Workiva (NYSE:WK) Q4 2019 Earnings Conference Call February 20, 2020 5:00 PM ET Company Participants Adam Terese - Director, Investor Relations Marty Vanderploeg - Chief Executive Officer Stuart Miller - Chief Financial Officer Jill Klindt - Chief Accounting Officer Conference Call Participants Tom Roderick - Stifel Nick Negulic - SunTrust Chris Merwin - Goldman Sachs Rob Oliver - Baird Mike Grondahl - Northland Securities Stan Zlotsky - Morgan Stanley Kevin Ruth - Raymond James Operator Ladies and gentleme ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) Workiva offers a cloud-based connected reporting and compliance platform, serving over 3,500 organizations, with 2019 revenue of $297.9 million despite ongoing net losses [Overview](index=5&type=section&id=Overview) Workiva's connected reporting platform serves 3,510 organizations, including Fortune 500 companies, with **$297.9 million** revenue and a **$48.1 million net loss** in 2019 - As of December 31, 2019, Workiva's platform was used by **3,510 organizations**, including nearly **75% of Fortune 500® companies**[15](index=15&type=chunk) - The Wdata component of the platform enables customers to connect and integrate data from various enterprise systems like ERP, GRC, and CRM, automating workflows and improving data integrity[16](index=16&type=chunk)[17](index=17&type=chunk) Financial Performance (2017-2019) (in millions) | Metric | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | | **Revenue** | $207.9 | - | $297.9 | | **Net Loss** | $44.4 | $50.1 | $48.1 | - In 2019, approximately **83% of revenue** was from subscription and support fees, with the remainder from professional services[35](index=35&type=chunk) Customer Retention Rates (as of Dec 2019) | Metric | Rate | | :--- | :--- | | Subscription & Support Revenue Retention Rate (excl. add-ons) | 94.7% | | Subscription & Support Revenue Retention Rate (incl. add-ons) | 113.0% | [Workiva Technology and Platform Milestones](index=6&type=section&id=Workiva%20Technology%20and%20Platform%20Milestones) Workiva's enterprise-grade technology, built on AWS and Google Cloud, ensures scalability and reliability, with continuous platform evolution since its 2010 SEC reporting solution - The company's technology utilizes Amazon Web Services and Google Cloud Platform, enabling on-demand scaling of compute and storage capacity[25](index=25&type=chunk) - Key platform milestones include the initial SEC reporting solution (2010), a broader platform launch (2013), the introduction of Wdata for large dataset management (2018), and a next-generation platform rollout with improved features like Workiva Connected Sheets (2019)[26](index=26&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) [Our Industry and Market Trends](index=7&type=section&id=Our%20Industry%20and%20Market%20Trends) Industry trends like disconnected data, complex regulations, and demand for machine-readable formats drive the need for Workiva's platform, highlighting the inadequacy of legacy processes - Industry trends driving demand include widespread and disconnected data, changing regulatory requirements like SOX and ESEF, and the growing use of machine-readable data (XBRL)[36](index=36&type=chunk)[37](index=37&type=chunk)[39](index=39&type=chunk) - The SEC has mandated phased-in deadlines for Inline XBRL reporting, starting June 15, 2019, for large accelerated filers and extending to all filers by June 15, 2021[40](index=40&type=chunk) - The European Securities and Markets Authority (ESMA) now mandates Inline XBRL for its ESEF taxonomy, affecting over 5,000 E.U. issuers for reporting periods ending on or after January 1, 2020[44](index=44&type=chunk) - Legacy business processes are insufficient for modern enterprises due to restricted access, inefficient collaboration, rigid workflows, manual dataset creation, and a lack of audit trails and controls[48](index=48&type=chunk)[49](index=49&type=chunk)[52](index=52&type=chunk) [Growth Strategy](index=11&type=section&id=Growth%20Strategy) Workiva's growth strategy focuses on expanding within existing customers, acquiring new ones, growing its partner ecosystem, and continuous platform innovation, with a key emphasis on international expansion - Core growth strategies include expanding within existing customers, pursuing new customers, expanding the partner ecosystem, offering more solutions, and continuous innovation[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - In 2019, the company began focusing investments in five key growth vectors: EMEA expansion, global statutory reporting, integrated risk, Wdata, and the U.S. federal government[70](index=70&type=chunk) - International expansion is a key priority, as approximately **96% of revenue** for the year ended December 31, 2019, was generated in North America[71](index=71&type=chunk) - The company achieved FedRAMP Moderate Impact authorization in October 2019, enabling it to help federal agencies manage a wider range of information types and expanding its market within the U.S. government[78](index=78&type=chunk) [Workiva Platform Use Cases](index=14&type=section&id=Workiva%20Platform%20Use%20Cases) Workiva targets four primary areas: Regulatory Reporting (SEC, ESEF), Non-Regulatory Reporting (FP&A), Integrated Risk (SOX, ERM), and Financial Services (Dodd-Frank, CCAR) - The company focuses its sales and marketing resources in four main areas: Regulatory Reporting, Non-Regulatory Reporting, Financial Services, and Integrated Risk[80](index=80&type=chunk) - Regulatory reporting use cases include SEC filings (10-K, 10-Q), European ESEF reporting, and global statutory reporting for multinational corporations[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - Integrated Risk solutions cover SOX compliance, internal audit management, Enterprise Risk Management (ERM), and policy and procedure management[87](index=87&type=chunk)[88](index=88&type=chunk)[90](index=90&type=chunk) [Competition, Sales, and Marketing](index=17&type=section&id=Competition%2C%20Sales%2C%20and%20Marketing) Workiva competes against manual processes, diversified software, niche solutions, and professional services, leveraging a "land-and-expand" sales strategy through direct and partner channels - Primary competitors include the status quo of manual processes using legacy software, diversified enterprise software providers, niche software providers, and professional services firms[102](index=102&type=chunk)[111](index=111&type=chunk) - The company employs a "land-and-expand" sales strategy focused on acquiring new customers and growing relationships within existing ones[106](index=106&type=chunk) - The sales organization uses a combination of field sales, inside sales, and partnership channels, supported by customer success and professional services teams[107](index=107&type=chunk)[109](index=109&type=chunk) [Intellectual Property, Employees, and Corporate Information](index=19&type=section&id=Intellectual%20Property%2C%20Employees%2C%20and%20Corporate%20Information) Workiva protects its technology with 44 issued patents and 19 pending applications, grew its employee count to 1,580 in 2019, and is headquartered in Ames, Iowa - As of December 31, 2019, the company had **44 issued patents** and **19 pending patent applications** in the United States[118](index=118&type=chunk) - Full-time employee headcount increased by **19.8%** from 1,319 at the end of 2018 to **1,580** at the end of 2019[125](index=125&type=chunk) - The company was formed in 2008, converted to a Delaware corporation in 2014, and is headquartered in Ames, Iowa[126](index=126&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) Workiva faces significant risks including unprofitability, intense competition, reliance on SEC filings, technological changes, data security, and a dual-class stock structure concentrating voting control [Risks Related to Our Business and Industry](index=22&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) The company faces risks from its history of net losses, intense competition, reliance on SEC filings, technological changes, third-party data center dependence, and evolving data privacy regulations - The company has a history of net losses, including **$48.1 million** in 2019, **$50.1 million** in 2018, and **$44.4 million** in 2017, and may not achieve or maintain profitability in the future[130](index=130&type=chunk) - A majority of revenue is derived from customers using the platform for SEC filings, and efforts to increase use in other applications may not succeed, potentially reducing the revenue growth rate[140](index=140&type=chunk) - The business relies on third-party data center hosting facilities, including Google and Amazon, and interruptions or delays in these services could impair service delivery[150](index=150&type=chunk) - The company is subject to complex and evolving U.S. and foreign data privacy laws, such as GDPR and CCPA, and failure to comply could result in significant fines and reputational harm[172](index=172&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - In August 2019, the company issued convertible senior notes, which introduce risks related to potential conversion, dilution, and the requirement to use cash for settlement, which could affect liquidity[223](index=223&type=chunk) [Risks Related to Ownership of Our Class A Common Stock](index=48&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Class%20A%20Common%20Stock) Ownership of Workiva's Class A common stock carries risks from price volatility, a dual-class structure concentrating **69% of voting power** with Class B holders, and anti-takeover provisions - The dual-class structure of common stock concentrates voting control. As of December 31, 2019, Class B stockholders held approximately **69% of the voting power**, limiting the influence of Class A stockholders on corporate matters[237](index=237&type=chunk) - Anti-takeover provisions, such as a classified board of directors and limitations on stockholder actions, may delay or prevent a change of control or changes in management[239](index=239&type=chunk)[240](index=240&type=chunk) - The company does not intend to pay dividends for the foreseeable future, meaning investors must rely on stock price appreciation for returns[249](index=249&type=chunk) [Unresolved Staff Comments](index=54&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments - None[252](index=252&type=chunk) [Properties](index=54&type=section&id=Item%202.%20Properties) Workiva's corporate headquarters is a leased 120,000 square foot office in Ames, Iowa, supplemented by additional leased facilities across ten U.S. cities and multiple international locations - The corporate headquarters is a leased space of approximately **120,000 square feet** in Ames, Iowa[253](index=253&type=chunk) - The company leases additional offices in ten U.S. cities and multiple international locations, including Canada, Europe, and the Asia-Pacific region[253](index=253&type=chunk) [Legal Proceedings](index=54&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business, financial condition, or operating results - Workiva is not presently a party to any legal proceedings that are expected to have a material adverse effect on the company[254](index=254&type=chunk) [Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[255](index=255&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=55&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Workiva's Class A common stock trades on the NYSE under "WK", while Class B is not publicly traded; the company has never paid cash dividends and does not intend to in the foreseeable future - Class A common stock is listed on the NYSE under the symbol "WK"[258](index=258&type=chunk) - The company has never declared or paid cash dividends and does not expect to in the foreseeable future[260](index=260&type=chunk) [Selected Consolidated Financial Data](index=57&type=section&id=Item%206.