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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, 2021
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For transition period from               to
Commission File Number 001-36773
___________________________________
WORKIVA INC.
(Exact name of registrant as specified in its charter)
___________________________________
Delaware
(State or other jurisdiction of incorporation or organization)
47-2509828
(I.R.S. Employer Identification Number)
2900 University Blvd
Ames, IA 50010
(888) 275-3125
(Address of principal executive offices and zip code)
(888) 275-3125
(Registrant's telephone number, including area code)
___________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each 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 October 29, 2021, there were approximately 45,151,293 shares of the registrant's Class A common stock and 5,710,181 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, 2020, in “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q and in any subsequent filing we make with the SEC, as well as in any documents incorporated by reference that describe risks and factors that could cause results to differ materially from those projected in these forward-looking statements.
Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after completion of this Quarterly Report on Form 10-Q to conform these statements to actual results or revised expectations.
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, 2021As of December 31, 2020
(unaudited)
ASSETS
Current assets
Cash and cash equivalents$291,125 $322,831 
Marketable securities231,224 207,207 
Accounts receivable, net of allowance for doubtful accounts of $555 and $717 at September 30, 2021 and December 31, 2020, respectively
64,099 68,922 
Deferred commissions28,021 21,923 
Other receivables3,354 3,155 
Prepaid expenses and other13,092 9,047 
Total current assets630,915 633,085 
Property and equipment, net28,490 29,365 
Operating lease right-of-use assets14,536 15,844 
Deferred commissions, non-current29,234 23,421 
Goodwill34,279 — 
Intangible assets, net8,193 1,583 
Other assets4,568 3,708 
Total assets$750,215 $707,006 
1
WORKIVA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(in thousands, except share and per share amounts)
As of September 30, 2021As of December 31, 2020
(unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable
$4,018 $2,843 
Accrued expenses and other current liabilities
78,799 68,256 
Deferred revenue
235,754 208,990 
Convertible senior notes, current296,341 — 
Finance lease obligations1,776 1,705 
Total current liabilities616,688 281,794 
Convertible senior notes, net— 289,490 
Deferred revenue, non-current
31,463 35,894 
Other long-term liabilities
1,335 1,680 
Operating lease liabilities, non-current15,231 17,209 
Finance lease obligations, non-current15,320 16,662 
Total liabilities680,037 642,729 
Stockholders’ equity
Class A common stock, $0.001 par value per share, 1,000,000,000 shares authorized, 45,094,257 and 40,719,189 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
45 41 
Class B common stock, $0.001 par value per share, 500,000,000 shares authorized, 5,710,181 and 8,069,610 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
6 8 
Preferred stock, $0.001 par value per share, 100,000,000 shares authorized, no shares issued and outstanding
— — 
Additional paid-in-capital
508,025 478,698 
Accumulated deficit
(438,106)(414,700)
Accumulated other comprehensive income
208 230 
Total stockholders’ equity70,178 64,277 
Total liabilities and stockholders’ equity$750,215 $707,006 
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,
2021202020212020
Revenue
Subscription and support$98,912 $75,850 $275,053 $214,907 
Professional services13,781 12,249 47,449 42,853 
Total revenue112,693 88,099 322,502 257,760 
Cost of revenue
Subscription and support15,606 12,013 42,906 36,264 
Professional services10,799 9,873 31,766 30,262 
Total cost of revenue26,405 21,886 74,672 66,526 
Gross profit86,288 66,213 247,830 191,234 
Operating expenses
Research and development29,841 23,956 84,305 70,458 
Sales and marketing46,026 35,487 128,586 106,874 
General and administrative18,390 13,642 52,795 46,564 
Total operating expenses94,257 73,085 265,686 223,896 
Loss from operations(7,969)(6,872)(17,856)(32,662)
Interest income219 471 834 2,832 
Interest expense(3,508)(3,500)(10,495)(10,467)
Other income (expense), net3,805 (387)3,265 263 
Loss before (benefit) provision for income taxes(7,453)(10,288)(24,252)(40,034)
(Benefit) provision for income taxes(885)67 (846)351 
Net loss$(6,568)$(10,355)$(23,406)$(40,385)
Net loss per common share:
Basic and diluted$(0.13)$(0.21)$(0.46)$(0.84)
Weighted-average common shares outstanding - basic and diluted51,441,688 48,840,131 50,921,612 48,188,183 

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,
2021202020212020
Net loss$(6,568)$(10,355)$(23,406)$(40,385)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment, net of tax22 30 226 (51)
Unrealized (loss) gain on available-for-sale securities, net of tax(18)(211)(248)251 
Other comprehensive income (loss), net of tax4 (181)(22)200 
Comprehensive loss$(6,564)$(10,536)$(23,428)$(40,185)

See accompanying notes.

4
WORKIVA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands)
(unaudited)
Common Stock (Class A and B)
SharesAmountAdditional Paid-in-CapitalAccumulated Other Comprehensive IncomeAccumulated DeficitTotal Stockholders' Equity
Balances at December 31, 202048,789 $49 $478,698 $230 $(414,700)$64,277 
Stock-based compensation expense— — 11,623 — — 11,623 
Issuance of common stock upon exercise of stock options312 1 4,137 — — 4,138 
Issuance of common stock under employee stock purchase plan93 — 4,237 — — 4,237 
Issuance of restricted stock units803 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(70)— (7,146)— — (7,146)
Net loss— — — — (7,324)(7,324)
Other comprehensive loss— — — (49)— (49)
Balances at March 31, 202149,927 $50 $491,549 $181 $(422,024)$69,756 
Stock-based compensation expense— — 11,052 — — 11,052 
Issuance of common stock upon exercise of stock options117 — 1,480 — — 1,480 
Issuance of restricted stock units318 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(8)— (731)— — (731)
Net loss— — — — (9,514)(9,514)
Other comprehensive income— — — 23 — 23 
Balances at June 30, 202150,354 $50 $503,350 $204 $(431,538)$72,066 
Stock-based compensation expense——12,687——12,687 
Issuance of common stock upon exercise of stock options20013,173——3,174 
Issuance of common stock under employee stock purchase plan56—4,624——4,624 
Issuance of restricted stock units305————— 
Tax withholding related to net share settlements of stock-based compensation awards(111)—(15,809)——(15,809)
Net loss————(6,568)(6,568)
Other comprehensive income———4—4 
Balances at September 30, 202150,804$51 $508,025 $208 $(438,106)$70,178 
5
WORKIVA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (continued)
(in thousands)
(unaudited)
Common Stock (Class A and B)
SharesAmountAdditional Paid-in-CapitalAccumulated Other Comprehensive IncomeAccumulated DeficitTotal Stockholders' Equity
Balances at December 31, 201946,639 $47 $420,170 $287 $(366,302)$54,202 
Stock-based compensation expense— — 9,936 — — 9,936 
Issuance of common stock upon exercise of stock options225 2,794 — — 2,794 
Issuance of common stock under employee stock purchase plan94 — 3,660 — — 3,660 
Issuance of restricted stock units117 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(30)— (1,379)— — (1,379)
Net loss— — — — (10,418)(10,418)
Other comprehensive loss— — — (9)— (9)
Balances at March 31, 202047,045 $47 $435,181 $278 $(376,720)$58,786 
Stock-based compensation expense— — 14,894 — — 14,894 
Issuance of common stock upon exercise of stock options443 — 6,664 — — 6,664 
Issuance of restricted stock units153 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(21)— (732)— — (732)
Net loss— — — — (19,612)(19,612)
Other comprehensive income— — — 390 — 390 
Balances at June 30, 202047,620 $47 $456,007 $668 $(396,332)$60,390 
Stock-based compensation expense— — 10,601 — — 10,601 
Issuance of common stock upon exercise of stock options371 1 4,794 — — 4,795 
Issuance of common stock under employee stock purchase plan93 — 3,567 — — 3,567 
Issuance of restricted stock units47 — — — — — 
Net loss— — — — (10,355)(10,355)
Other comprehensive income— — — (181)— (181)
Balances at September 30, 202048,131 $48 $474,969 $487 $(406,687)$68,817 

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,
2021202020212020
Cash flows from operating activities
Net loss$(6,568)$(10,355)$(23,406)$(40,385)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization1,429 1,080 3,580 3,195 
Stock-based compensation expense12,687 10,601 35,362 35,431 
Recovery of doubtful accounts(61)(550)(162)(191)
Amortization of premiums and discounts on marketable securities, net811 106 2,199 319 
Gain on settlement of equity securities(3,698)— (3,698)— 
Amortization of debt discount and issuance costs2,301 2,231 6,851 6,641 
Deferred income tax(930)63 (914)(68)
Changes in assets and liabilities:
Accounts receivable2,074 (13,307)5,233 4,805 
Deferred commissions(2,027)(4,818)(12,104)(6,381)
Operating lease right-of-use asset985 1,019 2,906 2,992 
Other receivables(628)224 (204)29 
Prepaid expenses and other(1,024)(211)(4,049)(3,056)
Other assets(514)83 (1,197)(600)
Accounts payable478 (181)1,214 (3,255)
Deferred revenue9,949 16,182 22,028 11,314 
Operating lease liability(1,112)(1,115)(3,390)(3,438)
Accrued expenses and other liabilities2,161 6,822 10,327 12,538 
Net cash provided by operating activities16,313 7,874 40,576 19,890 
Cash flows from investing activities
Purchase of property and equipment(771)(379)(2,431)(1,763)
Purchase of marketable securities(48,213)(7,980)(143,085)(45,269)
Sale of marketable securities— — 250 11,423 
Maturities of marketable securities45,579 16,300 116,371 42,337 
Business combinations, net of cash acquired(35,067)— (35,067)— 
Purchase of intangible assets(64)(102)(187)(253)
Other investments— — (750)— 
Net cash (used in) provided by investing activities(38,536)7,839 (64,899)6,475 
7
WORKIVA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)
(unaudited)
Three months ended September 30,Nine months ended September 30,
2021202020212020
Cash flows from financing activities
Proceeds from option exercises3,174 4,795 8,792 14,253 
Taxes paid related to net share settlements of stock-based compensation awards(15,809)— (23,686)(2,111)
Proceeds from shares issued in connection with employee stock purchase plan4,624 3,567 8,861 7,227 
Principal payments on finance lease obligations(430)(410)(1,271)(1,212)
Net cash (used in) provided by financing activities(8,441)7,952 (7,304)18,157 
Effect of foreign exchange rates on cash(405)346 (79)(132)
Net (decrease) increase in cash and cash equivalents(31,069)24,011 (31,706)44,390 
Cash and cash equivalents at beginning of period322,194 402,121 322,831 381,742 
Cash and cash equivalents at end of period$291,125 $426,132 $291,125 $426,132 
Supplemental cash flow disclosure
Cash paid for interest$2,177 $2,240 $4,607 $4,787 
Cash paid for income taxes, net of refunds$36 $84 $(30)$469 
Supplemental disclosure of noncash investing and financing activities
Allowance for tenant improvements$— $— $— $149 

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”) simplifies complex work for thousands of organizations worldwide. We are a leading provider of cloud-based compliance and regulatory reporting solutions that are designed to solve business challenges at the intersection of data, process and people. 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. Accordingly, the financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet data as of December 31, 2020 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, 2021 are not necessarily indicative of the results expected for the full year ending December 31, 2021.
Seasonality has affected our revenue, expenses and cash flows from operations. Revenue from professional services has been higher in the first quarter as many of our customers file their Form 10-K in the first calendar quarter. Our sales and marketing expense also has some degree of seasonality. Sales and marketing expense has historically been higher in the third quarter due to our annual user conference in September. Our transition to a virtual event in September 2020 and September 2021 has mostly mitigated this trend. 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. 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, 2020 filed with the SEC on February 17, 2021.
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, the fair value of the liability and equity components of the convertible senior notes, 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
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which was issued to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes, performing intraperiod allocation, and calculating income taxes in interim periods. Further, ASU 2019-12 adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax basis goodwill and allocating taxes to members of a consolidated group. The standard became effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The standard provides different transition methods for the various provisions. Effective January 1, 2021, we adopted this standard. The adoption of this new standard did not have a material impact on our consolidated financial statements.
New Accounting Pronouncements Not Yet Adopted
In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for certain convertible instruments, amends guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share (“EPS”) calculations as a result of these changes. The standard will be effective for us beginning January 1, 2022 and can be applied on either a fully retrospective or modified retrospective basis. Early adoption is permitted for fiscal years beginning after December 15, 2020. We intend to adopt this standard using the modified retrospective method on January 1, 2022 and are currently evaluating its impact on our consolidated financial statements.
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2. Supplemental Consolidated Balance Sheet Information
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
As of September 30, 2021As of December 31, 2020
Accrued vacation$11,876 $10,294 
Accrued commissions6,975 12,678 
Accrued bonuses16,579 6,573 
Accrued payroll3,013 2,631 
Estimated health insurance claims1,605 1,224 
Accrued interest485 1,455 
ESPP employee contributions2,941 4,269 
Customer deposits24,592 18,283 
Operating lease liabilities4,233 4,541 
Accrued other liabilities6,500 6,308 
$78,799 $68,256 

3. Cash Equivalents and Marketable Securities
At September 30, 2021, cash equivalents and marketable securities consisted of the following (in thousands):
Amortized Cost
Unrealized Gains
Unrealized Losses
Aggregate Fair Value
Money market funds$253,079 $— $— $253,079 
Commercial paper12,487 — — 12,487 
U.S. treasury debt securities52,755 4 (28)52,731 
Corporate debt securities160,945 64 (41)160,968 
Foreign government debt securities5,037 1 — 5,038 
$484,303 $69 $(69)$484,303 
Included in cash and cash equivalents$253,079 $— $— $253,079 
Included in marketable securities$231,224 $69 $(69)$231,224 
At December 31, 2020, cash equivalents and marketable securities consisted of the following (in thousands):
Amortized Cost
Unrealized Gains
Unrealized Losses
Aggregate Fair Value
Money market funds$265,578 $— $— $265,578 
Commercial paper21,489 — — 21,489 
U.S. treasury debt securities51,731 80 (2)51,809 
Corporate debt securities147,715 214 (47)147,882 
Foreign government debt securities1,025 2 — 1,027 
$487,538 $296 $(49)$487,785 
Included in cash and cash equivalents$280,578 $— $— $280,578 
Included in marketable securities$206,960 $296 $(49)$207,207 

