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

Workiva Inc. Announces Third Quarter 2021 Financial Results

Nov. 03, 2021

AMES, Iowa--(BUSINESS WIRE)--Nov. 03, 2021--Workiva Inc. (NYSE:WK), the company that simplifies complex work, today announced financial results for its third quarter ended September 30, 2021.

"Workiva delivered another strong quarter, beating third quarter guidance for revenue and operating results," said Marty Vanderploeg, Chief Executive Officer. "We achieved 30.4% organic growth in subscription & support revenue, and 27.9% in total revenue."

"We continue to build on our market leadership and the increased demand for financial and ESG reporting solutions that drive digital transformations," Vanderploeg added.

"Due to our continued outperformance, we are raising our full-year guidance," said Jill Klindt, Chief Financial Officer. "We now expect total revenue to range from $439 million to $440 million, and non-GAAP operating income to range from $15 million to $16 million."

Third Quarter 2021 Financial Highlights

* Revenue: Total revenue for the third quarter of 2021 reached $112.7 million, an increase of 27.9% from $88.1 million in the third quarter of 2020. Subscription and support revenue contributed $98.9 million, up 30.4% versus the third quarter of 2020. Professional services revenue was $13.8 million, an increase of 12.5% compared to the same quarter in the prior year. * Gross Profit: GAAP gross profit for the third quarter of 2021 was $86.3 million compared with $66.2 million in the same quarter of 2020. GAAP gross margin was 76.6% versus 75.2% in the third quarter of 2020. Non-GAAP gross profit for the third quarter of 2021 was $87.4 million, an increase of 30.7% compared with the prior year's third quarter, and non-GAAP gross margin was 77.6% compared to 75.9% in the third quarter of 2020. * Results from Operations: GAAP loss from operations for the third quarter of 2021 was $8.0 million compared with a loss of $6.9 million in the prior year's third quarter. Non-GAAP income from operations was $5.0 million, compared with non-GAAP income from operations of $3.7 million in the third quarter of 2020. * GAAP Net Loss: GAAP net loss for the third quarter of 2021 was $6.6 million compared with a net loss of $10.4 million for the prior year's third quarter. GAAP net loss per basic and diluted share was $0.13 compared with a net loss per basic and diluted share of $0.21 in the third quarter of 2020. * Non-GAAP Net Income: Non-GAAP net income for the third quarter of 2021 was $8.7 million compared with net income of $2.5 million in the prior year's third quarter. Non-GAAP net income per basic share and diluted share was $0.17 and $0.15, respectively, compared with net income per basic and diluted share of $0.05 in the third quarter of 2020. * Liquidity: As of September 30, 2021, Workiva had cash, cash equivalents and marketable securities totaling $522.3 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 $17.1 million of finance lease obligations outstanding as of September 30, 2021.

Key Metrics and Recent Business Highlights

* Customers: Workiva had 4,146 customers as of September 30, 2021, a net increase of 563 customers from September 30, 2020. * Revenue Retention Rate: As of September 30, 2021, Workiva's revenue retention rate (excluding add-on revenue) was 96.5%, and the revenue retention rate including add-on revenue was 111.1%. Add-on revenue includes changes in both solutions and pricing for existing customers. * Large Contracts: As of September 30, 2021, Workiva had 1,043 customers with an annual contract value (ACV) of more than $100,000, up 33% from 785 customers at September 30, 2020. Workiva had 541 customers with an ACV of more than $150,000, up 41% from 383 customers in the third 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 November 3, 2021, Workiva is providing guidance as follows:

Fourth Quarter 2021 Guidance

* Total revenue is expected to be in the range of $116.5 million to $117.5 million. * GAAP loss from operations is expected to be in the range of $15.6 million to $14.6 million. * Non-GAAP loss from operations is expected to be in the range of $2.8 million to $1.8 million. * GAAP net loss per basic and diluted share is expected to be in the range of $0.37 to $0.35. * Non-GAAP net loss per basic share is expected to be in the range of $0.07 to $0.05. * Net loss per basic share is based on 51.7 million weighted-average shares outstanding.

