Business Wire | Feb 17, 2021 04:15PM EST

Workiva Announces Fourth Quarter and Full Year 2020 Financial Results

Feb. 17, 2021

AMES, Iowa--(BUSINESS WIRE)--Feb. 17, 2021--Workiva Inc. (NYSE:WK), the company that simplifies complex work, today announced financial results for its fourth quarter and full year ended December 31, 2020.

"We are pleased with our fourth quarter and full year 2020 results, which beat guidance for revenue and operating income," said Marty Vanderploeg, Chief Executive Officer.

"We have successfully upgraded all of our customers to our new platform, which is more open and scalable," added Vanderploeg. "With the upgrade now complete, we are prioritizing three areas where we see opportunities for revenue growth: development and deployment of fit-for-purpose solutions, global expansion and our partner ecosystem."

"On the strength of record subscription bookings in the fourth quarter, we are raising guidance for fiscal 2021 revenue," said Stuart Miller, Chief Financial Officer.

Fourth Quarter 2020 Financial Highlights

* Revenue: Total revenue for the fourth quarter of 2020 reached $93.8 million, an increase of 16.9% from $80.3 million in the fourth quarter of 2019. Subscription and support revenue contributed $81.0 million, up 22.4% versus the fourth quarter of 2019. Professional services revenue was $12.9 million, a decrease of 8.9% compared to the same quarter in the prior year. * Gross Profit: GAAP gross profit for the fourth quarter of 2020 was $70.2 million compared with $57.2 million in the same quarter of 2019. GAAP gross margin was 74.8% versus 71.3% in the fourth quarter of 2019. Non-GAAP gross profit for the fourth quarter of 2020 was $71.0 million, an increase of 22.2% compared with the prior year's fourth quarter, and non-GAAP gross margin was 75.6% compared to 72.3% in the fourth quarter of 2019. * Results from Operations: GAAP loss from operations for the fourth quarter of 2020 was $5.1 million compared with a loss of $14.4 million in the prior year's fourth quarter. Non-GAAP income from operations was $5.2 million, compared with non-GAAP loss from operations of $4.6 million in the fourth quarter of 2019. * GAAP Net Loss: GAAP net loss for the fourth quarter of 2020 was $8.0 million compared with a net loss of $16.1 million for the prior year's fourth quarter. GAAP net loss per basic and diluted share was $0.16 compared with a net loss per basic and diluted share of $0.34 in the fourth quarter of 2019. * Non-GAAP Net Income/Loss: Non-GAAP net income for the fourth quarter of 2020 was $4.6 million compared with a net loss of $4.1 million in the prior year's fourth quarter. Non-GAAP net income per basic and diluted share was $0.09 and $0.09, respectively, compared with a net loss per basic and diluted share of $0.09, in the fourth quarter of 2019. * Liquidity: As of December 31, 2020, Workiva had cash, cash equivalents and marketable securities totaling $530.0 million, compared with $488.0 million as of December 31, 2019. Workiva had $345.0 million aggregate principal amount of 1.125% convertible senior notes due in 2026 and $18.4 million of other financing obligations outstanding as of December 31, 2020.

Key Metrics and Recent Business Highlights

* Customers: Workiva had 3,723 customers as of December 31, 2020, a net increase of 213 customers from December 31, 2019. * Revenue Retention Rate: As of December 31, 2020, Workiva's revenue retention rate (excluding add-on revenue) was 95.0%, and the revenue retention rate including add-on revenue was 109.5%. Add-on revenue includes changes in both solutions and pricing for existing customers. * Large Contracts: As of December 31, 2020, Workiva had 847 customers with an annual contract value (ACV) of more than $100,000, up 30% from 652 customers at December 31, 2019. Workiva had 419 customers with an ACV of more than $150,000, up 47% from 285 customers in the fourth quarter of 2019.