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The contractual maturities of the investments classified as marketable securities are as follows (in thousands):
As of September 30, 2021
Due within one year$134,115 
Due in one to two years95,098 
Due in three to five years2,011 
$231,224 
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, 2021, 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, 2021
Less than 12 months
12 months or greater
Fair Value
Unrealized Loss
Fair Value
Unrealized Loss
U.S. treasury debt securities$34,768 $(28)$— $— 
Corporate debt securities73,864 (41)— — 
Total$108,632 $(69)$— $— 
We do not believe the unrealized losses represent credit losses based on our evaluation of available evidence as of September 30, 2021, 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 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.
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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, 2021, 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. 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, 2021Fair Value Measurements as of December 31, 2020
Description
Total
Level 1
Level 2
Total
Level 1
Level 2
Money market funds$253,079 $253,079 $— $265,578 $265,578 $— 
Commercial paper12,487 — 12,487 21,489 — 21,489 
U.S. treasury debt securities52,731 — 52,731 51,809 — 51,809 
Corporate debt securities160,968 — 160,968 147,882 — 147,882 
Foreign government debt securities5,038 — 5,038 1,027 — 1,027 
$484,303 $253,079 $231,224 $487,785 $265,578 $222,207 
Included in cash and cash equivalents$253,079 $280,578 
Included in marketable securities$231,224 $207,207 
We completed an acquisition during the three months ended September 30, 2021. The values of the net assets acquired and the resulting goodwill were recorded at fair value using Level 3 inputs. The majority of the related current assets acquired and liabilities assumed were recorded at their carrying values as of the date of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and definite-lived intangible assets acquired in the acquisition was externally estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. We developed internal estimates for the expected cash flows and discount rates used in the present value calculations.
Convertible Senior Notes
As of September 30, 2021, the fair value of our convertible senior notes was $641.8 million. 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.
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5. Convertible Senior Notes
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 “Notes”). The Notes were issued pursuant to an indenture and are senior, unsecured obligations of the Company. The 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 Notes totaled $335.9 million, net of initial purchaser discounts and issuance costs.
The initial conversion rate is 12.4756 shares of our common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $80.16 per share, subject to adjustment upon the occurrence of specified events.
Holders of the Notes may convert all or a portion of their Notes prior to the close of business on May 15, 2026, in multiples of $1,000 principal amount, only under the following circumstances:
•during any calendar quarter commencing after the calendar quarter ending on September 30, 2019 (and only during such calendar quarter), if the last reported sale price of our Class A common stock, par value $0.001 per share (which we refer to in this offering memorandum as our “Class A common stock”), for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, 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 indenture.
On or after May 16, 2026, 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. It is our current intent to settle conversions through a combination settlement of cash and shares of our Class A common stock with a specified dollar amount per $1,000 principal amount of Notes of $1,000.
The Company may redeem for cash all or any portion of the Notes, at its option, on or after August 21, 2023, 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 redemption date.
During the third quarter of 2021 one of the conversion conditions was met and the Notes are now convertible at the option of the holders through December 31, 2021. Specifically, the last reported sale
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price of our Class A common stock exceeded 130% of the conversion price of the Notes for more than 20 trading days during the 30 consecutive trading days ended September 30, 2021. As a result, the Notes were classified as current liabilities on the condensed consolidated balance sheet as of September 30, 2021. As of September 30, 2021, and through the date of this filing, we have not received any conversion requests for the Notes.
Interest expense representing the amortization of the debt discount and issuance costs as well as contractual interest expense is amortized to interest expense at an effective interest rate of 4.3% over the term of the Notes. As of September 30, 2021 the if-converted value of the Notes exceeded the principal amount by $261.7 million.
As of September 30, 2021, the remaining life of the Notes is approximately 4.8 years.
The net carrying amount of the liability and equity components of the Notes was as follows (in thousands):
September 30, 2021December 31, 2020
Liability component:
Principal$345,000 $345,000 
Unamortized discount(43,255)(49,346)
Unamortized issuance costs(5,404)(6,164)
Net carrying amount$296,341 $289,490 
Equity component, net of purchase discounts and issuance costs$58,560 $58,560 

Interest expense related to the Notes is as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
2021202020212020
Contractual interest expense$970 $970 $2,911 $2,910 
Amortization of debt discount2,045 1,983 6,091 5,903 
Amortization of issuance costs256 248 760 738 
Total interest expense$3,271 $3,201 $9,762 $9,551 

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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.
Leases
In July 2021, we signed an operating lease agreement to lease office space in London which commenced on October 1, 2021. The agreement has a term of three years with an optional two-year extension and a base rent of approximately $1.6 million per year.
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7. Stock-Based Compensation
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):
Three months ended September 30,Nine months ended September 30,
2021202020212020
Cost of revenue
Subscription and support
$731 $426 $1,824 $1,293 
Professional services
407 272 1,183 1,062 
Operating expenses
Research and development
2,347 2,167 7,195 5,790 
Sales and marketing
4,095 2,687 10,481 8,367 
General and administrative
5,107 5,049 14,679 18,919 
Total
$12,687 $10,601 $35,362 $35,431 
Stock Options
The following table summarizes the option activity under the Plans for the nine months ended September 30, 2021:




Options

Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (Years)
Outstanding at December 31, 20202,903,167 $14.48 4.7
Granted— — 
Forfeited(6,380)19.25 
Exercised(629,755)13.96 
Outstanding at September 30, 20212,267,032 $14.61 4.1
Exercisable at September 30, 20212,259,753 $14.59 4.1









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Restricted Stock Units
The following table summarizes the restricted stock unit activity under the Plan for the nine months ended September 30, 2021:




Number of Shares
Weighted-
Average
Grant Date Fair Value
Unvested at December 31, 20202,904,616 $35.72 
Granted872,135 108.00 
Forfeited(182,761)63.62 
Vested(1)
(1,557,830)30.63 
Unvested at September 30, 20212,036,160 $68.96 
(1) During the nine months ended September 30, 2021, in accordance with our Nonqualified Deferred Compensation Plan, recipients of 402,832 shares had elected to defer settlement of the vested restricted stock units and 270,567 shares were released from deferral. This resulted in total deferred units of 695,869 as of September 30, 2021.    
Employee Stock Purchase Plan
During the nine months ended September 30, 2021, 148,864 shares of common stock were purchased under the ESPP at a weighted-average price of $59.52 per share, resulting in cash proceeds of $8.9 million.
Compensation expense associated with ESPP purchase rights is recognized on a straight-line basis over the vesting period. At September 30, 2021, there was approximately $1.0 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.
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8. Revenue Recognition
Disaggregation of Revenue
The following table presents our revenues disaggregated by industry (in thousands).
Three months ended September 30,Nine months ended September 30,
2021202020212020
Information technology$16,097 $11,983 $44,953 $34,264 
Diversified financials13,538 10,665 38,094 31,232 
Consumer discretionary12,148 9,748 34,019 28,497 
Healthcare11,860 8,772 34,003 25,517 
Industrials11,826 9,365 33,739 27,768 
Banks9,940 8,959 30,247 25,914 
Insurance7,547 5,828 22,106 17,173 
Energy6,818 5,812 20,178 17,793 
Utilities6,040 3,538 16,795 10,707 
Real estate4,608 3,769 13,727 11,810 
Materials4,570 3,824 13,040 10,735 
Other7,701 5,836 21,601 16,350 
Total revenues
$112,693 $88,099 $322,502 $257,760 
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,
2021202020212020
Subscription and support$98,912 $75,850 $275,053 $214,907 
XBRL professional services9,003 7,798 33,558 29,543 
Other services4,778 4,451 13,891 13,310 
Total revenues
$112,693 $88,099 $322,502 $257,760 
Deferred Revenue
We recognized $91.3 million and $68.2 million of revenue during the three months ended September 30, 2021 and 2020, respectively, that was included in the deferred revenue balances at the beginning of the respective periods. We recognized $198.7 million and $148.3 million of revenue during the nine months ended September 30, 2021 and 2020, 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, 2021, we expect revenue of approximately $518.5 million to be recognized from remaining performance obligations for subscription contracts. We expect to recognize approximately $305.2 million of these remaining performance obligations over the next 12 months with the balance substantially recognized in the 24 months thereafter.
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9. Net Loss Per Share
Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including convertible senior notes, outstanding stock options, stock related to unvested restricted stock units, and common stock issuable pursuant to the ESPP to the extent dilutive. Basic and diluted net loss per share was the same for each period presented, as the inclusion of all potential common shares outstanding would have been anti-dilutive.
The net loss per share is allocated based on the participation rights of the Class A and Class B common shares as if the loss for the year has been distributed. As the liquidation and dividend rights are identical, the net loss is allocated on a proportionate basis.
A reconciliation of the denominator used in the calculation of basic and diluted loss per share is as follows (in thousands, except share and per share data):
Three months ended
September 30, 2021September 30, 2020
Class A
Class B
Class A
Class B
Numerator
Net loss$(5,731)$(837)$(8,566)$(1,789)
Denominator
Weighted-average common shares outstanding - basic and diluted44,886,268 6,555,420 40,400,270 8,439,861 
Basic and diluted net loss per share$(0.13)$(0.13)$(0.21)$(0.21)

Nine months ended
September 30, 2021September 30, 2020
Class AClass BClass AClass B
Numerator
Net loss$(19,993)$(3,413)$(33,239)$(7,146)
Denominator
Weighted-average common shares outstanding - basic and diluted43,496,619 7,424,993 39,661,228 8,526,955 
Basic and diluted net loss per share$(0.46)$(0.46)$(0.84)$(0.84)
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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, 2021September 30, 2020
Shares subject to outstanding common stock options2,267,032 3,265,977 
Shares subject to unvested restricted stock units2,036,160 2,974,719 
Shares issuable pursuant to the ESPP55,561 95,084 
In addition, as of September 30, 2021 and 2020, approximately 4.3 million shares of our Class A common stock underlying the conversion option in the Notes were excluded from the weighted-average shares used to calculate the diluted net loss per common share as they are considered anti-dilutive. We use the treasury stock method for calculating any potential dilutive effect of the conversion option on diluted net income per share, if applicable.
10. Business Combination
On July 30, 2021, we acquired all of the equity interest in OneCloud, Inc. (“OneCloud”), an integration platform as a service (“iPaaS”) company, in order to extend our integration and data preparation capabilities, for $35.1 million, net of cash acquired of $1.5 million.
We previously held an investment in OneCloud which was accounted for as an investment in equity securities. Prior to performing purchase accounting we remeasured the previous ownership interest to fair value, increasing the value to $4.7 million, which resulted in a gain of $3.7 million recorded in other income (expense), net in the condensed consolidated statement of operations.
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 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 and strategic benefits that are expected to be achieved and is not deductible for income tax purposes.
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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$36,564 
Previously held equity interest4,698 
Total consideration$41,262 
Cash$1,497 
Intangible assets7,000 
Goodwill34,279 
Other assets548 
Deferred revenue(900)
Deferred tax liability(988)
Other liabilities(174)
Fair value of assets and liabilities$41,262 
We incurred costs related to the acquisition of approximately $0.4 million during the nine months ended September 30, 2021. All acquisition related costs were expensed as incurred and have been recorded in general and administrative expenses in our condensed consolidated statements of operations.
The amount of revenues and net loss from the acquisition included in our condensed consolidated statements of operations for the three and nine months ended September 30, 2021 were insignificant.
11. Goodwill and Intangible Assets
Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. Goodwill is tested for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We perform our annual goodwill impairment test as of October 1. As of September 30, 2021, no impairment charges have been recorded.
The changes in the carrying amount of goodwill were as follows (in thousands):
December 31, 2020$— 
Acquisition34,279 
September 30, 2021$34,279 
Intangible assets consist of patents and intangible assets acquired in a business combination, primarily technology, customer relationships and a trade name. Patents are recorded at cost to obtain and amortized over the useful lives. Intangible assets acquired in a business combination are recorded at fair value on the date of acquisition and amortized over their estimated useful lives.
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The following table presents the components of net intangible assets (in thousands):
As of September 30, 2021As of December 31, 2020
Weighted Average Useful Life (Years)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Acquired technology4$6,600 $(275)$6,325 $— $— $— 
Acquired customer relationships10300 (5)295 — — — 
Acquired trade name2100 (8)92 — — — 
Patents102,708 (1,227)1,481 2,538 (955)1,583 
Total$9,708 $(1,515)$8,193 $2,538 $(955)$1,583 
Amortization expense related to intangible assets was $0.4 million and $0.1 million for the three months ended September 30, 2021 and 2020, respectively, and $0.6 million and $0.3 million for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, expected remaining amortization expense of intangible assets by fiscal year is as follows (in thousands):
Three months ended December 31, 2021$541 
20222,021 
20231,910 
20241,867 
20251,154 
2026160 
Thereafter540 
Total expected amortization expense$8,193 

