wk-20240331

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 March 31, 2024
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.

(Exact name of registrant as specified in its charter)

___________________________________


Delaware (State or other jurisdiction of incorporation or organization)									47-2509828 (I.R.S. Employer Identification Number)
2900 University Blvd Ames, IA 50010 (888) 275-3125
(Address of principal executive offices and zip code)
(888) 275-3125
(Registrant's telephone number, including area code)
___________________________________


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of each exchange on which registered
Class A common stock, par value $.001	WK	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ý			Accelerated filer o

Non-accelerated filer o			Smaller reporting company ☐

			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ý

As of April 29, 2024, there were approximately 50,979,294 shares of the registrant's Class A common stock and 3,845,583 shares of the registrant's Class B common stock outstanding.

WORKIVA INC.

TABLE OF CONTENTS


		Page
	Part I. Financial Information
Item 1.	Unaudited Consolidated Financial Statements:	1
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	1
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023	3
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2024 and 2023	4
	Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the Three Months Ended March 31, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	32
Item 4.	Controls and Procedures	32

	Part II. Other Information
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 6.	Exhibits	34
	Signatures	S-1

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q 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. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical facts, including statements regarding our future results of operations and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, in “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q and in any subsequent filing we make with the SEC, as well as in any documents incorporated by reference that describe risks and factors that could cause results to differ materially from those projected in these forward-looking statements.

Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after completion of this Quarterly Report on Form 10-Q to conform these statements to actual results or revised expectations.

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Part I. Financial Information

Item 1. Financial Statements


WORKIVA INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
	As of March 31, 2024		As of December 31, 2023
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	296,066	$	256,100
Marketable securities	542,281		557,622
Accounts receivable, net of allowance for doubtful accounts of $1,034 and $1,163 at March 31, 2024 and December 31, 2023, respectively	87,898		125,193
Deferred costs	37,822		39,023
Other receivables	7,162		7,367
Prepaid expenses and other	25,771		23,631
Total current assets	997,000		1,008,936

Property and equipment, net	23,295		24,282
Operating lease right-of-use assets	11,254		12,642
Deferred costs, non-current	32,848		33,346
Goodwill	110,317		112,097
Intangible assets, net	21,154		22,892
Other assets	6,036		4,665
Total assets	$	1,201,904	$	1,218,860

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WORKIVA INC. CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(in thousands, except share and per share amounts)

	As of March 31, 2024		As of December 31, 2023
	(unaudited)
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	9,911	$	5,204
Accrued expenses and other current liabilities	89,437		97,921
Deferred revenue	367,060		380,843

Finance lease obligations	540		532
Total current liabilities	466,948		484,500

Convertible senior notes, non-current	763,063		762,455
Deferred revenue, non-current	31,085		36,177
Other long-term liabilities	212		178
Operating lease liabilities, non-current	9,839		10,890
Finance lease obligations, non-current	13,913		14,050
Total liabilities	1,285,060		1,308,250

Stockholders’ deficit
Class A common stock, $0.001 par value per share, 1,000,000,000 shares authorized, 50,939,332 and 50,333,435 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	51		50
Class B common stock, $0.001 par value per share, 500,000,000 shares authorized, 3,845,583 and 3,845,583 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	4		4
Preferred stock, $0.001 par value per share, 100,000,000 shares authorized, no shares issued and outstanding	—		—
Additional paid-in-capital	584,752		562,942
Accumulated deficit	(664,328)		(652,641)
Accumulated other comprehensive (loss) income	(3,635)		255
Total stockholders’ deficit	(83,156)		(89,390)
Total liabilities and stockholders’ deficit	$	1,201,904	$	1,218,860

See accompanying notes.

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WORKIVA INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited)
	Three months ended March 31,
	2024		2023
Revenue
Subscription and support	$	154,979	$	129,664
Professional services	20,688		20,525
Total revenue	175,667		150,189
Cost of revenue
Subscription and support	27,927		24,133
Professional services	13,596		14,385
Total cost of revenue	41,523		38,518
Gross profit	134,144		111,671
Operating expenses
Research and development	45,495		45,791
Sales and marketing	82,633		70,710
General and administrative	24,299		42,011
Total operating expenses	152,427		158,512
Loss from operations	(18,283)		(46,841)
Interest income	10,455		3,717
Interest expense	(3,232)		(1,501)
Other income (expense), net	86		(940)
Loss before provision for income taxes	(10,974)		(45,565)
Provision for income taxes	713		585
Net loss	$	(11,687)	$	(46,150)
Net loss per common share:
Basic and diluted	$	(0.21)	$	(0.86)
Weighted-average common shares outstanding - basic and diluted	54,915,852		53,690,242

See accompanying notes.

