- First Quarter Subscription revenue grew 34% year-over-year to
$51.4 million - Added 8 Net New Enterprise-Wide DAP* Customers with Average ARR* up to
$653 thousand - Expanded strategic alliance with HCL
Announced Strategic Partnership with Execution Management Company Celonis
“In the first quarter the market trends of driving businesses forward through digital transformation continued to accelerate,” said
First Quarter 2022 Financial Highlights:
- Revenue. Total revenue was
$56.8 million in the first quarter of 2022, an increase of 33% year-over-year. Subscription revenue was$51.4 million , an increase of 34% year-over-year compared to 30% year-over-year in the first quarter of 2021. - Annualized Recurring Revenue (ARR)*: as of
March 31, 2022 grew 30% year-over-year to$230 million . - Remaining Performance Obligation (RPO)*: was
$318 million as ofMarch 31, 2022 , an increase of 34% year-over-year. - GAAP Operating Loss: was
$29.6 million in the first quarter of 2022, or 52% of total revenue, compared to$13.0 million , or 31% of total revenue, in the first quarter of 2021. - Non-GAAP Operating Loss*: was
$18.6 million in the first quarter of 2022, or 33% of total revenue, compared to$9.5 million , or 22% of total revenue, in the first quarter of 2021. - Cash Flow: Net cash used in operations in the first quarter of 2022 was
$18.3 million , or 32% of total revenue, compared to$2.9 million used in operations or 7% of total revenue, in the first quarter of 2021. - Free Cash Flow*: was negative
$20.3 million in the first quarter of 2022, or 36% of total revenue, compared to negative$4.1 million , or 10% of total revenue, in the first quarter of 2021. - Cash, Cash Equivalents, and Short-term Deposits were
$326.8 million as ofMarch 31, 2022 .
“I was pleased with the progress of our go to market strategy by further diversifying our channels through partnerships while continuing to see growth with our internal salesforce,” said
First Quarter and Recent Business Highlights:
- In the first quarter,
WalkMe added eight net new Enterprise-Wide DAP* customers for a total of 134, representing customer count growth of 52% year-over-year. ARR* from DAP* customers grew 56% year-over-year. - Customers with over
$100 thousand in ARR* grew 29% year-over-year to 476 and customers with over$1 million in ARR grew 41% year-over-year to 31. - In the fourth quarter of 2021,
WalkMe updated and enhanced its third-party data sources for identifying customers with 500 or more employees and as a result now captures a greater number of customers in this category in the same period compared to the previous methodology. ARR* from customers with 500 or more employees grew 32% year-over-year and represented 87% of total ARR* without the new data sources. With the new data sources, ARR* from customers with 500 or more employees is now greater than 92% of total ARR*. - Announced a strategic partnership with
Celonis , a global leader in execution management, that enables joint customers to maximize the impact and return on digital transformation investments.WalkMe andCelonis are expected to collaborate to optimize their respective customers’ business performance by offering WalkMe’s leading Digital Adoption Platform combined with the real-time process optimization capabilities of the Celonis Execution Management System (EMS ) to accelerate digital transformation. WalkMe expanded its relationship with HCL - a leadingGlobal Technology Company - to create more go to market opportunities in theirDigital Workplace Services Business Group . HCL has invested in WalkMe Digital Adoption skills to deliver a strategic Managed Services Offering to support their customers.
Financial Outlook:
For the second quarter of 2022, the Company currently expects:
- Total revenue of
$59 to$60 million , representing a growth rate of 26% to 28% year-over-year - Non-GAAP operating loss* of
$20 to$19 million
For the full year 2022, the Company currently expects:
- Reiterates Total revenue of
$251 to$255 million , representing a growth rate of 30% to 32% year-over-year - Non-GAAP operating loss* of
$78 to$74 million
*The section titled “Non-GAAP Financial Measures and Key Performance Indicators” below contains a description of the non-GAAP financial measures discussed in this press release and reconciliations between historical GAAP and non-GAAP information are contained in the tables below. The Company is unable to provide a reconciliation of non-GAAP Operating Income (Loss) to Operating Income (Loss), its most directly comparable GAAP financial measure, on a forward-looking basis without unreasonable effort, because items that impact this GAAP financial measure are not within the Company’s control and/or cannot be reasonably predicted. These items may include, but are not limited to, predicting forward-looking share-based compensation. Such information may have a significant, and potentially unpredictable, impact on the Company’s future financial results.
