Workiva Inc. Announces First Quarter 2025 Financial Results

Published: 2025-05-01 16:42:03 ET WK

Published on 05/01/2025 at 16:42

Increased Q1 2025 subscription & support revenue by 20% over Q1 2024 Total revenue of $206 million in Q1 2025, representing 17% year-over-year growth Repurchased $40 million of Class A common stock under the 2024 share repurchase plan Customers with annual contract value over $500,000 grew 32% year-over-year

Workiva Inc. (NYSE:WK), the platform that powers transparency, accountability, and trust, today announced financial results for its first quarter ended March 31, 2025.

"We kicked off the year with solid revenue growth as we continue to see broad-based demand across our solution portfolio. CFOs trust Workiva to be the platform that drives performance and productivity," said Julie Iskow, President & Chief Executive Officer. "We remain focused on the execution of our growth strategy and productivity initiatives. We believe that we have the competitive differentiation and focused execution to continue to deliver on our 2025 and longer-term targets."

"Workiva delivered better than expected top and bottom line first quarter results," said Jill Klindt, Chief Financial Officer. "Subscription revenue grew by 20%, and contracts valued over $500 thousand dollars were up 32% year-over-year. We are holding our 2025 revenue outlook unchanged, and remain confident in our long-term market opportunity."

First Quarter 2025 Financial Results

Key Metrics and Recent Business Highlights

Financial Outlook

While the prevailing environment provides elevated levels of uncertainty, as of May 1, 2025, Workiva is providing guidance as follows:

Second Quarter 2025 Guidance:

Full Year 2025 Guidance:

Quarterly Conference Call

Workiva will host a webcast today at 5:00 p.m. Eastern Time to review the Company’s financial results for the first quarter 2025, in addition to discussing the Company’s outlook for the second quarter and full year 2025. The call can be accessed by dialing 1-833-630-1956 (U.S. domestic) or 1-412-317-1837 (international). Additionally, a live webcast and replay will be available at https://investor.workiva.com/news-events/events.

About Workiva

Workiva Inc. (NYSE: WK) powers transparency, accountability, and trust. Finance, accounting, sustainability, risk and audit teams from more than 6,000 organizations worldwide rely on Workiva for their mission-critical work. We transform how customers connect data, unify processes, and empower teams in a secure, audit-ready, AI-powered collaborative platform. Learn more at workiva.com.

Non-GAAP Financial Measures

The non-GAAP adjustments referenced herein relate to the exclusion of stock-based compensation and amortization of acquisition-related intangible assets. A reconciliation of GAAP to non-GAAP historical financial measures has been provided in Table I at the end of this press release. A reconciliation of GAAP to non-GAAP guidance has been provided in Table II at the end of this press release.

Workiva believes that the use of non-GAAP gross profit and gross margin, non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) per share, free cash flow and free cash flow margin is helpful to its investors. These measures, which are referred to as non-GAAP financial measures, are not prepared in accordance with generally accepted accounting principles in the United States, or GAAP. Workiva’s management uses these non-GAAP financial measures as tools for financial and operational decision making and for evaluating Workiva’s own operating results over different periods of time.

Non-GAAP gross margin is the ratio calculated by dividing non-GAAP gross profit by revenues. Non-GAAP gross profit is calculated by excluding stock-based compensation expense attributable to cost of revenues from gross profit. Non-GAAP income (loss) from operations is calculated by excluding stock-based compensation expense and amortization expense for acquisition-related intangible assets from loss from operations. Non-GAAP net income (loss) is calculated by excluding stock-based compensation expense, net of tax and amortization expense for acquisition-related intangible assets from net loss. Non-GAAP net income (loss) per share is calculated by dividing non-GAAP net income (loss) by the weighted- average shares outstanding as presented in the calculation of GAAP net loss per share. Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash expenses, Workiva believes that providing non-GAAP financial measures that exclude stock-based compensation expense allows for more meaningful comparisons between its operating results from period to period. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of its related amortization can vary significantly and are unique to each acquisition and thus we do not believe they are reflective of ongoing operations.

Free cash flow, a non-GAAP measure, represents cash flow from operating activities less purchase of property and equipment. Free cash flow margin is calculated by dividing free cash flow by total revenue. We consider free cash flow and free cash flow margin to be liquidity measures that provide useful information to investors about the amount of cash generated or used by the business.

Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in Workiva’s industry, as other companies in the industry may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Workiva’s reported financial results. Further, stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in Workiva’s business and an important part of the compensation provided to its employees. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Investors should review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate Workiva’s business.

Forward-Looking Statements

Certain statements in this press release 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. These statements relate to future events or the Company’s future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In particular, statements about the Company’s expectations, beliefs, plans, objectives, assumptions, future events or future performance contained in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential," "outlook," "guidance," "target," "goal," "project," "continue to," "confident," or the negative of those terms or other comparable terminology.