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WORKIVA INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) (unaudited)
	Three months ended March 31,
	2024		2023
Net loss	$	(11,687)	$	(46,150)
Other comprehensive (loss) income
Foreign currency translation adjustment	(2,483)		1,701
Unrealized (loss) gain on available-for-sale securities	(1,407)		1,579
Other comprehensive (loss) income	(3,890)		3,280
Comprehensive loss	$	(15,577)	$	(42,870)

See accompanying notes.

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WORKIVA INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands) (unaudited)

Three Months Ended March 31, 2024
	Common Stock (Class A and B)
	Shares	Amount		Additional Paid-in-Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Deficit
Balances at December 31, 2023	54,179	$	54	$	562,942	$	255	$	(652,641)	$	(89,390)
Stock-based compensation expense	—	—		23,007		—		—		23,007
Issuance of common stock upon exercise of stock options	19	1		301		—		—		302
Issuance of common stock under employee stock purchase plan	88	—		7,113		—		—		7,113
Issuance of restricted stock units	590	—		—		—		—		—
Tax withholding related to net share settlements of stock-based compensation awards	(91)	—		(8,611)		—		—		(8,611)
Net loss	—	—		—		—		(11,687)		(11,687)
Other comprehensive loss	—	—		—		(3,890)		—		(3,890)
Balances at March 31, 2024	54,785	$	55	$	584,752	$	(3,635)	$	(664,328)	$	(83,156)


















Three Months Ended March 31, 2023
	Common Stock (Class A and B)
	Shares	Amount		Additional Paid-in-Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
Balances at December 31, 2022	52,652	$	53	$	537,732	$	(6,686)	$	(525,116)	$	5,983
Stock-based compensation expense	—	—		38,042		—		—		38,042
Issuance of common stock upon exercise of stock options	102	—		1,457		—		—		1,457
Issuance of common stock under employee stock purchase plan	107	—		5,546		—		—		5,546
Issuance of restricted stock units	449	—		—		—		—		—
Tax withholding related to net share settlements of stock-based compensation awards	(78)	—		(7,228)		—		—		(7,228)
Net loss	—	—		—		—		(46,150)		(46,150)
Other comprehensive income	—	—		—		3,280		—		3,280
Balances at March 31, 2023	53,232	$	53	$	575,549	$	(3,406)	$	(571,266)	$	930

See accompanying notes.

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WORKIVA INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
	Three months ended March 31,
	2024		2023
Cash flows from operating activities
Net loss	$	(11,687)	$	(46,150)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	2,522		2,800
Stock-based compensation expense	23,007		38,042
(Recovery of) provision for doubtful accounts	(123)		106
Realized loss on sale of available-for-sale securities, net	—		561
Amortization of premiums and discounts on marketable securities, net	(3,749)		(1,028)

Amortization of issuance costs and debt discount	608		325

Deferred income tax	(295)		(10)
Changes in assets and liabilities:
Accounts receivable	36,947		29,363
Deferred costs	1,405		1,770
Operating lease right-of-use asset	1,426		1,295
Other receivables	194		95
Prepaid expenses and other	(2,273)		(5,732)
Other assets	(1,090)		(74)
Accounts payable	4,726		207
Deferred revenue	(17,526)		(9,955)
Operating lease liability	(987)		(1,172)
Accrued expenses and other liabilities	(8,261)		(4,880)
Net cash provided by operating activities	24,844		5,563

Cash flows from investing activities
Purchase of property and equipment	(203)		(198)
Purchase of marketable securities	(116,567)		(125,815)
Sale of marketable securities	4,609		43,713
Maturities of marketable securities	129,640		31,905

Purchase of intangible assets	(31)		(79)

Net cash provided by (used in) investing activities	17,448		(50,474)

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WORKIVA INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands) (unaudited)
	Three months ended March 31,
	2024		2023

Cash flows from financing activities
Proceeds from option exercises	302		1,457
Taxes paid related to net share settlements of stock-based compensation awards	(8,611)		(7,228)
Proceeds from shares issued in connection with employee stock purchase plan	7,113		5,546


Principal payments on finance lease obligations	(129)		(124)