Full Year 2020 Financial Highlights

* Revenue: Total revenue for the full year 2020 was $351.6 million, an increase of 18.0% compared with $297.9 million in the prior year. Subscription and support revenue was $295.9 million, an increase of 20.4% on a year-over-year basis. * Gross Profit: GAAP gross profit for 2020 was $261.4 million compared with $212.9 million in the prior year. GAAP gross margin was 74.4% in 2020. Non-GAAP gross profit was $264.6 million, an increase of 22.4% compared with the prior year, and non-GAAP gross margin was 75.2%. * Results from Operations: GAAP loss from operations for the full year 2020 was $37.8 million compared with a loss from operations of $45.4 million in the prior year. Non-GAAP income from operations was $8.0 million compared with a loss from operations of $9.6 million in 2019. * GAAP Net Loss: GAAP net loss for 2020 was $48.4 million compared with a net loss of $47.5 million in the prior year. GAAP net loss per basic and diluted share was $1.00 compared with a loss per basic and diluted share of $1.03 in 2019. * Non-GAAP Net Income/Loss: Non-GAAP net income for 2020 was $6.3 million compared with a net loss of $8.4 million in the prior year. Non-GAAP net income per basic and diluted share was $0.13 and $0.12, respectively, compared with a non-GAAP net loss per basic and diluted share of $0.18 in 2019. * Cash Flow: Net cash provided by operating activities was $33.2 million in 2020, compared to cash provided by operating activities of $30.9 million in 2019.

Financial Outlook

As of February 17, 2021, Workiva is providing guidance as follows:

First Quarter 2021 Guidance

* Total revenue is expected to be in the range of $100.0 million to $101.0 million. * GAAP loss from operations is expected to be in the range of $8.5 million to $7.5 million. * Non-GAAP income from operations is expected to be in the range of $4.0 million to $5.0 million. * GAAP net loss per basic and diluted share is expected to be in the range of $0.23 to $0.21. * Non-GAAP net income per basic share is expected to be in the range of $0.06 to $0.08. * Net income (loss) per basic share is based on 50.2 million weighted-average shares outstanding.

Full Year 2021 Guidance:

* Total revenue is expected to be in the range of $409.0 million to $411.0 million. * GAAP loss from operations is expected to be in the range of $71.0 million to $69.0 million. * Non-GAAP loss from operations is expected to be in the range of $12.0 million to $10.0 million. * GAAP net loss per basic and diluted share is expected to be in the range of $1.63 to $1.59. * Non-GAAP net loss per basic share is expected to be in the range of $0.30 to $0.26. * Net income (loss) per basic share is based on 51.4 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 fourth quarter, in addition to discussing the Company's outlook for the first 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 9516867. 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 February 24, 2021, at 800-585-8367 (U.S. domestic) or 416-621-4642 (international). The replay pass code is 9516867. 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/blogFollow Workiva on LinkedIn: www.linkedin.com/company/workivaLike Workiva on Facebook: www.facebook.com/workivaFollow 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.

WORKIVA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except share and per share amounts)

Three months ended Year ended December 31, December 31,

2020 2019 2020 2019

(unaudited)

Revenue

Subscription and $ 80,970 $ 66,148 $ 295,877 $ 245,765 support

Professional services 12,864 14,117 55,717 52,126

Total revenue 93,834 80,265 351,594 297,891

Cost of revenue

Subscription and 13,239 11,946 49,503 42,881 support ^(1)

Professional services 10,412 11,102 40,674 42,131 ^(1)

Total cost of revenue 23,651 23,048 90,177 85,012

Gross profit 70,183 57,217 261,417 212,879

Operating expenses

Research and 24,386 23,216 94,844 89,921 development ^(1)

Sales and marketing ^ 37,813 33,732 144,687 120,300 (1)

General and 13,124 14,675 59,688 48,064 administrative ^(1)

Total operating 75,323 71,623 299,219 258,285 expenses

Loss from operations (5,140 ) (14,406 ) (37,802 ) (45,406 )

Interest income 450 2,064 3,282 4,657

Interest expense (3,497 ) (3,456 ) (13,964 ) (6,027 )

Other expense, net (468 ) (305 ) (205 ) (564 )

Loss before (benefit)provision for income (8,655 ) (16,103 ) (48,689 ) (47,340 )taxes

(Benefit) provision (642 ) 38 (291 ) 139 for income taxes

Net loss $ (8,013 ) $ (16,141 ) $ (48,398 ) $ (47,479 )

Net loss per common share:

Basic and diluted $ (0.16 ) $ (0.34 ) $ (1.00 ) $ (1.03 )

