Financial and compliance reporting software provider, Workiva (NYSE:WK), has reported a 19.1% year-on-year (YoY) revenue growth in Q3 FY2023, reaching $158.2 million. This figure marks a significant increase from $112.7 million two years prior. The company's subscription revenue also experienced a surge, increasing by 21%.
Despite the strong sales growth, Workiva reported a non-GAAP loss of $0.65 per share, a deepening from last year's loss of $0.15 per share. This increased loss comes amid the costly nature of maintaining compliance standards for publicly traded corporations across different regions.
Workiva's full-year revenue guidance exceeded estimates, showcasing the firm's robust financial performance. However, the company's Q4 guidance of $164.5 million fell slightly short by 1.31%. CEO Julie Iskow stated that despite the loss per share, the operating profit surpassed their high-end guidance.
In the context of growing demand for compliance software, Workiva managed to maintain its net revenue retention rate at 112%, expanding its customer base to 5,945. This achievement came despite a significant 44.4% drop in free cash flow to $14.1 million and a steady gross margin of 75.8%.
Founded in 2010, Workiva has been providing software solutions to automate compliance processes for publicly traded corporations across multiple regions with varying rules and regulations. Despite facing challenges such as deepening losses per share and decreasing cash flow, the robust sales growth indicates the firm's potential to navigate through these hurdles and continue its upward trajectory.
InvestingPro Insights
According to real-time data from InvestingPro, Workiva (NYSE:WK) operates with a market cap of 4910M USD and a negative P/E Ratio of -44.76. The revenue for the last twelve months as of Q2 2023 stood at 581.86M USD, reflecting a growth of 17.62%. Despite the growth, the company has been operating at a loss with an operating income of -107.12M USD.
InvestingPro Tips highlight that the company has been experiencing a declining trend in earnings per share, and the stock is currently in oversold territory. Despite these challenges, 6 analysts have revised their earnings upwards for the upcoming period, indicating potential profitability. However, it's important to note that the company has not been profitable over the last twelve months.
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