Throughout this press release, we provide a number of key performance indicators used by our management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in the section entitled “Non-GAAP Financial Measures and Key Performance Indicators” in this press release.
Conference Call Information:
A live webcast of the conference call will be accessible on the
Approximately one hour after completion of the live call and for at least 30 days thereafter, an archived version of the webcast will be available on the Company’s investor relations website at https://ir.walkme.com.
Supplemental Financial and Other Information:
We intend to announce material information to the public through the WalkMe Investor Relations website at ir.walkme.com,
Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page of our website.
Non-GAAP Financial Measures and Key Performance Indicators:
In addition to our financial results reported in accordance with GAAP, this press release and the accompanying tables and related presentation materials may contain one or more of the following non-GAAP financial measures: Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Income (Loss), Non-GAAP Operating Margin, Non-GAAP Net Income (Loss) attributable to
Non-GAAP Gross Profit and Non-GAAP Gross Margin. We define Non-GAAP Gross Profit as gross profit excluding share-based compensation and amortization of acquired intangibles. We exclude these items because they occur for reasons that may be unrelated to our core operating performance during the period, and because we believe that such items may obscure underlying business trends and make comparisons of long-term performance difficult. We use Non-GAAP Gross Profit with traditional GAAP measures to evaluate our financial performance. Non-GAAP Gross Margin is calculated as a percentage of revenues.
Non-GAAP Operating Income (Loss) and Non-GAAP Operating Margin. We define Non-GAAP Operating Income (Loss) as income (loss) from operations excluding share-based compensation and amortization of acquired intangibles. We exclude these items because they occur for reasons that may be unrelated to our core operating performance during the period, and because we believe that such items may obscure underlying business trends and make comparisons of long-term performance difficult. We use Non-GAAP Operating Income (Loss) with traditional GAAP measures to evaluate our financial performance. Non-GAAP Operating Margin is calculated as a percentage of revenues.
Non-GAAP Net Income (Loss) attributable to
Free Cash Flow. We define Free Cash Flow as net cash provided by (used in) operating activities, less cash used for purchases of property and equipment and capitalized internal-use software costs. We believe that Free Cash Flow is a useful indicator of liquidity that provides information to management and investors, even if negative, about the amount of cash used in our business. Our Free Cash Flow may vary from period to period and be impacted as we continue to invest for growth in our business.
For more information on the non-GAAP financial measures, please see the reconciliation tables provided below. The accompanying reconciliation tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.
ARR. We define ARR as the annualized value of customer subscription contracts as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms (including contracts for which we are negotiating a renewal). Our calculation of ARR is not adjusted for the impact of any known or projected future events (such as customer cancellations, upgrades or downgrades, or price increases or decreases) that may cause any such contract not to be renewed on its existing terms. In addition, the amount of actual revenue that we recognize over any 12-month period is likely to differ from ARR at the beginning of that period, sometimes significantly. This may occur due to new bookings, cancellations, upgrades, downgrades or other changes in pending renewals, as well as the effects of professional services revenue and acquisitions or divestitures. As a result, ARR should be viewed independently of, and not as a substitute for or forecast of, revenue and deferred revenue. Our calculation of ARR may differ from similarly titled metrics presented by other companies.
Enterprise-Wide DAP Customers: We define Enterprise-Wide DAP Customers as those who have purchased enterprise-wide subscriptions or who have department-wide usage of our Digital Adoption Platform across four or more applications.
Special Note Regarding Forward-Looking Statements:
Certain statements in this press release may constitute “forward-looking” statements and information, within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the safe harbor provisions of the
About
WalkMe’s cloud-based Digital Adoption Platform enables organizations to measure, drive and act to ultimately accelerate their digital transformations and better realize the value of their software investments. Our code-free platform leverages our proprietary technology to provide visibility to an organization’s Chief Information Officer and business leaders, while improving user experience, productivity and efficiency for employees and customers. Alongside walkthroughs and third-party integration capabilities, our platform can be customized to fit an organization’s needs.
