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wk-20240930
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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 September 30, 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 classTrading SymbolName of each exchange on which registered
Class A common stock, par value $.001WKNew 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 November 1, 2024, there were approximately 51,545,404 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
i
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.
ii
Part I. Financial Information
Item 1.     Financial Statements
    
WORKIVA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
As of September 30, 2024As of December 31, 2023
(unaudited)
ASSETS
Current assets
Cash and cash equivalents$248,239 $256,100 
Marketable securities528,115 557,622 
Accounts receivable, net of allowance for doubtful accounts of $1,157 and $1,163 at September 30, 2024 and December 31, 2023, respectively
137,921 125,193 
Deferred costs44,726 39,023 
Other receivables8,646 7,367 
Prepaid expenses and other21,055 23,631 
Total current assets988,702 1,008,936 
Property and equipment, net21,757 24,282 
Operating lease right-of-use assets9,485 12,642 
Deferred costs, non-current43,557 33,346 
Goodwill202,133 112,097 
Intangible assets, net30,278 22,892 
Other assets6,174 4,665 
Total assets$1,302,086 $1,218,860 
1
WORKIVA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(in thousands, except share and per share amounts)
As of September 30, 2024As of December 31, 2023
(unaudited)
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable
$13,346 $5,204 
Accrued expenses and other current liabilities
111,029 97,921 
Deferred revenue
414,229 380,843 
Finance lease obligations555 532 
Total current liabilities539,159 484,500 
Convertible senior notes, non-current764,281 762,455 
Deferred revenue, non-current
27,527 36,177 
Other long-term liabilities
236 178 
Operating lease liabilities, non-current8,062 10,890 
Finance lease obligations, non-current13,631 14,050 
Total liabilities1,352,896 1,308,250 
Stockholders’ deficit
Class A common stock, $0.001 par value per share, 1,000,000,000 shares authorized, 51,526,990 and 50,333,435 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
52 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 September 30, 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
645,083 562,942 
Accumulated deficit
(698,868)(652,641)
Accumulated other comprehensive income2,919 255 
Total stockholders’ deficit(50,810)(89,390)
Total liabilities and stockholders’ deficit$1,302,086 $1,218,860 
See accompanying notes.
2
WORKIVA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
Three months ended September 30,Nine months ended September 30,
2024202320242023
Revenue
Subscription and support$171,035 $143,421 $486,749 $409,857 
Professional services14,586 14,754 52,042 53,529 
Total revenue185,621 158,175 538,791 463,386 
Cost of revenue
Subscription and support30,621 24,864 86,493 74,080 
Professional services13,050 13,491 39,873 42,297 
Total cost of revenue43,671 38,355 126,366 116,377 
Gross profit141,950 119,820 412,425 347,009 
Operating expenses
Research and development48,425 41,747 142,328 130,235 
Sales and marketing89,756 72,576 257,086 215,168 
General and administrative25,551 21,022 76,225 86,660 
Total operating expenses163,732 135,345 475,639 432,063 
Loss from operations(21,782)(15,525)(63,214)(85,054)
Interest income9,298 7,294 30,089 15,546 
Interest expense(3,199)(47,437)(9,668)(50,437)
Other expense, net(350)(71)(309)(1,450)
Loss before provision for income taxes(16,033)(55,739)(43,102)(121,395)
Provision for income taxes959 530 3,125 1,934 
Net loss$(16,992)$(56,269)$(46,227)$(123,329)
Net loss per common share:
Basic and diluted$(0.31)$(1.04)$(0.84)$(2.28)
Weighted-average common shares outstanding - basic and diluted55,581,841 54,256,941 55,226,254 53,987,791 

See accompanying notes.

3
WORKIVA INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(unaudited)
Three months ended September 30,Nine months ended September 30,
2024202320242023
Net loss$(16,992)$(56,269)$(46,227)$(123,329)
Other comprehensive income (loss)
Foreign currency translation adjustment4,657 (3,189)1,446 (1,180)
Unrealized gain on available-for-sale securities2,992 208 1,218 1,471 
Other comprehensive income (loss)7,649 (2,981)2,664 291 
Comprehensive loss$(9,343)$(59,250)$(43,563)$(123,038)

See accompanying notes.

4
WORKIVA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands)
(unaudited)
Nine Months Ended September 30, 2024
Common Stock (Class A and B)
SharesAmountAdditional Paid-in-CapitalAccumulated Other Comprehensive Income (Loss)Accumulated Deficit
Total Stockholders' Deficit
Balances at December 31, 202354,179 $54 $562,942 $255 $(652,641)$(89,390)
Stock-based compensation expense— — 23,007 — — 23,007 
Issuance of common stock upon exercise of stock options19 1 301 — — 302 
Issuance of common stock under employee stock purchase plan88 — 7,113 — — 7,113 
Issuance of restricted stock units590 — — — — — 
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, 202454,785 $55 $584,752 $(3,635)$(664,328)$(83,156)
Stock-based compensation expense— — 25,402 — — 25,402 
Issuance of common stock upon exercise of stock options18 — 290 — — 290 
Issuance of restricted stock units131 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(20)— (1,640)— — (1,640)
Net loss— — — — (17,548)(17,548)
Other comprehensive loss— — — (1,095)— (1,095)
Balances at June 30, 202454,914 $55 $608,804 $(4,730)$(681,876)$(77,747)
Stock-based compensation expense——27,470——27,470 
Issuance of common stock upon exercise of stock options20813,273——3,274 
Issuance of common stock under employee stock purchase plan106—6,709——6,709 
Issuance of restricted stock units160————— 
Tax withholding related to net share settlements of stock-based compensation awards(15)—(1,173)——(1,173)
Net loss————(16,992)(16,992)
Other comprehensive income———7,649—7,649 
Balances at September 30, 202455,373$56 $645,083 $2,919 $(698,868)$(50,810)
5
WORKIVA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (continued)
(in thousands)
(unaudited)
Nine Months Ended September 30, 2023
Common Stock (Class A and B)
SharesAmountAdditional Paid-in-Capital
Accumulated Other Comprehensive Loss
Accumulated Deficit
Total Stockholders' Equity (Deficit)
Balances at December 31, 202252,652 $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 options102 — 1,457 — — 1,457 
Issuance of common stock under employee stock purchase plan107 — 5,546 — — 5,546 
Issuance of restricted stock units449 — — — — — 
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, 202353,232 $53 $575,549 $(3,406)$(571,266)$930 
Stock-based compensation expense— — 20,610 — — 20,610 
Issuance of common stock upon exercise of stock options47 1 746 — — 747 
Issuance of restricted stock units266 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(12)— (1,212)— — (1,212)
Net loss— — — — (20,910)(20,910)
Other comprehensive loss— — — (8)— (8)
Balances at June 30, 202353,533 $54 $595,693 $(3,414)$(592,176)$157 
Stock-based compensation expense— — 19,377 — — 19,377 
Issuance of common stock upon exercise of stock options70 — 1,120 — — 1,120 
Issuance of common stock under employee stock purchase plan93 — 6,967 — — 6,967 
Issuance of restricted stock units332 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(9)— (984)— — (984)
Induced conversion of convertible senior notes
——(81,080)——(81,080)
Net loss— — — — (56,269)(56,269)
Other comprehensive loss— — — (2,981)— (2,981)
Balances at September 30, 2023
54,019 $54 $541,093 $(6,395)$(648,445)$(113,693)