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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 17, 2021. 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, 2020, in “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q and in any subsequent filing we make with the SEC.
Overview
Workiva simplifies complex work for thousands of organizations worldwide. We are a leading provider of cloud-based compliance and regulatory reporting solutions that are designed to solve business challenges at the intersection of data, process and people.
Workiva changes the way enterprises manage and report business data. Our open, intelligent and intuitive platform is based on single instance, multi-tenant software applications deployed in the cloud. Our platform connects data, documents and teams, which results in improved efficiency, greater transparency and reduced risk of errors. We offer customers controlled collaboration, data linking, data integrations, granular permissions, process management and a full audit trail on our proprietary platform. As of September 30, 2021, 4,146 organizations subscribed to our platform for at least one solution.
Customers use our platform to create, review and publish data-linked documents and reports with greater control, consistency, accuracy and productivity. Customers collaborate in the same document simultaneously, which improves efficiency and version control. Our platform is flexible and scalable, so customers can easily adapt it to define, automate and change their business processes in real time.
Our platform lets our customers connect data from 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.
While our customers use our platform for dozens of different use cases, our sales and marketing resources are organized into four solution groups: Regulatory Reporting, Operational & Financial Reporting, Financial Services and Governance, Risk & Compliance.
We operate our business on a Software-as-a-Service (“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. Prior to the third quarter of 2018, our subscription pricing was based primarily on the number of corporate entities, number of users, level of customer support and length of contract. Thereafter, we began converting existing customer orders to, and signing new orders primarily based on, a solution-based licensing model. Under this model, operating metrics related to a customer’s expected use of each solution determine the price. At September 30, 2021, over 80% of our subscription revenue was priced on a solution-based licensing model. We charge customers additional fees primarily for document setup and XBRL tagging services.
We generate sales primarily through our direct sales force and, to a lesser extent, our customer success and professional services teams. 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.
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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 2,014 at September 30, 2021 from 1,670 at September 30, 2020, an increase of 20.6%.
We have achieved significant revenue growth in recent periods. Our revenue grew to $112.7 million and $322.5 million during the three and nine months ended September 30, 2021, respectively from $88.1 million and $257.8 million during the three and nine months ended September 30, 2020, respectively. We incurred a net loss of $6.6 million and $23.4 million, during the three and nine months ended September 30, 2021, respectively compared to $10.4 million and $40.4 million during the three and nine months ended September 30, 2020, respectively.
Recent Business Developments
On July 30, 2021, we acquired all of the equity interest in OneCloud, Inc., an integration platform as a service (“iPaaS”) company, in order to extend our integration and data preparation capabilities. See Note 10 to the condensed consolidated financial statements for more information.
Impact of COVID-19
A pandemic of respiratory disease (abbreviated “COVID-19”) began to spread globally, including to the United States, in early 2020. The World Health Organization declared COVID-19 to be a public health emergency of international concern. Recently, and despite increasing rates of vaccination, infection and hospitalization rates have been increasing throughout the United States, Europe and elsewhere, largely due to the emergence of new variant strains of the COVID-19 virus which are believed to be more contagious than the original virus. The COVID-19 outbreak has resulted in travel restrictions, prohibitions of non-essential activities, disruption and shutdown of certain businesses and greater uncertainty in global financial markets. The extent of the impact of COVID-19 on our future operational and financial performance remains uncertain and will depend on certain developments, including the duration and spread of COVID-19 and variants of concern, related public health measures, the manufacture, distribution, efficacy and public acceptance of treatments and vaccines, and their impact on the macroeconomy, our current and prospective customers, employees and vendors.
We cannot fully predict the extent to which the ongoing COVID-19 outbreak will impact our business or operating results, which is highly dependent on inherently uncertain future developments, including the severity and duration of the COVID-19 outbreak and the actions taken by governments and businesses in relation to COVID-19 containment. During the first quarter of 2020, we adopted several measures in response to the COVID-19 outbreak, including advising employees to work from home, restricting non-critical business travel by our employees, and changing in-person marketing events to a digital format. During the second quarter of 2021, we continued to slowly reopen select offices under limited occupancy requirements and strict health precautions in accordance with local authority guidelines. Our top priority has been, and remains, the health and safety of our employees. Travel was primarily restricted to business critical travel only. The full impact of the COVID-19 outbreak continues to be inherently uncertain at the time of this report. In 2021, as the administration of vaccines has increased, we have reopened our offices to partial capacity, allowing our employees to voluntarily return, and we continue to evaluate our strategy to return to in-person marketing events and future annual user conferences. We will continue to monitor Center for Disease Control (“CDC”) guidelines and local restrictions across the world, the administration of vaccines, and the number of new cases, as we continue to re-open certain of our offices and allow employees to travel. We expect to see an increase in travel, office and entertainment costs as a result of this progress. We continue to meet the needs of our customers, keeping our platform fully operational and delivering the services contracted by our customers. The effect, if any, of these and any additional operational changes we may implement is uncertain, but changes we have implemented to date have not materially impaired, and are not expected to
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materially impair, our ability to maintain operations, including financial reporting systems, internal control over financial reporting and disclosure controls and procedures.
As a result of the work and travel restrictions relating to the ongoing COVID-19 outbreak, substantially all of our sales and operating activities are still being conducted remotely even though we have slowly begun reopening our offices and permitting certain business travel. This global work-from-home operating environment may adversely impact the productivity of certain employees, and these conditions may persist and harm our business, including our financial condition and results of operations. Additionally, we believe a number of customers and prospects may have delayed purchasing decisions as result of the COVID-19 outbreak. Furthermore, in response to the COVID-19 outbreak existing and potential customers may ultimately choose to reduce technology spending or attempt to renegotiate contracts and obtain concessions, which could materially and negatively impact our financial condition and results of operations. Because our platform is offered as a subscription-based service, the effects of the outbreak may not be fully reflected in our operating results until future periods. The long-term impact of COVID-19 on our operational and financial performance will depend on certain developments, including the duration, spread, and severity of the virus and its variants, as well as the efficacy of vaccines and vaccine distribution, and the timing and trajectory of the economic recovery. As additional COVID-19 variants emerge, and the development, distribution and public acceptance of treatments and vaccines progress and public health recommendations change, we continue to evaluate and refine our return to work and distributed workforce strategies.
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 many contributors and disparate sets of business data. We market our platform to professionals in the areas of: finance and accounting, regulatory reporting, management and performance reporting, integrated risk management, and global statutory reporting. We intend to continue to build our sales and marketing organization and leverage our brand equity to attract new customers.
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 across both new and existing customers will be larger and more complex, which tend to lengthen the sales cycle.
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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 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, Middle East, and Africa (“EMEA”), as well as use cases for integrated risk, global statutory reporting, and the U.S. government.
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. Sales and marketing expense has historically been higher in the third quarter due to our annual user conference in September. Our transition to a virtual event in 2020 and continuing in September 2021 has mostly mitigated this trend. 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.
Key Performance Indicators
Three months ended September 30,Nine months ended September 30,
2021202020212020
(dollars in thousands)
Financial metrics
Total revenue
$112,693 $88,099 $322,502 $257,760 
Percentage increase in total revenue
27.9 %18.8 %25.1 %18.4 %
Subscription and support revenue
$98,912 $75,850 $275,053 $214,907 
Percentage increase in subscription and support revenue
30.4 %20.4 %28.0 %19.6 %
Subscription and support as a percent of total revenue
87.8 %86.1 %85.3 %83.4 %
As of September 30,
20212020
Operating metrics
Number of customers
4,1463,583
Subscription and support revenue retention rate
96.5%94.9%
Subscription and support revenue retention rate including add-ons
111.1%110.0%
Number of customers with annual contract value $100k+
1,043785
Number of customers with annual contract value $150k+
541383
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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.
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 96.5% as of September 30, 2021, up from 94.9% as of September 30, 2020. 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 just 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.
Our subscription and support revenue retention rate including add-ons was 111.1% as of the quarter ended September 30, 2021, up from 110.0% as of September 30, 2020.
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.
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, 2021 and 2020, no single customer represented more than 1% of our revenue, and our largest 10 customers accounted for less than 6% of our revenue in the aggregate.
Our recent revenue growth has been based in part on the strength of the initial public offering (“IPO”)/special-purpose acquisition company (“SPAC”) market, which can fluctuate. A significant decline in the IPO/SPAC market could impact sales of our capital markets and SEC solutions and potentially other solutions and our corresponding revenue growth rate.
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 twelve to 36 months. We typically invoice our customers for subscription fees annually in advance. For contracts with a two or three year term,
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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 ups 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.
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, and stock-based compensation; the costs of contracted third-party vendors; the costs of server usage by our customers; information technology costs; and facility costs. Costs of server usage are comprised primarily of fees paid to Amazon Web Services and Google Cloud Platform.
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, and stock-based compensation; costs of 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, 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,
2021202020212020
(in thousands)
Revenue
Subscription and support$98,912 $75,850 $275,053 $214,907 
Professional services13,781 12,249 47,449 42,853 
Total revenue112,693 88,099 322,502 257,760 
Cost of revenue
Subscription and support(1)
15,606 12,013 42,906 36,264 
Professional services(1)
10,799 9,873 31,766 30,262 
Total cost of revenue26,405 21,886 74,672 66,526 
Gross profit86,288 66,213 247,830 191,234 
Operating expenses
Research and development(1)
29,841 23,956 84,305 70,458 
Sales and marketing(1)
46,026 35,487 128,586 106,874 
General and administrative(1)
18,390 13,642 52,795 46,564 
Total operating expenses94,257 73,085 265,686 223,896 
Loss from operations(7,969)(6,872)(17,856)(32,662)
Interest income219 471 834 2,832 
Interest expense(3,508)(3,500)(10,495)(10,467)
Other income (expense), net3,805 (387)3,265 263 
Loss before provision for income taxes(7,453)(10,288)(24,252)(40,034)
(Benefit) provision for income taxes(885)67 (846)351 
Net loss$(6,568)$(10,355)$(23,406)$(40,385)
(1)     Stock-based compensation expense included in these line items was as follows:
Three months ended September 30,Nine months ended September 30,
2021202020212020
(in thousands)
Cost of revenue
Subscription and support
$731 $426 $1,824 $1,293 
Professional services
407 272 1,183 1,062 
Operating expenses
Research and development
2,347 2,167 7,195 5,790 
Sales and marketing
4,095 2,687 10,481 8,367 
General and administrative
5,107 5,049 14,679 18,919 
Total stock-based compensation expense
$12,687 $10,601 $35,362 $35,431 
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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,
2021202020212020
Revenue
Subscription and support87.8 %86.1 %85.3 %83.4 %
Professional services12.2 13.9 14.7 16.6 
Total revenue100.0 100.0 100.0 100.0 
Cost of revenue
Subscription and support13.8 13.6 13.3 14.1 
Professional services9.6 11.2 9.8 11.7 
Total cost of revenue23.4 24.8 23.1 25.8 
Gross profit76.6 75.2 76.9 74.2 
Operating expenses
Research and development26.5 27.2 26.1 27.3 
Sales and marketing40.8 40.3 39.9 41.5 
General and administrative16.3 15.5 16.4 18.1 
Total operating expenses83.6 83.0 82.4 86.9 
Loss from operations(7.0)(7.8)(5.5)(12.7)
Interest income0.2 0.5 0.3 1.1 
Interest expense(3.1)(4.0)(3.3)(4.1)
Other income (expense), net3.4 (0.4)1.0 0.1 
Loss before provision for income taxes(6.5)(11.7)(7.5)(15.6)
(Benefit) provision for income taxes(0.8)0.1 (0.3)0.1 
Net loss(5.7)%(11.8)%(7.2)%(15.7)%
Comparison of Three and Nine Months Ended September 30, 2021 and 2020
Revenue
Three months ended September 30,Nine months ended September 30,
20212020
% Change
20212020
% Change
(dollars in thousands)
Revenue
Subscription and support
$98,912 $75,850 30.4%$275,053 $214,907 28.0%
Professional services
13,781 12,249 12.5%47,449 42,853 10.7%
Total revenue
$112,693 $88,099 27.9%$322,502 $257,760 25.1%
Total revenue increased $24.6 million for the three months ended September 30, 2021 compared to the same quarter a year ago due primarily to a $23.1 million increase in subscription and support revenue. Growth in subscription and support revenue in the third quarter was attributable mainly to strong demand and better pricing for a broad range of use cases. The total number of our customers increased 15.7% from September 30, 2020 to September 30, 2021. Professional services revenue increased $1.5 million for the three months ended September 30, 2021 compared to the same quarter a year ago due primarily to growth in revenue from XBRL professional services.
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Total revenue increased $64.7 million for the nine months ended September 30, 2021 compared to the same period a year ago due primarily to a $60.1 million increase in subscription and support revenue. Additionally, professional services revenue increased $4.6 million due to growth in revenue from XBRL professional services.
Cost of Revenue
Three months ended September 30,Nine months ended September 30,
20212020% Change20212020% Change
(dollars in thousands)
Cost of revenue
Subscription and support
$15,606 $12,013 29.9%$42,906 $36,264 18.3%
Professional services
10,799 9,873 9.4%31,766 30,262 5.0%
Total cost of revenue
$26,405 $21,886 20.6%$74,672 $66,526 12.2%
Cost of revenue increased $4.5 million in the three months ended September 30, 2021 compared to the same quarter a year ago. Subscription and support cost of revenue increased $3.6 million due primarily to $3.0 million in higher cash-based compensation and benefits due mostly to increased headcount. This increase resulted primarily from our continued investment in and support of our platform and solutions. Professional services cost of revenue increased $0.9 million due primarily to increased headcount.
Cost of revenue increased $8.1 million during the nine months ended September 30, 2021 compared to the same period a year ago. Subscription and support cost of revenue increased $6.6 million due primarily to an increase in cash-based compensation and benefits of $5.3 million as well as a $1.0 million increase in software and cloud infrastructure services. This increase in cloud infrastructure services was the result of our continued investment in and support of our platform and solutions. Professional services cost of revenue increased $1.5 million due primarily to increased headcount.
Operating Expenses
Three months ended September 30,Nine months ended September 30,
20212020
% Change
20212020% Change
(dollars in thousands)
Operating expenses
Research and development
$29,841 $23,956 24.6%$84,305 $70,458 19.7%
Sales and marketing
46,026 35,487 29.7%128,586 106,874 20.3%
General and administrative
18,390 13,642 34.8%52,795 46,564 13.4%
Total operating expenses
$94,257 $73,085 29.0%$265,686 $223,896 18.7%
Research and Development
Research and development expenses increased $5.9 million in the three months ended September 30, 2021 compared to the same quarter a year ago due primarily to $4.6 million in higher cash-based compensation and benefits and a $0.5 million increase in professional service fees. The increases in compensation and professional service fees were the result of our continued investment in and support of our platform and solutions.
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Research and development expenses increased $13.8 million in the nine months ended September 30, 2021 compared to the same period a year ago due primarily to higher cash-based compensation and benefits of $10.9 million, a $1.4 million increase in stock-based compensation and a $1.4 million increase in professional service fees. The increases in compensation and professional service fees were the result of our continued investment in and support of our platform and solutions.
Sales and Marketing
Sales and marketing expenses increased $10.5 million during the three months ended September 30, 2021 compared to the three months ended September 30, 2020 due primarily to $8.1 million in higher cash-based compensation and benefits, a $1.4 million increase in stock-based compensation, a $0.4 million increase in marketing and advertising as well as a $0.4 million increase in software expense. Headcount in sales and marketing increased 22.0% in the quarter ended September 30, 2021 compared to the same quarter a year ago. In the third quarter of 2021, we recognized an additional $1.0 million in stock-based compensation pursuant to severance obligations. The increases in marketing and advertising costs and software expense supports our continued investment in and support of our platform and solutions. We expect to continue to invest in sales and marketing to help drive revenue growth.
Sales and marketing expenses increased $21.7 million during the nine months ended September 30, 2021 compared to the same period a year ago due primarily to $18.6 million higher cash-based compensation and benefits, an additional $2.1 million in stock-based compensation, $1.3 million in marketing and advertising fees and $1.9 million in software expense. These increases were partially offset by $1.9 million in savings gained from reduced travel by our sales and marketing employees due to the COVID-19 pandemic. The increase in compensation was due to an increase in employee headcount. During 2021, we recognized an additional $1.7 million in stock-based compensation pursuant to severance obligations. The increase in marketing and advertising costs as well as the remaining increase in software expense supports our continued investment in and support of our platform and solutions.
General and Administrative
General and administrative expenses increased $4.7 million during the three months ended September 30, 2021 compared to the three months ended September 30, 2020 due primarily to $2.3 million in higher cash-based compensation and benefits, an additional $0.5 million in stock-based compensation, a $0.9 million increase in professional service fees and a $0.4 million increase in software expense. Headcount in general and administrative increased 18.5% compared to the same quarter a year ago. The increase in professional service fees was the result of our continued investment in and support of our platform and solutions.
General and administrative expenses increased $6.2 million during the nine months ended September 30, 2021 compared to the same period a year ago. This increase was due primarily to $7.8 million in higher cash-based compensation and benefits, a $1.2 million increase in software and cloud infrastructure services, a $1.2 million increase in professional service fees and a $0.9 million increase in rent expense. These increases were partially offset by a $3.7 million decrease in stock-based compensation. In addition, in the second quarter of 2020, we also recorded one-time fees of $0.6 million related to the cancellation of certain events. In the second quarter of 2020, we recorded an additional $1.2 million and $4.9 million of cash-based and equity-based compensation, respectively, pursuant to certain separation agreements with former executives. The offsetting increase in personnel-related costs was driven primarily by an increase in employee headcount. The increases in software and cloud infrastructure service costs and professional service fees are the result of our continued investment in and support of our platform and solutions. The increase in rent expense was our investment in office space for our expanding worldwide footprint.
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Non-Operating Income (Expenses)
Three months ended September 30,Nine months ended September 30,
20212020% Change20212020% Change
(dollars in thousands)
