Business Wire | Aug 3, 2021 04:15PM EDT

Workiva Inc. Announces Second Quarter 2021 Financial Results

Aug. 03, 2021

AMES, Iowa--(BUSINESS WIRE)--Aug. 03, 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 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 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 June 30, Six months ended June 30,

2021 2020 2021 2020

(unaudited)

Revenue

Subscription and $ 91,205 $ 70,696 $ 176,141 $ 139,057 support

Professional services 14,382 13,164 33,668 30,604

Total revenue 105,587 83,860 209,809 169,661

Cost of revenue

Subscription and 14,098 12,098 27,300 24,251 support ^(1)

Professional services 10,493 10,146 20,967 20,389 ^(1)

Total cost of revenue 24,591 22,244 48,267 44,640

Gross profit 80,996 61,616 161,542 125,021

Operating expenses

Research and 27,830 23,508 54,464 46,502 development ^(1)

Sales and marketing ^ 41,525 35,270 82,560 71,387 (1)

General and 17,384 19,553 34,405 32,922 administrative ^(1)

Total operating 86,739 78,331 171,429 150,811 expenses

Loss from operations (5,743 ) (16,715 ) (9,887 ) (25,790 )

Interest income 255 655 615 2,361

Interest expense (3,502 ) (3,489 ) (6,987 ) (6,967 )

Other (expense) (156 ) (68 ) (540 ) 650 income, net

Loss before provision(benefit) for income (9,146 ) (19,617 ) (16,799 ) (29,746 )taxes

Provision (benefit) 368 (5 ) 39 284 for income taxes

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-averagecommon shares 51,065,867 48,171,552 50,657,264 47,858,628 outstanding - basicand diluted

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

Three months ended June 30,

Six months ended June 30,

2021

2020

2021

2020

(unaudited)

Cost of revenue

Subscription and support

$

597

$

436

$

1,093

$

867

Professional services

409

365

776

790

Operating expenses

Research and development

2,417

2,040

4,848

3,623

Sales and marketing

2,837

2,944

6,386

5,680

General and administrative

4,792

9,109

9,572

13,870

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

Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

(unaudited)

Cost of revenue

Subscription and support $ 597 $ 436 $ 1,093 $ 867

Professional services 409 365 776 790

Operating expenses

Research and development 2,417 2,040 4,848 3,623

Sales and marketing 2,837 2,944 6,386 5,680

General and 4,792 9,109 9,572 13,870 administrative

WORKIVA INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

June 30, 2021

December 31, 2020

(unaudited)

Assets

Current assets

Cash and cash equivalents

$

322,194

$

322,831

Marketable securities

229,419

207,207

Accounts receivable, net

65,908

68,922

Deferred costs

26,646

21,923

Other receivables

2,750

3,155

Prepaid expenses and other

12,045

9,047

Total current assets

658,962

633,085

Property and equipment, net

28,922

29,365

Operating lease right-of-use assets

15,558

15,844

Deferred costs, non-current

28,797

23,421

Intangible assets, net

1,516

1,583

Other assets

5,127

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 liabilities

76,682

68,256

Deferred revenue

224,952

208,990

Finance lease obligations

1,752

1,705

Total current liabilities

307,090

281,794

Convertible senior notes, net

294,040

289,490

Deferred revenue, non-current

32,219

35,894

Other long-term liabilities

1,338

1,680

Operating lease liabilities, non-current

16,355

17,209

Finance lease obligations, non-current

15,774

16,662

Total liabilities

666,816

642,729

Stockholders' equity

Common stock

50

49

Additional paid-in-capital

503,350

478,698

Accumulated deficit

(431,538

)

(414,700

)

Accumulated other comprehensive income

204

230

Total stockholders' equity

72,066

64,277

Total liabilities and stockholders' equity

$

738,882

$

707,006

WORKIVA INC.