Media Contact:
press@walkme.com
Investor Contact:
investors@walkme.com
Condensed Consolidated Balance Sheets | |||||||
(in thousands; unaudited) | |||||||
2022 | 2021 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 249,513 | $ | 276,889 | |||
Short-term deposits | 77,301 | 65,478 | |||||
Trade receivables, net | 47,447 | 37,754 | |||||
Deferred contract acquisition costs | 21,270 | 20,405 | |||||
Prepaid expenses and other current assets | 11,826 | 7,954 | |||||
Total current assets | 407,357 | 408,480 | |||||
Non-current assets: | |||||||
Deferred contract acquisition costs | 35,602 | 35,969 | |||||
Other assets | 604 | 987 | |||||
Property and equipment, net | 12,945 | 10,885 | |||||
3,120 | 3,296 | ||||||
Total non-current assets | 52,271 | 51,137 | |||||
Total assets | $ | 459,628 | $ | 459,617 | |||
Liabilities, redeemable non-controlling interest and shareholders’ equity | |||||||
Current liabilities: | |||||||
Trade payables | $ | 6,051 | $ | 6,592 | |||
Accrued expenses and other current liabilities | 41,141 | 49,310 | |||||
Deferred revenues | 108,282 | 86,024 | |||||
Total current liabilities | 155,474 | 141,926 | |||||
Long-term liabilities: | |||||||
Deferred revenues | 1,170 | 1,288 | |||||
Other long-term liabilities | 7,545 | 6,892 | |||||
Total long-term liabilities | 8,715 | 8,180 | |||||
Total liabilities | 164,189 | 150,106 | |||||
Redeemable non-controlling interest | 17,091 | 23,901 | |||||
Shareholders’ equity: | |||||||
Share capital and additional paid-in capital | 633,097 | 610,193 | |||||
Other comprehensive income (loss) | (224 | ) | 455 | ||||
Accumulated deficit | (354,525 | ) | (325,038 | ) | |||
Total shareholders’ equity | 278,348 | 285,610 | |||||
Total Liabilities, redeemable non-controlling interest and shareholders’ equity | $ | 459,628 | $ | 459,617 | |||
Condensed Consolidated Statements of Operations | |||||||
(in thousands, except share and per share data; unaudited) | |||||||
Three months ended | |||||||
2022 | 2021 | ||||||
Revenues | |||||||
Subscription | $ | 51,389 | $ | 38,474 | |||
Professional services | 5,459 | 4,180 | |||||
Total revenues | 56,848 | 42,654 | |||||
Cost of revenues | |||||||
Subscription(1)(2) | 6,875 | 5,689 | |||||
Professional services(1) | 6,893 | 5,080 | |||||
Total cost of revenues | 13,768 | 10,769 | |||||
Gross profit | 43,080 | 31,885 | |||||
Operating expenses | |||||||
Research and development(1) | 15,475 | 10,422 | |||||
Sales and marketing(1) | 42,079 | 25,135 | |||||
General and administrative(1) | 15,168 | 9,373 | |||||
Total operating expenses | 72,722 | 44,930 | |||||
Operating loss | (29,642 | ) | (13,045 | ) | |||
Financial income, net | 576 | 45 | |||||
Loss before income taxes | (29,066 | ) | (13,000 | ) | |||
Income taxes | (679 | ) | (404 | ) | |||
Net loss | (29,745 | ) | (13,404 | ) | |||
Net loss attributable to non-controlling interest | (258 | ) | (246 | ) | |||
Adjustment attributable to non-controlling interest | (6,458 | ) | 10,816 | ||||
Net loss attributable to | $ | (23,029 | ) | $ | (23,974 | ) | |
Net loss per share attributable to | $ | (0.27 | ) | $ | (1.71 | ) | |
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted | 83,964,074 | 13,995,089 | |||||
(1)Includes share-based compensation expense as follows: | |||||||
Three months ended | |||||||
2022 | 2021 | ||||||
Cost of subscription revenues | $ | 260 | $ | 54 | |||
Cost of professional services | 591 | 123 | |||||
Research and development | 1,566 | 471 | |||||
Sales and marketing | 3,812 | 793 | |||||
General and administrative | 4,647 | 2,091 | |||||
Total share-based compensation expense | $ | 10,876 | $ | 3,532 | |||
(2)Includes amortization of acquired intangibles as follows: | |||||||
Three months ended | |||||||
2022 | 2021 | ||||||
Cost of revenues | $ | 176 | $ | - | |||
Condensed Consolidated Statements of Cash Flow | |||||||
(in thousands; unaudited) | |||||||
Three months ended | |||||||
2022 | 2021 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (29,745 | ) | $ | (13,404 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Share-based compensation | 10,876 | 3,532 | |||||
Depreciation and amortization | 1,496 | 1,014 | |||||
