,149 | ) |
|
| (22,688 | ) |
|
| (41,432 | ) |
|
| (69,529 | ) |
Interest income |
| 10,336 |
|
|
| 4,535 |
|
|
| 20,791 |
|
|
| 8,252 |
|
Interest expense |
| (3,237 | ) |
|
| (1,499 | ) |
|
| (6,469 | ) |
|
| (3,000 | ) |
Other (expense) and income, net |
| (45 | ) |
|
| (439 | ) |
|
| 41 |
|
|
| (1,379 | ) |
Loss before provision for income taxes |
| (16,095 | ) |
|
| (20,091 | ) |
|
| (27,069 | ) |
|
| (65,656 | ) |
Provision for income taxes |
| 1,453 |
|
|
| 819 |
|
|
| 2,166 |
|
|
| 1,404 |
|
Net loss | $ | (17,548 | ) |
| $ | (20,910 | ) |
| $ | (29,235 | ) |
| $ | (67,060 | ) |
Net loss per common share: |
|
|
|
|
|
|
| ||||||||
Basic and diluted | $ | (0.32 | ) |
| $ | (0.39 | ) |
| $ | (0.53 | ) |
| $ | (1.25 |
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