See accompanying notes.
6
WORKIVA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three months ended September 30,Nine months ended September 30,
2024202320242023
Cash flows from operating activities
Net loss$(16,992)$(56,269)$(46,227)$(123,329)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization3,006 2,686 8,092 8,353 
Stock-based compensation expense27,470 19,377 75,879 78,029 
Provision for (recovery of) doubtful accounts57 8 (46)57 
Accretion of premiums and discounts on marketable securities, net(2,638)(1,930)(9,543)(4,530)
Amortization of debt discount and issuance costs609 472 1,826 1,122 
Induced conversion expense— 45,144 — 45,144 
Realized loss on sale of available-for-sale securities, net— — — 708 
Deferred income tax(1)(14)(292)(17)
Changes in assets and liabilities:
Accounts receivable(15,187)(15,234)(11,507)7,243 
Deferred costs(4,946)3,116 (15,140)6,248 
Operating lease right-of-use asset1,210 1,244 3,808 3,807 
Other receivables(1,745)(1,556)2,796 (1,842)
Prepaid expenses and other344 3,452 2,764 (3,985)
Other assets464 1,043 (1,191)1,479 
Accounts payable4,788 (386)7,630 (1,267)
Deferred revenue26,606 11,120 22,159 22,225 
Operating lease liability(878)(750)(2,831)(3,129)
Accrued expenses and other liabilities(3,261)3,468 5,559 10,217 
Net cash provided by operating activities18,906 14,991 43,736 46,533 
Cash flows from investing activities
Purchase of property and equipment(243)(895)(554)(1,732)
Purchase of marketable securities(158,522)(144,989)(310,075)(322,008)
Maturities of marketable securities108,993 36,906 345,733 76,811 
Sale of marketable securities— — 4,609 65,052 
Acquisitions, net of cash acquired187 — (98,093)— 
Purchase of intangible assets(44)(48)(116)(167)
Net cash used in investing activities(49,629)(109,026)(58,496)(182,044)
7
WORKIVA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)
(unaudited)
Three months ended September 30,Nine months ended September 30,
2024202320242023
Cash flows from financing activities
Proceeds from option exercises3,273 1,120 3,865 3,324 
Taxes paid related to net share settlements of stock-based compensation awards(1,173)(984)(11,424)(9,424)
Proceeds from shares issued in connection with employee stock purchase plan6,709 6,967 13,822 12,513 
Proceeds from the issuance of convertible senior notes, net of issuance costs— 691,113 — 691,113 
Payments for repurchase of convertible senior notes— (396,869)— (396,869)
Principal payments on finance lease obligations(134)(127)(395)(376)
Net cash provided by financing activities8,675 301,220 5,868 300,281 
Effect of foreign exchange rates on cash2,390 (1,239)925 (82)
Net (decrease) increase in cash, cash equivalents, and restricted cash(19,658)205,946 (7,967)164,688 
Cash, cash equivalents, and restricted cash at beginning of period268,412 198,939 256,721 240,197 
Cash, cash equivalents, and restricted cash at end of period$248,754 $404,885 $248,754 $404,885 
Supplemental cash flow disclosure
Cash paid for interest$4,983 $2,160 $10,085 $4,509 
Cash paid for income taxes, net of refunds$1,387 $604 $4,520 $2,126 
Noncash investing and financing activities
Purchases of property and equipment, accrued but not paid$259 $— $259 $— 
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Cash and cash equivalents at end of period$248,239 $404,885 $248,239 $404,885 
Restricted cash included within prepaid expenses and other at end of period515 — 515 — 
Total cash, cash equivalents, and restricted cash at end of period shown in the consolidated statements of cash flows$248,754 $404,885 $248,754 $404,885 

See accompanying notes.
8
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”) provides software solutions to bring customers’ financial reporting, Governance, Risk, and Compliance (“GRC”) and Environmental, Social, and Governance (“ESG”) data together in a controlled, secure, audit-ready platform. Our platform simplifies the most complex reporting and disclosure challenges by streamlining processes, connecting data and teams, and ensuring consistency. 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 and nine months ended September 30, 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.
9
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 do not believe the adoption of this standard will have a material impact 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.
10
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 September 30, 2024As of December 31, 2023
Accrued vacation$18,889 $15,356 
Accrued commissions11,211 11,969 
Accrued bonuses23,195 6,825 
Accrued payroll6,604 7,206 
Estimated health insurance claims2,417 3,462 
Accrued interest1,197 3,510 
ESPP employee contributions4,287 7,540 
Customer deposits25,720 24,763 
Operating lease liabilities4,001 5,256 
Accrued other liabilities13,508 12,034 
$111,029 $97,921 

3. Cash Equivalents and Marketable Securities
At September 30, 2024, cash equivalents and marketable securities consisted of the following (in thousands):
Amortized Cost
Unrealized Gains
Unrealized Losses
Aggregate Fair Value
Money market funds$99,716 $— $— $99,716 
Commercial paper5,953 — — 5,953 
U.S. treasury debt securities255,229 989 (34)256,184 
U.S. government agency debt securities92,849 401 (2)93,248 
Corporate debt securities181,850 874 (14)182,710 
$635,597 $2,264 $(50)$637,811 
Included in cash and cash equivalents$109,694 $2 $— $109,696 
Included in marketable securities$525,903 $2,262 $(50)$528,115 
11
At December 31, 2023, cash equivalents and marketable securities consisted of the following (in thousands):
Amortized Cost
Unrealized Gains
Unrealized Losses
Aggregate Fair Value
Money market funds$108,826 $— $— $108,826 
Commercial paper56,115 — — 56,115 
U.S. treasury debt securities224,136 531 (80)224,587 
U.S. government agency debt securities110,036 256 (15)110,277 
Corporate debt securities165,341 497 (187)165,651 
Foreign government debt securities999 — (7)992 
$665,453 $1,284 $(289)$666,448 
Included in cash and cash equivalents$108,826 $— $— $108,826 
Included in marketable securities$556,627 $1,284 $(289)$557,622 

The contractual maturities of the investments classified as marketable securities are as follows (in thousands):
As of September 30, 2024
Due within one year$348,502 
Due in one to two years179,613 
$528,115 
The following table presents gross unrealized losses and fair values for those cash equivalents and marketable securities that were in an unrealized loss position as of September 30, 2024, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands):
As of September 30, 2024
Less than 12 months
12 months or greater
Fair Value
Unrealized Loss
Fair Value
Unrealized Loss
U.S. treasury debt securities$39,627 $(30)$7,490 $(4)
U.S. government agency debt securities957 (2)— — 
Corporate debt securities17,183 (9)5,842 (5)
Total$57,767 $(41)$13,332 $(9)
We do not believe the unrealized losses represent credit losses based on our evaluation of available evidence as of September 30, 2024, which includes an assessment of whether it is more likely than not we will be required to sell the investment before recovery of the investment's amortized cost basis.
4. Fair Value Measurements
We determine the fair values of our financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal
12
or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3 - Inputs are unobservable inputs based on our assumptions.
Financial Assets
Cash equivalents primarily consist of AAA-rated money market funds with overnight liquidity and no stated maturities. We classified cash equivalents as Level 1 due to the short-term nature of these instruments and measured the fair value based on quoted prices in active markets for identical assets.
When available, our marketable securities are valued using quoted prices for identical instruments in active markets. If we are unable to value our marketable securities using quoted prices for identical instruments in active markets, we value our investments using broker reports that utilize quoted market prices for comparable instruments. We validate, on a sample basis, the derived prices provided by the brokers by comparing their assessment of the fair values of our investments against the fair values of the portfolio balances of another third-party professional pricing service. As of September 30, 2024, all of our marketable securities were valued using quoted prices for comparable instruments in active markets and are classified as Level 2.
Based on our valuation of our money market funds and marketable securities, we concluded that they are classified in either Level 1 or Level 2, and we have no financial assets measured using Level 3 inputs on a recurring basis. The following table presents information about our assets that are measured at fair value on a recurring basis using the above input categories (in thousands):
Fair Value Measurements as of September 30, 2024Fair Value Measurements as of December 31, 2023
Description
Total
Level 1
Level 2
Total
Level 1
Level 2
Money market funds$99,716 $99,716 $— $108,826 $108,826 $— 
Commercial paper5,953 — 5,953 56,115 — 56,115 
U.S. treasury debt securities256,184 — 256,184 224,587 — 224,587 
U.S. government agency debt securities93,248 — 93,248 110,277 — 110,277 
Corporate debt securities182,710 — 182,710 165,651 — 165,651 
Foreign government debt securities— — — 992 — 992 
$637,811 $99,716 $538,095 $666,448 $108,826 $557,622 
Included in cash and cash equivalents$109,696 $108,826 
Included in marketable securities$528,115 $557,622 
13
Convertible Senior Notes
As of September 30, 2024, the fair value of our convertible senior notes due in 2026 and 2028 was $82.4 million and $659.7 million, respectively. The fair value was determined based on the quoted price of the convertible senior notes in an over-the-counter market on the last trading day of the reporting period and has been classified as Level 2 in the fair value hierarchy. See Note 5 to the condensed consolidated financial statements for more information.
5. Convertible Senior Notes
The following table presents details of our convertible senior notes, which are further discussed below (original principal in thousands):
Month Issued
Maturity Date
Free Convertibility Date
Redemption Date
Original Principal (including overallotment)
Initial Conversion Rate per $1,000 Principal
Initial Conversion Price
2026 Notes
August 2019August 15, 2026May 15, 2026August 21, 2023$345,000 12.4756$80.16 
2028 Notes
August 2023August 15, 2028May 15, 2028August 21, 2026$702,000 7.4690$133.89 
In August 2019, we issued $345.0 million aggregate principal amount of 1.125% convertible senior notes due 2026 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, including the exercise in full by the initial purchasers of their option to purchase an additional $45.0 million principal amount (the "2026 Notes”). The 2026 Notes bear interest at a fixed rate of 1.125% per annum, payable semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2020. Proceeds from the issuance of the 2026 Notes totaled $335.9 million, net of initial purchaser discounts and issuance costs.
In August 2023, we issued $702.0 million aggregate principal amount of 1.250% convertible senior notes due 2028 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, including the partial exercise of 77.0 million principal amount by the initial purchasers of their option to purchase up to an additional $100 million principal amount (the "2028 Notes”). The 2028 Notes bear interest at a fixed rate of 1.250% per annum, payable semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2024. Proceeds from the issuance of the 2028 Notes totaled $691.1 million, net of initial purchaser discounts and issuance costs.
The 2026 Notes and the 2028 Notes are together referred to as the "Notes".
The Notes were issued pursuant to an indenture and are senior, unsecured obligations of the Company. The 2028 Notes will rank equally with all of the Company’s existing and future senior unsecured indebtedness, including the Company’s outstanding 2026 Notes.
Holders of the Notes may convert all or a portion of their Notes prior to the close of business on their respective Free Convertibility dates, in multiples of $1,000 principal amount, only under the following circumstances:
•during any calendar quarter commencing after the calendar quarter in which the respective Notes were issued (and only during such calendar quarter), if the last reported sale price of our Class A common stock, par value $0.001 per share, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including,
14
the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
•during the five consecutive business day period immediately following any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined below) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A common stock and the conversion rate on each such trading day;
•if we call any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or
•upon the occurrence of certain specified corporate events as set forth in the relevant indenture.
On or after the relevant Free Convertibility Date, holders of the Notes may convert their Notes at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the Notes.
Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A common stock or a combination of cash and shares of our Class A common stock, at our election, in the manner and subject to the terms and conditions provided in the indenture.
The Company may redeem for cash all or any portion of the Notes, at its option, on or after the respective Redemption Date, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the respective Redemption Date.
During the third quarter of 2024 none of the conversion conditions were met and therefore the Notes are not convertible at the option of the holders. As a result, the Notes were classified as non-current liabilities on the condensed consolidated balance sheet as of September 30, 2024.
Interest expense representing the amortization of issuance costs as well as contractual interest expense is amortized to interest expense at an effective interest rate of 1.5% and 1.6% over the term of the 2026 Notes and 2028 Notes, respectively.
As of September 30, 2024, the remaining life of the 2026 Notes and 2028 Notes were approximately 1.8 years and 3.8 years, respectively.
The net carrying amount of the Notes was as follows (in thousands):
September 30, 2024December 31, 2023
2026 Notes
2028 Notes
2026 Notes
2028 Notes
Principal$71,242 $702,000 $71,242 $702,000 
Unamortized issuance costs(508)(8,453)(711)(10,076)
Net carrying amount$70,734 $693,547 $70,531 $691,924 