%20Selected%20Consolidated%20Financial%20Data) This section provides a five-year summary of Workiva's financials, showing consistent revenue growth to **$297.9 million** in 2019, alongside persistent net losses and increased assets due to convertible senior notes Selected Consolidated Statement of Operations Data (2017-2019) (in thousands) | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Total revenue** | $297,891 | $244,344 | $207,869 | | **Gross profit** | $212,879 | $178,484 | $147,624 | | **Loss from operations** | $(45,722) | $(49,788) | $(44,303) | | **Net loss** | $(48,134) | $(50,071) | $(44,426) | | **Net loss per share** | $(1.04) | $(1.15) | $(1.07) | Selected Consolidated Balance Sheet Data (as of Dec 31) (in thousands) | (in thousands) | 2019 | 2018 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $381,742 | $77,584 | | **Total assets** | $646,396 | $231,111 | | **Deferred revenue** | $206,186 | $173,716 | | **Convertible senior notes, net** | $280,601 | $— | | **Total stockholders' equity (deficit)** | $65,343 | $(9,740) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=59&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Workiva's 2019 financial performance, highlighting a **21.9% revenue increase** to **$297.9 million**, ongoing investments leading to a **$48.1 million net loss**, and a strong liquidity position of **$488.0 million** in cash and marketable securities [Results of Operations](index=65&type=section&id=Results%20of%20Operations) In 2019, total revenue increased by **21.9%** to **$297.9 million**, driven by subscription growth, while operating expenses rose **13.3%**, resulting in a **$48.1 million net loss** Revenue Comparison (2019 vs. 2018) (in thousands) | Revenue Type | 2019 | 2018 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Subscription and support | $245,765 | $200,392 | $45,373 | 22.6% | | Professional services | $52,126 | $43,952 | $8,174 | 18.6% | | **Total revenue** | **$297,891** | **$244,344** | **$53,547** | **21.9%** | Operating Expenses Comparison (2019 vs. 2018) (in thousands) | Expense Category | 2019 | 2018 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $89,921 | $81,602 | $8,319 | 10.2% | | Sales and marketing | $120,300 | $90,337 | $29,963 | 33.2% | | General and administrative | $48,380 | $56,333 | $(7,953) | (14.1)% | | **Total operating expenses** | **$258,601** | **$228,272** | **$30,329** | **13.3%** | - The decrease in General and Administrative expenses in 2019 was primarily due to the absence of separation agreement costs for the former CEO, which amounted to **$5.9 million** in cash-based and **$3.6 million** in equity-based compensation in 2018[316](index=316&type=chunk) [Liquidity and Capital Resources](index=69&type=section&id=Liquidity%20and%20Capital%20Resources) Workiva's liquidity was significantly bolstered by the **$345.0 million** convertible senior notes issuance in August 2019, resulting in **$488.0 million** in cash and marketable securities by year-end Cash Flow Summary (in thousands) | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Cash flow from operating activities** | $30,566 | $6,400 | $5,520 | | **Cash flow used in investing activities** | $(90,065) | $(5,632) | $(6,473) | | **Cash flow from financing activities** | $363,370 | $16,876 | $9,822 | - In August 2019, the company issued **$345.0 million** in 1.125% convertible senior notes due 2026, receiving net proceeds of **$335.9 million**[324](index=324&type=chunk) - Principal sources of liquidity as of December 31, 2019, were cash, cash equivalents, and marketable securities totaling **$488.0 million**[321](index=321&type=chunk) [Critical Accounting Policies and Estimates](index=73&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Revenue recognition under ASC 606 is a critical accounting policy, involving identifying performance obligations, determining transaction prices, and recognizing subscription revenue ratably over the contract term - Revenue recognition is a critical accounting policy, following the five-step model under ASC 606[340](index=340&type=chunk)[342](index=342&type=chunk) - Subscription and support revenue is recognized ratably over the contract term[340](index=340&type=chunk) - Agreements for professional services are typically treated as customer options to purchase services, with revenue recognized upon exercise of the option and completion of the service[341](index=341&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=75&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) Workiva's primary market risks are foreign currency fluctuations and interest rate sensitivity, with a 100-basis point interest rate increase estimated to reduce its investment portfolio market value by **$0.8 million** - The company's primary market risks are foreign currency exchange rates and interest rate sensitivity[348](index=348&type=chunk) - Foreign currency risk stems from sales and expenses denominated in Canadian dollars, Euros, and British Pounds, among others. Foreign currency transaction losses were **$609,000** in 2019[349](index=349&type=chunk) - As of December 31, 2019, an immediate **100-basis point increase** in interest rates would have caused an estimated **$0.8 million reduction** in the market value of the company's investment portfolio[354](index=354&type=chunk) [Financial Statements and Supplementary Data](index=77&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Workiva's audited consolidated financial statements for 2017-2019, including an unqualified opinion