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WalkMe Ltd. Announces Fourth Quarter 2022 Financial Results

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WalkMe Ltd. (NASDAQ:WKME) reported a 22% revenue growth to $64.9 million for Q4 2022, with subscription revenue up 21% to $58.7 million. Annualized Recurring Revenue (ARR) reached $262 million, a 19% increase year-over-year. The company achieved significant operational improvements, reducing Non-GAAP operating loss to 16% of revenue, down from 35% in Q4 2021. The company anticipates revenue growth of 10% to 13% for 2023, with expected total revenue between $269 million and $276 million. Hagit Ynon was appointed Chief Financial Officer, focusing on operational efficiency and positive free cash flow by Q4 2023.

Positive
  • ARR from Digital Adoption Platform (DAP) customers grew 63% year-over-year.
  • Total revenue increase of 22% year-over-year in Q4.
  • GAAP gross margin improved to 81% compared to 76% in Q4 2021.
  • Total revenue for 2022 increased by 27% year-over-year.
Negative
  • GAAP operating loss was $22.6 million, or 35% of total revenue, for Q4 2022.
  • Full-year GAAP operating loss increased to $109.8 million, or 45% of total revenue.
  • Free cash flow was negative $53.9 million for 2022.
  • ARR from Digital Adoption Platform (DAP*) customers grew 63% year-over-year
  • ARR from customers of greater than 500 employees grew 22% year-over-year
  • Continued improvement of Non-GAAP Operating loss of 16% of revenue in 4Q22 from 35% of revenue in 4Q21, and GAAP Operating loss to 35% of revenue in 4Q22 from 55% of revenue in 4Q21
  • Hagit Ynon named as Chief Financial Officer

SAN FRANCISCO, Feb. 15, 2023 (GLOBE NEWSWIRE) -- WalkMe Ltd. (NASDAQ:WKME), a leading provider of digital adoption solutions, today announced financial results for its fourth quarter ended December 31, 2022.

“WalkMe continues to help the largest companies in the world identify and resolve the crippling digital friction that’s keeping them from achieving their digital transformation goals. They’re relying on us to regain control of their tech stack and finally turn it into a competitive advantage,” said Dan Adika, CEO of WalkMe. “In 2023, we expect to continue seeing gains in operational efficiency and achieve free cash flow positive in the fourth quarter, while investing in exciting developments in AI that harness our unmatched access to data across billions of interactions to deliver better experiences for our customers and their employees.”

Fourth Quarter 2022 Financial Highlights:

  • Revenue: Total revenue was $64.9 million in the fourth quarter of 2022, an increase of 22% year-over-year. Subscription revenue was $58.7 million, an increase of 21% year-over-year.
  • Annualized Recurring Revenue (ARR)*: ARR grew 19% year-over-year to $262 million as of December 31, 2022.
  • Remaining Performance Obligation (RPO): was $374 million as of December 31, 2022, an increase of 18% year-over-year.
  • GAAP Gross Margin: was 81% in the fourth quarter of 2022 compared to 76% in the fourth quarter of 2021.
  • GAAP Operating Loss: was $22.6 million in the fourth quarter of 2022, or 35% of total revenue, compared to $29.1 million, or 55% of total revenue, in the fourth quarter of 2021.
  • Non-GAAP Operating Loss*: was $10.5 million in the fourth quarter of 2022, or 16% of total revenue, compared to $18.9 million, or 35% of total revenue, in the fourth quarter of 2021.
  • Cash Flow: Net cash used in operations in the fourth quarter of 2022 was $8.8 million, or 14% of total revenue, compared to $13.9 million used in operations or 26% of total revenue, in the fourth quarter of 2021.
  • Free Cash Flow*: was negative $10.2 million in the fourth quarter of 2022, or 16% of total revenue, compared to negative $16.4 million, or 31% of total revenue, in the fourth quarter of 2021.
  • Cash, Cash Equivalents, Short-term Deposits and Marketable Securities: were $304.9 million as of December 31, 2022.