15
Interest expense related to the Notes was as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
2024202320242023
Contractual interest expense$2,394 $1,618 $7,182 $3,558 
Amortization of issuance costs609 472 1,826 1,122 
Total interest expense$3,003 $2,090 $9,008 $4,680 


6. Commitments and Contingencies
Litigation
From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We evaluate the development of legal matters on a regular basis and accrue a liability when we believe a loss is probable and the amount can be reasonably estimated. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of any currently pending legal proceedings to which we are a party will not have a material adverse effect on our business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
7. Stock-Based Compensation
We grant stock-based incentive awards to attract, motivate and retain qualified employees, non-employee directors and consultants, and to align their financial interests with those of our stockholders. We utilize stock-based compensation in the form of restricted stock units, performance restricted stock units, options to purchase Class A common stock and Employee Stock Purchase Plan ("ESPP") purchase rights. Prior to our corporate conversion in December 2014, awards were provided under the 2009 Unit Incentive Plan (“the 2009 Plan”). The 2009 Plan was amended to provide that no further awards will be issued thereunder, and our board of directors and stockholders adopted and approved our 2014 Equity Incentive Plan (“the 2014 Plan” and, together with the 2009 Plan, “the Plans”).
On May 30, 2024, stockholders approved an amendment to the 2014 Plan that increased the number of shares available for grant by 3,900,000. As of September 30, 2024, 4,920,079 shares of Class A common stock were available for grant under the 2014 Plan.
Stock-Based Compensation Expense
Stock-based compensation expense was recorded in the following cost and expense categories consistent with the respective employee or service provider’s related cash compensation (in thousands):
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Three months ended September 30,Nine months ended September 30,
2024202320242023
Cost of revenue
Subscription and support
$2,164 $1,247 $5,708 $3,732 
Professional services
858 623 2,348 1,923 
Operating expenses
Research and development
5,681 4,155 15,474 13,677 
Sales and marketing
9,942 7,108 26,470 20,769 
General and administrative
8,825 6,244 25,879 37,928 
Total
$27,470 $19,377 $75,879 $78,029 
Stock Options
The following table summarizes the option activity under the Plans for the nine months ended September 30, 2024:




Options

Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (Years)
Outstanding at December 31, 20231,211,619 $14.46 2.3
Granted— — 
Forfeited— — 
Expired— — 
Exercised(245,202)15.76 
Outstanding at September 30, 2024966,417 $14.13 1.9
Exercisable at September 30, 2024966,417 $14.13 1.9
Restricted Stock Units and Performance Restricted Stock Units
The following table summarizes the restricted stock unit and performance restricted stock unit activity under the Plans for the nine months ended September 30, 2024:




Number of Shares
Weighted-
Average
Grant Date Fair Value
Unvested at December 31, 20232,198,411 $97.17 
Granted1,490,197 87.53 
Forfeited(166,120)95.04 
Vested(1)
(864,693)95.97 
Unvested at September 30, 20242,657,795 $92.34 
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(1) During the nine months ended September 30, 2024, in accordance with our Nonqualified Deferred Compensation Plan, recipients of 3,325 shares elected to defer settlement of their vested restricted stock units and 18,919 shares were released from deferral.
Employee Stock Purchase Plan
During the nine months ended September 30, 2024, 194,239 shares of common stock were purchased under the ESPP at a weighted-average price of $71.16 per share, resulting in cash proceeds of $13.8 million.
Compensation expense associated with ESPP purchase rights is recognized on a straight-line basis over the vesting period. At September 30, 2024, there was approximately $1.4 million of total unrecognized compensation expense related to the ESPP, which is expected to be recognized over a weighted-average period of 0.3 years.
8. Revenue Recognition
Disaggregation of Revenue
The following table presents our revenues disaggregated by type of good or service (in thousands):
Three months ended September 30,Nine months ended September 30,
2024202320242023
Subscription and support$171,035 $143,421 $486,749 $409,857 
XBRL professional services11,704 11,555 43,324 42,719 
Other services2,882 3,199 8,718 10,810 
Total revenues
$185,621 $158,175 $538,791 $463,386 
Deferred Revenue
We recognized $153.0 million and $129.9 million of revenue during the three months ended September 30, 2024 and 2023, respectively, that was included in the deferred revenue balances at the beginning of the respective periods. We recognized $331.2 million and $277.8 million of revenue during the nine months ended September 30, 2024 and 2023, respectively, that was included in the deferred revenue balances at the beginning of the respective periods.
Transaction Price Allocated to the Remaining Performance Obligations
As of September 30, 2024, we expect revenue of approximately $1,076.1 million to be recognized from remaining performance obligations for subscription contracts. We expect to recognize approximately $586.0 million of these remaining performance obligations over the next 12 months with the balance substantially recognized in the 24 months thereafter.
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9. Intangible Assets and Goodwill
The following table presents the components of net intangible assets (in thousands):
As of September 30, 2024As of December 31, 2023
Weighted Average Useful Life (Years)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Acquired technology4.7$26,591 $(10,811)$15,780 $15,949 $(7,471)$8,478 
Acquired customer-related9.716,940 (4,020)12,920 15,427 (2,769)12,658 
Acquired trade names3.02,180 (1,829)351 2,172 (1,721)451 
Patents10.03,267 (2,040)1,227 3,150 (1,845)1,305 
Total6.7$48,978 $(18,700)$30,278 $36,698 $(13,806)$22,892 
Amortization expense related to intangible assets was $2.0 million and $1.5 million for the three months ended September 30, 2024 and 2023, respectively, and $4.8 million and $4.6 million for the nine months ended September 30, 2024 and 2023, respectively.
As of September 30, 2024, expected remaining amortization expense of intangible assets by fiscal year is as follows (in thousands):
Remainder of 2024$1,958 
20257,121 
20265,801 
20274,460 
20284,008 
Thereafter6,930 
Total expected amortization expense$30,278 
The changes in the carrying amount of goodwill were as follows (in thousands):
December 31, 2023$112,097 
Acquisition89,146 
Foreign currency translation adjustments890 
September 30, 2024$202,133 