Full Year 2021 Guidance:

* Total revenue is expected to be in the range of $439.0 million to $440.0 million. * GAAP loss from operations is expected to be in the range of $33.5 million to $32.5 million. * Non-GAAP income from operations is expected to be in the range of $15.0 million to $16.0 million. * GAAP net loss per basic and diluted share is expected to be in the range of $0.83 to $0.81. * Non-GAAP net income per basic and diluted share is expected to be in the range of $0.30 to $0.32. * Net income (loss) per basic and diluted share is based on 51.1 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 third quarter, in addition to discussing the Company's outlook for the fourth 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 8009407. 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 November 10, 2021, at 800-585-8367 (U.S. domestic) or 416-621-4642 (international). The replay pass code is 8009407. 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 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, amortization expense for acquisition-related intangible assets, 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. 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. 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 Nine months ended September 30, September 30,

2021 2020 2021 2020

(unaudited)

Revenue

Subscription and $ 98,912 $ 75,850 $ 275,053 $ 214,907 support

Professional services 13,781 12,249 47,449 42,853

Total revenue 112,693 88,099 322,502 257,760

Cost of revenue

Subscription and 15,606 12,013 42,906 36,264 support ^(1)

Professional services 10,799 9,873 31,766 30,262 ^(1)

Total cost of revenue 26,405 21,886 74,672 66,526

Gross profit 86,288 66,213 247,830 191,234

Operating expenses

Research and 29,841 23,956 84,305 70,458 development ^(1)

Sales and marketing ^ 46,026 35,487 128,586 106,874 (1)

General and 18,390 13,642 52,795 46,564 administrative ^(1)

Total operating 94,257 73,085 265,686 223,896 expenses

Loss from operations (7,969 ) (6,872 ) (17,856 ) (32,662 )

Interest income 219 471 834 2,832

Interest expense (3,508 ) (3,500 ) (10,495 ) (10,467 )

Other income 3,805 (387 ) 3,265 263 (expense), net

Loss before (benefit)provision for income (7,453 ) (10,288 ) (24,252 ) (40,034 )taxes

(Benefit) provision (885 ) 67 (846 ) 351 for income taxes

Net loss $ (6,568 ) $ (10,355 ) $ (23,406 ) $ (40,385 )

Net loss per common share:

Basic and diluted $ (0.13 ) $ (0.21 ) $ (0.46 ) $ (0.84 )

Weighted-averagecommon shares 51,441,688 48,840,131 50,921,612 48,188,183outstanding - basicand diluted

(1) Includes stock-based compensation expense as follows:Three months ended September 30,

Nine months ended September 30,

2021

2020

2021

2020

(unaudited)

Cost of revenue

Subscription and support

$

731

$

426

$

1,824

$

1,293

Professional services

407

272

1,183

1,062

Operating expenses

Research and development

2,347

2,167

7,195

5,790

Sales and marketing

4,095

2,687

10,481

8,367

General and administrative

5,107

5,049

14,679

18,919

(1) Includes stock-based compensation expense asfollows: Three months Nine months ended ended September 30, September 30,

2021 2020 2021 2020

(unaudited)

Cost of revenue

Subscription and support $ 731 $ 426 $ 1,824 $ 1,293

Professional services 407 272 1,183 1,062

Operating expenses

Research and development 2,347 2,167 7,195 5,790

Sales and marketing 4,095 2,687 10,481 8,367

General and administrative 5,107 5,049 14,679 18,919

WORKIVA INC.CONSOLIDATED BALANCE SHEETS(in thousands)

September 30, 2021

December 31, 2020

(unaudited)