CONSOLIDATED BALANCE SHEETS

(in thousands)

June 30, December 31, 2021 2020

(unaudited)

Assets

Current assets

Cash and cash equivalents $ 322,194 $ 322,831

Marketable securities 229,419 207,207

Accounts receivable, net 65,908 68,922

Deferred costs 26,646 21,923

Other receivables 2,750 3,155

Prepaid expenses and other 12,045 9,047

Total current assets 658,962 633,085

Property and equipment, net 28,922 29,365

Operating lease right-of-use assets 15,558 15,844

Deferred costs, non-current 28,797 23,421

Intangible assets, net 1,516 1,583

Other assets 5,127 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 liabilities 76,682 68,256

Deferred revenue 224,952 208,990

Finance lease obligations 1,752 1,705

Total current liabilities 307,090 281,794

Convertible senior notes, net 294,040 289,490

Deferred revenue, non-current 32,219 35,894

Other long-term liabilities 1,338 1,680

Operating lease liabilities, non-current 16,355 17,209

Finance lease obligations, non-current 15,774 16,662

Total liabilities 666,816 642,729

Stockholders' equity

Common stock 50 49

Additional paid-in-capital 503,350 478,698

Accumulated deficit (431,538 ) (414,700 )

Accumulated other comprehensive income 204 230

Total stockholders' equity 72,066 64,277

Total liabilities and stockholders' equity $ 738,882 $ 707,006

WORKIVA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three months ended June 30,

Six months ended June 30,

2021

2020

2021

2020

(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 amortization

1,097

1,052

2,151

2,115

Stock-based compensation expense

11,052

14,894

22,675

24,830

Provision for (recovery of) doubtful accounts

17

319

(101

)

359

Amortization of premiums and discounts on marketable securities, net

763

112

1,388

213

Amortization of debt discount and issuance costs

2,284

2,213

4,550

4,410

Deferred income tax

362

(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 asset

977

875

1,921

1,973

Other receivables

585

58

424

(195

)

Prepaid expenses

722

(890

)

(3,025

)

(2,845

)

Other assets

(110

)

(609

)

(683

)

(683

)

Accounts payable

(1,172

)

(1,692

)

736

(3,074

)

Deferred revenue

11,900

(3,640

)

12,079

(4,868

)

Operating lease liability

(1,202

)

(1,178

)

(2,278

)

(2,323

)

Accrued expenses and other liabilities

16,123

13,737

8,166

5,716

Net cash provided by operating activities

12,760

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 securities

250

-

250

11,423

Maturities of marketable securities

30,206

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 exercises

1,480

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 activities

325

5,528

1,137

10,205

Effect of foreign exchange rates on cash

310

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 period

331,173

393,434

322,831

381,742

Cash and cash equivalents at end of period

$

322,194

$

402,121

$

322,194

$

402,121

WORKIVA INC.



CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three months ended June Six months ended June 30, 30,

2021 2020 2021 2020

(unaudited)

Cash flows from operating activities

Net loss $ (9,514 ) $ (19,612 ) $ (16,838 ) $ (30,030 )

Adjustments to reconcilenet loss to net cash provided by operatingactivities:

Depreciation and 1,097 1,052 2,151 2,115 amortization

Stock-based compensation 11,052 14,894 22,675 24,830 expense

Provision for (recovery 17 319 (101 ) 359 of) doubtful accounts

Amortization of premiumsand discounts on 763 112 1,388 213 marketable securities,net

Amortization of debtdiscount and issuance 2,284 2,213 4,550 4,410 costs

Deferred income tax 362 (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 977 875 1,921 1,973 right-of-use asset

Other receivables 585 58 424 (195 )

Prepaid expenses 722 (890 ) (3,025 ) (2,845 )

Other assets (110 ) (609 ) (683 ) (683 )

Accounts payable (1,172 ) (1,692 ) 736 (3,074 )

Deferred revenue 11,900 (3,640 ) 12,079 (4,868 )

Operating lease liability (1,202 ) (1,178 ) (2,278 ) (2,323 )

Accrued expenses and 16,123 13,737 8,166 5,716 other liabilities

Net cash provided by 12,760 7,189 24,263 12,016 operating activities

Cash flows from investing activities

Purchase of property and (811 ) (696 ) (1,660 ) (1,384 )equipment

Purchase of marketable (51,217 ) (16,457 ) (94,872 ) (37,289 )securities

Sale of marketable 250 - 250 11,423 securities

Maturities of marketable 30,206 13,062 70,792 26,037 securities

Purchase of intangible (52 ) (74 ) (123 ) (151 )assets

Other (750 ) - (750 ) -

Net cash used in (22,374 ) (4,165 ) (26,363 ) (1,364 )investing activities



Cash flows from financing activities

Proceeds from option 1,480 6,664 5,618 9,458 exercises

Taxes paid related to netshare settlements of (731 ) (732 ) (7,877 ) (2,111 )stock-based compensationawards

Proceeds from sharesissued in connection with - - 4,237 3,660 employee stock purchaseplan