Interest income$219 $471 (53.5)%$834 $2,832 (70.6)%
Interest expense
(3,508)(3,500)0.2%(10,495)(10,467)0.3%
Other income (expense), net3,805 (387)*3,265 263 *
(*) Percentage is not meaningful.
Interest Income, Interest Expense and Other (Expense) Income, Net
During the three months ended September 30, 2021, interest income and interest expense remained relatively flat compared to the same period in the prior year. Other income (expense), net increased $4.2 million during the three months ended September 30, 2021 compared to the same period a year ago due primarily to a $3.7 million gain recognized upon the settlement of our equity interest in OneCloud.
During the nine months ended September 30, 2021, interest income decreased $2.0 million compared to the same period in the prior year due primarily to lower interest rates on our investments. Other income (expense), net increased $3.0 million compared to the same period a year ago due primarily to the $3.7 million gain recognized upon the settlement of our equity interest in OneCloud. Interest expense remained relatively flat compared to the same time period in the prior year.
Results of Operations for Fiscal 2020 Compared to 2019
For a comparison of our results of operations for the fiscal years ended December 31, 2020 and 2019, 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, 2020, filed with the SEC on February 17, 2021.
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Liquidity and Capital Resources
Three months ended September 30,Nine months ended September 30,
2021202020212020
(in thousands)
Cash flow provided by operating activities$16,313 $7,874 $40,576 $19,890 
Cash flow (used in) provided by investing activities(38,536)7,839 (64,899)6,475 
Cash flow (used in) provided by financing activities(8,441)7,952 (7,304)18,157 
Net (decrease) increase in cash and cash equivalents, net of impact of exchange rates$(31,069)$24,011 $(31,706)$44,390 
As of September 30, 2021, our principal sources of liquidity were cash, cash equivalents and marketable securities totaling $522.3 million, which were held for working capital purposes. We have financed our operations primarily through the proceeds of offerings of equity, convertible debt, and cash from operating activities. We have generated significant operating losses and negative cash flows from operating activities as reflected in our accumulated deficit and consolidated statements of cash flows. 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.
In August 2019, we issued $345.0 million aggregate principal amount of 1.125% convertible senior notes due 2026 (the “Notes”). The Notes are senior, unsecured obligations and 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 Notes totaled $335.9 million, net of initial purchaser discounts and issuance costs.
During the third quarter of 2021 one of the conversion conditions was met and the Notes are now convertible at the option of the holders through December 31, 2021. Specifically, the last reported sale price of our Class A common stock exceeded 130% of the conversion price of the Notes for more than 20 trading days during the 30 consecutive trading days ended September 30, 2021. 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. As of September 30, 2021, and through the date of this filing, we have not received any conversion requests for the Notes.
Operating Activities
For the three months ended September 30, 2021, cash provided by operating activities was $16.3 million. The primary factors affecting our operating cash flows during the period were our net loss of $6.6 million, adjusted for non-cash charges of $1.4 million for depreciation and amortization of our property and equipment and intangible assets, $12.7 million of stock-based compensation expense, $2.3 million for the amortization of our debt discount and issuance costs and a $10.3 million net change in operating assets and liabilities partially offset by a gain on the settlement of equity securities of $3.7 million. The primary drivers of the changes in operating assets and liabilities were a $2.2 million increase in accrued expenses and other liabilities, a $9.9 million increase in deferred revenue, a $0.5 million increase in accounts payable and a $2.1 million decrease in accounts receivable partially offset by a $2.0 million increase in deferred commissions, a $0.6 million increase in other receivables and a $1.0 million increase in prepaid expenses. Deferred commissions increased due primarily to payments made to our sales force related to the direct and incremental costs of obtaining a customer contract. Customer growth as well as
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the prior year impact of the COVID-19 pandemic accounted for most of the increase in deferred revenue. The increases in accounts payable, prepaid expenses and accrued expenses and other liabilities as well as the decrease in accounts receivable were attributable primarily to the timing of our billings, cash collections, and cash payments.
For the three months ended September 30, 2020, cash provided by operating activities was $7.9 million. The primary factors affecting our operating cash flows during the period were our net loss of $10.4 million, adjusted for non-cash charges of $1.1 million for depreciation and amortization of our property and equipment and intangible assets, $10.6 million of stock-based compensation expense, $2.2 million for the amortization of our debt discount and issuance costs and a $4.7 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $6.8 million increase in accrued expenses and other liabilities and a $16.2 million increase in deferred revenue partially offset by a $13.3 million increase in accounts receivable and a $4.8 million increase in deferred commissions. Customer growth and contract renewals for longer terms accounted for most of the increase in deferred revenue. Deferred commissions increased due primarily to payments made to our sales force related to the direct and incremental costs of obtaining a customer contract. Increases in accrued expenses and other liabilities as well as the increase in accounts receivable, were attributable primarily to the timing of our billings, cash collections, and cash payments.
For the nine months ended September 30, 2021, cash provided by operating activities was $40.6 million. The primary factors affecting our operating cash flows during the period were our net loss of $23.4 million, adjusted for non-cash charges of $3.6 million for depreciation and amortization of our property and equipment and intangible assets, $35.4 million of stock-based compensation expense, $6.9 million for the amortization of our debt discount and issuance costs and a $20.8 million net change in operating assets and liabilities partially offset by a gain on the settlement of equity securities of $3.7 million. The primary drivers of the changes in operating assets and liabilities were a $10.3 million increase in accrued expenses and other liabilities, a $22.0 million increase in deferred revenue, a $1.2 million increase in accounts payable and a $5.2 million decrease in accounts receivable partially offset by a $4.0 million increase in prepaid expenses, a $1.2 million increase in other assets and a $12.1 million increase in deferred commissions. Deferred commissions increased due primarily to payments made to our sales force related to the direct and incremental costs of obtaining a customer contract. Customer growth as well as the prior year impact of the COVID-19 pandemic accounted for most of the increase in deferred revenue. The increase in accounts payable and accrued expenses and other liabilities as well as the decrease in accounts receivable were attributable primarily to the timing of our billings, cash collections, and cash payments. The increase in prepaid expenses was due primarily to the timing of payments relating to annual subscriptions. The increase in other assets was primarily due to increases in deposits and tax credits receivable.
For the nine months ended September 30, 2020, cash provided by operating activities was $19.9 million. The primary factors affecting our operating cash flows during the period were our net loss of $40.4 million, adjusted for non-cash charges of $3.2 million for depreciation and amortization of our property and equipment and intangible assets, $35.4 million of stock-based compensation expense, $6.6 million for the amortization of our debt discount and issuance costs and a $14.9 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $12.5 million increase in accrued expenses and other liabilities, an $11.3 million increase in deferred revenue, and a $4.8 million decrease in accounts receivable partially offset by a $3.3 million decrease in accounts payable, a $3.1 million increase in prepaid expenses and a $6.4 million increase in deferred commissions. Deferred commissions increased due to payments made to our sales force related to the direct and incremental costs of obtaining a customer contract. Decreases in accounts receivable and accounts payable and the increase in accrued expenses and other liabilities were attributable primarily to
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the timing of our billings, cash collections, and cash payments. The increase in prepaid expenses was due primarily to timing of payments relating to annual contracts.
Investing Activities
Cash used in investing activities of $38.5 million for the three months ended September 30, 2021 was due primarily to the acquisition of OneCloud of $35.1 million and $48.2 million in purchases of marketable securities partially offset by $45.6 million from maturities of marketable securities.
Cash provided by investing activities of $7.8 million for the three months ended September 30, 2020 was due primarily to $8.0 million in purchases of marketable securities offset by $16.3 million from maturities of marketable securities.
Cash used in investing activities of $64.9 million for the nine months ended September 30, 2021 was due primarily to the acquisition of OneCloud of $35.1 million, $143.1 million in purchases of marketable securities, $2.4 million in purchases of fixed assets partially offset by $116.4 million from maturities of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of expanding our infrastructure and work force.
Cash provided by investing activities of $6.5 million for the nine months ended September 30, 2020 was due primarily to $45.3 million in purchases of marketable securities and $1.8 million of capital expenditures offset by $42.3 million from maturities of marketable securities as well as $11.4 million from the sale of marketable securities. Our capital expenditures were associated primarily with computer equipment in support of expanding our infrastructure and workforce.
Financing Activities
Cash used in financing activities of $8.4 million for the three months ended September 30, 2021 was due primarily to $3.2 million in proceeds from option exercises and $4.6 million in proceeds from shares issued in connection with our employee stock purchase plan offset by $15.8 million in taxes paid related to net share settlements of stock-based compensation awards.
Cash provided by financing activities of $8.0 million for the three months ended September 30, 2020 was due primarily to $4.8 million in proceeds from option exercises as well as $3.6 million in proceeds from shares issued in connection with our employee stock purchase plan.
Cash used in financing activities of $7.3 million for the nine months ended September 30, 2021 was due primarily to $8.8 million in proceeds from option exercises and $8.9 million in proceeds from shares issued in connection with our employee stock purchase plan partially offset by $23.7 million in payroll taxes paid related to net share settlements of stock-based compensation awards and $1.3 million in principal payments on finance lease obligations.
Cash provided by financing activities of $18.2 million for the nine months ended September 30, 2020 was due primarily to $14.3 million in proceeds from option exercises and $7.2 million in proceeds from shares issued in connection with our employee stock purchase plan partially offset by $2.1 million in payroll taxes paid related to net share settlements of stock-based compensation awards and $1.2 million in payments on finance lease obligations.
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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, 2020 filed with the SEC on February 17, 2021, other than those in the notes to the consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, including the classification of our convertible senior notes as current liabilities on the condensed consolidated balance sheet discussed in Note 5 to our consolidated financial statements and our new London-based operating lease discussed in Note 6 to our consolidated financial statements.
Off-Balance Sheet Arrangements
During all periods presented, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As a result, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in those types of relationships.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. U.S. GAAP. 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, 2021, 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, 2020 filed with the SEC on February 17, 2021.
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, 2020. Our exposures to market risk have not changed materially since December 31, 2020.
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.
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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.
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.
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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 2020 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 2021 to the risk factors that were included in the Form 10-K, other than what is set forth immediately below.
The COVID-19 pandemic has impacted our business, and its ultimate impact on our business and financial results is uncertain.
The COVID-19 pandemic has significantly impacted the global economy, disrupted global supply chains and created significant volatility and disruption in financial markets, and increased unemployment levels. Global health concerns relating to the COVID-19 pandemic continue to adversely affect the macroeconomic environment, and the pandemic has increased economic and stock market volatility and uncertainty. While it remains a developing situation, the the duration, spread, and severity and potential recurrence of the virus and its variants, quarantines, stay-at-home orders, COVID-19 vaccination rates and the availability of COVID-19 vaccines both globally and in the U.S, interruptions in travel and business disruptions with respect to us, our customers or partners have had and will continue to have an impact on our business. Although we are continuing to monitor and assess the effects of the COVID-19 pandemic, the ultimate impact of the COVID-19 pandemic on our business remains highly uncertain and will depend on certain developments, including the duration and spread of the outbreak, impact on our customers and our sales cycles, and effect on our vendors (including their data centers and computing infrastructure operations), all of which are uncertain and cannot be predicted. In addition, the stock market has experienced periods of high volatility during the COVID-19 pandemic and such volatility may continue. As a result, our stock price may be adversely impacted for reasons unrelated to our performance. A decline in stock price may make it more difficult for us to raise capital on terms acceptable to us or at all.
The COVID-19 pandemic has caused us to change our business practices, including implementing travel restrictions, allowing all non-essential personnel to work from home, prolonged closures of our offices, and cancellation of physical participation in sales activities, meetings, events and conferences. We may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers and business partners, including vaccination requirements for our employees. These precautionary measures could have increasingly negative effects on employee productivity and morale, sales and marketing efforts, customer success efforts, and revenue growth rates or other financial metrics, or create operational or other challenges, any of which could adversely impact our business, financial condition, and operating results in any given period. The remote work measures that we implemented have generally allowed us to provide uninterrupted service to our customers, but have affected the way we conduct our sales, research and development, testing, customer support, and other activities. While we have not observed significant
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impacts to our workforce’s productivity, working remotely presents additional operational challenges that may impact productivity in the future. Remote work has made our employees more reliant on cloud-based communication services, and if those services are interrupted, or are less secure, employee productivity could be harmed. Our employees may also face unexpected child-care or other related family responsibilities while working from home that could impact productivity and employee retention, particularly if our employees, executives, or their family members experience health issues.
Following federal health guidelines and as local regulations permit, we have commenced re-opening our offices and allowing our employees to return to work, although we are not yet operating in a normal capacity. As we re-open our offices, it is possible that local authorities could impose stay at home orders which would require us to close our offices in the future. These efforts may divert management attention, and any new safety protocols may create logistical challenges for our workforce which could adversely impact employee productivity and morale. Even if we follow what we believe to be best practices, there can be no assurance that our measures will prevent the transmission of COVID-19 between workers. Any incidents of actual or perceived transmission may expose us to liability from employee claims, adversely impact employee productivity and morale, and even result in negative publicity and reputational harm.
The extent to which the COVID-19 pandemic impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict, including, but not limited to, the duration and spread of the pandemic, its severity, the actions to contain the virus or address its impact, and how quickly and to what extent normal economic and operating activities can resume. To the extent the COVID-19 pandemic adversely affects our business, results of operations and financial condition, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section. Even after the pandemic has subsided, we may continue to experience an adverse impact to our business as a result of its global economic impact, including any recession that has occurred or may occur in the future. For the reasons discussed above and others that we may not have foreseen, we expect that the pandemic will have adverse impacts to aspects of our business in the near term, any of which individually or together may have a material adverse impact on our results of operations, financial condition, growth prospects and stock price.
Proposed new regulations concerning mandatory COVID-19 vaccination of employees could have a material adverse effect on our business and results of operations.
On September 9, 2021, President Biden issued an Executive Order requiring all employers with at least 100 employees to ensure that their employees are fully vaccinated or require unvaccinated workers to be tested at least once a week. The Occupational Safety and Health Administration (“OSHA”) has drafted an emergency regulation to carry out this mandate and has sent it to the White House for approval. We expect it to take effect in the near future. There are many questions that remain unanswered at this time, including whether the vaccine mandate will apply to all employees or only to employees who work onsite, whether employers must offer the testing option, and if so, who pays for the testing. Because we have more than 100 employees, we will be required to comply with this order.
On September 24, 2021, the Safer Federal Workforce Task Force (“Task Force”) issued COVID-19 workplace safety guidance (“guidance”) implementing President Biden’s Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors. The guidance sets forth three main requirements: a vaccination requirement for employees of covered contractors; masking and physical distancing requirements in workplaces of covered contractors; and a requirement to designate a person or persons to coordinate and implement COVID-19 workplace safety efforts. The guidance requires agencies — beginning November 14 — to include a clause in certain federal contracts mandating that federal contractors ensure all employees working on or in connection with those contracts, or working at the contractors’ workplaces, are fully vaccinated against COVID-19. Covered contractors with new or newly
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revised contracts must ensure their employees are fully vaccinated by December 8, 2021, and for contracts that are new or revised following that date, employees must be fully vaccinated by the first day of the period of performance of the new contract. Because we are a covered contractor, we will be required to mandate COVID-19 vaccination of certain members of our workforce under the guidance, and there is no weekly testing option under the guidance as there is under the U.S. Department of Labor's (“DOL's”) emergency regulation.
It is not possible to predict the precise impact the new regulations will have on us. These regulations may result in employee attrition, which could be material as a substantial number of our employees are based in states where vaccination rates are below the national average. If we were to lose employees, there could be a material adverse effect on future revenues. Accordingly, the proposed new regulations when implemented could have a material adverse effect on our business and results of operations.
Item 2.    Unregistered Sales of Securities and Use of Proceeds
Sales of Unregistered Securities
Not applicable.
Use of Proceeds from Public Offerings of Common Stock
There has been no material change in the planned use of proceeds from our initial public offering as described in our final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act on December 12, 2014.
Issuer Purchases of Equity Securities
The following table provides information about purchases of shares of our Class A Common Stock during the three months ended September 30, 2021 related to shares withheld upon vesting of restricted stock units for tax withholding obligations:
Date
Total Number of Shares Purchased (1)
Average Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced ProgramMaximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under Program
July 2021— $— — — 
August 2021— — — — 
September 2021110,666 142.85 — — 
Total110,666 $142.85 — — 
(1) Total number of shares delivered to employees to use to satisfy the mandatory tax withholding requirement upon vesting of stock-based compensation awards.
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Item 6.    Exhibits
The following exhibits are being filed herewith or incorporated by reference herein:
Exhibit
Number
Description
10.1
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, 2021 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)