10. Net Loss Per Share
Net loss per share is allocated based on the contractual participation rights of the Class A and Class B common shares as if the loss for the year has been distributed. As the liquidation and dividend rights are identical, the net loss is allocated on a proportionate basis.
A reconciliation of the denominator used in the calculation of basic and diluted loss per share is as follows (in thousands, except share and per share data):
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Three months ended
September 30, 2024September 30, 2023
Class A
Class B
Class A
Class B
Numerator
Net loss$(15,816)$(1,176)$(52,281)$(3,988)
Denominator
Weighted-average common shares outstanding - basic and diluted51,736,258 3,845,583 50,411,358 3,845,583 
Basic and diluted net loss per share$(0.31)$(0.31)$(1.04)$(1.04)
Nine months ended
September 30, 2024September 30, 2023
Class AClass BClass AClass B
Numerator
Net loss$(43,008)$(3,219)$(114,522)$(8,807)
Denominator
Weighted-average common shares outstanding - basic and diluted51,380,671 3,845,583 50,132,483 3,855,308 
Basic and diluted net loss per share$(0.84)$(0.84)$(2.28)$(2.28)
The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share were as follows:
As of
September 30, 2024September 30, 2023
Shares subject to outstanding common stock options966,417 1,289,808 
Shares subject to unvested restricted stock units and performance restricted stock units2,657,795 2,273,719 
Shares issuable pursuant to the ESPP125,951 86,000 
Shares underlying our convertible senior notes
6,132,025 9,547,320 
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11. Acquisitions
On June 17, 2024, we acquired all of the issued and outstanding equity interests in Sustain.Life, Inc. (“Sustain.Life”), a leading provider of carbon accounting solutions, for $98.1 million net of cash acquired of $0.3 million to launch Workiva Carbon. Workiva Carbon is an audit-ready carbon accounting solution that helps organizations measure, manage, track, and report carbon emissions, including data from third-party supply chain partners. Coupled with Workiva's ESG reporting solution, companies can now collect key business data, calculate critical metrics, set data-driven ESG strategy, measure progress, and report results all in the Workiva platform.
The transaction was accounted for as a business combination. The purchase price has been preliminarily allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair values of goodwill and definite-lived intangible assets acquired in the acquisition were externally estimated primarily based on the replacement cost approach. The fair values of assets acquired and liabilities assumed may change over the measurement period as additional information is received. The primary area subject to change includes our review of the valuation of intangible assets. We expect to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill. The goodwill recognized was primarily attributable to the assembled workforce, operational synergies, and strategic benefits that are expected to be achieved and is not deductible for income tax purposes.
The following table presents a preliminary allocation of the purchase price to the assets acquired and liabilities assumed at the date of acquisition (in thousands):
Cash consideration$98,343 
Total consideration$98,343 
Cash$251 
Accounts receivable, net488 
Other receivables4,066 
Prepaid expenses and other239 
Intangible assets
11,890 
Goodwill89,146 
Accounts payable(211)
Accrued liabilities(5,223)
Deferred revenue
(1,042)
Other long-term liabilities
(1,261)
Fair value of assets and liabilities$98,343 
We incurred costs related to the acquisition of approximately $1.1 million during the nine months ended September 30, 2024. All acquisition related costs were expensed as incurred and have been recorded in general and administrative expenses in our condensed consolidated statements of operations.
The amount of revenues and net loss from the acquisition included in our condensed consolidated statements of operations for the three and nine months ended September 30, 2024 were not material.
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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this report and in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 20, 2024. In addition to historical consolidated financial information, this discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and those discussed 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.
Overview
Workiva is on a mission to power transparent reporting for a better world. We build and deliver the world's leading cloud platform for assured integrated reporting to meet stakeholder demands for action, transparency, and disclosure of financial and non-financial data. Workiva offers the only unified software-as-a-service (“SaaS”) platform brings customers’ financial reporting, Governance, Risk, and Compliance (“GRC”) and Environmental, Social, and Governance (“ESG”) data together in a controlled, secure, audit-ready platform. Our platform simplifies the most complex reporting and disclosure challenges by streamlining processes, connecting data and teams, and ensuring consistency.
From data to disclosure, the Workiva platform empowers customers by connecting and transforming data from hundreds of enterprise resource planning (“ERP”), human capital management (“HCM”), and customer relationship management (“CRM”) systems, as well as other third-party cloud and on-premise applications. Customers use our platform to create, review and publish data-linked documents, presentations, and reports with greater control, consistency, accuracy, and productivity. Our platform is flexible and scalable, so customers can easily adapt it to define, automate, and change their business processes in real time.
Workiva provides more than 6,200 organizations across the globe with SaaS platform solutions to help solve some of the most complex reporting and disclosure challenges. While our customers use our platform for more than 100 different use cases, across dozens of vertical industries, we organize our sales and marketing resources into three purpose-built solution groups (Financial Reporting, ESG, and GRC) focusing primarily on the office of the Chief Financial Officer (“CFO”), Chief Sustainability Officer (“CSO”), and Chief Audit Executive (“CAE”).
We operate our business on a SaaS model. Customers enter into annual and multi-year subscription contracts to gain access to our platform. Our subscription fee includes the use of our software and technical support. Our subscription pricing is based primarily on a solution-based licensing model. Under this model, operating metrics related to a customer’s expected use of each solution determine the price. We charge customers additional fees primarily for document setup and XBRL tagging services.
We generate sales primarily through our direct sales force. In addition, we augment our direct sales channel with partnerships. Our advisory and service partners offer a wider range of domain and functional expertise that broadens the capabilities of our platform, bringing scale and support to customers and prospects. Our technology partners enable more data and process integrations to help customers connect critical transactional systems directly to our platform.
We continue to invest in the development of our solutions, infrastructure and sales and marketing to drive long-term growth. Our full-time employee headcount expanded to 2,751 at September 30, 2024 from 2,519 at September 30, 2023, an increase of 9.2%.
22
We have achieved significant revenue growth in recent periods. Our revenue grew to $185.6 million and $538.8 million during the three and nine months ended September 30, 2024, respectively from $158.2 million and $463.4 million during the three and nine months ended September 30, 2023, respectively. We incurred net losses of $17.0 million and $46.2 million during the three and nine months ended September 30, 2024, respectively compared to $56.3 million and $123.3 million during the three and nine months ended September 30, 2023, respectively.
We continue to invest for future growth and are focused on several key drivers, including focusing on multi-solution adoption by new and existing customers, further developing our partner program, accelerating international expansion and our fit-for-purpose solutions. These growth drivers often require a more sophisticated go-to-market approach and, as a result, we may incur additional costs upfront to obtain new customers and expand our relationships with existing customers, including additional sales and marketing expenses.
Recent Business Developments
On June 17, 2024, we acquired all of the issued and outstanding equity interests in Sustain.Life, a leading provider of carbon accounting solutions, to launch Workiva Carbon. Workiva Carbon is an audit-ready carbon accounting solution that helps organizations measure, manage, track, and report carbon emissions, including data from third-party supply chain partners. Coupled with Workiva's ESG reporting solution, companies can now collect key business data, calculate critical metrics, set data-driven ESG strategy, measure progress, and report results all in the Workiva platform. See Note 11 to the condensed consolidated financial statements for more information.
Effects of Volatility in the IPO/SPAC Markets
In the United States, volatility in the public markets has led to a decrease in the number of initial public offerings (“IPOs”) and special-purpose acquisition companies (“SPACs”) since fiscal year 2022. New sales of our SEC and capital markets solutions were adversely affected by this decline in the IPO and SPAC markets. We expect reduced valuation multiples caused by higher interest rates, inflation, and geopolitical instability to continue to negatively impact the number of IPOs and SPACs in fiscal year 2024. Whether and to what extent the IPO and SPAC markets will moderate cannot be accurately predicted.
Key Factors Affecting Our Performance
Generate Growth From Existing Customers. The Workiva platform can exhibit a powerful network effect within an enterprise, meaning that the usefulness of our platform attracts additional users. Since solution-based licensing offers our customers an unlimited number of seats for each solution purchased, we expect customers to add more seats over time. As more employees in an enterprise use our platform, additional opportunities for collaboration and automation drive demand among their colleagues for additional solutions.
Pursue New Customers. We sell to organizations that manage large, complex processes with distributed teams of contributors and disparate sets of business data. We market our platform to professionals and executives in the areas of financial and non-financial reporting, including regulatory, multi-entity and performance reporting. In addition, we market to teams responsible for ESG reporting, and GRC programs. We intend to continue to build our sales and marketing organization and leverage our brand equity to attract new customers.
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Offer More Solutions. We intend to introduce new solutions to continue to meet growing demand for our platform. Our close and trusted relationships with our customers are a source for new use cases, features and solutions. We have a disciplined process for tracking, developing and releasing new solutions that are designed to have immediate, broad applicability; a strong value proposition; and a high return on investment for both Workiva and our customers. Our advance planning team assesses customer needs, conducts industry-based research and defines new markets. This vetting process involves our sales, product marketing, customer success, professional services, research and development, finance and senior management teams.
Expand Across Enterprises. Our success in delivering multiple solutions has created demand from customers for a broader-based, enterprise-wide Workiva platform. In response, we have been improving our technology and realigning sales and marketing to capitalize on our growing enterprise-wide opportunities. We believe this expansion will add seats and revenue and continue to support our high revenue retention rates. However, we expect that enterprise-wide deals will be larger and more complex, which tend to lengthen the sales cycle.
Add Partners. We continue to expand and deepen our relationships with global and regional partners, including consulting firms, system integrators, large and mid-sized independent software vendors, and implementation partners. Our advisory and service partners offer a wider range of domain and functional expertise that broadens our platform’s capabilities and promotes Workiva as part of the digital transformation projects they drive for their customers. Our technology partners enable powerful data and process integrations to help customers connect critical transactional systems directly to our platform, with powerful linking, auditability and control features. We believe that our partner ecosystem extends our global reach, accelerates the usage and adoption of our platform, and enables more efficient delivery of professional services.
