10-Q 1 wk-20240930.htm 10-Q wk-20240930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 10-Q
___________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For transition period from               to
Commission File Number 001-36773
___________________________________
WORKIVA INC.
(Exact name of registrant as specified in its charter)
___________________________________
Delaware
(State or other jurisdiction of incorporation or organization)
47-2509828
(I.R.S. Employer Identification Number)
2900 University Blvd
Ames, IA 50010
(888) 275-3125
(Address of principal executive offices and zip code)
(888) 275-3125
(Registrant's telephone number, including area code)
___________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A common stock, par value $.001WKNew York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer    ý
Accelerated filer o
Non-accelerated filer    o
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes  No ý
As of November 1, 2024, there were approximately 51,545,404 shares of the registrant's Class A common stock and 3,845,583 shares of the registrant's Class B common stock outstanding.



WORKIVA INC.
TABLE OF CONTENTS
Page
i

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Quarterly Report on Form 10-Q are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical facts, including statements regarding our future results of operations and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, in “Item 1A. Risk Factors” in Part II of this Quarterly Report on Form 10-Q and in any subsequent filing we make with the SEC, as well as in any documents incorporated by reference that describe risks and factors that could cause results to differ materially from those projected in these forward-looking statements.
Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after completion of this Quarterly Report on Form 10-Q to conform these statements to actual results or revised expectations.
ii

Part I. Financial Information
Item 1.     Financial Statements
    
WORKIVA INC.

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

WORKIVA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(in thousands, except share and per share amounts)
As of September 30, 2024As of December 31, 2023
(unaudited)
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable
$13,346 $5,204 
Accrued expenses and other current liabilities
111,029 97,921 
Deferred revenue
414,229 380,843 
Finance lease obligations555 532 
Total current liabilities539,159 484,500 
Convertible senior notes, non-current764,281 762,455 
Deferred revenue, non-current
27,527 36,177 
Other long-term liabilities
236 178 
Operating lease liabilities, non-current8,062 10,890 
Finance lease obligations, non-current13,631 14,050 
Total liabilities1,352,896 1,308,250 
Stockholders’ deficit
Class A common stock, $0.001 par value per share, 1,000,000,000 shares authorized, 51,526,990 and 50,333,435 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
52 50 
Class B common stock, $0.001 par value per share, 500,000,000 shares authorized, 3,845,583 and 3,845,583 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively
4 4 
Preferred stock, $0.001 par value per share, 100,000,000 shares authorized, no shares issued and outstanding
  
Additional paid-in-capital
645,083 562,942 
Accumulated deficit
(698,868)(652,641)
Accumulated other comprehensive income2,919 255 
Total stockholders’ deficit(50,810)(89,390)
Total liabilities and stockholders’ deficit$1,302,086 $1,218,860 
See accompanying notes.
2

WORKIVA INC.

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

See accompanying notes.

3

WORKIVA INC.

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

See accompanying notes.

4

WORKIVA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands)
(unaudited)
Nine Months Ended September 30, 2024
Common Stock (Class A and B)
SharesAmountAdditional Paid-in-CapitalAccumulated Other Comprehensive Income (Loss)Accumulated Deficit
Total Stockholders' Deficit
Balances at December 31, 202354,179 $54 $562,942 $255 $(652,641)$(89,390)
Stock-based compensation expense— — 23,007 — — 23,007 
Issuance of common stock upon exercise of stock options19 1 301 — — 302 
Issuance of common stock under employee stock purchase plan88 — 7,113 — — 7,113 
Issuance of restricted stock units590 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(91)— (8,611)— — (8,611)
Net loss— — — — (11,687)(11,687)
Other comprehensive loss— — — (3,890)— (3,890)
Balances at March 31, 202454,785 $55 $584,752 $(3,635)$(664,328)$(83,156)
Stock-based compensation expense— — 25,402 — — 25,402 
Issuance of common stock upon exercise of stock options18 — 290 — — 290 
Issuance of restricted stock units131 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(20)— (1,640)— — (1,640)
Net loss— — — — (17,548)(17,548)
Other comprehensive loss— — — (1,095)— (1,095)
Balances at June 30, 202454,914 $55 $608,804 $(4,730)$(681,876)$(77,747)
Stock-based compensation expense27,47027,470 
Issuance of common stock upon exercise of stock options20813,2733,274 
Issuance of common stock under employee stock purchase plan1066,7096,709 
Issuance of restricted stock units160— 
Tax withholding related to net share settlements of stock-based compensation awards(15)(1,173)(1,173)
Net loss(16,992)(16,992)
Other comprehensive income7,6497,649 
Balances at September 30, 202455,373$56 $645,083 $2,919 $(698,868)$(50,810)
5