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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 3rd day of November, 2021.
WORKIVA INC.
By:
/s/ Martin J. Vanderploeg, Ph.D.
Name:
Martin J. Vanderploeg, Ph.D.
Title:
President and Chief Executive Officer
By:
/s/ Jill Klindt
Name:
Jill Klindt
Title:
Senior Vice President, Chief Financial Officer, Chief Accounting Officer and Treasurer

S-1
Document


EXECUTION DATEJune 8, 2021
EXECUTIVEMithun Banarjee
TERMThe term of the Executive’s employment hereunder shall commence upon the date hereof (the “Effective Date”). The period during which the Executive is employed by the Company hereunder is hereinafter referred to as the “Employment Term.”
TITLEExecutive Vice President of Global Operations of the Company
REPORTS TOChief Operating Officer
PRIMARY LOCATIONthe Executive’s home located in McKinney, Texas
BASE SALARY$400,000
BONUS GUARANTEENot applicable
DEFAULT TARGET BONUS75%
SIGNING BONUSNot applicable
EQUITY AWARDSDuring the Employment Term the Executive shall be eligible to receive grants pursuant to the Company’s equity compensation plan as in effect from time to time (the “Equity Plan”), subject to the terms of the Equity Plan, as determined by the Board or the Compensation Committee, in its discretion.
SEVERANCE MULTIPLETwo (2)


EXECUTION DATENovember 6, 2014
EXECUTIVEJeffrey D. Trom
TERMThe term of the Executive’s employment hereunder shall commence upon the date (the “Effective Date”) on which the Company completes its conversion of the Company from a limited liability company into a corporation (the “Conversion”). The period during which the Executive is employed by the Company hereunder is hereinafter referred to as the “Employment Term.”
TITLEManaging Director and Chief Technology Officer of the Company prior to any Conversion and Executive Vice President and Chief Technology Officer of the Company following any Conversion
REPORTS TOChief Operating Officer
PRIMARY LOCATIONThe Company’s office located in Bozeman, Montana
BASE SALARY$450,000
BONUS GUARANTEENot applicable
DEFAULT TARGET BONUS75%
SIGNING BONUSNot applicable
EQUITY AWARDSDuring the Employment Term the Executive shall be eligible to receive grants pursuant to the Company’s equity compensation plan as in effect from time to time (the “Equity Plan”), subject to the terms of the Equity Plan, as determined by the Board or the Compensation Committee, in its discretion.
SEVERANCE MULTIPLETwo (2)




Form of Employment Agreement
Each of the following executive officers has entered into an Employment Agreement with the Registrant in the form attached, with the variations noted below.
EXECUTION DATENovember 6, 2014
EXECUTIVEMartin J. Vanderploeg
TERMThe term of the Executive’s employment hereunder shall commence upon the date (the “Effective Date”) on which the Company completes its conversion of the Company from a limited liability company into a corporation (the “Conversion”). The period during which the Executive is employed by the Company hereunder is hereinafter referred to as the “Employment Term.”
TITLEManaging Director of the Company prior to any Conversion and President and Chief Operating Officer of the Company following any Conversion
REPORTS TOChief Executive Officer
PRIMARY LOCATIONThe Executive’s residence in Martin, South Dakota
BASE SALARY$450,000
BONUS GUARANTEENot applicable
DEFAULT TARGET BONUS125%
SIGNING BONUSNot applicable
EQUITY AWARDSDuring the Employment Term the Executive shall be eligible to receive grants pursuant to the Company’s equity compensation plan as in effect from time to time (the “Equity Plan”), subject to the terms of the Equity Plan, as determined by the Board or the Compensation Committee, in its discretion.
SEVERANCE MULTIPLEThree (3)




3

EXECUTION DATEMarch 18, 2021
EXECUTIVEBrandon E. Ziegler
TERMThe term of the Executive’s employment hereunder shall commence upon the date hereof (the “Effective Date”). The period during which the Executive is employed by the Company hereunder is hereinafter referred to as the “Employment Term.”
TITLEExecutive Vice President, Chief Legal Officer and Secretary
REPORTS TOChief Executive Officer
PRIMARY LOCATIONThe Company's office located in New York City, New York
BASE SALARY$400,000
BONUS GUARANTEENot applicable
DEFAULT TARGET BONUS75%
SIGNING BONUSNot applicable
EQUITY AWARDSDuring the Employment Term the Executive shall be eligible to receive grants pursuant to the Company’s equity compensation plan as in effect from time to time (the “Equity Plan”), subject to the terms of the Equity Plan, as determined by the Board or the Compensation Committee, in its discretion.
SEVERANCE MULTIPLETwo (2)


4


EXECUTION DATE8/12/2021
EXECUTIVEMichael Hawkins
TERMThe term of the Executive’s employment hereunder shall commence upon the date hereof (the “Effective Date”). The period during which the Executive is employed by the Company hereunder is hereinafter referred to as the “Employment Term.”
TITLEExecutive Vice President, Sales
REPORTS TOChief Operating Officer
PRIMARY LOCATIONthe Executive’s home located in Los Angeles, CA
BASE SALARY$400,000
BONUS GUARANTEENot applicable
DEFAULT TARGET BONUS75%
SIGNING BONUSNot applicable
EQUITY AWARDSDuring the Employment Term the Executive shall be eligible to receive grants pursuant to the Company’s equity compensation plan as in effect from time to time (the “Equity Plan”), subject to the terms of the Equity Plan, as determined by the Board or the Compensation Committee, in its discretion.
SEVERANCE MULTIPLETwo (2)
5

Form of Employment Agreement
This Employment Agreement (the “Agreement”) is made and entered into as of [EXECUTION DATE], by and between [EXECUTIVE] (the “Executive”) and WORKIVA INC., a Delaware limited liability company (the “Company”).
WHEREAS, the Company desires to employ the Executive on the terms and conditions set forth herein; and
WHEREAS, the Executive desires to be employed by the Company on such terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants, promises and obligations set forth herein, the parties agree as follows:
1.     Term. [TERM]
2.     Position and Duties.
2.1    Position. During the Employment Term, the Executive shall serve as the [TITLE], reporting to the Company’s [REPORTS TO]. In such position, the Executive shall have such duties, authority and responsibility as shall be determined from time to time by the Company’s [REPORTS TO], which duties, authority and responsibility are consistent with the Executive’s position. The Executive shall, if requested by the Company, also serve as a member of the board of directors of the Company (the “Board”) or as an officer or director of any affiliate of the Company for no additional compensation.
2.2    Duties. During the Employment Term, the Executive shall devote substantially all of his business time and attention to the performance of the Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the performance of such services either directly or indirectly without the prior written consent of the Company’s [REPORTS TO]. Notwithstanding the foregoing, the Executive will be permitted to (a) with the prior written consent of the Board (which consent can be withheld by the Board in its discretion) act or serve as a director, trustee, committee member or principal of any type of business, civic or charitable organization as long as such activities are disclosed in writing to the Company’s General Counsel in accordance with any Company conflict of interest policy that may be in effect from to time to time, and (b) purchase or own less than five percent (5%) of the publicly traded securities of any corporation; provided that, such ownership represents a passive investment and that the Executive is not a controlling person of, or a member of a group that controls, such corporation and that with respect to such ownership the Executive complies with any Company Customer Confidentiality and Securities Trading Policy in effect from time to time; provided further that, the activities described in clauses (a) and (b) do not interfere with the performance of the Executive’s duties and responsibilities to the Company as provided hereunder, including, but not limited to, the obligations set forth in Section 2 hereof.
3.     Place of Performance. The principal place of Executive’s employment shall be [PRIMARY LOCATION]; provided that, the Executive may be required to travel on Company business during the Employment Term.
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4.    Compensation.
4.1    Base Salary. The Company shall pay the Executive an annual rate of base salary of $[BASE SALARY] in periodic installments in accordance with the Company’s customary payroll practices, but no less frequently than monthly. The Executive’s base salary shall be reviewed at least annually by the Board and the Board may, but shall not be required to, increase the base salary during the Employment Term. The Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as “Base Salary”.
4.2    Annual Bonus.  
(a)    For each complete fiscal year of the Employment Term, the Executive shall have the opportunity to earn an annual bonus (the “Annual Bonus”), which bonus, if any, shall be determined in the sole and absolute discretion of the Board or any Compensation Committee of the Board (the “Compensation Committee”). The Board or the Compensation Committee, if any, shall also have the sole and absolute discretion to adopt a performance-based bonus plan or arrangement, in which case the Executive shall participate in such plan or arrangement on terms commensurate with other executive employees of the Company, provided that the Board or the Compensation Committee, if any, shall have the sole and absolute discretion to establish the level of target bonus (“Target Bonus”) for each participant in any such plan based on the relative seniority and responsibility levels of the participants. [BONUS GUARANTEE] For any fiscal year with respect to which the Board or the Compensation Committee, if any, has not established a Target Bonus for the Executive, for purposes of this Agreement the Executive’s Target Bonus shall be deemed to be equal to [DEFAULT TARGET BONUS]% of the Executive’s Base Salary as in effect on the first day of such fiscal year.
(b)    The Annual Bonus, if any, will be paid within two and a half (2 1/2) months after the end of the applicable fiscal year.
(c)    Except as otherwise provided in Section 5, in order to be eligible to receive an Annual Bonus, the Executive must be employed by the Company on the last day of the applicable fiscal year.
4.3    [SIGNING BONUS]
4.4    Equity Awards. [EQUITY AWARDS].
4.5    Fringe Benefits and Perquisites. During the Employment Term, the Executive shall be entitled to fringe benefits and perquisites consistent with the practices of the Company, and to the extent the Company provides similar benefits or perquisites (or both) to similarly situated executives of the Company.
4.6    Employee Benefits. During the Employment Term, the Executive shall be entitled to participate in all employee benefit plans, practices and programs maintained by the Company, as in effect from time to time (collectively, “Employee Benefit Plans”), on a basis which is no less favorable than is provided to other similarly situated executives of the Company, to the extent consistent with applicable law and the terms of the applicable Employee Benefit Plans. The Company reserves the right to amend or cancel any Employee Benefit Plans at any time in its sole discretion, subject to the terms of such Employee Benefit Plan and applicable law.
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4.7    Vacation. During the Employment Term, the Executive shall be entitled to a minimum of fifteen paid vacation days per calendar year (prorated for partial years) in accordance with the Company’s vacation policies, as in effect from time to time.
4.8    Business Expenses. The Executive shall be entitled to reimbursement for all reasonable and necessary out-of-pocket business, entertainment and travel expenses incurred by the Executive in connection with the performance of the Executive’s duties hereunder in accordance with the Company’s expense reimbursement policies and procedures.
4.9    Indemnification.
(a)    In the event that the Executive is made a party or threatened to be made a party to any action, suit, or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), other than any Proceeding initiated by the Executive or the Company related to any contest or dispute between the Executive and the Company or any of its affiliates with respect to this Agreement or the Executive’s employment hereunder, by reason of the fact that the Executive is or was a director or officer of the Company, or any affiliate of the Company, or is or was serving at the request of the Company as a director, officer, member, employee or agent of another corporation or a partnership, joint venture, trust or other enterprise, the Executive shall be indemnified and held harmless by the Company to the maximum extent permitted under applicable law from and against any liabilities, costs, claims and expenses, including all costs and expenses incurred in defense of any Proceeding (including attorneys’ fees). Costs and expenses incurred by the Executive in defense of such Proceeding (including attorneys’ fees) shall be paid by the Company in advance of the final disposition of such litigation upon receipt by the Company of: (i) a written request for payment; (ii) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (iii) an undertaking adequate under applicable law made by or on behalf of the Executive to repay the amounts so paid if it shall ultimately be determined that the Executive is not entitled to be indemnified by the Company under this Agreement.
(b)    During the Employment Term and for a period of six (6) years thereafter, the Company or any successor to the Company shall purchase and maintain, at its own expense, directors’ and officers’ liability insurance providing coverage to the Executive on terms that are no less favorable than the coverage provided to other directors and senior officers of the Company.
4.10    Clawback Provisions. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any other compensation, paid to the Executive pursuant to this Agreement or any other agreement or arrangement with the Company which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).
3