Investment in growth. We plan to continue to invest in the development of our platform, fit-for-purpose solutions and application marketplace to enhance our current offerings and build new features. In addition, we expect to continue to invest in our sales, marketing, professional services and customer success organizations to drive additional revenue and support the needs of our growing customer base and to take advantage of opportunities that we have identified in Europe, the Middle East and Africa ("EMEA") and Asia-Pacific ("APAC") regions.
Seasonality. Our revenue from professional services has some degree of seasonality. Many of our customers employ our professional services just before they file their Form 10-K, often 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 the payments of cash bonuses to employees during the first and fourth calendar quarters may result in some seasonality in operating cash flow.
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Key Performance Indicators
Three months ended September 30,Nine months ended September 30,
2024202320242023
(dollars in thousands)
Financial metrics
Total revenue
$185,621 $158,175 $538,791 $463,386 
Percentage increase in total revenue17.4 %19.1 %16.3 %17.6 %
Subscription and support revenue$171,035 $143,421 $486,749 $409,857 
Percentage increase in subscription and support revenue19.3 %20.9 %18.8 %20.9 %
Subscription and support as a percent of total revenue92.1 %90.7 %90.3 %88.4 %
As of September 30,
20242023
Operating metrics
Number of customers6,2375,945
Subscription and support revenue retention rate97.5%97.7%
Subscription and support revenue retention rate including add-ons110.5%112.0%
Number of customers with annual contract value $100k+1,9261,561
Number of customers with annual contract value $300k+383296
Number of customers with annual contract value $500k+
166130
Total customers. We believe total number of customers is a key indicator of our financial success and future revenue potential. We define a customer as an entity with an active subscription contract as of the measurement date. Our customer is typically a parent company or, in a few cases, a significant subsidiary that works with us directly. Companies with publicly-listed securities account for a substantial majority of our customers. Our customer count as of September 30, 2024 does not include Sustain.Life.
Subscription and support revenue retention rate. We calculate our subscription and support revenue retention rate based on all customers that were active at the end of the same calendar quarter of the prior year (“base customers”). We begin by annualizing the subscription and support revenue recorded in the same calendar quarter of the prior year for those base customers who are still active at the end of the current quarter. We divide the result by the annualized subscription and support revenue in the same quarter of the prior year for all base customers.
Our subscription and support revenue retention rate was 97.5% as of September 30, 2024, down slightly from 97.7% as of September 30, 2023. We believe that our success in maintaining a high rate of revenue retention is attributable primarily to our robust technology platform and strong customer service. Customers whose securities were deregistered due to merger or acquisition or financial distress accounted for over half of our revenue attrition in the latest quarter.
Subscription and support revenue retention rate including add-ons. Add-on revenue includes the change in both solutions and pricing for existing customers. We calculate our subscription and support revenue retention rate including add-ons by annualizing the subscription and support revenue recorded in the current quarter for our base customers that were active at the end of the current quarter. We divide the result by the annualized subscription and support revenue in the same quarter of the prior year for all base customers.
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Our subscription and support revenue retention rate including add-ons was 110.5% as of the quarter ended September 30, 2024, down from 112.0% as of September 30, 2023.
Annual contract value. Our annual contract value (“ACV”) for each customer is calculated by annualizing the subscription and support revenue recognized during each quarter. We believe the increase in the number of larger contracts shows our progress in expanding our customers’ adoption of our platform.
Three months ended September 30,Nine months ended September 30,
2024202320242023
Subscription and support revenue from customers with annual contract value of $100k+ as a percent of total subscription and support revenue71.8%67.1%70.3%65.6%
Subscription and support revenue from customers with annual contract value of $300k+ as a percent of total subscription and support revenue36.0%32.6%35.1%31.2%
Subscription and support revenue from customers with annual contract value of $500k+ as a percent of total subscription and support revenue
24.3%21.6%23.5%21.3%
Components of Results of Operations
Revenue
We generate revenue through the sale of subscriptions to our cloud-based software and the delivery of professional services. We serve a wide range of customers in many industries, and our revenue is not concentrated with any single customer or small group of customers. For the nine months ended September 30, 2024 and 2023, no single customer represented more than 1% of our revenue, and our largest 10 customers accounted for less than 10% of our revenue in the aggregate.
We generate sales directly through our sales force and partners. We also identify some sales opportunities with existing customers through our customer success and professional services teams.
Our customer contracts typically range in length from one year to three years. We typically invoice our customers for subscription fees annually in advance. For contracts with a two or three year term, customers sometimes elect to pay the entire multi-year subscription term in advance. Our arrangements do not contain general rights of return.
Subscription and Support Revenue. We recognize subscription and support revenue on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Amounts that are invoiced are initially recorded as deferred revenue.
Professional Services Revenue. We believe our professional services facilitate the sale of our subscription service to certain customers. To date, most of our professional services have consisted of document set up, XBRL tagging, and consulting to help our customers with business processes and best practices for using our platform. Our professional services are not required for customers to utilize our solution. We recognize revenue for document set up when the service is complete and control has transferred to the customer. Revenues from XBRL tagging and consulting services are recognized as the services are performed.        
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Cost of Revenue
Cost of revenue consists primarily of personnel and related costs directly associated with our professional services, customer success teams and training personnel, including salaries, benefits, bonuses, travel, and stock-based compensation; the costs of contracted third-party vendors; the costs of third-party hosting fees for server usage by our customers; information technology costs; and facility costs.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of personnel and related costs, including salaries, benefits, bonuses, commissions, travel, and stock-based compensation. Other costs included in this expense are marketing and promotional events, our annual user conference, online marketing, product marketing, information technology costs, and facility costs. We pay sales commissions for initial contracts and expansions of existing customer contracts. When the relevant amortization period is one year or less, we expense sales commissions as incurred. All other sales commissions are considered incremental costs of obtaining a contract with a customer and are deferred and amortized on a straight-line basis over a period of benefit that we have determined to be three years.
Research and Development Expenses
Research and development expenses consist primarily of personnel and related costs, including salaries, benefits, bonuses, travel, and stock-based compensation; costs of third-party hosting fees for server usage by our developers; information technology costs; and facility costs.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel and related costs for our executive, finance and accounting, legal, human resources, and administrative personnel, including salaries, benefits, bonuses, travel, and stock-based compensation; legal, accounting, and other professional service fees; other corporate expenses; information technology costs; and facility costs.
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Results of Operations
The following table sets forth selected consolidated statement of operations data for each of the periods indicated:
Three months ended September 30,Nine months ended September 30,
2024202320242023
(in thousands)
Revenue
Subscription and support$171,035 $143,421 $486,749 $409,857 
Professional services14,586 14,754 52,042 53,529 
Total revenue185,621 158,175 538,791 463,386 
Cost of revenue
Subscription and support(1)
30,621 24,864 86,493 74,080 
Professional services(1)
13,050 13,491 39,873 42,297 
Total cost of revenue43,671 38,355 126,366 116,377 
Gross profit141,950 119,820 412,425 347,009 
Operating expenses
Research and development(1)
48,425 41,747 142,328 130,235 
Sales and marketing(1)
89,756 72,576 257,086 215,168 
General and administrative(1)
25,551 21,022 76,225 86,660 
Total operating expenses163,732 135,345 475,639 432,063 
Loss from operations(21,782)(15,525)(63,214)(85,054)
Interest income9,298 7,294 30,089 15,546 
Interest expense(3,199)(47,437)(9,668)(50,437)
Other expense, net(350)(71)(309)(1,450)
Loss before provision for income taxes(16,033)(55,739)(43,102)(121,395)
Provision for income taxes959 530 3,125 1,934 
Net loss$(16,992)$(56,269)$(46,227)$(123,329)
(1)     Stock-based compensation expense included in these line items was as follows:
Three months ended September 30,Nine months ended September 30,
2024202320242023
(in thousands)
Cost of revenue
Subscription and support
$2,164 $1,247 $5,708 $3,732 
Professional services
858 623 2,348 1,923 
Operating expenses
Research and development
5,681 4,155 15,474 13,677 
Sales and marketing
9,942 7,108 26,470 20,769 
General and administrative
8,825 6,244 25,879 37,928 
Total stock-based compensation expense
$27,470 $19,377 $75,879 $78,029 
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The following table sets forth our consolidated statement of operations data as a percentage of revenue for each of the periods indicated:
Three months ended September 30,Nine months ended September 30,
2024202320242023
Revenue
Subscription and support92.1 %90.7 %90.3 %88.4 %
Professional services7.9 9.3 9.7 11.6 
Total revenue100.0 100.0 100.0 100.0 
Cost of revenue
Subscription and support16.5 15.7 16.1 16.0 
Professional services7.0 8.5 7.4 9.1 
Total cost of revenue23.5 24.2 23.5 25.1 
Gross profit76.5 75.8 76.5 74.9 
Operating expenses
Research and development26.1 26.4 26.4 28.1 
Sales and marketing48.4 45.9 47.7 46.4 
General and administrative13.8 13.3 14.1 18.7 
Total operating expenses88.3 85.6 88.2 93.2 
Loss from operations(11.8)(9.8)(11.7)(18.3)
Interest income5.0 4.6 5.6 3.4 
Interest expense(1.7)(30.0)(1.8)(10.9)
Other expense, net(0.2)— (0.1)(0.3)
Loss before provision for income taxes(8.7)(35.2)(8.0)(26.1)
Provision for income taxes0.5 0.3 0.6 0.4 
Net loss(9.2)%(35.5)%(8.6)%(26.5)%
Comparison of Three and Nine Months Ended September 30, 2024 and 2023
Revenue
Three months ended September 30,Nine months ended September 30,
20242023
% Change
20242023
% Change
(dollars in thousands)
Revenue
Subscription and support
$171,035 $143,421 19.3%$486,749 $409,857 18.8%
Professional services
14,586 14,754 (1.1)%52,042 53,529 (2.8)%
Total revenue
$185,621 $158,175 17.4%$538,791 $463,386 16.3%