Assets

Current assets

Cash and cash equivalents

$

291,125

$

322,831

Marketable securities

231,224

207,207

Accounts receivable, net

64,099

68,922

Deferred costs

28,021

21,923

Other receivables

3,354

3,155

Prepaid expenses and other

13,092

9,047

Total current assets

630,915

633,085

Property and equipment, net

28,490

29,365

Operating lease right-of-use assets

14,536

15,844

Deferred costs, non-current

29,234

23,421

Goodwill

34,279

-

Intangible assets, net

8,193

1,583

Other assets

4,568

3,708

Total assets

$

750,215

$

707,006

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$

4,018

$

2,843

Accrued expenses and other current liabilities

78,799

68,256

Deferred revenue

235,754

208,990

Convertible senior notes, current

296,341

-

Finance lease obligations

1,776

1,705

Total current liabilities

616,688

281,794

Convertible senior notes, net

-

289,490

Deferred revenue, non-current

31,463

35,894

Other long-term liabilities

1,335

1,680

Operating lease liabilities, non-current

15,231

17,209

Finance lease obligations, non-current

15,320

16,662

Total liabilities

680,037

642,729

Stockholders' equity

Common stock

51

49

Additional paid-in-capital

508,025

478,698

Accumulated deficit

(438,106

)

(414,700

)

Accumulated other comprehensive income

208

230

Total stockholders' equity

70,178

64,277

Total liabilities and stockholders' equity

$

750,215

$

707,006

WORKIVA INC.

CONSOLIDATED BALANCE SHEETS(in thousands)

September 30, December 31, 2021 2020

(unaudited)

Assets

Current assets

Cash and cash equivalents $ 291,125 $ 322,831

Marketable securities 231,224 207,207

Accounts receivable, net 64,099 68,922

Deferred costs 28,021 21,923

Other receivables 3,354 3,155

Prepaid expenses and other 13,092 9,047

Total current assets 630,915 633,085

Property and equipment, net 28,490 29,365

Operating lease right-of-use assets 14,536 15,844

Deferred costs, non-current 29,234 23,421

Goodwill 34,279 -

Intangible assets, net 8,193 1,583

Other assets 4,568 3,708

Total assets $ 750,215 $ 707,006

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable $ 4,018 $ 2,843

Accrued expenses and other current 78,799 68,256 liabilities

Deferred revenue 235,754 208,990

Convertible senior notes, current 296,341 -

Finance lease obligations 1,776 1,705

Total current liabilities 616,688 281,794

Convertible senior notes, net - 289,490

Deferred revenue, non-current 31,463 35,894

Other long-term liabilities 1,335 1,680

Operating lease liabilities, non-current 15,231 17,209

Finance lease obligations, non-current 15,320 16,662

Total liabilities 680,037 642,729

Stockholders' equity

Common stock 51 49

Additional paid-in-capital 508,025 478,698

Accumulated deficit (438,106 ) (414,700 )

Accumulated other comprehensive income 208 230

Total stockholders' equity 70,178 64,277

Total liabilities and stockholders' equity $ 750,215 $ 707,006

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

Three months ended September 30,

Nine months ended September 30,

2021

2020

2021

2020

(unaudited)

Cash flows from operating activities

Net loss

$

(6,568

)

$

(10,355

)

$

(23,406

)

$

(40,385

)

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

Depreciation and amortization

1,429

1,080

3,580

3,195

Stock-based compensation expense

12,687

10,601

35,362

35,431

Recovery of doubtful accounts

(61

)

(550

)

(162

)

(191

)

Amortization of premiums and discounts on marketable securities, net

811

106

2,199

319

Gain on settlement of equity securities

(3,698

)

-

(3,698

)

-

Amortization of debt discount and issuance costs

2,301

2,231

6,851

6,641

Deferred income tax

(930

)

63

(914

)

(68

)

Changes in assets and liabilities:

Accounts receivable

2,074

(13,307

)

5,233

4,805

Deferred costs

(2,027

)

(4,818

)

(12,104

)

(6,381

)

Operating lease right-of-use asset

985

1,019

2,906

2,992

Other receivables

(628

)

224

(204

)

29

Prepaid expenses

(1,024

)

(211

)

(4,049

)

(3,056

)

Other assets

(514

)