5.    Termination of Employment. The Employment Term and the Executive’s employment hereunder may be terminated by either the Company or the Executive at any time and for any reason; provided that, unless otherwise provided herein, either party shall be required to give the other party at least ten business days’ advance written notice of any termination of the Executive’s employment. Upon termination of the Executive’s employment during the Employment Term, the Executive shall be entitled to the compensation and benefits described in this Section 5 and shall have no further rights to any compensation or any other benefits from the Company or any of its affiliates.
5.1    Termination for Cause or Without Good Reason.  
(a)    The Executive’s employment hereunder may be terminated by the Company for Cause or by the Executive without Good Reason. If the Executive’s employment is terminated by the Company for Cause or by the Executive without Good Reason, the Executive shall be entitled to receive:
(i)    any accrued but unpaid Base Salary and accrued but unused vacation, which shall be paid on the pay date immediately following the Termination Date (as defined below) in accordance with the Company’s customary payroll procedures;
(ii)    any earned but unpaid Annual Bonus with respect to any completed fiscal year immediately preceding the Termination Date, which shall be paid on the otherwise applicable payment date except to the extent payment is otherwise deferred pursuant to any applicable deferred compensation arrangement;
(iii)    reimbursement for unreimbursed business expenses properly incurred by the Executive, which shall be subject to and paid in accordance with the Company’s expense reimbursement policy; and
(iv)    such employee benefits, if any, as to which the Executive may be entitled under the Company’s employee benefit plans as of the Termination Date; provided that, in no event shall the Executive be entitled to any payments in the nature of severance or termination payments except as specifically provided herein.
Items 5.1(a)(i) through 5.1(a)(iv) are referred to herein collectively as the “Accrued Amounts”. The treatment of any outstanding equity awards shall be determined in accordance with the terms of the Equity Plan and the applicable award agreements.
(b)    For purposes of this Agreement, “Cause” shall mean:
(i)    any action by the Executive while employed by the Company involving willful gross misconduct having a material adverse effect on the Company;
(ii)    the Executive’s willful failure to perform his duties (other than any such failure resulting from incapacity due to physical or mental illness); or
(iii)    the Executive being convicted of (a) a felony under the laws of the United States or any state or (b) a felony under the laws of any other country or political subdivision thereof involving moral turpitude.
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For purposes of this provision, no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.
Termination of the Executive’s employment shall not be deemed to be for Cause unless and until the Company delivers to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the Board (after reasonable written notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that the Executive has engaged in the conduct described in any of (i)-(iii) above.
(c)    For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following, in each case during the Employment Term:
(i)    a reduction in the Executive’s Base Salary without the Executive’s written consent, other than a general reduction in Base Salary that affects all similarly situated executives in substantially the same proportions;
(ii)    a material reduction in the Executive’s Target Bonus opportunity from any Target Bonus opportunity in effect for the prior fiscal year without the Executive’s written consent;
(iii)    a relocation of the Executive’s principal place of employment by more than 50 miles without the Executive’s written consent;
(iv)    any material breach by the Company of any material provision of this Agreement or any material provision of any other agreement between the Executive and the Company;
(v)    any Change of Control of the Company;
(vi)    the Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken place, except where such assumption occurs by operation of law;
(vii)    a material, adverse change in the Executive’s title, authority, duties or responsibilities (other than temporarily while the Executive is physically or mentally incapacitated or as required by applicable law) without the Executive’s written consent; or
(viii)    a material adverse change in the reporting structure applicable to the Executive without the Executive’s written consent.
The Executive cannot terminate his employment for Good Reason (other than pursuant to Section 5.1(c)(v)) unless he has provided written notice to the Company of the existence of the circumstances providing grounds for termination for Good Reason within 90 calendar days of the initial existence of such grounds and the Company has had at least 15 calendar days from the
5