from Ernst & Young LLP and detailed notes on critical audit matters like Convertible Senior Notes and Revenue Recognition - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting[361](index=361&type=chunk)[362](index=362&type=chunk) - Critical Audit Matters identified by the auditor were the accounting for Convertible Senior Notes, specifically the bifurcation and valuation of liability and equity components, and Revenue Recognition, focusing on the identification of distinct performance obligations in customer contracts[366](index=366&type=chunk)[368](index=368&type=chunk)[371](index=371&type=chunk) Consolidated Balance Sheet Highlights (As of Dec 31, 2019) (in thousands) | Account | Amount (in thousands) | | :--- | :--- | | **Total Assets** | **$646,396** | | Cash and cash equivalents | $381,742 | | Marketable securities | $106,214 | | **Total Liabilities** | **$581,053** | | Deferred revenue (current & non-current) | $206,186 | | Convertible senior notes, net | $280,601 | | **Total Stockholders' Equity** | **$65,343** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=119&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[528](index=528&type=chunk) [Controls and Procedures](index=119&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that Workiva's disclosure controls and procedures, as well as internal control over financial reporting, were effective as of December 31, 2019, with no material changes during the fourth quarter - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[531](index=531&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2019[532](index=532&type=chunk) - No material changes to internal control over financial reporting occurred during the fourth quarter of 2019[533](index=533&type=chunk) [Other Information](index=120&type=section&id=Item%209B.%20Other%20Information) On February 13, 2020, the Compensation Committee approved the 2020 Short-Term Incentive Plan for executive officers, linking cash bonuses to performance metrics like revenue growth and operating cash flow - The Compensation Committee approved the 2020 Short-Term Incentive Plan for executive officers on February 13, 2020, with cash bonuses tied to performance metrics like revenue growth and operating cash flow[534](index=534&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=121&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section details Workiva's executive officers, including President and CEO Martin J. Vanderploeg, and incorporates information on directors, code of ethics, and board committees by reference from the 2020 proxy statement - Martin J. Vanderploeg, Ph.D., is the President and Chief Executive Officer[538](index=538&type=chunk) - Julie Iskow joined as Executive Vice President and Chief Operating Officer in October 2019[539](index=539&type=chunk) - Information concerning directors, the code of ethics, and board committees is incorporated by reference from the 2020 Annual Meeting of Stockholders proxy statement[537](index=537&type=chunk)[546](index=546&type=chunk)[547](index=547&type=chunk) [Executive Compensation](index=123&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive and director compensation is incorporated by reference from the company's definitive proxy statement for the 2020 Annual Meeting of Stockholders - This information is incorporated by reference from the 2020 proxy statement[549](index=549&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=123&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners and management, as well as details on equity compensation plans, is incorporated by reference from the company's definitive proxy statement for the 2020 Annual Meeting of Stockholders - This information is incorporated by reference from the 2020 proxy statement[550](index=550&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=123&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information regarding certain relationships, related-party transactions, and director independence is incorporated by reference from the company's definitive proxy statement for the 2020 Annual Meeting of Stockholders - This information is incorporated by reference from the 2020 proxy statement[551](index=551&type=chunk) [Principal Accounting Fees and Services](index=123&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's definitive proxy statement for the 2020 Annual Meeting of Stockholders - This information is incorporated by reference from the 2020 proxy statement[552](index=552&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=124&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all documents filed with the Form 10-K, including consolidated financial statements, corporate governance documents, debt indentures, equity compensation plans, and executive certifications - This section contains the list of all financial statements and exhibits filed with the Form 10-K[555](index=555&type=chunk) - Key exhibits filed include corporate governance documents, debt indentures, equity compensation plans, and executive certifications[555](index=555&type=chunk)[556](index=556&type=chunk)[557](index=557&type=chunk)

Workiva Inc. (NYSE:WK) Q3 2019 Results Earnings Conference Call November 6, 2019 4:30 PM ET Company Participants Adam Terese - Director, IR Martin Vanderploeg - President, CEO & Director Stuart Miller - EVP & CFO Jill Klindt - Chief Accounting Officer Conference Call Participants Terry Tillman - SunTrust Robinson Tom Roderick - Stifel Mike Grondahl - Northland Securities Operator Good afternoon, my name is Dtamara and I will be your conference operator today. At this time, I would like to welcome everyone t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ FORM 10-Q ___________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number 001-36773 ___________________________________ WORKIVA INC. ( ...