83

(1,197

)

(600

)

Accounts payable

478

(181

)

1,214

(3,255

)

Deferred revenue

9,949

16,182

22,028

11,314

Operating lease liability

(1,112

)

(1,115

)

(3,390

)

(3,438

)

Accrued expenses and other liabilities

2,161

6,822

10,327

12,538

Net cash provided by operating activities

16,313

7,874

40,576

19,890

Cash flows from investing activities

Purchase of property and equipment

(771

)

(379

)

(2,431

)

(1,763

)

Purchase of marketable securities

(48,213

)

(7,980

)

(143,085

)

(45,269

)

Sale of marketable securities

-

-

250

11,423

Maturities of marketable securities

45,579

16,300

116,371

42,337

Business combinations, net of cash acquired

(35,067

)

-

(35,067

)

-

Purchase of intangible assets

(64

)

(102

)

(187

)

(253

)

Other investments

-

-

(750

)

-

Net cash (used in) provided by investing activities

(38,536

)

7,839

(64,899

)

6,475

Cash flows from financing activities

Proceeds from option exercises

3,174

4,795

8,792

14,253

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

(15,809

)

-

(23,686

)

(2,111

)

Proceeds from shares issued in connection with employee stock purchase plan

4,624

3,567

8,861

7,227

Principal payments on finance lease obligations

(430

)

(410

)

(1,271

)

(1,212

)

Net cash (used in) provided by financing activities

(8,441

)

7,952

(7,304

)

18,157

Effect of foreign exchange rates on cash

(405

)

346

(79

)

(132

)

Net (decrease) increase in cash and cash equivalents

(31,069

)

24,011

(31,706

)

44,390

Cash and cash equivalents at beginning of period

322,194

402,121

322,831

381,742

Cash and cash equivalents at end of period

$

291,125

$

426,132

$

291,125

$

426,132

WORKIVA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)

Three months ended Nine months ended September 30, September 30,

2021 2020 2021 2020

(unaudited)

Cash flows from operating activities

Net loss $ (6,568 ) $ (10,355 ) $ (23,406 ) $ (40,385 )

Adjustments to reconcilenet loss to net cash provided by operatingactivities:

Depreciation and 1,429 1,080 3,580 3,195 amortization

Stock-based compensation 12,687 10,601 35,362 35,431 expense

Recovery of doubtful (61 ) (550 ) (162 ) (191 )accounts

Amortization of premiumsand discounts on 811 106 2,199 319 marketable securities,net

Gain on settlement of (3,698 ) - (3,698 ) - equity securities

Amortization of debtdiscount and issuance 2,301 2,231 6,851 6,641 costs

Deferred income tax (930 ) 63 (914 ) (68 )

Changes in assets and liabilities:

Accounts receivable 2,074 (13,307 ) 5,233 4,805

Deferred costs (2,027 ) (4,818 ) (12,104 ) (6,381 )

Operating lease 985 1,019 2,906 2,992 right-of-use asset

Other receivables (628 ) 224 (204 ) 29

Prepaid expenses (1,024 ) (211 ) (4,049 ) (3,056 )

Other assets (514 ) 83 (1,197 ) (600 )

Accounts payable 478 (181 ) 1,214 (3,255 )

Deferred revenue 9,949 16,182 22,028 11,314

Operating lease liability (1,112 ) (1,115 ) (3,390 ) (3,438 )

Accrued expenses and 2,161 6,822 10,327 12,538 other liabilities

Net cash provided by 16,313 7,874 40,576 19,890 operating activities

Cash flows from investing activities

Purchase of property and (771 ) (379 ) (2,431 ) (1,763 )equipment

Purchase of marketable (48,213 ) (7,980 ) (143,085 ) (45,269 )securities

Sale of marketable - - 250 11,423 securities

Maturities of marketable 45,579 16,300 116,371 42,337 securities

Business combinations, (35,067 ) - (35,067 ) - net of cash acquired

Purchase of intangible (64 ) (102 ) (187 ) (253 )assets

Other investments - - (750 ) -

Net cash (used in)provided by investing (38,536 ) 7,839 (64,899 ) 6,475 activities