Weighted-averagecommon shares 49,222,465 47,058,209 48,448,166 46,302,656 outstanding - basicand diluted

(1) Includes stock-based compensation expense as follows:

Three months ended

December 31,

Year ended December 31,

2020

2019

2020

2019

(unaudited)

Cost of revenue

Subscription and support

$

416

$

412

$

1,709

$

1,554

Professional services

372

429

1,434

1,725

Operating expenses

Research and development

2,310

1,990

8,100

8,006

Sales and marketing

2,695

2,593

11,062

8,792

General and administrative

4,547

4,431

23,466

15,707

(1) Includes stock-based compensationexpense as follows:

Three months ended Year ended December 31, December 31,

2020 2019 2020 2019

(unaudited)

Cost of revenue

Subscription and support $ 416 $ 412 $ 1,709 $ 1,554

Professional services 372 429 1,434 1,725

Operating expenses

Research and development 2,310 1,990 8,100 8,006

Sales and marketing 2,695 2,593 11,062 8,792

General and administrative 4,547 4,431 23,466 15,707

WORKIVA INC.CONSOLIDATED BALANCE SHEETS(in thousands)

As of December 31,

2020

2019

Assets

Current assets

Cash and cash equivalents

$

322,831

$

381,742

Marketable securities

207,207

106,214

Accounts receivable, net

68,922

60,228

Deferred costs

21,923

14,108

Other receivables

3,155

2,432

Prepaid expenses and other

9,047

6,508

Total current assets

633,085

571,232

Property and equipment, net

29,365

32,300

Operating lease right-of-use assets

15,844

15,352

Deferred costs, non-current

23,421

14,977

Intangible assets, net

1,583

1,651

Other assets

3,708

3,439

Total assets

$

707,006

$

638,951

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$

2,843

$

7,057

Accrued expenses and other current liabilities

68,256

49,799

Deferred revenue

208,990

173,617

Finance lease obligations

1,705

1,629

Total current liabilities

281,794

232,102

Convertible senior notes, net

289,490

280,601

Deferred revenue, non-current

35,894

32,569

Other long-term liabilities

1,680

1,498

Operating lease liabilities, non-current

17,209

18,564

Finance lease obligations, non-current

16,662

19,415

Total liabilities

642,729

584,749

Stockholders' equity

Common stock

49

47

Additional paid-in-capital

478,698

420,170

Accumulated deficit

(414,700

)

(366,302

)

Accumulated other comprehensive income

230

287

Total stockholders' equity

64,277

54,202

Total liabilities and stockholders' equity

$

707,006

$

638,951

WORKIVA INC.

CONSOLIDATED BALANCE SHEETS(in thousands)

As of December 31,

2020 2019

Assets

Current assets

Cash and cash equivalents $ 322,831 $ 381,742

Marketable securities 207,207 106,214

Accounts receivable, net 68,922 60,228

Deferred costs 21,923 14,108

Other receivables 3,155 2,432

Prepaid expenses and other 9,047 6,508

Total current assets 633,085 571,232

Property and equipment, net 29,365 32,300

Operating lease right-of-use assets 15,844 15,352

Deferred costs, non-current 23,421 14,977

Intangible assets, net 1,583 1,651

Other assets 3,708 3,439

Total assets $ 707,006 $ 638,951

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable $ 2,843 $ 7,057

Accrued expenses and other current liabilities 68,256 49,799

Deferred revenue 208,990 173,617

Finance lease obligations 1,705 1,629

Total current liabilities 281,794 232,102

Convertible senior notes, net 289,490 280,601

Deferred revenue, non-current 35,894 32,569

Other long-term liabilities 1,680 1,498

Operating lease liabilities, non-current 17,209 18,564

Finance lease obligations, non-current 16,662 19,415

Total liabilities 642,729 584,749

Stockholders' equity

Common stock 49 47

Additional paid-in-capital 478,698 420,170

Accumulated deficit (414,700 ) (366,302 )

Accumulated other comprehensive income 230 287

Total stockholders' equity 64,277 54,202

Total liabilities and stockholders' equity $ 707,006 $ 638,951

WORKIVA INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)

Three months ended

December 31,

Year ended December 31,

2020

2019

2020

2019

(unaudited)