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Total revenue increased $27.4 million for the three months ended September 30, 2024 compared to the same quarter a year ago due primarily to a $27.6 million increase in subscription and support revenue. Growth in subscription and support revenue in the third quarter was attributable mainly to strong demand and continued solution expansion across our customer base. Revenue from professional services was relatively flat for the three months ended September 30, 2024 compared to the same quarter a year ago. We continue to transition consulting and other services to our partners and expect the revenue growth rate from subscription and support to continue to outpace revenue growth from professional services on an annual basis.
Total revenue increased $75.4 million for the nine months ended September 30, 2024 compared to the same period a year ago due primarily to a $76.9 million increase in subscription and support revenue. Growth in subscription and support revenue was attributable mainly to strong demand and continued solution expansion across our customer base. Revenue from professional services decreased $1.5 million for the nine months ended September 30, 2024 compared to the same period a year ago. We continue to transition consulting and other services to our partners and expect the revenue growth rate from subscription and support to continue to outpace revenue growth from professional services on an annual basis.
Cost of Revenue
Three months ended September 30,Nine months ended September 30,
20242023% Change20242023% Change
(dollars in thousands)
Cost of revenue
Subscription and support
$30,621 $24,864 23.2%$86,493 $74,080 16.8%
Professional services
13,050 13,491 (3.3)%39,873 42,297 (5.7)%
Total cost of revenue
$43,671 $38,355 13.9%$126,366 $116,377 8.6%
Cost of revenue increased $5.3 million during the three months ended September 30, 2024 compared to the same quarter a year ago. Subscription and support cost of revenue increased $5.8 million due primarily to $3.5 million in higher cash-based compensation and benefits costs and $0.9 million of additional stock-based compensation. The increase in compensation was primarily driven by a modest increase in employee headcount. Amortization of acquired intangible assets for Sustain.Life was $0.6 million. Professional services cost of revenue decreased $0.4 million due primarily to a $0.5 million decrease in cash-based compensation and benefits costs. The decrease was primarily driven by a decrease in employee headcount as we continue to transition consulting and other services to our partners.
Cost of revenue increased $10.0 million during the nine months ended September 30, 2024 compared to the same period a year ago. Subscription and support cost of revenue increased $12.4 million due primarily to $8.4 million in higher cash-based compensation and benefits costs, $2.0 million of additional stock-based compensation, and a $0.5 million increase in travel expense. The increase in compensation was primarily driven by a modest increase in employee headcount. The increase in travel expense was primarily due to a general increase in travel driven by an increase in employee headcount. Amortization of acquired intangible assets for Sustain.Life was $0.6 million. Professional services cost of revenue decreased $2.4 million due primarily to a $2.1 million decrease in cash-based compensation and benefits costs and a $0.7 million decrease in professional service fees. The decrease was primarily driven by a decrease in employee headcount and staff augmentation as we continue to transition consulting and other services to our partners.
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Operating Expenses
Three months ended September 30,Nine months ended September 30,
20242023% Change20242023% Change
(dollars in thousands)
Operating expenses
Research and development
$48,425 $41,747 16.0%$142,328 $130,235 9.3%
Sales and marketing
89,756 72,576 23.7%257,086 215,168 19.5%
General and administrative
25,551 21,022 21.5%76,225 86,660 (12.0)%
Total operating expenses
$163,732 $135,345 21.0%$475,639 $432,063 10.1%
Research and Development
Research and development expenses increased $6.7 million during the three months ended September 30, 2024 compared to the same quarter a year ago due primarily to $4.0 million in higher cash-based compensation and benefits, $1.5 million of additional stock-based compensation and a $1.0 million increase in professional service fees The increase in compensation was primarily driven by a modest increase in employee headcount. The increase in professional service fees resulted primarily from our continued investment in and support of our platform and solutions.
Research and development expenses increased $12.1 million during the nine months ended September 30, 2024 compared to the same period a year ago due primarily to $8.1 million in higher cash-based compensation and benefits, $1.8 million of additional stock-based compensation, and a $2.1 million increase in professional service fees. The remaining increase in compensation was primarily driven by a modest increase in employee headcount. The increase in professional service fees resulted primarily from our continued investment in and support of our platform and solutions.
Sales and Marketing
Sales and marketing expenses increased $17.2 million during the three months ended September 30, 2024 compared to the same quarter a year ago due primarily to $8.0 million in higher cash-based compensation and benefits, $2.8 million of additional stock-based compensation, a $1.9 million increase in travel expense, a $1.7 million increase in professional service fees, and a $2.5 million increase in marketing and advertising. During the third quarter of 2024 we recognized an additional $1.8 million in cash-based and stock-based compensation pursuant to certain severance obligations. The remaining increase in compensation was primarily due to an increase in employee headcount as we continue to invest in our go-to-market activities. The increase in travel expense was primarily due to a general increase in travel driven by an increase in employee headcount and our continued investment in our go-to-market activities. The increases in professional service fees and marketing and advertising was the result of our continued investment in and support of our platform and solutions.
Sales and marketing expenses increased $41.9 million during the nine months ended September 30, 2024 compared to the same period a year ago due primarily to $24.3 million in higher cash-based compensation and benefits, $5.7 million of additional stock-based compensation, a $4.1 million increase in travel expense, a $3.6 million increase in professional service fees, and a $3.5 million increase in marketing and advertising. The increase in compensation was primarily due to an increase in employee headcount and sales commissions as we continue to invest in our go-to-market activities. The increase in travel expense was primarily due to a general increase in travel driven by an increase in employee headcount and our continued investment in our go-to-market activities. The increases in professional service fees and marketing and advertising were the result of our continued investment in and support of our platform and solutions.
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General and Administrative
General and administrative expenses increased $4.5 million during the three months ended September 30, 2024 compared to the same quarter a year ago due primarily to a $0.9 million increase in cash-based compensation and benefits, $2.6 million of additional stock-based compensation, and a $0.8 million increase in recruiting and professional service fees. The increase in compensation was primarily due to additional performance-based restricted stock awards issued to executives in the latter part of the first quarter of 2024 and changes in the assumptions associated with the attainment of company-specific performance targets. The remaining increase in compensation was due to a modest increase in employee headcount. The increase in professional service fees was primarily due to costs incurred to acquire Sustain.Life.
General and administrative expenses decreased $10.4 million during the nine months ended September 30, 2024 compared to the same period a year ago due primarily to a $12.2 million decrease in stock-based compensation partially offset by a $2.0 million increase in professional service fees. In addition, during the nine months ended September 30, 2023, we recorded a one-time benefit of $1.0 million related to a goods and services tax refund as well as one-time fees of $0.6 million related to the cancellation of certain events which did not recur in 2024. The decrease in compensation during the first nine months of 2024 is primarily due to the recognition of $1.4 million and $18.1 million in cash-based and stock-based compensation, respectively, pursuant to certain transition agreements with former executives during the first quarter of 2023 which did not recur in 2024, partially offset by a modest increase in employee headcount and an increase in performance-based restricted stock expense driven by additional performance-based restricted stock awards issued to executives in the latter part of the first quarter of 2024 and changes in the assumptions associated with the attainment of company-specific performance targets. The increase in professional service fees was primarily due to costs incurred to acquire Sustain.Life.
Non-Operating Income (Expenses)
Three months ended September 30,Nine months ended September 30,
20242023% Change20242023% Change
(dollars in thousands)
Interest income$9,298 $7,294 27.5%$30,089 $15,546 93.5%
Interest expense
(3,199)(47,437)(93.3)%(9,668)(50,437)(80.8)%
Other expense, net(350)(71)*(309)(1,450)*
(*) Percentage is not meaningful.
Interest Income, Interest Expense and Other Expense, Net
During the three months ended September 30, 2024, interest income increased $2.0 million compared to the same quarter a year ago due primarily to an increase in our investment balance, coupled with higher interest rates. During the three months ended September 30, 2023, we recorded a $45.1 million loss on induced conversion from the partial repurchase of our convertible senior notes due in 2026 (the "2026 Notes"), which did not recur in 2024 and contributed primarily to the decrease in interest expense compared to the same quarter a year ago. Other expense, net increased $0.3 million compared to the same quarter a year ago due primarily to losses on foreign currency transactions.
32
During the nine months ended September 30, 2024, interest income increased $14.5 million compared to the same period a year ago due primarily to an increase in our investment balance, facilitated by the issuance of our 2028 convertible notes (the "2028 Notes"), coupled with higher interest rates. During the nine months ended September 30, 2023, we recorded a $45.1 million loss on induced conversion from the partial repurchase of our 2026 Notes, which did not recur in 2024 and contributed primarily to the decrease in interest expense compared to the same period a year ago. Other expense, net decreased $1.1 million compared to the same period a year ago due primarily to gains on foreign currency transactions as well as losses on the sale of available-for-sale securities from the first nine months of 2023 which did not recur in 2024.
Results of Operations for Fiscal 2023 Compared to 2022
For a comparison of our results of operations for the fiscal years ended December 31, 2023 and 2022, see "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 20, 2024.
Liquidity and Capital Resources
Overview of Sources and Uses of Cash
As of September 30, 2024, our principal sources of liquidity were cash, cash equivalents and marketable securities totaling $776.4 million, which were held for working capital purposes. We have financed our operations primarily through cash generated from operations and issuances of convertible debt. We have generated significant operating losses as reflected in our accumulated deficit on our condensed consolidated balance sheets. While we expect to continue to incur operating losses and may incur negative cash flows from operations in the future, we believe that current cash and cash equivalents and cash flows from operating activities will be sufficient to fund our operations for at least the next twelve months.
Convertible Debt
In August 2023, we issued $702.0 million aggregate principal amount of our 1.250% 2028 Notes. Proceeds from the issuance of the 2028 Notes totaled $691.1 million, net of initial purchaser discounts and issuance costs. We used $396.9 million of the net proceeds from the 2028 Notes offering to repurchase $273.8 million principal amount, together with accrued and unpaid interest thereon, of our 1.125% 2026 Notes in separate and individually negotiated transactions with certain holders. As of September 30, 2024, we had outstanding debt relating to our 2026 Notes and 2028 Notes of $70.7 million and $693.5 million, with corresponding maturity dates of August 15, 2026 and August 15, 2028, respectively.