Cash flows from financing activities

Proceeds from option 3,174 4,795 8,792 14,253 exercises

Taxes paid related to netshare settlements of (15,809 ) - (23,686 ) (2,111 )stock-based compensationawards

Proceeds from sharesissued in connection with 4,624 3,567 8,861 7,227 employee stock purchaseplan

Principal payments on (430 ) (410 ) (1,271 ) (1,212 )finance lease obligations

Net cash (used in)provided by financing (8,441 ) 7,952 (7,304 ) 18,157 activities

Effect of foreign (405 ) 346 (79 ) (132 )exchange rates on cash

Net (decrease) increasein cash and cash (31,069 ) 24,011 (31,706 ) 44,390 equivalents

Cash and cash equivalents 322,194 402,121 322,831 381,742 at beginning of period

Cash and cash equivalents $ 291,125 $ 426,132 $ 291,125 $ 426,132 at end of period

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

Three months ended September 30,

Nine months ended September 30,

2021

2020

2021

2020

Gross profit, subscription and support

$

83,306

$

63,837

$

232,147

$

178,643

Add back: Stock-based compensation

731

426

1,824

1,293

Gross profit, subscription and support, non-GAAP

$

84,037

$

64,263

$

233,971

$

179,936

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

85.0

%

84.7

%

85.1

%

83.7

%

Gross profit, professional services

$

2,982

$

2,376

$

15,683

$

12,591

Add back: Stock-based compensation

407

272

1,183

1,062

Gross profit, professional services, non-GAAP

$

3,389

$

2,648

$

16,866

$

13,653

As a percentage of professional services revenue, non-GAAP

24.6

%

21.6

%

35.5

%

31.9

%

Gross profit

$

86,288

$

66,213

$

247,830

$

191,234

Add back: Stock-based compensation

1,138

698

3,007

2,355

Gross profit, non-GAAP

$

87,426

$

66,911

$

250,837

$

193,589

As percentage of revenue, non-GAAP

77.6

%

75.9

%

77.8

%

75.1

%

Cost of revenue, subscription and support

$

15,606

$

12,013

$

42,906

$

36,264

Less: Stock-based compensation

731

426

1,824

1,293

Cost of revenue, subscription and support, non-GAAP

$

14,875

$

11,587

$

41,082

$

34,971

As percentage of revenue, non-GAAP

13.2

%

13.2

%

12.7

%

13.6

%

Cost of revenue, professional services

$

10,799

$

9,873

$

31,766

$

30,262

Less: Stock-based compensation

407

272

1,183

1,062

Cost of revenue, professional services, non-GAAP

$

10,392

$

9,601

$

30,583

$

29,200

As percentage of revenue, non-GAAP

9.2

%

10.9

%

9.5

%

11.3

%

Research and development

$

29,841

$

23,956

$

84,305

$

70,458

Less: Stock-based compensation

2,347

2,167

7,195

5,790

Less: Amortization of acquisition-related intangibles

275

-

275

-

Research and development, non-GAAP

$

27,219

$

21,789

$

76,835

$

64,668

As percentage of revenue, non-GAAP

24.2

%

24.7

%

23.8

%

25.1

%

Sales and marketing

$

46,026

$

35,487

$

128,586

$

106,874

Less: Stock-based compensation

4,095

2,687

10,481

8,367

Less: Amortization of acquisition-related intangibles

13

-

13

-

Sales and marketing, non-GAAP

$

41,918

$

32,800

$

118,092

$

98,507

As percentage of revenue, non-GAAP

37.2

%

37.2

%

36.6

%

38.2

%

General and administrative

$

18,390

$

13,642

$

52,795

$

46,564

Less: Stock-based compensation

5,107

5,049

14,679

18,919

General and administrative, non-GAAP

$

13,283

$

8,593

$

38,116

$

27,645

As percentage of revenue, non-GAAP

11.8

%

9.8

%

11.8

%

10.7

%

Loss from operations

$

(7,969

)