Cash flows from operating activities

Net loss

$

(8,013

)

$

(16,141

)

$

(48,398

)

$

(47,479

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

1,101

1,149

4,296

3,844

Stock-based compensation expense

10,340

9,855

45,771

35,784

Provision for (recovery of) doubtful accounts

32

(34

)

(159

)

(92

)

Amortization of premiums and discounts on marketable securities, net

349

102

668

13

Amortization of debt discount and issuance costs

2,248

2,179

8,889

3,262

Deferred income tax

68

2

-

(65

)

Changes in assets and liabilities:

Accounts receivable

(12,833

)

(16,364

)

(8,028

)

5,166

Deferred costs

(9,572

)

(2,300

)

(15,953

)

(10,268

)

Operating lease right-of-use asset

914

747

3,906

2,552

Other receivables

(709

)

(780

)

(680

)

(1,250

)

Prepaid expenses

564

1,653

(2,492

)

(2,084

)

Other assets

385

489

(215

)

(1,860

)

Accounts payable

(851

)

1,993

(4,106

)

2,153

Deferred revenue

26,165

17,927

37,479

32,039

Operating lease liability

(1,087

)

(809

)

(4,525

)

(3,035

)

Accrued expenses and other liabilities

4,252

2,399

16,790

12,238

Net cash provided by operating activities

13,353

2,067

33,243

30,918

Cash flows from investing activities

Purchase of property and equipment

(110

)

(244

)

(1,873

)

(3,104

)

Purchase of marketable securities

(130,657

)

(17,099

)

(175,926

)

(112,565

)

Sale of marketable securities

-

-

11,423

498

Maturities of marketable securities

20,585

6,450

62,922

26,840

Purchase of intangible assets

(43

)

(22

)

(296

)

(734

)

Other

-

-

-

(1,000

)

Net cash used in investing activities

(110,225

)

(10,915

)

(103,750

)

(90,065

)

Cash flows from financing activities

Proceeds from option exercises

4,936

1,659

19,189

24,152

Taxes paid related to net share settlements of stock-based compensation awards

(11,546

)

-

(13,657

)

(390

)

Proceeds from shares issued in connection with employee stock purchase plan

-

-

7,227

4,922

Proceeds from the issuance of convertible senior notes, net of issuance costs

-

-

-

335,899

Principal payments on finance lease obligations

(429

)

(392

)

(1,641

)

(1,565

)

Net cash (used in) provided by financing activities

(7,039

)

1,267

11,118

363,018

Effect of foreign exchange rates on cash

610

199

478

287

Net (decrease) increase in cash and cash equivalents

(103,301

)

(7,382

)

(58,911

)

304,158

Cash and cash equivalents at beginning of period

426,132

389,124

381,742

77,584

Cash and cash equivalents at end of period

$

322,831

$

381,742

$

322,831

$

381,742

WORKIVA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)

Three months ended Year ended December 31, December 31,

2020 2019 2020 2019

(unaudited)

Cash flows from operating activities

Net loss $ (8,013 ) $ (16,141 ) $ (48,398 ) $ (47,479 )

Adjustments to reconcilenet loss to net cash provided by operatingactivities:

Depreciation and 1,101 1,149 4,296 3,844 amortization

Stock-based compensation 10,340 9,855 45,771 35,784 expense

Provision for (recovery 32 (34 ) (159 ) (92 )of) doubtful accounts

Amortization of premiumsand discounts on 349 102 668 13 marketable securities,net

Amortization of debtdiscount and issuance 2,248 2,179 8,889 3,262 costs

Deferred income tax 68 2 - (65 )

Changes in assets and liabilities:

Accounts receivable (12,833 ) (16,364 ) (8,028 ) 5,166

Deferred costs (9,572 ) (2,300 ) (15,953 ) (10,268 )

Operating lease 914 747 3,906 2,552 right-of-use asset

Other receivables (709 ) (780 ) (680 ) (1,250 )

Prepaid expenses 564 1,653 (2,492 ) (2,084 )

Other assets 385 489 (215 ) (1,860 )

Accounts payable (851 ) 1,993 (4,106 ) 2,153

Deferred revenue 26,165 17,927 37,479 32,039

Operating lease liability (1,087 ) (809 ) (4,525 ) (3,035 )