Workiva, Inc. (NYSE:WK) Q2 2019 Earnings Conference Call August 6, 2019 5:00 PM ET Company Participants Adam Rogers - Director, IR Martin Vanderploeg - President, CEO & Director Stuart Miller - EVP & CFO Conference Call Participants Eric Lemus - SunTrust Robinson Humphrey Matthew Van Vliet - Stifel, Nicolaus & Company Matthew Lemenager - Robert W. Baird & Co. Alexander Sklar - Raymond James & Associates Michael Pochucha - Northland Capital Markets Stan Zlotsky - Morgan Stanley Operator Good afternoon. My na ...

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Unaudited Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Consolidated%20Financial%20Statements) Unaudited Q2 2019 financials show **24.3% revenue growth**, a reduced net loss, and positive operating cash flow, with assets reaching **$280.0 million** [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$280.0 million** by June 30, 2019, driven by higher cash and ASC 842 adoption, while stockholders' equity turned positive to **$9.6 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2019 (unaudited) | Dec 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $94,713 | $77,584 | | Total current assets | $205,353 | $177,231 | | Operating lease right-of-use assets | $16,510 | $— | | **Total assets** | **$279,982** | **$231,111** | | **Liabilities & Stockholders' Equity** | | | | Deferred revenue (Current) | $156,234 | $148,545 | | Total current liabilities | $204,434 | $191,581 | | Operating lease liabilities, non-current | $20,038 | $— | | **Total liabilities** | **$270,355** | **$240,851** | | **Total stockholders' equity (deficit)** | **$9,627** | **$(9,740)** | - The adoption of the new lease standard (ASC 842) on January 1, 2019, resulted in the recognition of **$15.7 million** in operating right-of-use assets and corresponding lease liabilities[51](index=51&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2019 total revenue grew **24.3%** to **$73.5 million**, with net loss significantly improving to **$8.3 million** due to reduced operating expenses Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2019 | Q2 2018 | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | :--- | :--- | | Subscription and support revenue | $60,472 | $48,837 | $116,595 | $95,307 | | Professional services revenue | $13,012 | $10,293 | $26,852 | $23,729 | | **Total revenue** | **$73,484** | **$59,130** | **$143,447** | **$119,036** | | Gross profit | $52,807 | $42,834 | $103,234 | $86,229 | | Total operating expenses | $61,234 | $64,624 | $118,993 | $117,525 | | Loss from operations | $(8,427) | $(21,790) | $(15,759) | $(31,296) | | **Net loss** | **$(8,322)** | **$(21,768)** | **$(15,785)** | **$(31,386)** | | Net loss per share (basic & diluted) | $(0.18) | $(0.50) | $(0.35) | $(0.73) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations turned positive at **$23.9 million** for H1 2019, a significant improvement driven by lower net loss and working capital changes Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $23,882 | $(763) | | Net cash used in investing activities | $(24,685) | $(7,230) | | Net cash provided by financing activities | $17,717 | $5,332 | | **Net increase (decrease) in cash** | **$17,129** | **$(2,838)** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail ASC 842 adoption, revenue disaggregation, **$197.7 million** in remaining performance obligations, and **$16.7 million** in stock-based compensation - The company adopted the new lease standard, ASC 842, on January 1, 2019, using the modified retrospective approach, which resulted in recognizing right-of-use assets and lease liabilities without restating prior periods[49](index=49&type=chunk) - As of June 30, 2019, the company had **$197.7 million** in remaining performance obligations for subscription contracts, with **$160.8 million** expected to be recognized as revenue over the next 12 months[83](index=83&type=chunk) - Total stock-based compensation expense was **$8.5 million** for Q2 2019 and **$16.7 million** for the six months ended June 30, 2019[70](index=70&type=chunk) Revenue by Type (in thousands) | Revenue Type | Q2 2019 | Q2 2018 | | :--- | :--- | :--- | | Subscription and support | $60,472 | $48,837 | | XBRL professional services | $9,522 | $6,916 | | Other services | $3,490 | $3,377 | | **Total revenues** | **$73,484** | **$59,130** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes **24.3% revenue growth** to a new licensing model and increased investments, anticipating higher operating losses in H2 2019 - The company is transitioning customers from a seat-based to a solution-based licensing model, which typically has a higher contract value and offers unlimited seats per solution[91](index=91&type=chunk) - A substantial majority of subscription revenue is expected to be on this model by year-end 2019[92](index=92&type=chunk) - Management is accelerating investments in talent and technology, particularly for expansion in EMEA, integrated risk, statutory reporting, and Wdata, to maintain long-term revenue growth[97](index=97&type=chunk)[104](index=104&type=chunk) - These investments are expected to increase operating losses through the second half of 2019[104](index=104&type=chunk) Key Performance Indicators (as of June 30) | Operating Metric | 2019 | 2018 | | :--- | :--- | :--- | | Number of customers | 3,421 | 3,222 | | Subscription and support revenue retention rate | 95.4% | 95.6% | | Subscription and support revenue retention rate including add-ons | 114.5% | 106.9% | | Number of customers with ACV $100k+ | 558 | 366 | | Number of customers with ACV $150k+ | 238 | 161 | [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q2 2019 revenue grew **24.3%** driven by subscription and professional services, while a **48.2% decrease** in G&A expenses improved operating loss - Q2 2019 subscription and support revenue growth was driven by strong demand and the ongoing conversion of customer accounts to a solution-based licensing model[125](index=125&type=chunk) - Sales and marketing expenses increased by **$6.0 million** in Q2 2019 compared to Q2 2018, driven by a **16.8% increase** in headcount and higher costs for marketing programs related to partnership and international expansion[132](index=132&type=chunk) - General and administrative expenses decreased by **$10.4 million** in Q2 2019 compared to Q2 2018[134](index=134&type=chunk) - The prior-year period included significant cash and equity-based compensation pursuant to a separation agreement with the former CEO[135](index=135&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$137.6 million** in liquid assets, with Q2 2019 operations providing **$18.8 million** in cash, supported by a **$15.0 million** credit facility - Cash provided by operating activities was **$18.8 million** for Q2 2019, compared to cash used of **$2.5 million** in Q2 2018[139](index=139&type=chunk) - The improvement is attributed to a lower net loss and favorable working capital changes[143](index=143&type=chunk) - The company believes current cash, cash flows from operations, and availability under its credit facility will be sufficient to fund operations for at least the next twelve months[139](index=139&type=chunk) - In June 2019, the company entered into non-cancelable agreements for cloud services, committing to purchase **$0.9 million** in 2019, **$1.7 million** in 2020, **$1.7 million** in 2021, and **$0.9 million** in 2022[156](index=156&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) Market risk exposures remain materially unchanged since December 31, 2018, as previously disclosed in the Annual Report - There have been no material changes in the company's market risk exposures since December 31, 2018[160](index=160&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2019, with no material changes to internal controls - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[163](index=163&type=chunk) - No material changes were identified in the company's internal control over financial reporting during the most recently completed fiscal quarter[164](index=164&type=chunk) [Part II. Other Information](index=41&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) No current legal proceedings are expected to materially adversely affect the company's business or financial condition - The company is not presently a party to any legal proceedings that management believes would have a material adverse effect on the business[166](index=166&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors, except for a new risk concerning potential adverse effects from changes in U.S. GAAP, specifically ASC 842 - A new risk factor has been added concerning the potential adverse effects of changes in accounting principles, such as the recently adopted lease standard ASC 842[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred, and the planned use of IPO proceeds remains materially unchanged - There has been no material change in the planned use of proceeds from the company's initial public offering[172](index=172&type=chunk) [Exhibits](index=42&type=section&id=Item%206.%20Exhibits) Exhibits include CEO and CFO certifications and financial statements formatted in Inline XBRL - The exhibits filed include CEO and CFO certifications and financial data in Inline XBRL format[173](index=173&type=chunk)

Financial Data and Key Metrics Changes - Billings increased by 25% from Q1 2018 to Q1 2019, but declined 19% sequentially from Q4 2018 to Q1 2019 [18] - Total revenue for Q1 2019 was nearly $70 million, representing a 16.8% increase from Q1 2018 [21] - Operating profit was recorded for the first time in Q1 2019, with an operating margin improvement of 720 basis points [19][31] - Gross profit was $51.2 million in Q1 2019, up 17.1% from the same quarter a year ago, with a consolidated gross margin of 73.2% [28] Business Line Data and Key Metrics Changes - Subscription and support revenue was $56.1 million, up 20.8% from Q1 2018, driven by deeper penetration of existing customers [22] - Professional services revenue was $13.8 million, an increase of 3% from Q1 2018, with growth in XBRL professional services [23] - Subscription and support revenue retention rate was 95.7%, unchanged from the same period last year, while the retention rate with add-ons improved to 110.7% [26][27] Market Data and Key Metrics Changes - The company finished Q1 with 3,366 customers, a net increase of 247 customers from Q1 2018 [24] - The number of contracts valued at over $100,000 a year totaled 493, up 47% from Q1 2018 [27] - For annual contract value of $150,000 plus, there were 207 customers, up 37% from Q1 2018 [27] Company Strategy and Development Direction - The company is focusing on building more APIs and connectors to improve integrations with ERPs and other third-party systems [11][12] - There is an aggressive expansion in Europe, with new offices in Frankfurt and Paris to better support customers [13] - The company aims to deepen its penetration of existing customers while also pursuing new customer acquisitions [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for