We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Workiva (WK) Posts Wider Loss in Q4, Wdesk Adoption Strong
Read MoreHide Full Article
Workiva Inc. (WK - Free Report) reported fourth-quarter 2017 loss of 19 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 22 cents. However, the figure was significantly wider than the year-ago quarter’s loss of 9 cents.
Total revenues increased 17.5% year over year to $54.5 million, slightly better than the Zacks Consensus Estimate of $53.3 million. The company continued to add Wdesk users. Management stated that Non-SEC use cases now comprise 54% of its subscription bookings.
Subscription and support (S&S) revenues (83.6% of total revenues) increased 18.8% to $45.5 million. Almost 50% of the S&S revenue growth came from new customers, added in the last 12 months. The remaining 50% of the increase came from deeper penetration of the company’s products into existing customer base.
Professional services (16.4% of total revenues) revenues were up 11.3% to almost $9 million.
Workiva is spending heavily on developing its enterprise wide Wdesk platform. Investments are focused on additional functionality, greater scalability, data connectors, talent training, packaging, partnerships and other initiatives. These are expected to drive top-line growth in the long haul.
Expanding Customer Base Drives Growth
Workiva had 3,063 customers as of Dec 31, 2017, a net increase of 291 customers from Dec 31, 2016. Exiting the quarter, the company had 324 customers with an annual contract value (ACV) of more than $100,000, up 37% from 236 customers at the end of the year-ago quarter.
Moreover, the company had 146 customers with an ACV of more than $150,000, up 52% from 96 customers at the end of the year-ago quarter.
Further, Workiva's revenue-retention rate (excluding add-on revenues) was 96%. Including add-on revenues, retention rate was 107.6% as of Dec 31.
Operating Details
Non-GAAP gross margin contracted 90 basis points (bps) from the year-ago quarter to 71.1%.
S&S gross margin contracted 20 bps to 81.2%. This was primarily due to an increase in employee headcount and compensation to support initiatives in new markets. Professional services gross margin was 19.9%, down from 27.1% in the year-ago quarter.
Research & development (R&D) expenses as percentage of revenues increased 330 bps. Sales & marketing (S&M) expenses as percentage of revenues increased 80 bps. General & administrative (G&A) expenses as percentage of revenues increased 240 bps on a year-over-year basis.
The higher operating expenses reflected increases in compensation, travel and consulting expenses and continuing investment on developing the platform.
Operating loss was $8.4 million, wider than loss of $3.7 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
Workiva exited the quarter with cash and cash equivalents of $76.7 million, a decrease of $1.1 million from the previous quarter. Net cash used by operating activities was $6.2 million, compared with cash provided of $5.2 million in the year-ago quarter.
Guidance
For first-quarter 2018, total revenues are anticipated between $57.3 million and $57.8 million. Management expects ASC 606 will have an unfavorable impact of approximately $2 million on professional services revenues in the first-quarter.
Non-GAAP operating loss is expected in the range of $7.8-$8.3 million. Non-GAAP net loss is expected in the range of 19-20 cents per share.
For 2018, Workiva forecasts total revenues between $234 million and $236 million. Non-GAAP operating loss is expected in the range of $32-$34 million.
Non-GAAP net loss is projected in the range of 77–82 per share.
Zacks Rank & Key Picks
Workiva carries a Zacks Rank #3 (Hold).
Paycom Software (PAYC - Free Report) , Facebook and The Trade Desk (TTD - Free Report) are some better-ranked stocks worth considering in the broader technology sector. While Paycom sports a Zacks Rank #1 (Strong Buy), both Facebook and The Trade Desk carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Paycom, Facebook and The Trade Desk are currently pegged at 25.75%, 26.51% and 25%, respectively.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Image: Bigstock
Workiva (WK) Posts Wider Loss in Q4, Wdesk Adoption Strong
Workiva Inc. (WK - Free Report) reported fourth-quarter 2017 loss of 19 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 22 cents. However, the figure was significantly wider than the year-ago quarter’s loss of 9 cents.
Total revenues increased 17.5% year over year to $54.5 million, slightly better than the Zacks Consensus Estimate of $53.3 million. The company continued to add Wdesk users. Management stated that Non-SEC use cases now comprise 54% of its subscription bookings.
Subscription and support (S&S) revenues (83.6% of total revenues) increased 18.8% to $45.5 million. Almost 50% of the S&S revenue growth came from new customers, added in the last 12 months. The remaining 50% of the increase came from deeper penetration of the company’s products into existing customer base.
Professional services (16.4% of total revenues) revenues were up 11.3% to almost $9 million.
Workiva Inc. Price, Consensus and EPS Surprise
Workiva Inc. Price, Consensus and EPS Surprise | Workiva Inc. Quote
Workiva is spending heavily on developing its enterprise wide Wdesk platform. Investments are focused on additional functionality, greater scalability, data connectors, talent training, packaging, partnerships and other initiatives. These are expected to drive top-line growth in the long haul.
Expanding Customer Base Drives Growth
Workiva had 3,063 customers as of Dec 31, 2017, a net increase of 291 customers from Dec 31, 2016. Exiting the quarter, the company had 324 customers with an annual contract value (ACV) of more than $100,000, up 37% from 236 customers at the end of the year-ago quarter.
Moreover, the company had 146 customers with an ACV of more than $150,000, up 52% from 96 customers at the end of the year-ago quarter.
Further, Workiva's revenue-retention rate (excluding add-on revenues) was 96%. Including add-on revenues, retention rate was 107.6% as of Dec 31.
Operating Details
Non-GAAP gross margin contracted 90 basis points (bps) from the year-ago quarter to 71.1%.
S&S gross margin contracted 20 bps to 81.2%. This was primarily due to an increase in employee headcount and compensation to support initiatives in new markets. Professional services gross margin was 19.9%, down from 27.1% in the year-ago quarter.
Research & development (R&D) expenses as percentage of revenues increased 330 bps. Sales & marketing (S&M) expenses as percentage of revenues increased 80 bps. General & administrative (G&A) expenses as percentage of revenues increased 240 bps on a year-over-year basis.
The higher operating expenses reflected increases in compensation, travel and consulting expenses and continuing investment on developing the platform.
Operating loss was $8.4 million, wider than loss of $3.7 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
Workiva exited the quarter with cash and cash equivalents of $76.7 million, a decrease of $1.1 million from the previous quarter. Net cash used by operating activities was $6.2 million, compared with cash provided of $5.2 million in the year-ago quarter.
Guidance
For first-quarter 2018, total revenues are anticipated between $57.3 million and $57.8 million. Management expects ASC 606 will have an unfavorable impact of approximately $2 million on professional services revenues in the first-quarter.
Non-GAAP operating loss is expected in the range of $7.8-$8.3 million. Non-GAAP net loss is expected in the range of 19-20 cents per share.
For 2018, Workiva forecasts total revenues between $234 million and $236 million. Non-GAAP operating loss is expected in the range of $32-$34 million.
Non-GAAP net loss is projected in the range of 77–82 per share.
Zacks Rank & Key Picks
Workiva carries a Zacks Rank #3 (Hold).
Paycom Software (PAYC - Free Report) , Facebook and The Trade Desk (TTD - Free Report) are some better-ranked stocks worth considering in the broader technology sector. While Paycom sports a Zacks Rank #1 (Strong Buy), both Facebook and The Trade Desk carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Paycom, Facebook and The Trade Desk are currently pegged at 25.75%, 26.51% and 25%, respectively.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>