Please see the Company’s documents filed or to be filed with the Securities and Exchange Commission, including the Company’s annual reports filed on Form 10-K and quarterly reports on Form 10-Q, and any amendments thereto for a discussion of certain important risk factors that relate to forward-looking statements contained in this report. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company’s control. These and other important factors may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

WORKIVA INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts)

Three months ended March 31,

2025

2024

(unaudited)

Revenue

Subscription and support

185,512

154,979

Professional services

20,768

20,688

Total revenue

206,280

175,667

Cost of revenue

Subscription and support (1)

34,062

27,927

Professional services (1)

14,280

13,596

Total cost of revenue

48,342

41,523

Gross profit

157,938

134,144

Operating expenses

Research and development (1)

53,780

45,495

Sales and marketing (1)

101,671

82,633

General and administrative (1)

27,237

24,299

Total operating expenses

182,688

152,427

Loss from operations

(24,750

)

(18,283

)

Interest income

8,747

10,455

Interest expense

(3,195

)

(3,232

)

Other (expense) income, net

(233

)

Loss before provision for income taxes

(19,431

)

(10,974

)

Provision for income taxes

1,940

713

Net loss

(21,371

)

(11,687

)

Net loss per common share:

Basic and diluted

(0.38

)

(0.21

)

Weighted-average common shares outstanding - basic and diluted

56,157,533

54,915,852

(1) Includes stock-based compensation expense as follows:

Three months ended March 31,

2025

2024

(unaudited)

Cost of revenue

Subscription and support

2,433

1,601

Professional services

996

727

Operating expenses

Research and development

6,050

4,641

Sales and marketing

9,751

8,038

General and administrative

8,658

8,000

WORKIVA INC. CONSOLIDATED BALANCE SHEETS (in thousands)

March 31, 2025

December 31, 2024

(unaudited)

Assets

Current assets

Cash and cash equivalents

242,024

301,835

Marketable securities

525,000

514,585

Accounts receivable, net

118,620

148,433

Deferred costs

51,184

50,914

Other receivables

9,308

10,276

Prepaid expenses and other

28,161

22,199

Total current assets

974,297

1,048,242

Property and equipment, net

21,485

21,825

Operating lease right-of-use assets

12,341

11,786

Deferred costs, non-current

51,456

54,858

Goodwill

199,724

196,844

Intangible assets, net

26,031

27,389

Other assets

8,300

7,525

Total assets

1,293,634

1,368,469

Liabilities and Stockholders’ Deficit

Current liabilities

Accounts payable

14,761

7,747

Accrued expenses and other current liabilities

93,495

126,508

Deferred revenue

438,513

457,608

Finance lease obligations

570

562

Total current liabilities

547,339

592,425

Convertible senior notes, non-current

765,501

764,891

Deferred revenue, non-current

33,104

29,681

Other long-term liabilities

238

227

Operating lease liabilities, non-current

9,845

9,441

Finance lease obligations, non-current

13,342

13,488

Total liabilities

1,369,369

1,410,153

Stockholders’ deficit

Common stock

Additional paid-in-capital

655,377

672,363

Accumulated deficit

(729,054

)

(707,683

)

Accumulated other comprehensive loss

(2,114

)

(6,420

)

Total stockholders’ deficit

(75,735

)

(41,684

)

Total liabilities and stockholders’ deficit

1,293,634

1,368,469

WORKIVA INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

Three months ended March 31,

2025

2024

(unaudited)

Cash flows from operating activities

Net loss

(21,371

)

(11,687

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities

Depreciation and amortization

2,893

2,522

Stock-based compensation expense

27,888

23,007

Provision for (recovery of) doubtful accounts

(123

)

Accretion of premiums and discounts on marketable securities, net

(1,695

)

(3,749

)

Amortization of debt discount and issuance costs

610

608

Deferred income tax

(64

)

(295

)

Changes in assets and liabilities:

Accounts receivable

30,636

36,947

Deferred costs

4,093

1,405

Operating lease right-of-use assets

1,329

1,426

Other receivables

994

194

Prepaid expenses and other

(5,653

)

(2,273

)

Other assets

(648

)

(1,090

)

Accounts payable

6,651

4,726

Deferred revenue

(18,438

)

(17,526

)

Operating lease liabilities

(831

)

(987

)

Accrued expenses and other liabilities

(33,764

)

(8,261

)

Net cash (used in) provided by operating activities

(7,358

)

24,844

Cash flows from investing activities

Purchase of property and equipment

(763

)

(203

)

Purchase of marketable securities

(102,965

)

(116,567

)

Maturities of marketable securities

94,614

129,640

Sale of marketable securities

—

4,609

Purchase of intangible assets

(19

)

(31

)

Net cash (used in) provided by investing activities

(9,133

)

17,448

Cash flows from financing activities

Proceeds from option exercises

631

302

Taxes paid related to net share settlements of stock-based compensation awards

(12,922

)