Wdesk, particularly in Europe, and noted that customers are seeking efficient reporting solutions [14][15] - The company plans to accelerate hiring to capitalize on revenue growth opportunities, expecting operating expenses to rise as a percentage of revenue [20][34] - Positive operating cash flow is anticipated for Q2 and the full year 2019, with a focus on improving operating cash flow significantly compared to 2018 [21][33] Other Important Information - The company raised its full-year 2019 revenue guidance to a range of $284 million to $286 million [34] - Non-GAAP operating loss guidance for the full year remains unchanged at $15 million to $17 million [34] Q&A Session Summary Question: Subscription growth rate and future expectations - Management indicated that they expect subscription growth to remain strong and are making investments to support this growth [38] Question: Impact of solution-based pricing on customer migration - Less than half of customers are on solution-based licensing, with significant add-on sales contributing to growth [40] Question: European XBRL mandate and customer inquiries - There is increasing interest from larger customers in Europe regarding the upcoming XBRL mandate, leading to inquiries about solutions [47] Question: Renewal values and sustainability - The new quarterly measurement of retention rates is expected to reduce variability, with a current retention rate of 110% [48] Question: New logo growth and sales strategy - The company anticipates a consistent pace of new logo additions, maintaining a balance between new logos and upselling to existing customers [66][67]

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) This section presents Workiva Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis for the quarter ended March 31, 2019 [Item 1. Unaudited Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Consolidated%20Financial%20Statements) This section presents Workiva Inc.'s unaudited condensed consolidated financial statements for Q1 2019, detailing financial position, performance, and cash flows, including the impact of ASC 842 adoption [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2019, reflects increased total assets and liabilities, with stockholders' equity turning positive, largely due to ASC 842 adoption Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2019 (unaudited) | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $78,736 | $77,584 | | Total current assets | $183,515 | $177,231 | | Operating lease right-of-use assets | $17,057 | $— | | **Total assets** | **$256,281** | **$231,111** | | **Liabilities & Equity** | | | | Deferred revenue (Current) | $149,943 | $148,545 | | Total current liabilities | $187,794 | $191,581 | | Operating lease liabilities, non-current | $20,846 | $— | | **Total liabilities** | **$252,425** | **$240,851** | | **Total stockholders' equity (deficit)** | **$3,856** | **($9,740)** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2019, total revenue increased significantly, driven by subscription growth, leading to a narrowed loss from operations and reduced net loss compared to the prior year Q1 2019 vs Q1 2018 Statement of Operations (in thousands, except per share data) | Metric | Three months ended March 31, 2019 | Three months ended March 31, 2018 | | :--- | :--- | :--- | | Subscription and support revenue | $56,123 | $46,470 | | Professional services revenue | $13,840 | $13,436 | | **Total revenue** | **$69,963** | **$59,906** | | Gross profit | $50,427 | $43,395 | | Loss from operations | ($7,332) | ($9,506) | | **Net loss** | **($7,463)** | **($9,618)** | | Net loss per share (basic and diluted) | ($0.17) | ($0.22) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2019 saw improved net cash from operating activities, primarily due to a smaller net loss and working capital changes, while investing activities used cash for marketable securities Cash Flow Summary for Three Months Ended March 31 (in thousands) | Cash Flow Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $5,119 | $1,783 | | Net cash (used in) provided by investing activities | ($16,592) | $427 | | Net cash provided by financing activities | $12,520 | $2,805 | | **Net increase in cash and cash equivalents** | **$1,152** | **$4,923** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, including the ASC 842 lease standard adoption, and provide insights into marketable securities, stock-based compensation, and future revenue from performance obligations - Effective January 1, 2019, the company adopted the new lease accounting standard ASC 842, resulting in the recognition of **$15.7 million** in operating right-of-use assets and corresponding lease liabilities on the balance sheet[45](index=45&type=chunk)[47](index=47&type=chunk) - Total stock-based compensation expense for Q1 2019 was **$8.2 million**, an increase from **$5.9 million** in Q1 2018[63](index=63&type=chunk) - As of March 31, 2019, approximately **$180.7 million** of revenue is expected to be recognized from remaining performance obligations, with **$151.3 million** expected within the next 12 months[76](index=76&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Workiva's Q1 2019 performance, highlighting strong revenue growth driven by subscription services, customer base expansion, improved operating leverage, and robust liquidity [Overview](index=23&type=section&id=Overview) Workiva offers a cloud-based platform, Wdesk, serving a large customer base, and is transitioning its SaaS model to a solution-based