$

(6,872

)

$

(17,856

)

$

(32,662

)

Add back: Stock-based compensation

12,687

10,601

35,362

35,431

Add back: Amortization of acquisition-related intangibles

288

-

288

-

Income from operations, non-GAAP

$

5,006

$

3,729

$

17,794

$

2,769

As percentage of revenue, non-GAAP

4.4

%

4.2

%

5.5

%

1.1

%

Net loss

$

(6,568

)

$

(10,355

)

$

(23,406

)

$

(40,385

)

Add back: Stock-based compensation

12,687

10,601

35,362

35,431

Add back: Amortization of acquisition-related intangibles

288

-

288

-

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

2,301

2,231

6,851

6,641

Net income, non-GAAP

$

8,708

$

2,477

$

19,095

$

1,687

As percentage of revenue, non-GAAP

7.7

%

2.8

%

5.9

%

0.7

%

Net loss per basic and diluted share:

$

(0.13

)

$

(0.21

)

$

(0.46

)

$

(0.84

)

Add back: Stock-based compensation

0.25

0.21

0.69

0.74

Add back: Amortization of acquisition-related intangibles

0.01

-

0.01

-

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

0.04

0.05

0.13

0.14

Net income per basic share, non-GAAP

$

0.17

$

0.05

$

0.37

$

0.04

Net income per diluted share, non-GAAP

$

0.15

$

0.05

$

0.34

$

0.03

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

51,441,688

48,840,131

50,921,612

48,188,183

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

56,563,730

53,209,214

55,687,528

52,417,046

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

Three months ended Nine months ended September 30, September 30,

2021 2020 2021 2020

Gross profit,subscription and $ 83,306 $ 63,837 $ 232,147 $ 178,643 support

Add back: Stock-based 731 426 1,824 1,293 compensation

Gross profit,subscription and $ 84,037 $ 64,263 $ 233,971 $ 179,936 support, non-GAAP

As a percentage ofsubscription and 85.0 % 84.7 % 85.1 % 83.7 %support revenue,non-GAAP



Gross profit, $ 2,982 $ 2,376 $ 15,683 $ 12,591 professional services

Add back: Stock-based 407 272 1,183 1,062 compensation

Gross profit,professional $ 3,389 $ 2,648 $ 16,866 $ 13,653 services, non-GAAP

As a percentage ofprofessional services 24.6 % 21.6 % 35.5 % 31.9 %revenue, non-GAAP



Gross profit $ 86,288 $ 66,213 $ 247,830 $ 191,234

Add back: Stock-based 1,138 698 3,007 2,355 compensation

Gross profit, $ 87,426 $ 66,911 $ 250,837 $ 193,589 non-GAAP

As percentage of 77.6 % 75.9 % 77.8 % 75.1 %revenue, non-GAAP



Cost of revenue,subscription and $ 15,606 $ 12,013 $ 42,906 $ 36,264 support

Less: Stock-based 731 426 1,824 1,293 compensation

Cost of revenue,subscription and $ 14,875 $ 11,587 $ 41,082 $ 34,971 support, non-GAAP

As percentage of 13.2 % 13.2 % 12.7 % 13.6 %revenue, non-GAAP



Cost of revenue, $ 10,799 $ 9,873 $ 31,766 $ 30,262 professional services

Less: Stock-based 407 272 1,183 1,062 compensation

Cost of revenue,professional $ 10,392 $ 9,601 $ 30,583 $ 29,200 services, non-GAAP

