Workiva(WK) - 2024 Q1 - Quarterly Results

Executive Summary Workiva achieved strong Q1 results with 20% subscription revenue growth, driven by new logos and multi-solution deals - Subscription revenue grew 20% in Q1 2024, attributed to the strength of Workiva's integrated platform for Financial Reporting, ESG, and GRC[2] - The company's focus on multi-solution deals is yielding results, with 66% of subscription revenue in Q1 coming from customers with multiple solutions[2] - The number of customers with an annual contract value (ACV) over $300,000 increased by 34% compared to Q1 2023, reaching a total of 332 customers[2] First Quarter 2024 Financial Performance Workiva reported Q1 2024 total revenue of $176 million, a 17% increase, significantly improving profitability Detailed Financial Results (GAAP & Non-GAAP) Q1 2024 total revenue reached $176 million, with GAAP gross margin at 76.4% and Non-GAAP income from operations at $6 million Q1 2024 Key Financial Results vs. Q1 2023 (in millions, except per share data) | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $176 | $150 | 17% | | Subscription & Support Revenue | $155 | $130 | 20% | | GAAP Gross Profit | $134 | $112 | 20% | | GAAP Gross Margin | 76.4% | 74.3% | +2.1 p.p. | | GAAP Loss from Operations | $(18) | $(47) | 64% improvement | | Non-GAAP Income (Loss) from Operations | $6 | $(7) | N/A | | GAAP Net Loss | $(12) | $(46) | 74% improvement | | Non-GAAP Net Income (Loss) | $13 | $(7) | N/A | | GAAP Net Loss per Share | $(0.21) | $(0.86) | 76% improvement | | Non-GAAP Net Income (Loss) per Share | $0.22 | $(0.12) | N/A | - As of March 31, 2024, Workiva maintained a strong liquidity position with cash, cash equivalents, and marketable securities totaling $838 million[6] Key Metrics and Business Highlights Workiva's customer base grew to 6,074, maintaining high revenue retention rates and robust growth in large contracts Customer and Retention Metrics as of March 31, 2024 | Metric | Value | YoY Change | | :--- | :--- | :--- | | Total Customers | 6,074 | +320 | | Revenue Retention Rate (excl. add-on) | 98% | - | | Revenue Retention Rate (incl. add-on) | 111% | - | Growth in Large Customer Contracts (YoY) | ACV Threshold | Customer Count | % Growth | | :--- | :--- | :--- | | > $100,000 | 1,696 | 24% | | > $150,000 | 961 | 29% | | > $300,000 | 332 | 34% | Financial Outlook Workiva provided Q2 and full-year 2024 guidance, projecting total revenue of $719-723 million and Non-GAAP income from operations Second Quarter 2024 Guidance | Metric | GAAP Range | Non-GAAP Range | | :--- | :--- | :--- | | Total Revenue | $174M - $176M | N/A | | Loss from Operations | $(24.0)M - $(22.0)M | N/A | | Income from Operations | N/A | $2M - $4M | | Net Loss per Basic Share | $(0.32) - $(0.29) | N/A | | Net Income per Basic Share | N/A | $0.16 - $0.19 | Full Year 2024 Guidance | Metric | GAAP Range | Non-GAAP Range | | :--- | :--- | :--- | | Total Revenue | $719M - $723M | N/A | | Loss from Operations | $(76)M - $(72)M | N/A | | Income from Operations | N/A | $27M - $31M | | Net Loss per Basic Share | $(0.90) - $(0.83) | N/A | | Net Income per Basic Share | N/A | $0.96 - $1.03 | Consolidated Financial Statements This section presents Workiva Inc.'s unaudited consolidated financial statements for Q1 2024, including key statements Consolidated Statements of Operations For Q1 2024, total revenues reached $175.7 million, with gross profit of $134.1 million, reducing net loss to $11.7 million Q1 2024 Consolidated Statement of Operations Highlights (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenue | $175,667 | $150,189 | | Gross Profit | $134,144 | $111,671 | | Total Operating Expenses | $152,427 | $158,512 | | Loss from Operations | $(18,283) | $(46,841) | | Net Loss | $(11,687) | $(46,150) | | Net Loss per Share (Basic & Diluted) | $(0.21) | $(0.86) | Consolidated Balance Sheets As of March 31, 2024, Workiva's total assets were $1.20 billion, with cash and marketable securities totaling $838.3 million Balance Sheet Summary as of March 31, 2024 (in thousands) | Category | Amount | | :--- | :--- | | Assets | | | Cash and cash equivalents | $296,066 | | Marketable securities | $542,281 | | Total Current Assets | $997,000 | | Total Assets | $1,201,904 | | Liabilities & Stockholders' Deficit | | | Deferred Revenue (Current) | $367,060 | | Total Current Liabilities | $466,948 | | Convertible senior notes, non-current | $763,063 | | Total Liabilities | $1,285,060 | | Total Stockholders' Deficit | $(83,156) | Consolidated Statements of Cash Flows In Q1 2024, Workiva generated $24.8 million in net cash from operating activities, increasing cash by $39.9 million Q1 2024 Statement of Cash Flows Summary (in thousands) | Cash Flow Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $24,844 | $5,563 | | Net Cash from Investing Activities | $17,448 | $(50,474) | | Net Cash from Financing Activities | $(1,325) | $(349) | | Net Increase (Decrease) in Cash | $39,860 | $(44,712) | Reconciliation of GAAP to Non-GAAP Measures This section provides detailed reconciliations of GAAP to Non-GAAP financial measures, adjusting for stock-based compensation and amortization Historical Reconciliation (Table I) For Q1 2024, GAAP loss from operations of $18.3 million is reconciled to Non-GAAP income of $6.0 million Q1 2024 Reconciliation of GAAP Loss from Operations to Non-GAAP Income from Operations (in thousands) | Description | Amount | | :--- | :--- | | Loss from operations (GAAP) | $(18,283) | | Add back: Stock-based compensation | $23,007 | | Add back: Amortization of acquisition-related intangibles | $1,302 | | Income from operations (Non-GAAP) | $6,026 | Q1 2024 Reconciliation of GAAP Net Loss to Non-GAAP Net Income (in thousands) | Description | Amount | | :--- | :--- | | Net loss (GAAP) | $(11,687) | | Add back: Stock-based compensation | $23,007 | | Add back: Amortization of acquisition-related intangibles | $1,302 | | Net income (Non-GAAP) | $12,622 | Guidance Reconciliation (Table II) This table reconciles full-year 2024 GAAP loss from operations to Non-GAAP income from operations of $27-31 million Full Year 2024 Guidance Reconciliation (in thousands) | Description | Low End | High End | | :--- | :--- | :--- | | Loss from operations, GAAP range | $(76,000) | $(72,000) | | Add back: Stock-based compensation | $98,000 | $98,000 | | Add back: Amortization of acquisition-related intangibles | $5,000 | $5,000 | | Income from operations, non-GAAP range | $27,000 | $31,000 |