On August 1, 2024, Workiva Inc (WK, Financial) released its 8-K filing announcing its financial results for the second quarter ended June 30, 2024. Workiva Inc is a cloud-native platform that simplifies the complexities of reporting and compliance, empowering customers by connecting and transforming data from various systems to create, review, and publish data-linked documents and reports with greater control, consistency, accuracy, and productivity.
Performance Overview
Workiva Inc reported total revenue of $178 million for Q2 2024, surpassing the analyst estimate of $175.22 million and marking a 15% increase from $155 million in Q2 2023. Subscription and support revenue grew by 18% year-over-year to $161 million, while professional services revenue declined by 6% to $17 million.
Financial Achievements
GAAP gross profit for the quarter was $136 million, up from $116 million in the same period last year, with a gross margin of 76.8%. On a non-GAAP basis, gross profit was $139 million, reflecting an 18% increase, and the gross margin was 78.3%. The company reported a GAAP net loss of $18 million, or $0.32 per share, compared to a net loss of $21 million, or $0.39 per share, in Q2 2023. Non-GAAP net income was $9 million, or $0.17 per share, compared to $1 million, or $0.02 per share, in the prior year's second quarter.
Key Metrics and Business Highlights
Workiva Inc ended the quarter with 6,147 customers, a net increase of 287 from the previous year. The company also reported a revenue retention rate of 98%, excluding add-on revenue, and 109% including add-on revenue. Notably, the number of customers with an annual contract value (ACV) of more than $300,000 grew by 31% year-over-year to 356.
Additionally, Workiva announced a $100 million share repurchase program, reflecting confidence in its long-term growth prospects. The company had cash, cash equivalents, and marketable securities totaling $741 million as of June 30, 2024.
Income Statement Summary
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $178 million | $155 million |
| Subscription & Support Revenue | $161 million | $137 million |
| Professional Services Revenue | $17 million | $18 million |
| GAAP Gross Profit | $136 million | $116 million |
| GAAP Net Loss | $18 million | $21 million |
| Non-GAAP Net Income | $9 million | $1 million |
Analysis and Outlook
Workiva Inc's strong performance in Q2 2024, particularly the 18% growth in subscription revenue, underscores the increasing demand for its cloud-native platform. The company's ability to secure large contract deals and expand its customer base with high ACV contracts is a positive indicator of its market position and growth potential.
However, the company continues to face challenges, including a GAAP net loss and a decline in professional services revenue. The announced share repurchase program and robust cash position provide a cushion and reflect management's confidence in the company's future prospects.
For the third quarter of 2024, Workiva Inc expects total revenue to be in the range of $182 million to $183 million, with a GAAP net loss per share between $0.29 and $0.27. For the full year, the company has raised its revenue guidance to a range of $727 million to $729 million.
Overall, Workiva Inc's Q2 2024 results demonstrate solid growth and strategic initiatives that position the company well for future success in the software industry.
Explore the complete 8-K earnings release (here) from Workiva Inc for further details.