licensing approach - As of March 31, 2019, Workiva served **3,366 organizations**, including more than **75% of Fortune 500® companies**, with its Wdesk platform[80](index=80&type=chunk) - The company is transitioning from a user-based pricing model to a solution-based licensing model, expecting a substantial majority of subscription revenue to be on this new model by **mid-2020**[83](index=83&type=chunk) [Key Performance Indicators](index=25&type=section&id=Key%20Performance%20Indicators) Key performance indicators demonstrate strong customer growth and retention, with significant increases in customers with higher annual contract values and improved retention rates including add-ons Key Performance Indicators as of March 31 | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Number of customers | 3,366 | 3,119 | | Subscription and support revenue retention rate | 95.7% | 95.7% | | Subscription and support revenue retention rate including add-ons | 110.7% | 105.3% | | Number of customers with ACV $100k+ | 493 | 335 | | Number of customers with ACV $150k+ | 207 | 151 | [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q1 2019 results show robust total revenue growth driven by subscription services, alongside controlled operating expense increases and a reduced loss from operations Revenue Comparison (in thousands) | Revenue Type | Q1 2019 | Q1 2018 | % Change | | :--- | :--- | :--- | :--- | | Subscription and support | $56,123 | $46,470 | 20.8% | | Professional services | $13,840 | $13,436 | 3.0% | | **Total revenue** | **$69,963** | **$59,906** | **16.8%** | Operating Expense Comparison (in thousands) | Expense Category | Q1 2019 | Q1 2018 | % Change | | :--- | :--- | :--- | :--- | | Research and development | $22,011 | $20,127 | 9.4% | | Sales and marketing | $25,365 | $21,006 | 20.8% | | General and administrative | $10,383 | $11,768 | (11.8)% | | **Total operating expenses** | **$57,759** | **$52,901** | **9.2%** | - The decrease in General and Administrative expenses was primarily due to a **$1.0 million** reduction in cash-based compensation, benefits, and travel costs, largely related to executive compensation[121](index=121&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2019, Workiva maintains strong liquidity with substantial cash and marketable securities, supported by improved operating cash flow and available credit facilities - As of March 31, 2019, the company's cash, cash equivalents, and marketable securities totaled **$114.4 million**[124](index=124&type=chunk) - The company has a **$15.0 million** credit facility with Silicon Valley Bank, maturing in August 2020, and a universal shelf registration statement to offer and sell up to **$250.0 million** in securities[125](index=125&type=chunk)[127](index=127&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company states that its exposures to market risk have not materially changed since the disclosures made in its Annual Report on Form 10-K for the year ended December 31, 2018 - There have been no material changes in the company's market risk exposures since December 31, 2018[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2019, with enhancements made to comply with the new ASC 842 lease accounting guidance - The principal executive and financial officers concluded that disclosure controls and procedures were effective as of the end of the period[142](index=142&type=chunk) - During Q1 2019, the company enhanced internal controls and procedures to comply with the new leasing guidance under ASC 842[143](index=143&type=chunk) [Part II. Other Information](index=36&type=section&id=Part%20II.%20Other%20Information) This section covers other information including legal proceedings, risk factors, equity sales, and required exhibits [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any legal proceedings that would have a material adverse effect on its business, financial condition, or operating results - Workiva is not presently a party to any legal proceedings that management believes would have a material adverse effect on the company[146](index=146&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section notes no material changes to risk factors from the 2018 Form 10-K, except for a new risk related to the adoption of the ASC 842 lease accounting standard - A new risk factor has been added concerning the potential adverse effects of changes in U.S. GAAP, specifically highlighting the adoption of the new lease accounting standard, ASC 842, effective January 1, 2019[148](index=148&type=chunk)[149](index=149&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of securities or material changes in IPO proceeds use, detailing the acquisition of Class A Common Stock for employee tax obligations - During the three months ended March 31, 2019, the company acquired **9,898 shares** of its Class A Common Stock from employees to satisfy mandatory tax withholding requirements upon the vesting of stock-based compensation awards[154](index=154&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include certifications from the CEO and CFO as required by the Sarbanes-Oxley Act of 2002, as well as XBRL data files - Exhibits filed with the report include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and XBRL Interactive Data Files[156](index=156&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ FORM 10-K (Mark One) ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number 001-36773 ___________________________________ WORKIVA INC. (Exact name of registrant as specified in its ...