Net cash used in financing activities	(1,325)		(349)
Effect of foreign exchange rates on cash	(1,107)		548

Net increase (decrease) in cash, cash equivalents and restricted cash	39,860		(44,712)
Cash, cash equivalents and restricted cash at beginning of period	256,721		240,197
Cash, cash equivalents and restricted cash at end of period	$	296,581	$	195,485

Supplemental cash flow disclosure
Cash paid for interest	$	4,906	$	2,146
Cash paid for income taxes, net of refunds	$	952	$	323

Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Cash and cash equivalents at end of period	$	296,066	$	195,485
Restricted cash included within prepaid expenses and other at end of period	515		—
Total cash, cash equivalents, and restricted cash at end of period shown in the consolidated statements of cash flows	$	296,581	$	195,485

See accompanying notes.

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WORKIVA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Significant Accounting Policies

Organization

Workiva Inc., a Delaware corporation, and its wholly-owned subsidiaries (the “Company” or “we” or “us”) is on a mission to power transparent reporting for a better world. We believe that consumers, employees, shareholders, and other stakeholders today expect more from business – more action, transparency, and disclosure of financial and non-financial information. We build solutions to meet that demand and streamline processes, connect data and teams, and ensure consistency – all within the Workiva platform, the world’s leading cloud platform for assured integrated reporting. Our operational headquarters are located in Ames, Iowa, with additional offices located in the United States, Europe, the Asia-Pacific region and Canada.

Basis of Presentation and Principles of Consolidation

The financial information presented in the accompanying unaudited condensed consolidated financial statements has been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated balance sheet data as of December 31, 2023 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of our financial position and results of operations. The operating results for the three months ended March 31, 2024 are not necessarily indicative of the results expected for the full year ending December 31, 2024.

Seasonality affects our revenue, expenses and cash flows from operations. Revenue from professional services is generally higher in the first quarter as many of our customers file their 10-K in the first calendar quarter. Our sales and marketing expense also has some degree of seasonality. Sales and marketing expenses have historically been higher in the third quarter due to our annual user conference in September. In addition, the timing of cash bonus payments to employees during the first and fourth calendar quarters may result in some seasonality in operating cash flow. The condensed consolidated financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in this report and the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 20, 2024.

The unaudited condensed consolidated financial statements include the accounts of Workiva Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

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Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and various other assumptions believed to be reasonable. These estimates include, but are not limited to, the allowance for doubtful accounts, the determination of the relative selling prices of our services, the measurement of material rights, health insurance claims incurred but not yet reported, valuation of available-for-sale marketable securities, useful lives of deferred contract costs, intangible assets and property and equipment, goodwill, income taxes, discount rates used in the valuation of right-of-use assets and lease liabilities, and certain assumptions used in the valuation of equity awards. While these estimates are based on our best knowledge of current events and actions that may affect us in the future, actual results may differ materially from these estimates.

Recently Adopted Accounting Pronouncements

None.

New Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The standard is effective for annual periods beginning after December 15, 2023, with early adoption permitted. We are assessing the effect of adopting this standard on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are assessing the effect of adopting this standard on our consolidated financial statements and related disclosures.

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2. Supplemental Consolidated Balance Sheet Information

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	As of March 31, 2024		As of December 31, 2023
Accrued vacation	$	17,759	$	15,356
Accrued commissions	7,843		11,969
Accrued bonuses	8,256		6,825
Accrued payroll	7,660		7,206
Estimated health insurance claims	2,463		3,462
Accrued interest	1,197		3,510
ESPP employee contributions	4,319		7,540
Customer deposits	22,307		24,763
Operating lease liabilities	4,489		5,256
Accrued other liabilities	13,144		12,034
	$	89,437	$	97,921

3. Cash Equivalents and Marketable Securities

At March 31, 2024, cash equivalents and marketable securities consisted of the following (in thousands):


	Amortized Cost		Unrealized Gains		Unrealized Losses		Aggregate Fair Value
Money market funds	$	120,399	$	—	$	—	$	120,399
Commercial paper	21,119		—		—		21,119
U.S. treasury debt securities	263,751		84		(283)		263,552
U.S. government agency debt securities	99,374		45		(103)		99,316
Corporate debt securities	178,987		145		(298)		178,834
Foreign government debt securities	1,000		—		(2)		998
	$	684,630	$	274	$	(686)	$	684,218
Included in cash and cash equivalents	$

SEC Form 10-Q filed by Workiva Inc.