date on which such notice is provided to cure such circumstances. If the Executive does not terminate his employment for Good Reason within 120 days after the first occurrence of the applicable grounds (other than Section 5.1(c)(v)), then the Executive will be deemed to have waived his right to terminate for Good Reason with respect to such grounds.
5.2    Termination Without Cause or for Good Reason. The Employment Term and the Executive’s employment hereunder may be terminated by the Executive for Good Reason or by the Company without Cause. In the event of such termination, the Executive shall be entitled to receive the Accrued Amounts and, subject to the Executive’s compliance with Section 6, Section 7 and Section 8 of this Agreement and his execution of a release of claims in favor of the Company, its affiliates and their respective officers and directors in a form provided by the Company (the “Release”), the Executive shall be entitled to receive the following:
(a)    A lump sum payment, which shall be paid within 30 days following the Termination Date, equal to [SEVERANCE MULTIPLE] times the sum of the Executive’s Base Salary and Target Bonus for the year in which the Termination Date occurs.
(b)    With respect to the fiscal year in which the Termination Date occurs, an amount equal to (X) the Annual Bonus paid to Executive in respect of the last calendar year for which Executive received a bonus prior to the Termination Date, multiplied by (Y) a fraction, the numerator of which is the number of days between first day of the calendar year in which the Termination Date occurs and the Termination Date and the denominator of which is 365, payable in a single payment concurrent with the payment of the amounts due under Section 5.2(a) hereof;
(c)    If the Executive timely and properly elects continuation coverage under the Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”), the Company shall reimburse the Executive the difference between the monthly COBRA premium paid by the Executive for himself and his dependents and the monthly premium amount paid by similarly situated active executives. Such reimbursement shall be paid to the Executive on the tenth day of the month immediately following the month in which the Executive timely remits the premium payment. The Executive shall be eligible to receive such reimbursement until the earliest of: (i) the eighteen-month anniversary of the Termination Date; (ii) the date the Executive is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which the Executive becomes eligible to receive substantially similar coverage from another employer.
(d)    The treatment of any outstanding equity awards shall be determined in accordance with the terms of the Equity Plan and the applicable award agreements; provided that notwithstanding the terms of the Equity Plan or any applicable award agreements:
(i)    all outstanding unvested stock or equity unit options, appreciation units and stock appreciation rights, granted to the Executive during the Employment Term shall become fully vested and exercisable for the remainder of their full term;
(ii)    all outstanding equity-based compensation awards other than stock options, appreciation units and stock appreciation rights that are not intended to qualify as performance-based compensation under Section 162(m)(4)(C) of the Internal Revenue Code of 1986, as amended (the “Code”) shall become fully vested and the restrictions thereon shall lapse; provided that, any delays in the settlement or payment of such awards that are set forth in the applicable award agreement and that are required under Section 409A of the Code
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(“Section 409A”) shall remain in effect; and
(iii)    all outstanding equity-based compensation awards other than stock or equity unit options, appreciation units and stock appreciation rights that are intended to constitute performance-based compensation under Section 162(m)(4)(C) of the Code (“Section 162(m)”) shall remain outstanding and shall vest or be forfeited in accordance with the terms of the applicable award agreements, if the applicable performance goals are satisfied.
(e)    Upon any termination of Executive’s employment by the Company other than for Cause or upon termination by the Executive for Good Reason, Executive shall be released from the restrictive covenants set forth in Section 7 of this Agreement.
5.3    Death or Disability.  
(a)    The Executive’s employment hereunder shall terminate automatically upon the Executive’s death during the Employment Term, and the Company may terminate the Executive’s employment on account of the Executive’s Disability.
(b)    If the Executive’s employment is terminated during the Employment Term on account of the Executive’s death or Disability, the Executive (or the Executive’s estate and/or beneficiaries, as the case may be) shall be entitled to receive the following:
(i)    the Accrued Amounts;
(ii)    a lump sum payment, which shall be paid within 30 days following the Termination Date, equal to the sum of the Executive’s Base Salary and Target Bonus for the year in which the Termination Date occurs;
(iii)    with respect to the fiscal year in which the Termination Date occurs, an amount equal to (X) the Annual Bonus paid to Executive in respect of the last calendar year for which Executive received a bonus prior to the Termination Date, multiplied by (Y) a fraction, the numerator of which is the number of days between first day of the calendar year in which the Termination Date occurs and the Termination Date and the denominator of which is 365, payable in a single payment concurrent with the payment of the amounts due under Section 5.3(b)(ii) hereof; and
(iv)    the treatment of any outstanding equity awards shall be determined in accordance with the terms of the Equity Plan and the applicable award agreements; provided that notwithstanding the terms of the Equity Plan or any applicable award agreements:
(A)    all outstanding unvested stock or equity unit options, appreciation units and stock appreciation rights, granted to the Executive during the Employment Term shall become fully vested and exercisable for the remainder of their full term;
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(B)    all outstanding equity-based compensation awards other than stock options, appreciation units and stock appreciation rights that are not intended to qualify as performance-based compensation under Section 162(m)(4)(C) shall become fully vested and the restrictions thereon shall lapse; provided that, any delays in the settlement or payment of such awards that are set forth in the applicable award agreement and that are required under Section 409A of the Code (“Section 409A”) shall remain in effect; and
(C)    all outstanding equity-based compensation awards other than stock or equity unit options, appreciation units and stock appreciation rights that are intended to constitute performance-based compensation under Section 162(m)(4)(C) shall remain outstanding and shall vest or be forfeited in accordance with the terms of the applicable award agreements, if the applicable performance goals are satisfied.
Notwithstanding any other provision contained herein, all payments made in connection with the Executive’s Disability shall be provided in a manner which is consistent with federal and state law.
(c)    For purposes of this Agreement, “Disability” shall mean the Executive is entitled to receive long-term disability benefits under the Company’s long-term disability plan, or if there is no such plan, the Executive’s inability, due to physical or mental incapacity, to substantially perform his duties and responsibilities under this Agreement for one hundred eighty (180) days out of any three hundred sixty-five (365) day period or one hundred twenty (120) consecutive days; provided however, in the event the Company temporarily replaces the Executive, or transfers the Executive’s duties or responsibilities to another individual on account of the Executive’s inability to perform such duties due to a mental or physical incapacity which is, or is reasonably expected to become, a Disability, then the Executive’s employment shall not be deemed terminated by the Company and the Executive shall not be able to resign with Good Reason as a result thereof. Any question as to the existence of the Executive’s Disability as to which the Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the Executive and the Company. If the Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Executive shall be final and conclusive for all purposes of this Agreement.
5.4    Change in Control.  
(a)    Notwithstanding any other provision contained herein, if the Executive’s employment hereunder is terminated by the Executive for Good Reason or by the Company without Cause (other than on account of the Executive’s death or Disability), in each case within three (3) months prior to or twelve (12) months following a Change in Control, the Executive shall be entitled to receive the Accrued Amounts and, subject to the Executive’s compliance with Section 6 and Section 8 of this Agreement and his execution of a Release, the Executive shall be entitled to receive the following:
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(i)    a lump sum payment equal to three (3) times the sum of the Executive’s Base Salary and Target Bonus for the year in which the Termination Date occurs (or if greater, the year immediately preceding the year in which the Change in Control occurs), which shall be paid within 30 days following the Termination Date; and
(ii)    a lump sum payment equal to the Executive’s Target Bonus for the fiscal year in which the Date of Termination occurs (or if greater, the year in which the Change in Control occurs), which shall be paid within 30 days following the Termination Date;
(b)    If the Executive timely and properly elects continuation coverage under COBRA, the Company shall reimburse the Executive the difference between the monthly COBRA premium paid by the Executive for himself and his dependents and the monthly premium amount paid by similarly situated active executives. Such reimbursement shall be paid to the Executive on the tenth of the month immediately following the month in which the Executive timely remits the premium payment. The Executive shall be eligible to receive such reimbursement until the earliest of: (i) the eighteen-month anniversary of the Termination Date; (ii) the date the Executive is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which the Executive becomes eligible to receive substantially similar coverage from another employer.
(c)    Notwithstanding the terms of any equity incentive plan or award agreements, as applicable, in the event of a Change in Control:
(i)    all outstanding unvested stock or equity unit options, appreciation units and stock appreciation rights granted to the Executive during the Employment Term shall become fully vested and exercisable for the remainder of their full term;
(ii)    all outstanding equity-based compensation awards other than stock or equity unit options, appreciation units and stock appreciation rights that are not intended to qualify as performance-based compensation under Section 162(m)(4)(C) shall become fully vested and the restrictions thereon shall lapse; provided that, any delays in the settlement or payment of such awards that are set forth in the applicable award agreement and that are required under Section 409A shall remain in effect; and
(iii)    all outstanding equity-based compensation awards other than stock or equity options, appreciation units and stock appreciation rights that are intended to constitute performance-based compensation under Section 162(m)(4)(C) shall remain outstanding and shall vest or be forfeited in accordance with the terms of the applicable award agreements, if the applicable performance goals are satisfied.
(d)    For purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the following:
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(i)    one person (or more than one person acting as a group) acquires beneficial ownership of voting securities of the Company that, together with the voting securities held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the Company’s then outstanding voting securities;
(ii)    one person (or more than one person acting as a group) acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) beneficial ownership of the Company’s voting securities possessing 30% or more of the total voting power of the Company’s then outstanding voting securities;
(iii)    a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or
(iv)    the sale of all or substantially all of the Company’s assets.
Notwithstanding the foregoing, a Change in Control shall not occur unless such transaction constitutes a change in the ownership of the Company, a change in effective control of the Company, or a change in the ownership of a substantial portion of the Company’s assets under Section 409A.
5.5    Notice of Termination. Any termination of the Executive’s employment hereunder by the Company or by the Executive during the Employment Term (other than termination pursuant to Section 5.3(a) on account of the Executive’s death) shall be communicated by written notice of termination (“Notice of Termination”) to the other party hereto in accordance with Section 20. The Notice of Termination shall specify:
(a)    The termination provision of this Agreement relied upon;
(b)    To the extent applicable, the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated; and
(c)    The applicable Termination Date.
5.6    Termination Date. The Executive’s Termination Date shall be:
(a)    If the Executive’s employment hereunder terminates on account of the Executive’s death, the date of the Executive’s death;
(b)    If the Executive’s employment hereunder is terminated on account of the Executive’s Disability, the date that it is determined that the Executive has a Disability;
(c)    If the Company terminates the Executive’s employment hereunder for Cause, the date the Notice of Termination is delivered to the Executive;
(d)    If the Company terminates the Executive’s employment hereunder without Cause, the date specified in the Notice of Termination, which shall be no less than ten days following the date on which the Notice of Termination is delivered; provided that, the Company shall have the option to provide the Executive with a lump sum payment equal to ten days’ Base Salary in lieu of such notice, which shall be paid in a lump sum on the Executive’s Termination Date and for all purposes of this Agreement, the
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Executive’s Termination Date shall be the date on which such Notice of Termination is delivered; and
(e)    If the Executive terminates his employment hereunder with or without Good Reason, the date specified in the Executive’s Notice of Termination, which shall be no less than ten days following the date on which the Notice of Termination is delivered; provided that, the Company may waive all or any part of the ten-day notice period for no consideration by giving written notice to the Executive and for all purposes of this Agreement, the Executive’s Termination Date shall be the date determined by the Company.
Notwithstanding anything contained herein, the Termination Date shall not occur until the date on which the Executive incurs a “separation from service” within the meaning of Section 409A.
5.7    Mitigation. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and except as provided in Section 5.2(c), any amounts payable pursuant to this Section 5 shall not be reduced by compensation the Executive earns on account of employment with another employer.
5.8    Resignation of All Other Positions. Upon termination of the Executive’s employment hereunder for any reason, the Executive shall be deemed to have resigned from all positions that the Executive holds as an officer or member of the board of directors (or a committee thereof) of the Company or any of its affiliates.
5.9    Section 280G.  
(a)    Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or its affiliates to the Executive or for the Executive’s benefit pursuant to the terms of this Agreement or otherwise (“Covered Payments”) constitute parachute payments (“Parachute Payments”) within the meaning of Section 280G of the Code and would, but for this Section 5.9 be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then the Covered Payments shall be either (i) reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the “Reduced Amount”) or (ii) payable in full if the Executive’s receipt on an after-tax basis of the full amount of payments and benefits (after taking into account the applicable federal, state, local and foreign income, employment and excise taxes (including the Excise Tax)) would result in the Executive receiving an amount greater than the Reduced Amount on an after-tax basis. Any reduction in the Covered Payments shall be made in a manner that maximizes the Executive’s economic position. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A of the Code, and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.
(b)    All calculations and determinations under this Section 5.9 shall be made by an independent accounting firm or independent tax counsel appointed by the Company (the “Tax Counsel”) whose determinations shall be conclusive and binding on the Company and the
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Executive for all purposes. For purposes of making the calculations and determinations required by this Section 5.9, the Tax Counsel may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Company and the Executive shall furnish the Tax Counsel with such information and documents as the Tax Counsel may reasonably request in order to make its determinations under this Section 5.9. The Company shall bear all costs the Tax Counsel may reasonably incur in connection with its services.
6.    Confidential Information. As a condition to the commencement of employment, on or prior to the Effective Date, the Executive shall execute and deliver to the Company the Company Confidential Information and Invention Assignment Agreement, a copy of which is attached hereto as Annex B.
7.    Restrictive Covenants.
7.1    Executive acknowledges and agrees that (i) by virtue of Executive’s employment with the Company will learn valuable trade secrets and other confidential, proprietary information, including the Company’s customer and potential customer lists, relating to the Company’s business, (ii) Executive’s skills, knowledge and services to the Company are unique in nature, (iii) the Company’s business is international in scope and (iv) the Company would be irreparably damaged if Executive were to provide services to any person or entity in violation of the restrictions contained in this Agreement. Accordingly, as a condition of and inducement to the Company to enter into this Agreement, Executive agrees that during the Employment Term and, except as otherwise provided in Section 5.2(f) hereof or the last paragraph of this Section 7, for an additional six (6) months thereafter (such period being referred to herein as the “Restricted Period”), neither Executive nor any Affiliate of Executive (as defined below) shall, directly or indirectly, either for Executive or for any other person or entity:
(a)    in any area in which the Company conducts any phase of its business including production, promotional, and marketing activities engage or participate in, or assist, advise or be connected with (including as an employee, owner, partner, shareholder, officer, director, advisor, consultant, agent or otherwise), or permit Executive’s name to be used by or render services for, any person or entity engaged in a Competing Business (as hereinafter defined); provided, however, that nothing in this Agreement shall prevent Executive from acquiring or owning, as a passive investment, up to two percent (2%) of the outstanding voting securities of an entity engaged in a Competing Business which are publicly traded on any recognized national securities market, subject to the requirement that Executive comply with the Company Customer Confidentiality and Securities Trading Policy in effect from time to time;
(b)    take any action, in connection with a Competing Business, which might divert from the Company or an Affiliate of the Company any opportunity which would be within the scope of the Company’s or such Affiliate’s then business;
(c)    solicit or attempt to solicit any person or entity who is or has been (i) a customer of the Company at any time (A) up to the date hereof or (B) during the Restricted Period to purchase Competing Products or Services (as herein defined) from any person or entity (other than the Company) or (ii) a customer, supplier, licensor, licensee or other business relation of the Company at any time (A) up to the date hereof or (B) during the Restricted Period to cease doing business with the Company; provided,
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however, that this subsection (c) shall only apply to customers, suppliers, licensors or other business relations of the Company with which the Executive had contact or of which the Executive had knowledge as a result of Executive’s employment; or
(d)    induce, entice, hire, employ, attempt to hire or employ, solicit or endeavor to entice away from the Company any person employed by the Company or its affiliates at any time during Executive’s employment or the Restricted Period, in order to accept employment or association with himself or herself, or any other person, firm, corporation or entity whatsoever; approach any such person for any such purpose, or authorize or knowingly cooperate with the taking of any such action by any other person, firm, corporation or entity.
As used herein, a “Competing Business” shall mean a business which engages or is making plans to engage, in whole or in part, in the production, marketing or distributing of products, or the performance, marketing and sale of services, which are competitive with, and are similar to, may be used as substitutes for, or may detract from any products or services of the Company or any Affiliate thereof during the Restricted Period, whether, in the case of products, such products are or were produced by or for the Company for sale by the Company or purchased as finished goods for resale by the Company, or, in the case of services, such services were performed by the Company or by another company or person on behalf of the Company; the products and services subject to these restrictive covenants being herein referred to as “Competing Products and Services”. As used herein, an “Affiliate” shall mean and include any person or entity which controls a party, which such party controls or which is under common control with such party. “Control” means the power, direct or indirect, to influence or cause the direction of the management and policies of a person or entity through voting securities, contract or otherwise.
8.    Non-disparagement. The Executive agrees and covenants that he will not at any time make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning the Company or its businesses, or any of its employees, officers, and existing and prospective customers, suppliers, investors and other associated third parties.
This Section 8 does not, in any way, restrict or impede the Executive from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation or order. The Executive shall promptly provide written notice of any such order to the Company’s Chief Executive Officer.
9.    Acknowledgement. The Executive acknowledges and agrees that the services to be rendered by him to the Company are of a special and unique character; that the Executive will obtain knowledge and skill relevant to the Company’s industry, methods of doing business and marketing strategies by virtue of the Executive’s employment; and that the restrictive covenants and other terms and conditions of this Agreement are reasonable and reasonably necessary to protect the legitimate business interest of the Company.
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The Executive further acknowledges that the amount of his compensation reflects, in part, his obligations and the Company’s rights under Section 6, Section 7 and Section 8 of this Agreement; that he has no expectation of any additional compensation, royalties or other payment of any kind not otherwise referenced herein in connection herewith; that he will not be subject to undue hardship by reason of his full compliance with the terms and conditions of Section 6, Section 7 and Section 8 of this Agreement or the Company’s enforcement thereof.
10.    Remedies. In the event of a breach or threatened breach by the Executive of Section 6, Section 7 or Section 8 of this Agreement, the Executive hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief.
11.    Security.
11.1    Security and Access. The Executive agrees and covenants (a) to comply with all Company security policies and procedures as in force from time to time including without limitation those regarding computer equipment, telephone systems, voicemail systems, facilities access, monitoring, key cards, access codes, passwords, Company intranet, internet, social media and instant messaging systems, computer systems, e-mail systems, computer networks, software, data security, and any and all other Company facilities, IT resources and communication technologies (“Facilities Information Technology and Access Resources”); (b) not to access or use any Facilities and Information Technology Resources except as authorized by the Company; and (iii) not to access or use any Facilities and Information Technology Resources in any manner after the termination of the Executive’s employment by the Company, whether termination is voluntary or involuntary. The Executive agrees to notify the Company promptly in the event he learns of any violation of the foregoing by others, or of any other misappropriation or unauthorized access, use, reproduction or reverse engineering of, or tampering with any Facilities and Information Technology Access Resources or other Company property or materials by others.
11.2    Exit Obligations. Upon (a) voluntary or involuntary termination of the Executive’s employment or (b) the Company’s request at any time during the Executive’s employment, the Executive shall (i) provide or return to the Company any and all Company property, including keys, key cards, access cards, identification cards, security devices, employer credit cards, network access devices, computers, cell phones, smartphones, PDAs, pagers, fax machines, equipment, speakers, webcams, manuals, reports, files, books, compilations, work product, e-mail messages, recordings, tapes, disks, thumb drives or other removable information storage devices, hard drives, and data and all Company documents and materials belonging to the Company and stored in any fashion, including but not limited to those that constitute or contain any confidential information or work product, that are in the possession or control of the Executive, whether they were provided to the Executive by the Company or any of its business associates or created by the Executive in connection with his employment by the Company; and (ii) delete or destroy all copies of any such documents and materials not returned to the Company that remain in the Executive’s possession or control, including those stored on any non-Company devices, networks, storage locations and media in the Executive’s possession or control.
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12.    Governing Law: Jurisdiction and Venue. This Agreement, for all purposes, shall be construed in accordance with the laws of Iowa without regard to conflicts of law principles. Any action or proceeding by either of the parties to enforce this Agreement shall be brought only in a state or federal court located in the state of Iowa, county of Story. The parties hereby irrevocably submit to the non-exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.
13.    Entire Agreement. Unless specifically provided herein, this Agreement contains all of the understandings and representations between the Executive and the Company pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. The parties mutually agree that the Agreement can be specifically enforced in court and can be cited as evidence in legal proceedings alleging breach of the Agreement.
14.    Modification and Waiver. No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed by the Executive and by the Chief Executive Officer of the Company. No waiver by either of the parties of any breach by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure of or delay by either of the parties in exercising any right, power or privilege hereunder operate as a waiver thereof to preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.
15.    Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the parties with any such modification to become a part hereof and treated as though originally set forth in this Agreement.
The parties further agree that any such court is expressly authorized to modify any such unenforceable provision of this Agreement in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language to this Agreement or by making such other modifications as it deems warranted to carry out the intent and agreement of the parties as embodied herein to the maximum extent permitted by law.
The parties expressly agree that this Agreement as so modified by the court shall be binding upon and enforceable against each of them. In any event, should one or more of the provisions of this Agreement be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided above, this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been set forth herein.
16.    Captions. Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the caption or heading of any section or paragraph.
17.    Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
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18.    Section 409A. This Agreement is intended to comply with Section 409A or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement upon a termination of employment shall only be made upon a “separation from service” under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Executive on account of non-compliance with Section 409A.
Notwithstanding any other provision of this Agreement, if any payment or benefit provided to the Executive in connection with his termination of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and the Executive is determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of the Termination Date (the “Specified Employee Payment Date”). The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to the Executive in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
19.    Successors and Assigns. This Agreement is personal to the Executive and shall not be assigned by the Executive. Any purported assignment by the Executive shall be null and void from the initial date of the purported assignment. The Company may assign this Agreement to any successor or assign (whether direct or indirect, by Conversion, purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and permitted successors and assigns.
20.    Notice. Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, or by overnight carrier to the parties at the addresses set forth below (or such other addresses as specified by the parties by like notice):
If to the Company:
WORKIVA INC.
2900 University Blvd
Ames, Iowa 50010
Attention: Chief Executive Officer
If to the Executive, to the Executive’s address on file with the Company.
21.    Representations of the Executive. The Executive represents and warrants to the Company that:
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21.1    The Executive’s acceptance of employment with the Company and the performance of his duties hereunder will not conflict with or result in a violation of, a breach of, or a default under any contract, agreement or understanding to which he is a party or is otherwise bound.
21.2    The Executive’s acceptance of employment with the Company and the performance of his duties hereunder will not violate any non-solicitation, non-competition or other similar covenant or agreement of a prior employer.
22.    Withholding. The Company shall have the right to withhold from any amount payable hereunder any Federal, state and local taxes in order for the Company to satisfy any withholding tax obligation it may have with respect to such amount under any applicable law or regulation.
23.    Survival. Upon the expiration or other termination of this Agreement, the respective rights and obligations of the parties hereto shall survive such expiration or other termination to the extent necessary to carry out the intentions of the parties under this Agreement.
24.    Acknowledgment of Full Understanding. THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF HIS CHOICE BEFORE SIGNING THIS AGREEMENT.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

WORKIVA INC.
By: ______________________________
Name: _________________________
Title: ____________________________
EXECUTIVE
Signature: __________________________
Print Name: _______________________________