Principal payments on (424 ) (404 ) (841 ) (802 )finance lease obligations

Net cash provided by 325 5,528 1,137 10,205 financing activities

Effect of foreign 310 135 326 (478 )exchange rates on cash

Net (decrease) increasein cash and cash (8,979 ) 8,687 (637 ) 20,379 equivalents

Cash and cash equivalents 331,173 393,434 322,831 381,742 at beginning of period

Cash and cash equivalents $ 322,194 $ 402,121 $ 322,194 $ 402,121 at end of period

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,

2021

2020

2021

2020

Gross profit, subscription and support

$

77,107

$

58,598

$

148,841

$

114,806

Add back: Stock-based compensation

597

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-GAAP

85.2

%

83.5

%

85.1

%

83.2

%

Gross profit, professional services

$

3,889

$

3,018

$

12,701

$

10,215

Add back: Stock-based compensation

409

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-GAAP

29.9

%

25.7

%

40.0

%

36.0

%

Gross profit

$

80,996

$

61,616

$

161,542

$

125,021

Add back: Stock-based compensation

1,006

801

1,869

1,657

Gross profit, non-GAAP

$

82,002

$

62,417

$

163,411

$

126,678

As percentage of revenue, non-GAAP

77.7

%

74.4

%

77.9

%

74.7

%

Cost of revenue, subscription and support

$

14,098

$

12,098

$

27,300

$

24,251

Less: Stock-based compensation

597

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-GAAP

12.8

%

13.9

%

12.5

%

13.8

%

Cost of revenue, professional services

$

10,493

$

10,146

$

20,967

$

20,389

Less: Stock-based compensation

409

365

776

790

Cost of revenue, professional services, non-GAAP

$

10,084

$

9,781

$

20,191

$

19,599

As percentage of revenue, non-GAAP

9.6

%

11.7

%

9.6

%

11.6

%

Research and development

$

27,830

$

23,508

$

54,464

$

46,502

Less: Stock-based compensation

2,417

2,040

4,848

3,623

Research and development, non-GAAP

$

25,413

$

21,468

$

49,616

$

42,879

As percentage of revenue, non-GAAP

24.1

%

25.6

%

23.6

%

25.3

%

Sales and marketing

$

41,525

$

35,270

$

82,560

$

71,387

Less: Stock-based compensation

2,837

2,944

6,386

5,680

Sales and marketing, non-GAAP

$

38,688

$

32,326

$

76,174

$

65,707

As percentage of revenue, non-GAAP

36.6

%

38.5

%

36.3

%

38.7

%

General and administrative

$

17,384

$

19,553

$

34,405

$

32,922

Less: Stock-based compensation

4,792

9,109

9,572

13,870

General and administrative, non-GAAP

$

12,592

$

10,444

$

24,833

$

19,052

As percentage of revenue, non-GAAP

11.9

%

12.5

%

11.8

%

11.2

%

Loss from operations

$

(5,743

)

$

(16,715

)

$

(9,887

)

$

(25,790

)

Add back: Stock-based compensation

11,052

14,894

22,675

24,830

Income from operations, non-GAAP

$

5,309

$

(1,821

)

$

12,788

$

(960

)

As percentage of revenue, non-GAAP

5.0

%

(2.2

)%

6.1

%

(0.6

)%

Net loss

$

(9,514

)

$

(19,612

)

$

(16,838

)

$

(30,030

)

Add back: Stock-based compensation

11,052

14,894

22,675

24,830

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

2,284

2,213

4,550

4,410

Net income (loss), non-GAAP

$

3,822

$

(2,505

)

$

10,387

$

(790

)

As percentage of revenue, non-GAAP

3.6

%

(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 compensation

0.22

0.31

0.45

0.52

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

0.04

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-GAAP

51,065,867

48,171,552

50,657,264

47,858,628

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

55,064,895

48,171,552

55,081,027

47,858,628

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,

2021 2020 2021 2020

Gross profit,subscription and $ 77,107 $ 58,598 $ 148,841 $ 114,806 support

Add back: Stock-based 597 436 1,093 867 compensation

Gross profit,subscription and $ 77,704 $ 59,034 $ 149,934 $ 115,673 support, non-GAAP

As a percentage ofsubscription and 85.2 % 83.5 % 85.1 % 83.2 %support revenue,non-GAAP



Gross profit, $ 3,889 $ 3,018 $ 12,701 $ 10,215 professional services

Add back: Stock-based 409 365 776 790 compensation

Gross profit,professional $ 4,298 $ 3,383 $ 13,477 $ 11,005 services, non-GAAP

As a percentage ofprofessional services 29.9 % 25.7 % 40.0 % 36.0 %revenue, non-GAAP