WORKIVA INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (continued)
(in thousands)
(unaudited)
Nine Months Ended September 30, 2023
Common Stock (Class A and B)
SharesAmountAdditional Paid-in-Capital
Accumulated Other Comprehensive Loss
Accumulated Deficit
Total Stockholders' Equity (Deficit)
Balances at December 31, 202252,652 $53 $537,732 $(6,686)$(525,116)$5,983 
Stock-based compensation expense— — 38,042 — — 38,042 
Issuance of common stock upon exercise of stock options102 — 1,457 — — 1,457 
Issuance of common stock under employee stock purchase plan107 — 5,546 — — 5,546 
Issuance of restricted stock units449 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(78)— (7,228)— — (7,228)
Net loss— — — — (46,150)(46,150)
Other comprehensive income— — — 3,280 — 3,280 
Balances at March 31, 202353,232 $53 $575,549 $(3,406)$(571,266)$930 
Stock-based compensation expense— — 20,610 — — 20,610 
Issuance of common stock upon exercise of stock options47 1 746 — — 747 
Issuance of restricted stock units266 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(12)— (1,212)— — (1,212)
Net loss— — — — (20,910)(20,910)
Other comprehensive loss— — — (8)— (8)
Balances at June 30, 202353,533 $54 $595,693 $(3,414)$(592,176)$157 
Stock-based compensation expense— — 19,377 — — 19,377 
Issuance of common stock upon exercise of stock options70 — 1,120 — — 1,120 
Issuance of common stock under employee stock purchase plan93 — 6,967 — — 6,967 
Issuance of restricted stock units332 — — — — — 
Tax withholding related to net share settlements of stock-based compensation awards(9)— (984)— — (984)
Induced conversion of convertible senior notes
(81,080)(81,080)
Net loss— — — — (56,269)(56,269)
Other comprehensive loss— — — (2,981)— (2,981)
Balances at September 30, 2023
54,019 $54 $541,093 $(6,395)$(648,445)$(113,693)

See accompanying notes.
6

WORKIVA INC.

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

WORKIVA INC.

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

See accompanying notes.
8

WORKIVA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Significant Accounting Policies
Organization
Workiva Inc., a Delaware corporation, and its wholly-owned subsidiaries (the “Company” or “we” or “us”) provides software solutions to bring customers’ financial reporting, Governance, Risk, and Compliance (“GRC”) and Environmental, Social, and Governance (“ESG”) data together in a controlled, secure, audit-ready platform. Our platform simplifies the most complex reporting and disclosure challenges by streamlining processes, connecting data and teams, and ensuring consistency. Our operational headquarters are located in Ames, Iowa, with additional offices located in the United States, Europe, the Asia-Pacific region and Canada.
Basis of Presentation and Principles of Consolidation
The financial information presented in the accompanying unaudited condensed consolidated financial statements has been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated balance sheet data as of December 31, 2023 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of our financial position and results of operations. The operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results expected for the full year ending December 31, 2024.
Seasonality affects our revenue, expenses and cash flows from operations. Revenue from professional services is generally higher in the first quarter as many of our customers file their 10-K in the first calendar quarter. Our sales and marketing expense also has some degree of seasonality. Sales and marketing expenses have historically been higher in the third quarter due to our annual user conference in September. In addition, the timing of cash bonus payments to employees during the first and fourth calendar quarters may result in some seasonality in operating cash flow. The condensed consolidated financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in this report and the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 20, 2024.
The unaudited condensed consolidated financial statements include the accounts of Workiva Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
9

Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and various other assumptions believed to be reasonable. These estimates include, but are not limited to, the allowance for doubtful accounts, the determination of the relative selling prices of our services, the measurement of material rights, health insurance claims incurred but not yet reported, valuation of available-for-sale marketable securities, useful lives of deferred contract costs, intangible assets and property and equipment, goodwill, income taxes, discount rates used in the valuation of right-of-use assets and lease liabilities, and certain assumptions used in the valuation of equity awards. While these estimates are based on our best knowledge of current events and actions that may affect us in the future, actual results may differ materially from these estimates.
Recently Adopted Accounting Pronouncements
None.
New Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The standard is effective for annual periods beginning after December 15, 2023, with early adoption permitted. We do not believe the adoption of this standard will have a material impact on our consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are assessing the effect of adopting this standard on our consolidated financial statements and related disclosures.
10

2. Supplemental Consolidated Balance Sheet Information
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
As of September 30, 2024As of December 31, 2023
Accrued vacation$18,889 $15,356 
Accrued commissions11,211 11,969 
Accrued bonuses23,195 6,825 
Accrued payroll6,604 7,206 
Estimated health insurance claims2,417 3,462 
Accrued interest1,197 3,510 
ESPP employee contributions4,287 7,540 
Customer deposits25,720 24,763 
Operating lease liabilities4,001 5,256 
Accrued other liabilities13,508 12,034 
$111,029 $97,921 

3. Cash Equivalents and Marketable Securities
At September 30, 2024, cash equivalents and marketable securities consisted of the following (in thousands):
Amortized Cost
Unrealized Gains
Unrealized Losses
Aggregate Fair Value
Money market funds$99,716 $— $— $99,716 
Commercial paper5,953   5,953 
U.S. treasury debt securities255,229 989 (34)256,184 
U.S. government agency debt securities92,849 401 (2)93,248 
Corporate debt securities181,850 874 (14)182,710 
$635,597 $2,264 $(50)$637,811 
Included in cash and cash equivalents$109,694 $2 $— $109,696 
Included in marketable securities$525,903 $2,262 $(50)$528,115 
11

At December 31, 2023, cash equivalents and marketable securities consisted of the following (in thousands):
Amortized Cost
Unrealized Gains
Unrealized Losses
Aggregate Fair Value
Money market funds$108,826 $— $— $108,826 
Commercial paper56,115   56,115 
U.S. treasury debt securities224,136 531 (80)224,587 
U.S. government agency debt securities110,036 256 (15)110,277 
Corporate debt securities165,341 497 (187)165,651 
Foreign government debt securities999  (7)992 
$665,453 $1,284 $(289)$666,448 
Included in cash and cash equivalents$108,826 $— $— $108,826 
Included in marketable securities$556,627 $1,284 $(289)$557,622 

The contractual maturities of the investments classified as marketable securities are as follows (in thousands):
As of September 30, 2024
Due within one year$348,502 
Due in one to two years179,613 
$528,115 
The following table presents gross unrealized losses and fair values for those cash equivalents and marketable securities that were in an unrealized loss position as of September 30, 2024, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands):
As of September 30, 2024
Less than 12 months
12 months or greater
Fair Value
Unrealized Loss
Fair Value
Unrealized Loss
U.S. treasury debt securities$39,627 $(30)$7,490 $(4)
U.S. government agency debt securities957 (2)  
Corporate debt securities17,183 (9)5,842 (5)
Total$57,767 $(41)$13,332 $(9)
We do not believe the unrealized losses represent credit losses based on our evaluation of available evidence as of September 30, 2024, which includes an assessment of whether it is more likely than not we will be required to sell the investment before recovery of the investment's amortized cost basis.
4. Fair Value Measurements
We determine the fair values of our financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal
12

