Workiva (WK) Misses Q1 EPS by 5c, Beats on Revenues; Offers FY18 Guidance

Workiva (NYSE: WK) reported Q1 EPS of ($0.24), $0.05 worse than the analyst estimate of ($0.19). Revenue for the quarter came in at $59.9 million versus the consensus estimate of $57.66 million.

First Quarter 2018 Financial Highlights

• Revenue: Total revenue for the first quarter of 2018 reached $59.9 million, an increase of 15.4% from $51.9 million in the first quarter of 2017. Subscription and support revenue contributed $46.5 million, up 17.5% versus the first quarter of 2017. Professional services revenue was $13.4 million, an increase of 8.7% compared to the same quarter in the prior year. Adoption of ASC 606 caused recognition of professional services revenue to be $1.7 million less for the first quarter of 2018 than what would have been recognized under the legacy standard.
• Gross Profit: GAAP gross profit for the first quarter of 2018 was $43.4 million compared with $37.7 million in the same quarter of 2017. GAAP gross margin was 72.4% versus 72.6% in the first quarter of 2017. Non-GAAP gross profit for the first quarter of 2018 was $43.7 million, an increase of 15.3% compared with the prior year\'s first quarter, and non-GAAP gross margin was 73.0% compared to 73.1% in the first quarter of 2017.
• Loss from Operations: GAAP loss from operations for the first quarter of 2018 was $9.5 million compared with a loss of $6.0 million in the prior year\'s first quarter. Non-GAAP loss from operations was $3.6 million, compared with non-GAAP loss from operations of $1.8 million in the first quarter of 2017. Adoption of ASC 606 caused loss from operations to be $0.2 million less for the first quarter of 2018 than what would have been recognized under the legacy standard.
• Net Loss: GAAP net loss for the first quarter of 2018 was $9.6 million compared with a net loss of $5.8 million for the prior year\'s first quarter. GAAP net loss per basic and diluted share was $0.22 compared with a net loss per basic and diluted share of $0.14 in the first quarter of 2017.
• Non-GAAP net loss for the first quarter of 2018 was $3.7 million compared with a net loss of $1.7 million in the prior year\'s first quarter. Non-GAAP net loss per basic and diluted share was $0.09 compared with a net loss per basic and diluted share of $0.04 in the first quarter of 2017.

Financial Outlook

As of May 2, 2018, Workiva is providing guidance for its second quarter 2018 and full year 2018 as follows:

Second Quarter 2018 Guidance:

• Total revenue is expected to be in the range of $55.7 million to $56.2 million.
• GAAP loss from operations is expected to be in the range of $16.9 million to $17.4 million.
• Non-GAAP loss from operations is expected to be in the range of $10.0 million to $10.5 million.
• GAAP net loss per basic and diluted share is expected to be in the range of $0.40 to $0.41.
• Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.24 to $0.25.
• Net loss per basic and diluted share is based on 43.3 million weighted-average shares outstanding.

Full Year 2018 Guidance:

• Total revenue is expected to be in the range of $235.5 million to $237.0 million.
• GAAP loss from operations is expected to be in the range of $56.3 million to $57.8 million.
• Non-GAAP loss from operations is expected to be in the range of $30.0 million to $31.5 million.
• GAAP net loss per basic and diluted share is expected to be in the range of $1.32 to $1.35.
• Non-GAAP net loss per basic and diluted share is expected to be in the range of $0.72 to $0.75.
• Net loss per basic and diluted share is based on 43.5 million weighted-average shares outstanding.

GUIDANCE:

Workiva sees FY2018 EPS of $0.72-$0.75. Workiva sees FY2018 revenue of $235.3-237 million.

For earnings history and earnings-related data on Workiva (WK) click here.

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