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ANNEX B

WORKIVA INC.
CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT

    This Confidential Information and Invention Assignment Agreement (“Agreement”) is made and entered into by and between Workiva Inc. (the “Company”) and ___________________ (“Employee”).
    In consideration of the commencement of Employee’s employment relationship with the Company, and the compensation paid and/or to be paid to Employee, Employee hereby acknowledges and agrees with the Company as follows:
    1. Effective Date. This Agreement shall become effective on the earlier to occur of: (i) the commencement of Employee’s employment with the Company, or (ii) the date and time at which any Confidential Information (as defined in Section 2 below) was or is first disclosed to Employee.
    2. Confidential Information. The Company has created, developed or compiled, and will create, develop or compile (or will cause to be created, developed, or compiled) and/or otherwise owns or will own, certain proprietary and/or confidential information that has or could have commercial value or other utility in the business in which the Company is engaged or in which it contemplates engaging, or information which, if disclosed, could be detrimental to the interests of the Company, including, but not limited to, any and all information concerning ideas, designs, techniques, reports, processes, formulas, trade secrets, inventions, discoveries, improvements, research or development and test results, specifications, data, know-how, computer software code and/or systems, all other technology of any kind, business methods, marketing plans, business plans, strategies, forecasts, unpublished financial information, budgets, vendors, customers, employees, projections and business prospects (collectively “Confidential Information”). For purposes of this agreement, “Confidential Information” includes materials and information belonging to the Company’s affiliates or clients and includes not only materials and other information disclosed by the Company to Employee in the course of his/her employment (including such materials and/or information belonging to third parties doing business with the Company), but also materials and other information developed or learned by Employee during the course of his/her employment with the Company, such as Inventions (as defined in Section 7(a) below). In addition to Employee’s obligations under this Section 2, Employee agrees to comply with the Company’s Customer Confidentiality and Securities Trading Policy, as such policy is in effect as of the date hereof and as such policy may be amended from time to time (provided that the Company provides notice to Employee of any such amendments). By executing this Agreement, Employee acknowledges that Employee has received, read and understands the Company’s Customer Confidentiality and Securities Trading Policy.
    3. Protection of Confidential Information. Employee agrees that, at all times during and after his/her employment with the Company, he/she will hold in trust, keep strictly confidential, and not disclose to any third party or make any use of the Confidential Information of the Company, its clients and its affiliates except for the benefit of the Company and only in the course of his/her employment with the Company. Employee further agrees not to cause the transmission, removal, or transport of any Confidential Information or Inventions from the Company’s principal place of business, other Company facilities, such other place of business specified by the Company or from Company computer or other equipment, without prior written approval of the Chief Executive Officer of the Company. In the event that Employee telecommutes or provides services for the Company from a location other than a Company office, Employee shall, at all times, ensure that any Confidential Information or Inventions are maintained on Company computer or other Company equipment at all times, and maintained so that the Confidential Information and Inventions remain confidential. In the event that Employee desires to publish the results
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of his/her work for the Company through literature or speeches, Employee agrees to submit such literature or speeches to the Chief Executive Officer (“CEO”) at least 15 business days before dissemination of such information for a determination, in the Company’s sole discretion, of whether such disclosure may destroy trade secret status or be otherwise prejudicial to the interests of the Company, or whether disclosure may constitute an invasion of the Company’s privacy rights. Employee agrees not to publish, disclose, or otherwise disseminate such information without prior approval of the CEO. Employee acknowledges that he/she is aware that the unauthorized disclosure of Confidential Information of the Company, its clients or its affiliates may be highly prejudicial to the Company’s interests, an invasion of privacy, and/or an improper disclosure of trade secrets. Whenever the approval, designation, specification, or other act of the CEO is required under this Agreement, the CEO may, by written designation, authorize an agent of the Company to perform such act.
    4. Prior Knowledge and Inventions. Except as disclosed on Exhibit “A” to this Agreement, Employee does not know anything about the Company’s, its clients or its affiliates’ Confidential Information, other than the information he/she has learned from the Company. Employee has also disclosed on Exhibit “A” a complete list of all inventions owned in whole or in part by Employee and which Employee desires to exclude from the application of this Agreement (all of which are referred to in this Agreement as “Excluded Inventions”). The Company agrees to receive and hold all such disclosures in confidence.
    5. Prior Commitments. Employee has no agreements, relationships or commitments to any other person or entity which conflict or which may be likely to conflict with Employee’s obligations to the Company under this Agreement.
    6. Proprietary Information or Trade Secrets of Others. Employee will not disclose to the Company, or use, or induce the Company to use, any proprietary information or trade secrets of others. Employee represents and warrants that he/she has returned all property, including trade secrets and other confidential or proprietary information, belonging to all prior employers and agrees to indemnify Company from damages or other liability incurred by Company because of Employee’s breach of his/her obligations to any prior employers.
    7. Assignment of Employee Inventions.
        (a) Disclosure. Employee will promptly disclose in writing to the Company all discoveries, developments, designs, ideas, improvements, inventions, formulas, processes, techniques, know-how, and data (whether or not patentable or registrable under copyright or similar statutes) made, conceived, reduced to practice, or learned by Employee (either alone or jointly with others) during his/her employment with the Company that are related to the present or demonstrably anticipated future business of the Company or its affiliates, or which result from tasks assigned to Employee by the Company, or from the use of facilities or equipment owned, leased, or otherwise used by the Company or its affiliates (all of the foregoing are referred to in this Agreement as “Inventions”). Notwithstanding the foregoing sentence, in no event shall the term “Inventions” be deemed to include the Excluded Inventions for purposes of any provision of this Agreement.
        (b) Post-Employment Disclosure Obligations. Employee shall also promptly disclose in writing to Company all discoveries, developments, designs, ideas, improvements, inventions, formulas, processes, techniques, know-how, and data (whether or not patentable or registrable under copyright or similar statutes) that relate to the present or demonstrably anticipated future business of the Company or its affiliates and that are made, conceived or reduced to practice by Employee (either alone or jointly with others) within 12 months after termination of Employee’s employment for any reason. Employee acknowledges and agrees that all of the foregoing items that are based on the Company’s Confidential Information hereunder – or which were, in fact, made, conceived or reduced to practice during Employee’s employment by the Company – shall constitute Inventions subject to assignment under clause 7(c) below. Employee’s disclosure hereunder shall be narrowly tailored to comply with the restrictions of
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any commercially reasonable non-disclosure agreement signed by the Employee that is meant to protect the trade secrets and confidentiality of a subsequent employer.
        (c) Assignment of Inventions. Employee acknowledges and agrees that all Inventions belong to and shall be the sole property of the Company, subject to the provisions of this Agreement. Employee hereby assigns to the Company all rights, title, and interest Employee may have or may acquire in and to all Inventions. Both during and after his/her service with the Company, Employee agrees, promptly upon the request of the Company, to sign and deliver to the Company such other documents as the Company considers desirable to evidence the assignment to the Company of all rights of Employee, if any, in any Inventions and the Company’s ownership of such Inventions. Notwithstanding the foregoing, Employee shall not be obligated to assign to the Company any Invention that was developed entirely on Employee’s own time without using the Company’s equipment, supplies, facilities or trade secret information, unless such Invention either: (i) relates to the Company’s business or the Company’s actual or demonstrably anticipated research, or (ii) results from any work performed by Employee for the Company.
        (d) Copyrightable Subject Matter. Employee acknowledges and agrees that all copyrightable works, such as designs, artwork, digitized or other computer files, software (source, object and executable code) and documentation, created by Employee (either alone or jointly with others) in the course of working for the Company shall be the exclusive property of Company. Employee agrees that all such work product constitutes “works made for hire” under the copyright laws of the United States and shall be owned by the Company. Employee hereby assigns and agrees to assign to Company all right, title and interest, including all rights in the nature of copyright, in and to such work product not otherwise owned by Company (as a “work for hire” or otherwise), and hereby assigns to Company or waives any so-called “moral rights” in the work product to the extent permitted by law. Both during and after his/her service with the Company, and from time to time, Employee agrees, promptly upon the request of the Company, to sign and deliver to the Company such other documents as the Company considers desirable to evidence the assignment to the Company of all rights of Employee, if any, in the foregoing work product and the Company’s ownership of such work product.
    8. Power of Attorney. In the event the Company is unable to secure Employee’s signature on any document necessary to apply for, prosecute, obtain, or enforce any patent, copyright, or other right or protection relating to any Invention, whether due to mental or physical incapacity or any other cause, Employee hereby irrevocably designates and appoints the Company, and each of its duly authorized officers and agents, as his/her agent and attorney-in-fact to act for, and in his/her behalf and stead, to execute and file any such document and to do all other lawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights, or other rights or protections with the same force and effect as if executed and delivered by the Employee. Such appointment is acknowledged by Employee to be coupled with an interest and, therefore, is irrevocable.
    9. Delivery of Documents and Data upon Termination of Employment. In the event of a voluntary or involuntary termination of Employee’s service with the Company, for any reason or no reason, Employee agrees, promptly and without request, to deliver to and inform the Company of all documents and data pertaining to his/her service and the Confidential Information and Inventions of the Company or its affiliates, whether prepared by Employee or otherwise coming into his/her possession or control, and to sign a Termination Statement, a copy of which is attached as Exhibit “C” to this Agreement. Employee will not retain any written or other tangible material containing any information concerning or disclosing any of the Confidential Information or Inventions of the Company or its affiliates. Employee recognizes that the unauthorized taking of any of the Company’s or its affiliates’ trade secrets may subject the Employee to civil and criminal penalties, and that willful misappropriation may result in an award against Employee for triple the amount of the Company’s and its affiliates damages and their attorney fees in collecting such damages.
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    10. Injunctive Relief. Employee acknowledges that any breach of this Agreement will cause the Company and its affiliates irreparable harm for which damages would be an inadequate remedy and, therefore, in the event of such breach, in addition to its rights and remedies otherwise available at law, the Company and its affiliates shall be entitled to equitable and injunctive relief. Employee hereby waives any requirement for the posting of a bond or other security in the event that the Company seeks an injunction.
    11. Legal Expenses. In the event of litigation or arbitration between the parties arising out of or relating to this Agreement, the prevailing party will be entitled to recover court or arbitration costs and reasonable fees of attorneys, accountants and expert witnesses incurred by such party in connection with the action or arbitration.
    12. Material Condition of Employment. Employee acknowledges and agrees that the protections set forth in this Agreement are a material condition of his/her employment with and compensation by the Company.
    13. Amendment and Effect. This Agreement may not be amended except by an instrument in writing signed by both parties. This Agreement shall be binding on the heirs, executors, administrators, and other legal representatives and assigns of Employee, and is for the benefit of the Company and its successors and assigns.
    14. Severability. It is the desire and intent of the parties that the foregoing provisions of this Agreement shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. If any particular provision of this Agreement is adjudicated to be invalid or unenforceable, such provision shall be deemed to be deleted from this Agreement, such deletion to apply only with respect to the operation of such provision in the particular jurisdiction in which such adjudication is made.
    14. Law. This Agreement shall be governed by the laws of the State of Iowa, without regard to its conflict of law provisions.
    15. Entire Understanding. This Agreement contains the sole, complete and entire agreement and understanding of the parties concerning the matters contained herein and may not be altered, modified or changed in any manner except by a writing duly executed by the parties. No statements, promises or representations have been made by either party to another, or relied upon, and no consideration has been or is offered, promised, expected or held out, other than as stated in the Agreement.
    16. Cumulative Remedies. Each and all of the several rights and remedies provided for in this Agreement shall be cumulative. No one right or remedy shall be exclusive of the others or of any right or remedy allowed in law or in equity. No waiver or indulgence by the Company of any failure by Employee to keep or perform any promise or condition of this Agreement shall be a waiver of any preceding or succeeding breach of the same or any other promise or condition. No waiver by the Company of any right shall be construed as a waiver of any other right. The Company shall not be required to give notice to enforce strict adherence to all terms of this Agreement.
    17. Employment at Will. Nothing in this Agreement shall confer upon Employee any right to continue in the employ of the Company for any period of specific duration, or interfere with, or otherwise restrict in any way, the rights of the Company (or any parent or subsidiary employing or retaining Employee) or of Employee, which rights are hereby expressly reserved by each, to terminate Employee’s employment at any time for any reason, with or without cause.


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CAUTION: THIS AGREEMENT AFFECTS YOUR RIGHTS TO INVENTIONS YOU MAKE DURING YOUR SERVICE WITH THE COMPANY, AND RESTRICTS YOUR RIGHT TO DISCLOSE OR USE THE COMPANY’S CONFIDENTIAL INFORMATION DURING OR SUBSEQUENT TO YOUR SERVICE WITH THE COMPANY. BY SIGNING BELOW, EMPLOYEE IS CERTIFYING THAT HE/SHE HAS READ THIS AGREEMENT CAREFULLY AND UNDERSTANDS ITS TERMS, AND FURTHER THAT EMPLOYEE HAS COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT AND HAS RECEIVED A COPY OF THE WRITTEN NOTIFICATION TO EMPLOYEE CONTAINING CALIFORNIA LABOR CODE SECTION 2870.


WORKIVA INC.EMPLOYEE
________________________________________________________________________________
President and CEO(Signature)
________________________________________
(Printed Name)
________________________________________________________________________________
(Date)(Date)
5

EXHIBIT “A”

Employee Statement

    All capitalized terms not otherwise defined herein shall have the meanings set forth in the Confidential Information and Inventions Assignment Agreement by and between Workiva LLC and the undersigned (the “Agreement”).

    1. Confidential Information. Except as set forth below, I acknowledge at this time that I know nothing about the business or the Confidential Information or Inventions of the Company or its affiliates, except information that has been disclosed to me by the Company. If none, please so state.






2. Prior Inventions. Except as set forth below, I acknowledge at this time that I have not made or reduced to practice (alone or jointly with others) any inventions. If none, please so state.







3. Conflicting Relationships. Except as set forth below, I acknowledge that I have no other current or prior agreements, relationships, or commitments that conflict with my relationship with the Company under the Agreement. If none, please so state.





__________________________________________
                                

__________________________________________________________________________________
(Date)(Signature)

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EXHIBIT “B”

Written Notification to Employee

In accordance with California Labor Code section 2870, you are hereby notified that your Confidential Information and Invention Assignment Agreement does not require you to assign to the Company any invention for which no equipment, supplies, facility, or trade secret information of the Company was used and that was developed entirely on your own time, and does not relate to the business of the Company or to the Company’s actual or demonstrably anticipated research or development, or does not result from any work performed by you for the Company.
Following is the text of California Labor Code section 2870:
“(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his/her rights in an invention to his/her employer shall not apply to an invention that the employee developed entirely on his/her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:
(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or
(2) Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”
I hereby acknowledge receipt of this written notification.

Date: __________________________________________________________________________
(Signature)
________________________________________
(Printed Name)


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EXHIBIT “C”

Termination Certification

For purposes of this Certification, “Confidential Information” has the same meaning as in the Confidential Information and Invention Assignment Agreement (“Agreement”) I executed during my employment. This is to certify that I do not have in my possession, nor have I failed to return, any Confidential Information of the Company or any client of the Company or copies of such information, or any other documents or materials, equipment or other property belonging to the Company or any of its clients. In addition, any personal computer I may have used for Company business has been permanently wiped clean of all Confidential Information. If requested, I will produce my personal computer to the Company for purposes of confirming this representation.
I further certify that I have complied with and will continue to comply with all the terms of the Agreement, including the reporting of any inventions conceived or made by me that are covered by that Agreement.
I further agree that, in compliance with the Agreement, I will preserve as confidential and not use any or all Confidential Information, inventions, or any other information that has or could have commercial value or other utility in the business in which the Company is engaged or in which it contemplates engaging. I will not participate in the unauthorized disclosure of information that could be detrimental to the interests of the Company whether or not such information is identified as confidential or proprietary information by the Company.

EXHIBIT “C” IS INFORMATIONAL ONLY
AND DOES NOT NEED TO BE SIGNED AT THIS TIME

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Document

CERTIFICATION UNDER SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Martin J. Vanderploeg, Ph.D., 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 3, 2021
/s/ Martin J. Vanderploeg, Ph.D.
Martin J. Vanderploeg, Ph.D.
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 3, 2021
/s/ Jill Klindt
Jill Klindt
Senior Vice President, Chief Financial Officer, Chief Accounting Officer and Treasurer
(Principal Financial Officer)


Document

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

I, Martin J. Vanderploeg, 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, 2021 (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 3, 2021
/s/ Martin J. Vanderploeg, Ph.D.
Martin J. Vanderploeg, Ph.D.
President and Chief Executive Officer
(Principal Executive Officer)


Document

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

I, Jill Klindt, Senior Vice President, Chief Financial Officer, Chief Accounting 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, 2021 (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 3, 2021
/s/ Jill Klindt
Jill Klindt
Senior Vice President, Chief Financial Officer, Chief Accounting Officer and Treasurer
(Principal Financial Officer)