Accrued expenses and 4,252 2,399 16,790 12,238 other liabilities

Net cash provided by 13,353 2,067 33,243 30,918 operating activities

Cash flows from investing activities

Purchase of property and (110 ) (244 ) (1,873 ) (3,104 )equipment

Purchase of marketable (130,657 ) (17,099 ) (175,926 ) (112,565 )securities

Sale of marketable - - 11,423 498 securities

Maturities of marketable 20,585 6,450 62,922 26,840 securities

Purchase of intangible (43 ) (22 ) (296 ) (734 )assets

Other - - - (1,000 )

Net cash used in (110,225 ) (10,915 ) (103,750 ) (90,065 )investing activities



Cash flows from financing activities

Proceeds from option 4,936 1,659 19,189 24,152 exercises

Taxes paid related to netshare settlements of (11,546 ) - (13,657 ) (390 )stock-based compensationawards

Proceeds from sharesissued in connection with - - 7,227 4,922 employee stock purchaseplan

Proceeds from theissuance of convertible - - - 335,899 senior notes, net ofissuance costs

Principal payments on (429 ) (392 ) (1,641 ) (1,565 )finance lease obligations

Net cash (used in)provided by financing (7,039 ) 1,267 11,118 363,018 activities

Effect of foreign 610 199 478 287 exchange rates on cash

Net (decrease) increasein cash and cash (103,301 ) (7,382 ) (58,911 ) 304,158 equivalents

Cash and cash equivalents 426,132 389,124 381,742 77,584 at beginning of period

Cash and cash equivalents $ 322,831 $ 381,742 $ 322,831 $ 381,742 at end of period

TABLE IWORKIVA INC.RECONCILIATION OF NON-GAAP INFORMATION(in thousands, except share and per share)

Three months ended December 31,

Year ended December 31,

2020

2019

2020

2019

Gross profit, subscription and support

$

67,731

$

54,202

$

246,374

$

202,884

Add back: Stock-based compensation

416

412

1,709

1,554

Gross profit, subscription and support, non-GAAP

$

68,147

$

54,614

$

248,083

$

204,438

As a percentage of subscription and support revenue, non-GAAP

84.2

%

82.6

%

83.8

%

83.2

%

Gross profit, professional services

$

2,452

$

3,015

$

15,043

$

9,995

Add back: Stock-based compensation

372

429

1,434

1,725

Gross profit, professional services, non-GAAP

$

2,824

$

3,444

$

16,477

$

11,720

As a percentage of professional services revenue, non-GAAP

22.0

%

24.4

%

29.6

%

22.5

%

Gross profit

$

70,183

$

57,217

$

261,417

$

212,879

Add back: Stock-based compensation

788

841

3,143

3,279

Gross profit, non-GAAP

$

70,971

$

58,058

$

264,560

$

216,158

As percentage of revenue, non-GAAP

75.6

%

72.3

%

75.2

%

72.6

%

Cost of revenue, subscription and support

$

13,239

$

11,946

$

49,503

$

42,881

Less: Stock-based compensation

416

412

1,709

1,554

Cost of revenue, subscription and support, non-GAAP

$

12,823

$

11,534

$

47,794

$

41,327

As percentage of revenue, non-GAAP

13.7

%

14.4

%

13.6

%

13.9

%

Cost of revenue, professional services

$

10,412

$

11,102

$

40,674

$

42,131

Less: Stock-based compensation

372

429

1,434

1,725

Cost of revenue, professional services, non-GAAP

$

10,040

$

10,673

$

39,240

$

40,406

As percentage of revenue, non-GAAP

10.7

%

13.3

%

11.2

%

13.6

%

Research and development

$

24,386

$

23,216

$

94,844

$

89,921

Less: Stock-based compensation

2,310

1,990

8,100

8,006

Research and development, non-GAAP

$

22,076

$

21,226

$

86,744

$

81,915

As percentage of revenue, non-GAAP

23.5

%

26.4

%

24.7

%

27.5

%

Sales and marketing

$

37,813

$

33,732

$

144,687

$

120,300

Less: Stock-based compensation

2,695

2,593

11,062

8,792

Sales and marketing, non-GAAP

$

35,118

$

31,139

$

133,625

$

111,508

As percentage of revenue, non-GAAP

37.4

%

38.8

%

38.0

%

37.4

%

General and administrative

$

13,124

$

14,675

$

59,688

$

48,064

Less: Stock-based compensation

4,547

4,431

23,466

15,707

General and administrative, non-GAAP

$

8,577

$

10,244

$

36,222

$

32,357

As percentage of revenue, non-GAAP

9.1

%

12.8

%

10.3

%

10.9

%

Loss from operations

$

(5,140)