or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3 - Inputs are unobservable inputs based on our assumptions.
Financial Assets
Cash equivalents primarily consist of AAA-rated money market funds with overnight liquidity and no stated maturities. We classified cash equivalents as Level 1 due to the short-term nature of these instruments and measured the fair value based on quoted prices in active markets for identical assets.
When available, our marketable securities are valued using quoted prices for identical instruments in active markets. If we are unable to value our marketable securities using quoted prices for identical instruments in active markets, we value our investments using broker reports that utilize quoted market prices for comparable instruments. We validate, on a sample basis, the derived prices provided by the brokers by comparing their assessment of the fair values of our investments against the fair values of the portfolio balances of another third-party professional pricing service. As of September 30, 2024, all of our marketable securities were valued using quoted prices for comparable instruments in active markets and are classified as Level 2.
Based on our valuation of our money market funds and marketable securities, we concluded that they are classified in either Level 1 or Level 2, and we have no financial assets measured using Level 3 inputs on a recurring basis. The following table presents information about our assets that are measured at fair value on a recurring basis using the above input categories (in thousands):
Fair Value Measurements as of September 30, 2024Fair Value Measurements as of December 31, 2023
Description
Total
Level 1
Level 2
Total
Level 1
Level 2
Money market funds$99,716 $99,716 $ $108,826 $108,826 $ 
Commercial paper5,953  5,953 56,115  56,115 
U.S. treasury debt securities256,184  256,184 224,587  224,587 
U.S. government agency debt securities93,248  93,248 110,277  110,277 
Corporate debt securities182,710  182,710 165,651  165,651 
Foreign government debt securities   992  992 
$637,811 $99,716 $538,095 $666,448 $108,826 $557,622 
Included in cash and cash equivalents$109,696 $108,826 
Included in marketable securities$528,115 $557,622 
13

Convertible Senior Notes
As of September 30, 2024, the fair value of our convertible senior notes due in 2026 and 2028 was $82.4 million and $659.7 million, respectively. The fair value was determined based on the quoted price of the convertible senior notes in an over-the-counter market on the last trading day of the reporting period and has been classified as Level 2 in the fair value hierarchy. See Note 5 to the condensed consolidated financial statements for more information.
5. Convertible Senior Notes
The following table presents details of our convertible senior notes, which are further discussed below (original principal in thousands):
Month Issued
Maturity Date
Free Convertibility Date
Redemption Date
Original Principal (including overallotment)
Initial Conversion Rate per $1,000 Principal
Initial Conversion Price
2026 Notes
August 2019August 15, 2026May 15, 2026August 21, 2023$345,000 12.4756$80.16 
2028 Notes
August 2023August 15, 2028May 15, 2028August 21, 2026$702,000 7.4690$133.89 
In August 2019, we issued $345.0 million aggregate principal amount of 1.125% convertible senior notes due 2026 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, including the exercise in full by the initial purchasers of their option to purchase an additional $45.0 million principal amount (the "2026 Notes”). The 2026 Notes bear interest at a fixed rate of 1.125% per annum, payable semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2020. Proceeds from the issuance of the 2026 Notes totaled $335.9 million, net of initial purchaser discounts and issuance costs.
In August 2023, we issued $702.0 million aggregate principal amount of 1.250% convertible senior notes due 2028 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, including the partial exercise of 77.0 million principal amount by the initial purchasers of their option to purchase up to an additional $100 million principal amount (the "2028 Notes”). The 2028 Notes bear interest at a fixed rate of 1.250% per annum, payable semi-annually in arrears on February 15 and August 15 of each year, commencing on February 15, 2024. Proceeds from the issuance of the 2028 Notes totaled $691.1 million, net of initial purchaser discounts and issuance costs.
The 2026 Notes and the 2028 Notes are together referred to as the "Notes".
The Notes were issued pursuant to an indenture and are senior, unsecured obligations of the Company. The 2028 Notes will rank equally with all of the Company’s existing and future senior unsecured indebtedness, including the Company’s outstanding 2026 Notes.
Holders of the Notes may convert all or a portion of their Notes prior to the close of business on their respective Free Convertibility dates, in multiples of $1,000 principal amount, only under the following circumstances:
during any calendar quarter commencing after the calendar quarter in which the respective Notes were issued (and only during such calendar quarter), if the last reported sale price of our Class A common stock, par value $0.001 per share, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including,
14