As percentage of 9.2 % 10.9 % 9.5 % 11.3 %revenue, non-GAAP



Research and $ 29,841 $ 23,956 $ 84,305 $ 70,458 development

Less: Stock-based 2,347 2,167 7,195 5,790 compensation

Less: Amortization ofacquisition-related 275 - 275 - intangibles

Research and $ 27,219 $ 21,789 $ 76,835 $ 64,668 development, non-GAAP

As percentage of 24.2 % 24.7 % 23.8 % 25.1 %revenue, non-GAAP



Sales and marketing $ 46,026 $ 35,487 $ 128,586 $ 106,874

Less: Stock-based 4,095 2,687 10,481 8,367 compensation

Less: Amortization ofacquisition-related 13 - 13 - intangibles

Sales and marketing, $ 41,918 $ 32,800 $ 118,092 $ 98,507 non-GAAP

As percentage of 37.2 % 37.2 % 36.6 % 38.2 %revenue, non-GAAP



General and $ 18,390 $ 13,642 $ 52,795 $ 46,564 administrative

Less: Stock-based 5,107 5,049 14,679 18,919 compensation

General andadministrative, $ 13,283 $ 8,593 $ 38,116 $ 27,645 non-GAAP

As percentage of 11.8 % 9.8 % 11.8 % 10.7 %revenue, non-GAAP



Loss from operations $ (7,969 ) $ (6,872 ) $ (17,856 ) $ (32,662 )

Add back: Stock-based 12,687 10,601 35,362 35,431 compensation

Add back:Amortization of 288 - 288 - acquisition-relatedintangibles

Income from $ 5,006 $ 3,729 $ 17,794 $ 2,769 operations, non-GAAP

As percentage of 4.4 % 4.2 % 5.5 % 1.1 %revenue, non-GAAP



Net loss $ (6,568 ) $ (10,355 ) $ (23,406 ) $ (40,385 )

Add back: Stock-based 12,687 10,601 35,362 35,431 compensation

Add back:Amortization of 288 - 288 - acquisition-relatedintangibles

Add back: Non-cashinterest expenserelated to 2,301 2,231 6,851 6,641 convertible seniornotes

Net income, non-GAAP $ 8,708 $ 2,477 $ 19,095 $ 1,687

As percentage of 7.7 % 2.8 % 5.9 % 0.7 %revenue, non-GAAP



Net loss per basic $ (0.13 ) $ (0.21 ) $ (0.46 ) $ (0.84 )and diluted share:

Add back: Stock-based 0.25 0.21 0.69 0.74 compensation

Add back:Amortization of 0.01 - 0.01 - acquisition-relatedintangibles

Add back: Non-cashinterest expenserelated to 0.04 0.05 0.13 0.14 convertible seniornotes

Net income per basic $ 0.17 $ 0.05 $ 0.37 $ 0.04 share, non-GAAP

Net income perdiluted share, $ 0.15 $ 0.05 $ 0.34 $ 0.03 non-GAAP



Weighted-averagecommon shares 51,441,688 48,840,131 50,921,612 48,188,183 outstanding - basic,non-GAAP

Weighted-averagecommon shares 56,563,730 53,209,214 55,687,528 52,417,046 outstanding -diluted, non-GAAP

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

Three months ending December 31, 2021

Year ending December 31, 2021

Loss from operations, GAAP range

$

(15,611

)

-

$

(14,611

)

$

(33,467

)

-

$

(32,467

)

Add back: Stock-based compensation

12,384

12,384

47,746

47,746

Add back: Amortization of acquisition-related intangibles

433

433

721

721

Net (loss) income from operations, non-GAAP range

$

(2,794

)

-

$

(1,794

)

$

15,000

-

$

16,000

Net loss per share, GAAP range

$

(0.37

)

-

$

(0.35

)

$

(0.83

)

-

$

(0.81

)

Add back: Stock-based compensation

0.24

0.24

0.93

0.93

Add back: Amortization of acquisition-related intangibles

0.01

0.01

0.01

0.01

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

0.05

0.05

0.19

0.19

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

$

(0.07

)

-

$

(0.05

)

$

0.30

-

$

0.32

Weighted-average common shares outstanding - basic

51,700,000

51,700,000

51,100,000

51,100,000

View source version on businesswire.com: https://www.businesswire.com/news/home/20211103005827/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