$

(14,406)

$

(37,802)

$

(45,406)

Add back: Stock-based compensation

10,340

9,855

45,771

35,784

Income (loss) from operations, non-GAAP

$

5,200

$

(4,551)

$

7,969

$

(9,622)

As percentage of revenue, non-GAAP

5.5

%

(5.7)

%

2.3

%

(3.2)

%

Net loss

$

(8,013)

$

(16,141)

$

(48,398)

$

(47,479)

Add back: Stock-based compensation

10,340

9,855

45,771

35,784

Add back: Non-cash interest expense related to convertible senior notes

2,248

2,179

8,889

3,263

Net income (loss), non-GAAP

$

4,575

$

(4,107)

$

6,262

$

(8,432)

As percentage of revenue, non-GAAP

4.9

%

(5.1)

%

1.8

%

(2.8)

%

Net loss per basic and diluted share:

$

(0.16)

$

(0.34)

$

(1.00)

$

(1.03)

Add back: Stock-based compensation

0.20

0.20

0.95

0.78

Add back: Non-cash interest expense related to convertible senior notes

0.05

0.05

0.18

0.07

Net income (loss) per basic share, non-GAAP

$

0.09

$

(0.09)

$

0.13

$

(0.18)

Net income (loss) per diluted share, non-GAAP

$

0.09

$

(0.09)

$

0.12

$

(0.18)

Weighted-average common shares outstanding - basic, non-GAAP

49,222,465

47,058,209

48,448,166

46,302,656

Weighted-average common shares outstanding - diluted, non-GAAP

53,776,276

47,058,209

52,864,771

46,302,656

TABLE IWORKIVA INC.RECONCILIATION OF NON-GAAP INFORMATION(in thousands, except share and per share)

Three months ended December Year ended December 31, 31,

2020 2019 2020 2019

Gross profit,subscription and $ 67,731 $ 54,202 $ 246,374 $ 202,884 support

Add back: Stock-based 416 412 1,709 1,554 compensation

Gross profit,subscription and $ 68,147 $ 54,614 $ 248,083 $ 204,438 support, non-GAAP

As a percentage ofsubscription and 84.2 % 82.6 % 83.8 % 83.2 %support revenue,non-GAAP



Gross profit, $ 2,452 $ 3,015 $ 15,043 $ 9,995 professional services

Add back: Stock-based 372 429 1,434 1,725 compensation

Gross profit,professional $ 2,824 $ 3,444 $ 16,477 $ 11,720 services, non-GAAP

As a percentage ofprofessional services 22.0 % 24.4 % 29.6 % 22.5 %revenue, non-GAAP



Gross profit $ 70,183 $ 57,217 $ 261,417 $ 212,879

Add back: Stock-based 788 841 3,143 3,279 compensation

Gross profit, $ 70,971 $ 58,058 $ 264,560 $ 216,158 non-GAAP

As percentage of 75.6 % 72.3 % 75.2 % 72.6 %revenue, non-GAAP



Cost of revenue,subscription and $ 13,239 $ 11,946 $ 49,503 $ 42,881 support

Less: Stock-based 416 412 1,709 1,554 compensation

Cost of revenue,subscription and $ 12,823 $ 11,534 $ 47,794 $ 41,327 support, non-GAAP

As percentage of 13.7 % 14.4 % 13.6 % 13.9 %revenue, non-GAAP



Cost of revenue, $ 10,412 $ 11,102 $ 40,674 $ 42,131 professional services

Less: Stock-based 372 429 1,434 1,725 compensation

Cost of revenue,professional $ 10,040 $ 10,673 $ 39,240 $ 40,406 services, non-GAAP

