wk-20210331

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, 2021
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 30, 2021, there were approximately 42,209,295 shares of the registrant's Class A common stock and 7,784,610 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, 2021 and December 31, 2020	1
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020	3
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2021 and 2020	4
	Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended March 31, 2021 and 2020	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	30
Item 4.	Controls and Procedures	30

	Part II. Other Information
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 6.	Exhibits	32
	Signatures	S-1

Table of Contents

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, 2020, 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.

Table of Contents

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, 2021		As of December 31, 2020
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	331,173	$	322,831
Marketable securities	209,446		207,207
Accounts receivable, net of allowance for doubtful accounts of $599 and $717 at March 31, 2021 and December 31, 2020, respectively	53,754		68,922
Deferred commissions	22,924		21,923
Other receivables	3,314		3,155
Prepaid expenses and other	12,758		9,047
Total current assets	633,369		633,085

Property and equipment, net	28,961		29,365
Operating lease right-of-use assets	16,501		15,844
Deferred commissions, non-current	23,422		23,421
Intangible assets, net	1,560		1,583
Other assets	4,610		3,708
Total assets	$	708,423	$	707,006

Table of Contents


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

	As of March 31, 2021		As of December 31, 2020
	(unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	4,716	$	2,843
Accrued expenses and other current liabilities	60,110		68,256
Deferred revenue	212,025		208,990
Finance lease obligations	1,728		1,705
Total current liabilities	278,579		281,794

Convertible senior notes, net	291,756		289,490
Deferred revenue, non-current	32,888		35,894
Other long-term liabilities	1,683		1,680
Operating lease liabilities, non-current	17,540		17,209
Finance lease obligations, non-current	16,221		16,662
Total liabilities	638,667		642,729

Stockholders’ equity
Class A common stock, $0.001 par value per share, 1,000,000,000 shares authorized, 42,102,011 and 40,719,189 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	42		41
Class B common stock, $0.001 par value per share, 500,000,000 shares authorized, 7,824,610 and 8,069,610 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	8		8
Preferred stock, $0.001 par value per share, 100,000,000 shares authorized, no shares issued and outstanding	—		—
Additional paid-in-capital	491,549		478,698
Accumulated deficit	(422,024)		(414,700)
Accumulated other comprehensive income	181		230
Total stockholders’ equity	69,756		64,277
Total liabilities and stockholders’ equity	$	708,423	$	707,006

See accompanying notes.

Table of Contents


WORKIVA INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited)
	Three months ended March 31,
	2021		2020
Revenue
Subscription and support	$	84,936	$	68,361
Professional services	19,286		17,440
Total revenue	104,222		85,801
Cost of revenue
Subscription and support	13,202		12,153
Professional services	10,474		10,243
Total cost of revenue	23,676		22,396
Gross profit	80,546		63,405
Operating expenses
Research and development	26,634		22,994
Sales and marketing	41,035		36,117
General and administrative	17,021		13,369
Total operating expenses	84,690		72,480
Loss from operations	(4,144)		(9,075)
Interest income	360		1,706
Interest expense	(3,485)		(3,478)
Other (expense) income, net	(384)		718
Loss before (benefit) provision for income taxes	(7,653)		(10,129)
(Benefit) provision for income taxes	(329)		289
Net loss	$	(7,324)	$	(10,418)
Net loss per common share:
Basic and diluted	$	(0.15)	$	(0.22)
Weighted-average common shares outstanding - basic and diluted	50,244,120		47,545,703

See accompanying notes.

Table of Contents


WORKIVA INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) (unaudited)
	Three months ended March 31,
	2021		2020
Net loss	$	(7,324)	$	(10,418)
Other comprehensive loss, net of tax
Foreign currency translation adjustment, net of tax	156		(51)
Unrealized (loss) gain on available-for-sale securities, net of tax	(205)		42
Other comprehensive loss, net of tax	(49)		(9)
Comprehensive loss	$	(7,373)	$	(10,427)

See accompanying notes.

Table of Contents


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

Three months ended March 31, 2021
	Common Stock (Class A and B)
	Shares	Amount		Additional Paid-in-Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders' Equity
Balances at December 31, 2020	48,789	$	49	$	478,698	$	230	$	(414,700)	$	64,277
Stock-based compensation expense	—	—		11,623		—		—		11,623
Issuance of common stock upon exercise of stock options	312	1		4,137		—		—		4,138
Issuance of common stock under employee stock purchase plan	93	—		4,237		—		—		4,237
Issuance of restricted stock units	803	—		—		—		—		—
Tax withholding related to net share settlements of stock-based compensation awards	(70)	—		(7,146)						(7,146)
Net loss	—	—		—		—		(7,324)		(7,324)
Other comprehensive loss	—	—		—		(49)		—		(49)
Balances at March 31, 2021	49,927	$	50	$	491,549	$	181	$	(422,024)	$	69,756















Three months ended March 31, 2020
	Common Stock (Class A and B)
	Shares	Amount		Additional Paid-in-Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders' Equity
Balances at December 31, 2019	46,639	$	47	$	420,170	$	287	$	(366,302)

SEC Form 10-Q filed by Workiva Inc.