IPO Report: Workiva (WK)

Workiva (WK) has pioneered a cloud-based and mobile-enabled platform for enterprises to collaboratively collect, manage, report and analyze critical business data in real time. It is based in Ames, IA.

Nine other companies are scheduled for the week of Dec. 8, 2014. The full IPO calendar is available at IPOpremium.

Manager, Joint-managers: Morgan Stanley and Credit Suisse

Co-managers: Baird, Raymond James, and Stifel

WK scheduled a $101 million IPO with a market capitalization of $553 million at a price range midpoint of $14 for Friday, Dec. 12, 2014 on NYSE. SEC Documents

Workiva IPO Report

Overview

WK has pioneered a cloud-based and mobile-enabled platform for enterprises to collaboratively collect, manage, report and analyze critical business data in real time.

WK’ssecure software platform, Wdesk, allows users to integrate and control all of their business data, regardless of format or location, with innovative live-linking technology.

Conclusion

Neutral plus

Rev +34%; 71% gross profit

Into 60% of Fortune 100 and 500 companies

Loss rate of -34%; never made money

P/E of -14.6

Price-to-sales of 5

Price to book of 7.6

Per share dilution of -$12.17 vs IPO mid-range of $14

Accumulated deficit of -$115mm

Business

WK has pioneered a cloud-based and mobile-enabled platform for enterprises to collaboratively collect, manage, report and analyze critical business data in real time.

WK’ssecure software platform, Wdesk, allows users to integrate and control all of their business data, regardless of format or location, with innovative live-linking technology.

Built on a data engine

WK’sproprietary, integrated word processing, spreadsheet and presentation applications, built upon its data engine, allow thousands of users to collaborate simultaneously on data-linked reports and documents.

Wdesk empowers its customers to dynamically define their business processes and optimize workflows so that critical data can be reported and analyzed more efficiently.

WK’scustomers can gain insights based on their trusted data, which enables better real-time decision-making.

Additionally, WK’scustomers deploy its solutions to serve as a single system of record for critical data, to reduce risk and operational costs, and to increase efficiency in business reporting.

Customers

As of September 30, 2014, WK provided its solutions to more than 2,100 enterprise customers, including over 60% of both the Fortune 500 and Fortune 100.

Explosion of data

The explosion of data within enterprises has rendered existing processes and legacy technologies inefficient at helping users find, understand and report the most critical and relevant information on a timely basis.

Enterprises struggle to manage, report, analyze and understand their ever-expanding volume of data.

Executives need to leverage this data to make real-time decisions to improve performance and reduce risk. In addition, many businesses are required to report an increasing amount of disparate information to a variety of regulators, further straining their ability to produce meaningful and consistent data and reports on a timely basis.

To create business reports, many organizations rely on manual processes, large teams and a variety of point solutions, such as business productivity, email and general-purpose collaboration software.

Exacerbating these challenges is the continued growth in size and complexity of many enterprises, which results in employees and data spread around the world. The stakes for enterprises are high; reporting incorrect, incomplete or untimely information exposes organizations to potential liability, reputational risk and a weakened competitive position.

Workiva empowers organizations to address these challenges by providing a cloud-based and mobile-enabled platform that WK believes is fundamentally changing the way people work.

WK’sWdesk product platform allows multiple users to simultaneously create, review and publish data-linked documents and reports with greater control, accuracy and productivity than ever before.

WK offers its customers solutions for compliance, risk, sustainability and management reporting, as well as enterprise risk management. Underlying these solutions is WK’sscalable, enterprise-grade data engine that collects, aggregates and manages its customers’ unstructured and structured data.

Intellectual property

As of September 30, 2014, WK had 5 issued patents and 13 patent applications pending in the United States relating to WK’splatform.

Competition

The intensity and nature of WK’scompetition varies significantly across its different solutions, as changes in regulation and market trends result in evolving customer requirements for enterprise software. WK’sprimary competition includes:

Manual business processes that rely on legacy business productivity tools;

Diversified enterprise software providers;

Niche software providers who provide point solutions;

Providers of professional services, including consultants and business and financial printers;

Governance, risk and compliance software providers; and

Business intelligence / corporate performance management software providers.

5% shareholders pre-IPO

The Behar Living Trust     22.0%

Daniel Murray    8.4%

Bluestem Funds  7.6%

Dividends

No dividends are planned.

Use of proceeds

WK expects to receive $91 million from its IPO and use it for the following:

for working capital and for other general corporate purposes, including investments in sales and marketing in North America and Europe (among other things, the hiring of additional quota carrying sales people) and in research and development.