As percentage of 10.7 % 13.3 % 11.2 % 13.6 %revenue, non-GAAP



Research and $ 24,386 $ 23,216 $ 94,844 $ 89,921 development

Less: Stock-based 2,310 1,990 8,100 8,006 compensation

Research and $ 22,076 $ 21,226 $ 86,744 $ 81,915 development, non-GAAP

As percentage of 23.5 % 26.4 % 24.7 % 27.5 %revenue, non-GAAP



Sales and marketing $ 37,813 $ 33,732 $ 144,687 $ 120,300

Less: Stock-based 2,695 2,593 11,062 8,792 compensation

Sales and marketing, $ 35,118 $ 31,139 $ 133,625 $ 111,508 non-GAAP

As percentage of 37.4 % 38.8 % 38.0 % 37.4 %revenue, non-GAAP



General and $ 13,124 $ 14,675 $ 59,688 $ 48,064 administrative

Less: Stock-based 4,547 4,431 23,466 15,707 compensation

General andadministrative, $ 8,577 $ 10,244 $ 36,222 $ 32,357 non-GAAP

As percentage of 9.1 % 12.8 % 10.3 % 10.9 %revenue, non-GAAP



Loss from operations $ (5,140) $ (14,406) $ (37,802) $ (45,406)

Add back: Stock-based 10,340 9,855 45,771 35,784 compensation

Income (loss) from $ 5,200 $ (4,551) $ 7,969 $ (9,622) operations, non-GAAP

As percentage of 5.5 % (5.7) % 2.3 % (3.2) %revenue, non-GAAP



Net loss $ (8,013) $ (16,141) $ (48,398) $ (47,479)

Add back: Stock-based 10,340 9,855 45,771 35,784 compensation

Add back: Non-cashinterest expenserelated to 2,248 2,179 8,889 3,263 convertible seniornotes

Net income (loss), $ 4,575 $ (4,107) $ 6,262 $ (8,432) non-GAAP

As percentage of 4.9 % (5.1) % 1.8 % (2.8) %revenue, non-GAAP



Net loss per basic $ (0.16) $ (0.34) $ (1.00) $ (1.03) and diluted share:

Add back: Stock-based 0.20 0.20 0.95 0.78 compensation

Add back: Non-cashinterest expenserelated to 0.05 0.05 0.18 0.07 convertible seniornotes

Net income (loss) per $ 0.09 $ (0.09) $ 0.13 $ (0.18) basic share, non-GAAP

Net income (loss) perdiluted share, $ 0.09 $ (0.09) $ 0.12 $ (0.18) non-GAAP



Weighted-averagecommon shares 49,222,465 47,058,209 48,448,166 46,302,656 outstanding - basic,non-GAAP

Weighted-averagecommon shares 53,776,276 47,058,209 52,864,771 46,302,656 outstanding -diluted, non-GAAP

TABLE IIWORKIVA INC.RECONCILIATION OF NON-GAAP GUIDANCE(in thousands, except share and per share data)

Three months ending March 31, 2021

Year ending December 31, 2021

Loss from operations, GAAP range

$

(8,500

)

-

$

(7,500

)

$

(71,000

)

-

$

(69,000

)

Add back: Stock-based compensation

12,500

12,500

59,000

59,000

Income (loss) from operations, non-GAAP range

$

4,000

-

$

5,000

$

(12,000

)

-

$

(10,000

)

Net loss per share, GAAP range

$

(0.23

)

-

$

(0.21

)

$

(1.63

)

-

$

(1.59

)

Add back: Stock-based compensation

0.25

0.25

1.15

1.15

Add back: Non-cash interest expense related to convertible senior notes

0.04

0.04

0.18

0.18

Net income (loss) per share, basic, non-GAAP range

$

0.06

-

$

0.08

$

(0.30

)

-

$

(0.26

)

Weighted-average common shares outstanding - basic

50,200,000

50,200,000

51,400,000

51,400,000

View source version on businesswire.com: https://www.businesswire.com/news/home/20210217005732/en/

CONTACT: Investor Contact: Adam Terese Workiva Inc. investor@workiva.com (515) 663-4493

CONTACT: Media Contact: Kevin McCarthy Workiva Inc. press@workiva.com (515) 663-4471