Full Year 2022 Financial Highlights:

  • Revenue: Total revenue was $245 million in 2022, an increase of 27% year-over-year. Subscription revenue was $221 million, an increase of 26% year-over-year.
  • GAAP Gross Margin: was 78% in 2022 compared to 76% in 2021.
  • GAAP Operating Loss: was $109.8 million in 2022, or 45% of total revenue, compared to $77.8 million, or 40% of total revenue in 2021.
  • Non-GAAP Operating Loss*: was $58.3 million in the fourth quarter of 2022, or 24% of total revenue, compared to $50.2 million, or 26% of total revenue in 2021.
  • Cash Flow: Net cash used in operations in 2022 was $46.8 million, or 19% of total revenue, compared to $34.2 million used in operations or 18% of total revenue in 2021.
  • Free Cash Flow*: was negative $53.9 million in 2022, or 22% of total revenue, compared to negative $40.8 million, or 21% of total revenue in 2021.

“We ended the quarter strong against our strategic priorities driving growth in the enterprise segment, our partner ecosystem, and in the U.S. Federal market during a challenging economic environment,” said Hagit Ynon, CFO of WalkMe. “We will continue to reap the benefits from our investments in these spaces as we push for additional operational leverage to reach positive free cash flow by the fourth quarter of 2023 and for the full year of 2024.”

Fourth Quarter and Recent Business Highlights:

  • Hagit Ynon was named Chief Financial Officer, having served as EVP of Finance for over 3 years with the company and most recently as Interim CFO.
  • In the fourth quarter, WalkMe added eighteen net new Enterprise-Wide DAP customers for a total of 173, representing DAP customer count growth of 37% year-over-year. ARR from DAP customers grew 63% year-over-year.
  • Customers with over $1 million in ARR grew 26% year-over-year to 39 representing 32% of total ARR. Customers with over $100,000 in ARR grew 13% year-over-year to 514 and customers.
  • ARR from customers with 500 or more employees grew 22% year over year and now represents 94% of total ARR.
  • Continued progress with Federal Market signing two Federal customers through partner channels and progress towards Federal.
  • WalkMe was the only DAP provider named as one of the 2023 Top 50 Products for Enterprises by G2 Crowd.

Financial Outlook:

For the first quarter of 2023, the Company currently expects:

  • Total revenue of $64.6 to $65.6 million, representing a growth rate of 14% to 15% year-over-year
  • Non-GAAP operating loss* of $11 to $10 million

For the full year 2023, the Company currently expects:

  • Total revenue of $269 to $276 million, representing a growth rate of 10% to 13% year-over-year
  • Non-GAAP operating loss* of $29 to $26 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:

WalkMe will host a conference call and live webcast for analysts and investors at 5:00 a.m. Pacific Time on February 15, 2023. The press release with the financial results as well as the investor presentation materials will be accessible from the Company’s website prior to the conference call.

A live webcast of the conference call will be accessible on the WalkMe investor relations website at https://ir.walkme.com.

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, SEC filings, press releases, public conference calls, and public webcasts. We use these channels to communicate with our investors, customers, and the public about our company, our offerings, and other issues. As such, we encourage investors, the media, and others to follow the channels listed above, and to review the information disclosed through such channels.

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 WalkMe Ltd., Non-GAAP Net Income (Loss) per share attributable to WalkMe Ltd. and Free Cash Flow, all of which are non-GAAP financial measures. We believe that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key measures used by management in its financial and operational decision making. Non-GAAP financial measures have limitations as analytical tools and may differ from similarly titled measures presented by other companies. The presentation of this financial information is not intended to be considered as a substitute for the financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures and not rely on any single financial measure to evaluate our business.

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 and impairment 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 WalkMe Ltd. We define Non-GAAP Net Income (Loss) attributable to WalkMe Ltd. as Net Income (Loss) attributable to WalkMe Ltd. excluding share-based compensation, amortization and impairment of acquired intangibles and adjustment attributable to non-controlling interest. 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 Net Income (Loss) attributable to WalkMe Ltd. with traditional GAAP measures to evaluate our financial performance. Non-GAAP Net Income (Loss) per Share attributable to WalkMe Ltd. is calculated based on ordinary shares outstanding after accounting for the exchange of our outstanding convertible preferred shares into ordinary shares as though such event had occurred at the beginning of the periods.