the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
during the five consecutive business day period immediately following any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined below) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A common stock and the conversion rate on each such trading day;
if we call any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or
upon the occurrence of certain specified corporate events as set forth in the relevant indenture.
On or after the relevant Free Convertibility Date, holders of the Notes may convert their Notes at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the Notes.
Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A common stock or a combination of cash and shares of our Class A common stock, at our election, in the manner and subject to the terms and conditions provided in the indenture.
The Company may redeem for cash all or any portion of the Notes, at its option, on or after the respective Redemption Date, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the respective Redemption Date.
During the third quarter of 2024 none of the conversion conditions were met and therefore the Notes are not convertible at the option of the holders. As a result, the Notes were classified as non-current liabilities on the condensed consolidated balance sheet as of September 30, 2024.
Interest expense representing the amortization of issuance costs as well as contractual interest expense is amortized to interest expense at an effective interest rate of 1.5% and 1.6% over the term of the 2026 Notes and 2028 Notes, respectively.
As of September 30, 2024, the remaining life of the 2026 Notes and 2028 Notes were approximately 1.8 years and 3.8 years, respectively.
The net carrying amount of the Notes was as follows (in thousands):
September 30, 2024December 31, 2023
2026 Notes
2028 Notes
2026 Notes
2028 Notes
Principal$71,242 $702,000 $71,242 $702,000 
Unamortized issuance costs(508)(8,453)(711)(10,076)
Net carrying amount$70,734 $693,547 $70,531 $691,924 

15

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


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




Options

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




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

10. Net Loss Per Share
Net loss per share is allocated based on the contractual participation rights of the Class A and Class B common shares as if the loss for the year has been distributed. As the liquidation and dividend rights are identical, the net loss is allocated on a proportionate basis.
A reconciliation of the denominator used in the calculation of basic and diluted loss per share is as follows (in thousands, except share and per share data):
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Three months ended
September 30, 2024September 30, 2023
Class A
Class B
Class A
Class B
Numerator
Net loss$(15,816)$(1,176)$(52,281)$(3,988)
Denominator
Weighted-average common shares outstanding - basic and diluted51,736,258 3,845,583 50,411,358 3,845,583 
Basic and diluted net loss per share$(0.31)$(0.31)$(1.04)$(1.04)
Nine months ended
September 30, 2024September 30, 2023
Class AClass BClass AClass B
Numerator
Net loss$(43,008)$(3,219)$(114,522)$(8,807)
Denominator
Weighted-average common shares outstanding - basic and diluted51,380,671 3,845,583 50,132,483 3,855,308 
Basic and diluted net loss per share$(0.84)$(0.84)$(2.28)$(2.28)
The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share were as follows:
As of
September 30, 2024September 30, 2023
Shares subject to outstanding common stock options966,417 1,289,808 
Shares subject to unvested restricted stock units and performance restricted stock units2,657,795 2,273,719 
Shares issuable pursuant to the ESPP125,951 86,000 
Shares underlying our convertible senior notes
6,132,025 9,547,320 
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11. Acquisitions
On June 17, 2024, we acquired all of the issued and outstanding equity interests in Sustain.Life, Inc. (“Sustain.Life”), a leading provider of carbon accounting solutions, for $98.1 million net of cash acquired of $0.3 million to launch Workiva Carbon. Workiva Carbon is an audit-ready carbon accounting solution that helps organizations measure, manage, track, and report carbon emissions, including data from third-party supply chain partners. Coupled with Workiva's ESG reporting solution, companies can now collect key business data, calculate critical metrics, set data-driven ESG strategy, measure progress, and report results all in the Workiva platform.
The transaction was accounted for as a business combination. The purchase price has been preliminarily allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair values of goodwill and definite-lived intangible assets acquired in the acquisition were externally estimated primarily based on the replacement cost approach. The fair values of assets acquired and liabilities assumed may change over the measurement period as additional information is received. The primary area subject to change includes our review of the valuation of intangible assets. We expect to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill. The goodwill recognized was primarily attributable to the assembled workforce, operational synergies, and strategic benefits that are expected to be achieved and is not deductible for income tax purposes.
The following table presents a preliminary allocation of the purchase price to the assets acquired and liabilities assumed at the date of acquisition (in thousands):
Cash consideration$98,343 
Total consideration$98,343 
Cash$251 
Accounts receivable, net488 
Other receivables4,066 
Prepaid expenses and other239 
Intangible assets
11,890 
Goodwill89,146 
Accounts payable(211)
Accrued liabilities(5,223)
Deferred revenue
(1,042)
Other long-term liabilities
(1,261)
Fair value of assets and liabilities$98,343 
We incurred costs related to the acquisition of approximately $1.1 million during the nine months ended September 30, 2024. All acquisition related costs were expensed as incurred and have been recorded in general and administrative expenses in our condensed consolidated statements of operations.
The amount of revenues and net loss from the acquisition included in our condensed consolidated statements of operations for the three and nine months ended September 30, 2024 were not material.