Gross profit $ 80,996 $ 61,616 $ 161,542 $ 125,021

Add back: Stock-based 1,006 801 1,869 1,657 compensation

Gross profit, $ 82,002 $ 62,417 $ 163,411 $ 126,678 non-GAAP

As percentage of 77.7 % 74.4 % 77.9 % 74.7 %revenue, non-GAAP



Cost of revenue,subscription and $ 14,098 $ 12,098 $ 27,300 $ 24,251 support

Less: Stock-based 597 436 1,093 867 compensation

Cost of revenue,subscription and $ 13,501 $ 11,662 $ 26,207 $ 23,384 support, non-GAAP

As percentage of 12.8 % 13.9 % 12.5 % 13.8 %revenue, non-GAAP



Cost of revenue, $ 10,493 $ 10,146 $ 20,967 $ 20,389 professional services

Less: Stock-based 409 365 776 790 compensation

Cost of revenue,professional $ 10,084 $ 9,781 $ 20,191 $ 19,599 services, non-GAAP

As percentage of 9.6 % 11.7 % 9.6 % 11.6 %revenue, non-GAAP



Research and $ 27,830 $ 23,508 $ 54,464 $ 46,502 development

Less: Stock-based 2,417 2,040 4,848 3,623 compensation

Research and $ 25,413 $ 21,468 $ 49,616 $ 42,879 development, non-GAAP

As percentage of 24.1 % 25.6 % 23.6 % 25.3 %revenue, non-GAAP



Sales and marketing $ 41,525 $ 35,270 $ 82,560 $ 71,387

Less: Stock-based 2,837 2,944 6,386 5,680 compensation

Sales and marketing, $ 38,688 $ 32,326 $ 76,174 $ 65,707 non-GAAP

As percentage of 36.6 % 38.5 % 36.3 % 38.7 %revenue, non-GAAP



General and $ 17,384 $ 19,553 $ 34,405 $ 32,922 administrative

Less: Stock-based 4,792 9,109 9,572 13,870 compensation

General andadministrative, $ 12,592 $ 10,444 $ 24,833 $ 19,052 non-GAAP

As percentage of 11.9 % 12.5 % 11.8 % 11.2 %revenue, non-GAAP



Loss from operations $ (5,743 ) $ (16,715 ) $ (9,887 ) $ (25,790 )

Add back: Stock-based 11,052 14,894 22,675 24,830 compensation

Income from $ 5,309 $ (1,821 ) $ 12,788 $ (960 )operations, non-GAAP

As percentage of 5.0 % (2.2 ) 6.1 % (0.6 )revenue, non-GAAP % %



Net loss $ (9,514 ) $ (19,612 ) $ (16,838 ) $ (30,030 )

Add back: Stock-based 11,052 14,894 22,675 24,830 compensation

Add back: Non-cashinterest expenserelated to 2,284 2,213 4,550 4,410 convertible seniornotes

Net income (loss), $ 3,822 $ (2,505 ) $ 10,387 $ (790 )non-GAAP

As percentage of 3.6 % (3.0 ) 5.0 % (0.5 )revenue, non-GAAP % %



Net loss per basic $ (0.19 ) $ (0.41 ) $ (0.33 ) $ (0.63 )and diluted share:

Add back: Stock-based 0.22 0.31 0.45 0.52 compensation

Add back: Non-cashinterest expenserelated to 0.04 0.05 0.09 0.09 convertible seniornotes

Net income (loss) per $ 0.07 $ (0.05 ) $ 0.21 $ (0.02 )basic share, non-GAAP

Net income (loss) perdiluted share, $ 0.07 $ (0.05 ) $ 0.19 $ (0.02 )non-GAAP



Weighted-averagecommon shares 51,065,867 48,171,552 50,657,264 47,858,628 outstanding - basic,non-GAAP

Weighted-averagecommon shares 55,064,895 48,171,552 55,081,027 47,858,628 outstanding -diluted, non-GAAP

TABLE II

WORKIVA INC.

RECONCILIATION OF NON-GAAP GUIDANCE

(in thousands, except share and per share data)

Three months ending September 30, 2021

Year 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 notes

0.05

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 - basic

51,500,000

51,500,000

51,200,000

51,200,000

View source version on businesswire.com: https://www.businesswire.com/news/home/20210803005905/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