Workiva(US:WK)2021-11-02 16:00Revenue Performance - Total revenues for the three months ended September 30, 2021, were $112.7 million, representing a 28.0% increase from $88.1 million in the same period of 2020 [79]. - Revenue for the three months ended September 30, 2021, was $112.7 million, up 27.9% from $88.1 million in the same period of 2020 [105]. - Subscription and support revenue for the three months ended September 30, 2021, was $98.9 million, up from $75.9 million in the same period of 2020, indicating a growth of 30.3% [79]. - Subscription and support revenue reached $98.9 million for the three months ended September 30, 2021, reflecting a 30.4% increase from $75.9 million in the same period of 2020 [118]. - The company expects to recognize approximately $518.5 million in revenue from remaining performance obligations for subscription contracts as of September 30, 2021 [81]. - The company recognized $91.3 million of revenue during the three months ended September 30, 2021, that was included in the deferred revenue balances at the beginning of the period [80]. - Revenue from professional services was higher in the first quarter due to many customers filing their Form 10-K during this period [44]. - Revenue from professional services is subject to seasonality, with higher demand typically observed in the first calendar quarter [117]. Customer Growth - The company had 4,146 organizations subscribed to its platform as of September 30, 2021, indicating a growing customer base [99]. - The number of customers increased to 4,146 as of September 30, 2021, up from 3,583 in the same period of 2020 [119]. - Subscription and support revenue retention rate improved to 96.5% as of September 30, 2021, compared to 94.9% in the same period of 2020 [122]. - The subscription and support revenue retention rate including add-ons was 111.1% as of September 30, 2021, up from 110.0% in the same period of 2020 [124]. Expenses and Losses - Total operating expenses for the three months ended September 30, 2021, were $94.3 million, a 29.0% increase from $73.1 million in the same period of 2020 [140]. - Research and development expenses increased by $5.9 million to $29.8 million for the three months ended September 30, 2021, primarily due to higher cash-based compensation [141]. - Sales and marketing expenses rose by $10.5 million to $46.0 million for the three months ended September 30, 2021, driven by increased headcount and compensation [143]. - General and administrative expenses increased by $4.7 million to $18.4 million for the three months ended September 30, 2021, due to higher compensation and professional service fees [145]. - For the three months ended September 30, 2021, the company reported a net loss of $6.6 million, compared to a net loss of $10.4 million for the same period in 2020, representing a 36.5% improvement [105]. - The company reported a net loss of $23.4 million for the nine months ended September 30, 2021 [158]. Cash and Securities - Cash equivalents and marketable securities totaled $484.3 million as of September 30, 2021, with cash equivalents alone at $253.1 million [52]. - As of September 30, 2021, the company had cash, cash equivalents, and marketable securities totaling $522.3 million [152]. - Cash flow provided by operating activities was $40.6 million for the nine months ended September 30, 2021, compared to $19.9 million for the same period in 2020 [158][159]. - Cash used in investing activities was $64.9 million for the nine months ended September 30, 2021, primarily due to the acquisition of OneCloud for $35.1 million and $143.1 million in purchases of marketable securities [163]. - Cash used in financing activities was $7.3 million for the nine months ended September 30, 2021, primarily due to $23.7 million in payroll taxes paid related to net share settlements of stock-based compensation awards [167]. Acquisitions - The company completed an acquisition during the three months ended September 30, 2021, with the fair values of goodwill and intangible assets estimated based on future cash flows [58]. - The company acquired OneCloud, Inc. for $35.1 million on July 30, 2021, to enhance its integration and data preparation capabilities [85]. - The total consideration for the OneCloud acquisition was $41.3 million, with $34.3 million allocated to goodwill [89]. - The acquisition of OneCloud included a previously held equity interest remeasured to fair value, resulting in a gain of $3.7 million recorded in other income [86]. - The company incurred approximately $0.4 million in acquisition-related costs during the nine months ended September 30, 2021 [89]. - As of September 30, 2021, no impairment charges have been recorded for goodwill, which stood at $34.3 million [91]. Financial Instruments - The fair value of convertible senior notes was $641.8 million as of September 30, 2021, classified as Level 2 in the fair value hierarchy [59]. - The company issued $345.0 million in convertible senior notes with a fixed interest rate of 1.125% per annum, maturing in 2026 [60]. - The initial conversion rate for the convertible senior notes is 12.4756 shares per $1,000 principal amount, equivalent to a conversion price of approximately $80.16 per share [61]. - As of September 30, 2021, the net carrying amount of the liability component of the Notes was $296.3 million, with an unamortized discount of $43.3 million and unamortized issuance costs of $5.4 million [67]. - The total interest expense related to the Notes for the three months ended September 30, 2021, was $3.3 million, compared to $3.2 million for the same period in 2020 [66]. - As of September 30, 2021, the if-converted value of the Notes exceeded the principal amount by $261.7 million [66]. - The company has not received any conversion requests for its convertible senior notes as of September 30, 2021 [154]. Accounting Policies and Changes - The company adopted ASU 2019-12 for income taxes effective January 1, 2021, with no material impact on consolidated financial statements [48]. - The company plans to adopt ASU 2020-06 for convertible instruments on January 1, 2022, evaluating its impact on consolidated financial statements [49]. - No significant changes to critical accounting policies and estimates during the nine months ended September 30, 2021 [172]. - Market risk exposures have not changed materially since December 31, 2020 [173].