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 development 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:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this press release other than statements of historical fact, including, without limitation, statements regarding the Company’s future financial results and guidance, and expectations regarding our revenue, operating loss and free cash flow are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the following: our ability to manage our growth effectively, sustain our historical growth rate in the future or achieve or maintain profitability; the impact of the COVID-19 pandemic or adverse macro-economic changes on our business, financial condition and results of operations; the growth and expansion of the markets for our offerings and our ability to adapt and respond effectively to evolving market conditions; our estimates of, and future expectations regarding, our market opportunity; our ability to keep pace with technological and competitive developments and develop or otherwise introduce new products and solutions and enhancements to our existing offerings; our ability to maintain the interoperability of our offerings across devices, operating systems and third-party applications and to maintain and expand our relationships with third-party technology partners; the effects of increased competition in our target markets and our ability to compete effectively; our ability to attract and retain new customers and to expand within our existing customer base; the success of our sales and marketing operations, including our ability to realize efficiencies and reduce customer acquisition costs; the percentage of our remaining performance obligations that we expect to recognize as revenue; our ability to meet the service-level commitments under our customer agreements and the effects on our business if we are unable to do so; our relationships with, and dependence on, various third-party service providers; our dependence on our management team and other key employees; our ability to maintain and enhance awareness of our brand; our ability to offer high quality customer support; our ability to effectively develop and expand our marketing and sales capabilities; our ability to maintain the sales prices of our offerings and the effects of pricing fluctuations; the sustainability of, and fluctuations in, our gross margin; risks related to our international operations and our ability to expand our international business operations; the effects of currency exchange rate fluctuations on our results of operations; challenges and risks related to our sales to government entities; our ability to consummate acquisitions at our historical rate and at acceptable prices, to enter into other strategic transactions and relationships, and to manage the risks related to these transactions and arrangements; our ability to protect our proprietary technology, or to obtain, maintain, protect and enforce sufficiently broad intellectual property rights therein; our ability to maintain the security and availability of our platform, products and solutions; our ability to comply with current and future legislation and governmental regulations to which we are subject or may become subject in the future; changes in applicable tax law, the stability of effective tax rates and adverse outcomes resulting from examination of our income or other tax returns; risks related to political, economic and security conditions in Israel; the effects of unfavorable conditions in our industry or the global economy or reductions in information technology spending; factors that may affect the future trading prices of our ordinary shares; and other risk factors set forth in the section titled “Risk Factors” in our Annual Report on form 20-F filed with the Securities and Exchange Commission on March 24, 2022, and other documents filed with or furnished to the SEC. These statements reflect management’s current expectations regarding future events and operating performance and speak only as of the date of this press release. You should not put undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

About WalkMe

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:
Christina Knittel
press@walkme.com

Investor Contact:
John Streppa
investors@walkme.com


WalkMe Ltd.          
Condensed Consolidated Statements of Operations         
(in thousands, except share and per share data; unaudited)         
          
   Three months ended  Year ended
   December 31,  December 31,
   2022 2021 2022 2021
Revenues         
Subscription $58,702 $48,555 $220,972 $175,328 
Professional services  6,161  4,703  24,034  17,975 
Total revenues  64,863  53,258  245,006  193,303 
          
Cost of revenues         
Subscription(1)(2)  5,938  6,595  25,990  24,025 
Professional services(1)  6,511  6,382  27,894  22,632 
Total cost of revenues  12,449  12,977  53,884  46,657 
          
Gross profit  52,414  40,281  191,122  146,646 
          
Operating expenses         
Research and development(1)  13,964  14,384  59,468  48,160 
Sales and marketing(1)  45,314  41,294  176,307  127,719 
General and administrative(1)(2)  15,687  13,662  65,188  48,557 
Total operating expenses  74,965  69,340  300,963  224,436 
Operating loss  (22,551) (29,059) (109,841) (77,790)
Financial income (expense), net  2,954  128  5,322  (9)
Loss before income taxes  (19,597) (28,931) (104,519) (77,799)
Income taxes  (1,731) (521) (3,831) (2,494)
Net loss  (21,328) (29,452) (108,350) (80,293)
Net loss attributable to non-controlling interest  (376) (268) (743) (1,169)
Adjustment attributable to non-controlling interest  (2,337) (2,703) (14,979) 16,689 
Net loss attributable to WalkMe Ltd. $(18,615)$(26,481)$(92,628)$(95,813)
Net loss per share attributable to WalkMe Ltd. basic and diluted $(0.22)$(0.32)$(1.09)$(1.85)
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted  86,235,574  83,633,127  85,116,424  51,763,032 
          