Interest on short-term and long-term deposits | (86 | ) | (92 | ) | |||
Increase in trade receivables, net | (9,737 | ) | (13,796 | ) | |||
Increase in prepaid expenses and other current assets and other non-current assets | (3,398 | ) | (978 | ) | |||
Increase in deferred contract acquisition costs | (554 | ) | (5,981 | ) | |||
Increase (decrease) in trade payables | (984 | ) | 124 | ||||
Increase (decrease) in accrued expenses and other current liabilities | (9,101 | ) | 5,563 | ||||
Increase in deferred revenues | 22,293 | 21,079 | |||||
Increase in other long-term liabilities | 653 | 57 | |||||
Net cash used in operating activities | (18,287 | ) | (2,882 | ) | |||
Cash flows from investing activities: | |||||||
Purchase of property and equipment | (650 | ) | (488 | ) | |||
Investment in short-term deposits | (27,000 | ) | - | ||||
Proceeds from short-term deposits | 15,257 | 1,002 | |||||
Investment in restricted deposits | - | (1,002 | ) | ||||
Capitalization of software development costs | (1,372 | ) | (711 | ) | |||
Net cash used in investing activities | (13,765 | ) | (1,199 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from exercise of options | 692 | 722 | |||||
Proceeds from issuance of ordinary shares under the employee share purchase plan | 4,283 | - | |||||
Payment of deferred offering costs paid | - | (51 | ) | ||||
Issuance of preferred shares, net | - | 10,000 | |||||
Net cash provided by financing activities | 4,975 | 10,671 | |||||
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash | (306 | ) | (455 | ) | |||
Increase (decrease) in cash, cash equivalents and restricted cash | (27,383 | ) | 6,135 | ||||
Cash, cash equivalents and restricted cash - Beginning of period | 277,251 | 62,895 | |||||
Cash, cash equivalents and restricted cash - End of period | $ | 249,868 | $ | 69,030 | |||
Reconciliation from GAAP to Non-GAAP Results | |||||||
(in thousands, except share and per share data; unaudited) | |||||||
Three months ended | |||||||
2022 | 2021 | ||||||
Reconciliation of gross profit and gross margin | |||||||
GAAP gross profit | $ | 43,080 | $ | 31,885 | |||
Plus: Share-based compensation expense | 851 | 177 | |||||
Plus: Amortization of acquired intangibles | 176 | - | |||||
Non-GAAP gross profit | $ | 44,107 | $ | 32,062 | |||
GAAP gross margin | 76 | % | 75 | % | |||
Non-GAAP gross margin | 78 | % | 75 | % | |||
Reconciliation of operating loss and operating margin | |||||||
GAAP operating loss | $ | (29,642 | ) | $ | (13,045 | ) | |
Plus: Share-based compensation expense | 10,876 | 3,532 | |||||
Plus: Amortization of acquired intangibles | 176 | - | |||||
Non-GAAP operating loss | $ | (18,590 | ) | $ | (9,513 | ) | |
GAAP operating margin | (52 | )% | (31 | )% | |||
Non-GAAP operating margin | (33 | )% | (22 | )% | |||
Reconciliation of net loss | |||||||
GAAP net loss attributable to | $ | (23,029 | ) | $ | (23,974 | ) | |
Plus: Share-based compensation expense | 10,876 | 3,532 | |||||
Plus: Amortization of acquired intangibles | 176 | - | |||||
Plus: Adjustment attributable to non-controlling interest | (6,458 | ) | 10,816 | ||||
Non-GAAP net loss attributable to | $ | (18,435 | ) | $ | (9,626 | ) | |
Non-GAAP net loss per share attributable to | $ | (0.22 | ) | $ | (0.13 | ) | |
Shares used in non-GAAP per share calculations: | |||||||
GAAP weighted-average shares used to compute net loss per share, basic and diluted | 83,964,074 | 13,995,089 | |||||
Add: | |||||||
Additional weighted average shares giving effect to exchange of convertible preferred shares at the beginning of the period | - | 58,732,075 | |||||
Non-GAAP weighted-average shares used to compute net loss per share, basic and diluted | 83,964,074 | 72,727,164 | |||||
Reconciliation of GAAP Cash Flow from Operating Activities to Free Cash Flow | |||||||
(in thousands; unaudited) | |||||||
Three months ended | |||||||
2022 | 2021 | ||||||
Net cash used in operating activities | $ | (18,287 | ) | $ | (2,882 | ) | |
Less: Purchases of property and equipment | (650 | ) | (488 | ) | |||
Less: Capitalized software development costs | (1,372 | ) | (711 | ) | |||
Free cash flow | $ | (20,309 | ) | $ | (4,081 | ) | |
Source:
2022 GlobeNewswire, Inc., source