Share Repurchase Plan
On July 30, 2024, our board of directors authorized a share repurchase program for up to $100.0 million of our outstanding Class A common stock (the “2024 Repurchase Plan”). The repurchases may be made in the open market or through privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means, each in compliance with Rule 10b-18 under the Exchange Act. The timing, manner, price, and amount of the repurchase will be subject to the discretion of the Company’s management, and it may be suspended or discontinued at any time. As of September 30, 2024, we have not made any repurchases under the 2024 Repurchase Plan.
33
Cash Flows
Three months ended September 30,Nine months ended September 30,
2024202320242023
(in thousands)
Cash flow provided by operating activities$18,906 $14,991 $43,736 $46,533 
Cash flow used in investing activities(49,629)(109,026)(58,496)(182,044)
Cash flow provided by financing activities8,675 301,220 5,868 300,281 
Net (decrease) increase in cash, cash equivalents, and restricted cash, net of impact of exchange rates$(19,658)$205,946 $(7,967)$164,688 
Operating Activities
Our largest source of operating cash is cash collections from customers for subscription and support access to our platform. Our primary uses of cash from operating activities are for personnel-related expenditures, marketing activities, and costs of cloud infrastructure services.
Cash provided by operating activities of $18.9 million for the three months ended September 30, 2024 consisted of a net loss of $17.0 million adjusted for non-cash charges of $28.5 million and net cash inflows of $7.4 million from changes in operating assets and liabilities. The change in operating assets and liabilities was primarily driven by an increase in deferred revenue which was due in part to an increase in large contracts signed in the period coupled with growth in our customer base. The increases in accounts receivable, other receivables, and accounts payable as well as the decrease in accrued expenses and other liabilities were attributable primarily to the timing of cash payments and collections.
Cash provided by operating activities of $15.0 million for the three months ended September 30, 2023 consisted of a net loss of $56.3 million adjusted for non-cash charges of $65.7 million and net cash inflows of $5.5 million from changes in operating assets and liabilities. The adjustments for non-cash charges included a $45.1 million loss on induced conversion from the partial repurchase of our 2026 Notes. Customer growth and contract renewals for longer terms accounted for most of the increase in deferred revenue. Deferred costs decreased primarily due to the amortization of direct and incremental costs of obtaining a customer contract. The increases in accounts receivable, other receivables, and accrued expenses and other liabilities as well as the decreases in prepaid expenses and other assets were attributable primarily to the timing of our billings, cash collections, and cash payments.
Cash provided by operating activities of $43.7 million for the nine months ended September 30, 2024 consisted of a net loss of $46.2 million adjusted for non-cash charges of $75.9 million and net cash inflows of $14.0 million from changes in operating assets and liabilities. The adjustments for non-cash charges included a $45.1 million loss on induced conversion from the partial repurchase of our 2026 Notes. The change in operating assets and liabilities was primarily driven by an increase in deferred revenue which was due in part to multi-year prepaid customer contracts coupled with growth in our customer base. The increase in deferred costs was primarily due to growth in subscription bookings. The increases in accounts receivable, other assets, accounts payable, and accrued expenses and other liabilities as well as the decreases in other receivables and prepaid expenses were attributable primarily to the timing of our billings, cash collections, and cash payments.
34
Cash provided by operating activities of $46.5 million for the nine months ended September 30, 2023 consisted of a net loss of $123.3 million adjusted for non-cash charges of $128.9 million and net cash inflows of $41.0 million from changes in operating assets and liabilities. Customer growth accounted for most of the increase in deferred revenue. Deferred costs decreased primarily due to the amortization of direct and incremental costs of obtaining a customer contract. The increases in other receivables, prepaid expenses, and accrued expenses and other liabilities as well as the decreases in accounts receivable and accounts payable were attributable primarily to the timing of our billings, cash collections, and cash payments.
Investing Activities
Cash used in investing activities of $49.6 million for the three months ended September 30, 2024 consisted of $158.5 million in purchases of marketable securities and $0.2 million for the acquisition of Sustain.Life partially offset by $109.0 million from the maturities of marketable securities.
Cash used in investing activities of $109.0 million for the three months ended September 30, 2023 consisted of $145.0 million in purchases of marketable securities and $0.9 million in purchases of fixed assets partially offset by $36.9 million from the maturities of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of expanding our infrastructure and work force.
Cash used in investing activities of $58.5 million for the nine months ended September 30, 2024 consisted of $310.1 million in purchases of marketable securities, $98.1 million for the acquisition of Sustain.Life, and $0.6 million in purchases of fixed assets partially offset by $345.7 million from the maturities of marketable securities and $4.6 million from the sale of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of expanding our infrastructure and work force.
Cash used in investing activities of $182.0 million for the nine months ended September 30, 2023 consisted of $322.0 million in purchases of marketable securities and $1.7 million in purchases of fixed assets partially offset by $65.1 million from the sale of marketable securities and $76.8 million from the maturities of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of expanding our infrastructure and work force.
Financing Activities
Cash provided by financing activities of $8.7 million for the three months ended September 30, 2024 consisted of $6.7 million in proceeds from shares issued in connection with our Employee Stock Purchase Plan ("ESPP") and $3.3 million in proceeds from option exercises partially offset by $1.2 million in taxes paid related to net share settlements of stock-based compensation awards.
Cash provided by financing activities of $301.2 million for the three months ended September 30, 2023 consisted of $691.1 million in proceeds from the issuance of the 2028 Notes, net of issuance costs, $7.0 million in proceeds from shares issued in connection with our ESPP, and $1.1 million in proceeds from option exercises partially offset by $396.9 million paid for the partial repurchase of our 2026 Notes and $1.0 million in taxes paid related to net share settlements of stock-based compensation awards.
Cash provided by financing activities of $5.9 million for the nine months ended September 30, 2024 consisted of $13.8 million in proceeds from shares issued in connection with our ESPP and $3.9 million in proceeds from option exercises partially offset by $11.4 million in taxes paid related to net share settlements of stock-based compensation awards.
35
Cash provided by financing activities of $300.3 million for the nine months ended September 30, 2023 consisted of $691.1 million in proceeds from the issuance of the 2028 Notes, net of issuance costs, $12.5 million in proceeds from shares issued in connection with our ESPP, and $3.3 million in proceeds from option exercises partially offset by $396.9 million paid for the partial repurchase of our 2026 Notes and $9.4 million in taxes paid related to net share settlements of stock-based compensation awards.
Contractual Obligations and Commitments
There were no material changes in our contractual obligations and commitments from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 20, 2024.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, income taxes and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
During the nine months ended September 30, 2024, there were no significant changes to our critical accounting policies and estimates as described in the financial statements contained in the Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 20, 2024.
Item 3.    Quantitative and Qualitative Disclosures about Market Risk    
For quantitative and qualitative disclosures about market risk, see “Item 7A., Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the year ended December 31, 2023. Our exposures to market risk have not changed materially since December 31, 2023.
Item 4.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q.
Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of such date, our disclosure controls and procedures are designed to, and are effective to, provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.
36
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
37
Part II. Other Information
Item 1.    Legal Proceedings
From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that in the opinion of our management, if determined adversely to us, would have a material adverse effect on our business, financial condition, operating results or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2023 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. There have been no material changes during fiscal year 2024 to the risk factors that were included in the Form 10-K, other than what is set forth immediately below.
Risks Related to Ownership of Our Securities
The amount and frequency of our share repurchases may fluctuate, and we cannot guarantee that we will fully consummate our share repurchase authorization, or that it will enhance long-term shareholder value. Share repurchases could also increase the volatility of the trading price of our stock and will diminish our cash reserves.
The amount, frequency and execution of our share repurchases pursuant to the 2024 Repurchase Plan may fluctuate based on our operating results, cash flows, priorities for the use of cash for other purposes. These other purposes include, but are not limited to, operational spending, capital spending, acquisitions, and repayment of debt. Other factors, including changes in tax laws, could also impact our share repurchases. Although our board of directors has authorized share repurchases of up to $100.0 million of our outstanding Class A common stock, the authorization does not obligate us to repurchase any common stock, and we may not ultimately purchase any common stock.
We cannot guarantee that our share repurchase authorization pursuant to the 2024 Repurchase Plan will be fully consummated or that it will enhance long-term shareholder value. The repurchase authorization could affect the trading price of our stock and increase volatility. Price volatility may cause the average price at which we repurchase our common stock in a given period to exceed the common stock’s price at a given point in time. There can be no assurance that the time frame for repurchases under our 2024 Repurchase Plan or that any repurchases will have a positive impact on our stock price or earnings per share. Important factors that could cause us to discontinue or decrease our stock repurchases include, among others, unfavorable market conditions, the market price of our common stock, the nature of other investment or strategic opportunities presented to us from time to time and the availability of funds necessary to fulfill such repurchases.
Item 2.    Unregistered Sales of Securities and Use of Proceeds
Sales of Unregistered Securities
Not applicable.
Issuer Purchases of Equity Securities
None.
38
Item 5.    Other Information
Director and Officer Trading Arrangements
During the three months ended September 30, 2024, no director or officer of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
39
Item 6.    Exhibits
The following exhibits are being filed herewith or incorporated by reference herein:
Exhibit
Number
Description
2.1
Agreement and Plan of Merger, dated as of June 17, 2024, by and among the Company, Sustain, Merger Sub and Sellers Representative, incorporated by reference from Exhibit 2.1 to the Company's Current Report on Form 8-K filed on June 17, 2024.
31.1
31.2
32.1     
32.2     
101
The following financial information from Workiva Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Loss, (iv) the Consolidated Statements of Changes in Stockholders Equity (Deficit), (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

