Workiva Inc. reports 18.0% revenue growth in 2020 and 3.2 pp EBITDA Margin growth from -12.8% to -9.5%
02/17/2021 • About Workiva Inc. (
$WK) • By InTwits
Workiva Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Workiva Inc. is a fast growth stock: 2020 revenue growth was 18.0%, 5 year revenue CAGR was 19.3% at 2020 ROIC -9.7%
- The company operates at negative EBITDA Margin: -9.5%
- Workiva Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 was 5.0% while average EBITDA Margin was -15.5% for the sames years
- Workiva Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
- The company has unprofitable business model: ROIC is -9.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 18.0%. Revenue growth showed small slowdown in 20Q4 - it was 16.9% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 8.9 pp from -0.50% to 8.4% in 2020. EBITDA Margin stuck to a growing trend at 3.2 pp per annum in the last 5 years.
Gross Margin increased on 2.9 pp from 71.5% to 74.4% in 2020. SG&A as a % of Revenue increased slightly on 1.5 pp from 56.6% to 58.1% in 2020.
Net Income margin increased on 2.4 pp from -16.2% to -13.8% in 2020. Net Income margin stuck to a growing trend at 2.7 pp per annum in 2016-2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.53% in 2020. The company's CAPEX/Revenue showed almost no change from 2017 to 2020. For the last three years the average CAPEX/Revenue was 0.68%.
Return on investment
The company operates at negative ROIC (-9.7%) and ROE (-74.7%). ROIC jumped on 12.8 pp from -22.5% to -9.7% in 2020. During 2016-2020 ROIC bottomed in 2018 at -784% and was growing since that time.
Leverage (Debt)
Debt level is -3.2x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2020. Debt increased on 3.2% while cash dropped on 15.4%.
Workiva Inc. has no short term refinancing risk: cash is higher than short term debt (5,168.6%).
Management team
Workiva Inc.'s CEO is Martin J Vanderploeg "Marty". Martin J Vanderploeg "Marty" has 2 years tenure with the company.
Financial and operational results
FY ended 12/31/2020
Workiva Inc. ($WK) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 178.6 | 207.9 | 244.3 | 297.9 | 351.6 | 18.0% |
| Gross Profit | 127.0 | 147.6 | 178.5 | 212.9 | 261.4 | 22.8% |
| SG&A | 113.2 | 123.8 | 146.7 | 168.7 | 204.4 | 21.2% |
| EBITDA | -39.8 | -40.8 | -46.0 | -38.0 | -33.5 | |
| EBIT | -43.6 | -44.3 | -49.8 | | | |
| Interest expence | 1.9 | 1.8 | 1.8 | | | |
| Tax | 0.0 | 0.1 | 0.2 | | | |
| Net Income | -44.0 | -44.4 | -50.1 | -48.1 | -48.4 | |
| Stock Based Compensation | 14.2 | 19.5 | 30.8 | | | |
Balance Sheet
|
|---|
| Cash | 51.3 | 60.3 | 77.6 | 381.7 | 322.8 | -15.4% |
| Accounts Receivable | 22.5 | 28.8 | 65.1 | | | |
| Accounts Payable | 0.8 | 3.1 | 5.5 | | | |
| Short Term Debt | 1.3 | 1.2 | 1.2 | 4.4 | 6.2 | 42.2% |
| Long Term Debt | 19.8 | 18.4 | 17.2 | 315.1 | 323.4 | 2.6% |
Cash flow
|
|---|
| Capex | 1.9 | 1.2 | 1.1 | 3.1 | 1.9 | -39.7% |
Ratios
|
|---|
| Revenue growth | 23.0% | 16.4% | 17.5% | 21.9% | 18.0% | |
| EBITDA growth | 1.2% | 2.5% | 12.9% | -17.4% | -11.9% | |
|
|---|
| Gross Margin | 71.1% | 71.0% | 73.0% | 71.5% | 74.4% | 2.9% |
| EBITDA Margin | -22.3% | -19.6% | -18.8% | -12.8% | -9.5% | 3.2% |
| EBIT Margin | -24.4% | -21.3% | -20.4% | | |
| SG&A, % of revenue | 63.3% | 59.5% | 60.0% | 56.6% | 58.1% | 1.5% |
| SBC, % of revenue | 8.0% | 9.4% | 12.6% | | |
| Net Income Margin | -24.6% | -21.4% | -20.5% | -16.2% | -13.8% | 2.4% |
| CAPEX, % of revenue | 1.1% | 0.6% | 0.5% | 1.0% | 0.5% | -0.5% |
|
|---|
| ROIC | -127.6% | -404.2% | -784.5% | -22.5% | -9.7% | 12.8% |
| ROE | | | | | -74.7% | |
| Interest expence / Average debt | 8.9% | 9.1% | 9.6% | | | |
People
|
|---|
| Insider ownership | 7.0% | 7.0% | 7.0% | | | |
| Employees | 1,172 | 1,318 | 1,319 | | | |
| Revenue/Employee, th. $ | 152 | 158 | 185 | | | |
Workiva Inc. ($WK) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 86 | 84 | 88 | 94 | | 22.6% | 14.1% | 18.8% | 16.9% |
| EBITDA | -8 | -16 | -6 | -4 | | - | - | - | - |
| Net Income | -11 | -20 | -11 | -8 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 393 | 402 | 426 | 323 | | 399.7% | 324.6% | 9.5% | -15.4% |
| Short Term Debt | 6 | 1 | 1 | 6 | | 42.8% | -65.7% | -65.3% | 42.2% |
| Long Term Debt | 319 | 319 | 320 | 323 | | 744.9% | 773.1% | 2.0% | 2.6% |
Ratios
|
|---|
| Gross Margin | 73.9% | 73.5% | 75.2% | 74.8% | | 1.8% | 1.6% | 4.5% | 3.5% |
| EBITDA Margin | -9.3% | -18.7% | -6.6% | -4.3% | | -1.5% | -9.7% | 11.7% | 11.0% |
| Net Income Margin | -12.3% | -23.6% | -11.9% | -8.5% | | -1.7% | -12.2% | 9.7% | 11.8% |
Peers in Application Software
Below you can find Workiva Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 14.8% | 15.1% | 19.4% | 14.5% |
|---|
| Workiva Inc. ($WK) | - | 16.4% | 17.5% | 21.9% | 18.0% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 63.8% | 64.4% | 65.3% | 67.9% | 69.4% |
|---|
| Workiva Inc. ($WK) | 71.1% | 71.0% | 73.0% | 71.5% | 74.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -4.7% | -3.3% | -3.3% | 4.5% | 7.7% |
|---|
| Workiva Inc. ($WK) | -22.3% | -19.6% | -18.8% | -12.8% | -9.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| Workiva Inc. ($WK) | 1.1% | 0.6% | 0.5% | 1.0% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.2% | -10.2% | -9.8% | -4.2% | -1.8% |
|---|
| Workiva Inc. ($WK) | -127.6% | -404.2% | -784.5% | -22.5% | -9.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (54 companies) | -0.9x | -0.8x | -0.7x | 0.4x | 0.2x |
|---|