(8,611

)

Proceeds from shares issued in connection with employee stock purchase plan

7,535

7,113

Repurchases of Class A common stock

(40,118

)

—

Principal payments on finance lease obligations

(138

)

(129

)

Net cash used in financing activities

(45,012

)

(1,325

)

Effect of foreign exchange rates on cash

1,889

(1,107

)

Net (decrease) increase in cash, cash equivalents, and restricted cash

(59,614

)

39,860

Cash, cash equivalents, and restricted cash at beginning of period

302,350

256,721

Cash, cash equivalents, and restricted cash at end of period

242,736

296,581

Three months ended March 31,

2025

2024

(unaudited)

Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets

Cash and cash equivalents at end of period

242,024

296,066

Restricted cash included within prepaid expenses and other at end of period

712

515

Total cash, cash equivalents, and restricted cash at end of period shown in the consolidated statements of cash flows

242,736

296,581

TABLE I WORKIVA INC. RECONCILIATION OF NON-GAAP INFORMATION (in thousands, except share and per share)

Three months ended March 31,

2025

2024

Gross profit, subscription and support

151,450

127,052

Add back: Stock-based compensation

2,433

1,601

Add back: Amortization of acquisition-related intangibles

909

—

Gross profit, subscription and support, non-GAAP

154,792

128,653

Gross profit, professional services

6,488

7,092

Add back: Stock-based compensation

996

727

Gross profit, professional services, non-GAAP

7,484

7,819

Gross profit

157,938

134,144

Add back: Stock-based compensation

3,429

2,328

Add back: Amortization of acquisition-related intangibles

909

—

Gross profit, non-GAAP

162,276

136,472

Cost of revenue, subscription and support

34,062

27,927

Less: Stock-based compensation

2,433

1,601

Less: Amortization of acquisition-related intangibles

909

—

Cost of revenue, subscription and support, non-GAAP

30,720

26,326

Cost of revenue, professional services

14,280

13,596

Less: Stock-based compensation

996

727

Cost of revenue, professional services, non-GAAP

13,284

12,869

Research and development

53,780

45,495

Less: Stock-based compensation

6,050

4,641

Less: Amortization of acquisition-related intangibles

495

890

Research and development, non-GAAP

47,235

39,964

Sales and marketing

101,671

82,633

Less: Stock-based compensation

9,751

8,038

Less: Amortization of acquisition-related intangibles

447

412

Sales and marketing, non-GAAP

91,473

74,183

General and administrative

27,237

24,299

Less: Stock-based compensation

8,658

8,000

General and administrative, non-GAAP

18,579

16,299

Loss from operations

(24,750

)

(18,283

)

Add back: Stock-based compensation

27,888

23,007

Add back: Amortization of acquisition-related intangibles

1,851

1,302

Income from operations, non-GAAP

4,989

6,026

GAAP operating margin

(12.0

(10.3

Non-GAAP operating margin

2.4

3.4

Net loss

(21,371

)

(11,687

)

Add back: Stock-based compensation

27,888

23,007

Add back: Amortization of acquisition-related intangibles

1,851

1,302

Net income, non-GAAP

8,368

12,622

Net loss per basic and diluted share:

(0.38

)

(0.21

)

Add back: Stock-based compensation

0.50

0.42

Add back: Amortization of acquisition-related intangibles

0.03

0.02

Net income per basic share, non-GAAP

0.15

0.23

Net income per diluted share, non-GAAP

0.14

0.22

Weighted-average common shares outstanding - basic, non-GAAP

56,157,533

54,915,852

Effect of potentially dilutive securities

2,322,617

1,436,720

Weighted-average common shares outstanding - diluted, non-GAAP

58,480,150

56,352,572

Net cash (used in) provided by operating activities

(7,358

)

24,844

Purchase of property and equipment

(763

)

(203

)

Free cash flow

(8,121

)

24,641

Free cash flow margin

(3.9

14.0

TABLE II

WORKIVA INC.

RECONCILIATION OF NON-GAAP GUIDANCE

Three months ending June 30, 2025

Year ending December 31, 2025

GAAP operating margin

(14.8

(9.1

(8.6

Add back: Stock-based compensation

13.9

13.3

Add back: Amortization of acquisition-related intangibles

0.9

0.8

Non-GAAP operating margin

—

5.0

5.5

Net loss per basic share, GAAP range

(0.50

)

(1.07

)

(1.00

)

Add back: Stock-based compensation

0.52

2.03

Add back: Amortization of acquisition-related intangibles

0.03

0.12

Effect of potentially dilutive securities

—

(0.06

)

(0.06

)

Net income per diluted share, non-GAAP range

0.05

1.02

1.09

Weighted-average common shares used in calculating GAAP earnings per share, basic

56,100,000

56,400,000

Weighted-average common shares used in calculating non-GAAP earnings per share, diluted

57,600,000

59,700,000

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