40
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 6th day of November, 2024.
WORKIVA INC.
By:
/s/ Julie Iskow
Name:
Julie Iskow
Title:
President and Chief Executive Officer
By:
/s/ Jill Klindt
Name:
Jill Klindt
Title:
Executive Vice President, Chief Financial Officer and Treasurer

S-1
Document

CERTIFICATION UNDER SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Julie Iskow, certify that:
1.     I have reviewed this Quarterly Report on Form 10-Q of Workiva Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.     Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.     Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.     The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

November 6, 2024
/s/ Julie Iskow
Julie Iskow
President and Chief Executive Officer
(Principal Executive Officer)


Document

CERTIFICATION UNDER SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Jill Klindt, certify that:
1.     I have reviewed this Quarterly Report on Form 10-Q of Workiva Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.     Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.     Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.     The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


November 6, 2024
/s/ Jill Klindt
Jill Klindt
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)


Document

CERTIFICATION UNDER SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

I, Julie Iskow, President and Chief Executive Officer of Workiva Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.the Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

November 6, 2024
/s/ Julie Iskow
Julie Iskow
President and Chief Executive Officer
(Principal Executive Officer)


Document

CERTIFICATION UNDER SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

I, Jill Klindt, Executive Vice President, Chief Financial Officer, and Treasurer of Workiva Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.the Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

November 6, 2024
/s/ Jill Klindt
Jill Klindt
Executive Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)