(1) Includes share-based compensation expense as follows:         
   Three months ended  Year ended
   December 31,  December 31,
   2022 2021 2022 2021
Cost of subscription revenues $260 $235 $1,092 $542 
Cost of professional services  750  572  2,804  1,262 
Research and development  1,889  1,461  7,285  3,863 
Sales and marketing  5,191  3,886  19,126  8,205 
General and administrative  3,906  3,877  19,797  13,460 
Total share-based compensation expense $11,996 $10,031 $50,104 $27,332 
          
(2) Includes amortization and impairment of acquired intangibles as follows:         
   Three months ended  Year ended
   December 31,  December 31,
   2022 2021 2022 2021
Cost of revenues $68 $176 $488 $299 
General and administrative  -  -  979  - 
Total amortization and impairment $68 $176 $1,467 $299 
          


WalkMe Ltd.
Condensed Consolidated Balance Sheets
(in thousands; unaudited)
   
  December 31,  December 31,
  2022 2021
Assets    
     
Current assets:    
     
Cash and cash equivalents$94,105 $276,889 
Short-term deposits 125,231  65,478 
Short-term marketable securities 42,187  - 
Trade receivables, net 45,024  37,754 
Deferred contract acquisition costs 26,287  20,405 
Prepaid expenses and other current assets 6,243  7,954 
       
Total current assets 339,077  408,480 
     
Non-current assets:    
     
Long-term marketable securities 43,334  - 
Deferred contract acquisition costs 40,110  35,969 
Other assets 584  987 
Property and equipment, net 13,268  10,885 
Operating lease right-of-use assets 7,003  - 
Goodwill and Intangible assets, net 1,830  3,296 
       
Total non-current assets 106,129  51,137 
     
Total assets$445,206 $459,617 
     
Liabilities, redeemable non-controlling interest and shareholders’ equity     
     
Current liabilities:    
     
Trade payables$5,957 $6,592 
Accrued expenses and other current liabilities 53,414  49,310 
Deferred revenues 108,097  86,024 
Total current liabilities 167,468  141,926 
     
Long-term liabilities:    
     
Deferred revenues 1,613  1,288 
Other long-term liabilities 10,038  6,892 
Operating lease liabilities 3,833  - 
       
Total long-term liabilities 15,484  8,180 
       
Total liabilities 182,952  150,106 
     
Redeemable non-controlling interest 8,080  23,901 
Shareholders’ equity:    
Share capital and additional paid-in capital 688,636  610,193 
Other comprehensive income (loss) (1,817) 455 
Accumulated deficit (432,645) (325,038)
Total shareholders’ equity 254,174  285,610 
       
Total Liabilities, redeemable non-controlling interest and shareholders’ equity $445,206 $459,617 
     


WalkMe Ltd.         
Condensed Consolidated Statements of Cash Flow         
(in thousands; unaudited)         
          
   Three months ended  Year ended
   December 31,  December 31,
   2022 2021 2022 2021
Cash flows from operating activities:         
Net loss $(21,328)$(29,452)$(108,350)$(80,293)
          
Adjustments to reconcile net loss to net cash used in operating activities:         
Share-based compensation  11,996  10,031  50,104  27,332 
Depreciation, amortization and impairment  1,215  1,427  7,878  4,773 
Operating lease right-of-use assets and liabilities, net  (159) -  (551) - 
              
Finance (income) expense  (1,226) 204  (1,758) (59)
              
Amortization of premium and accretion of discount on marketable securities, net  (370) -  (370) - 
Increase in trade receivables, net  (10,001) (498) (7,417) (6,976)
Decrease (increase) in prepaid expenses and other current assets and other non-current assets  2,099  1,163  1,390  (3,061)
Increase in deferred contract acquisition costs  (6,467) (10,148) (10,272) (26,702)
Increase (decrease) in trade payables  1,433  750  (354) 906 
Increase (decrease) in accrued expenses and other current liabilities  7,822  11,682  (3,178) 19,795 
Increase in deferred revenues  5,051  735  22,924  28,577 
Increase in other long-term liabilities  1,136  202  3,146  1,483 
              
Net cash used in operating activities  (8,799) (13,904) (46,808) (34,225)
          
Cash flows from investing activities:         
          
Purchase of intangible assets  -  (1,338) -  (1,338)
Purchase of property and equipment  (194) (1,267) (2,867) (2,642)
Investment in short-term deposits  (30,000) (257) (170,500) (66,260)
Proceeds from short-term deposits  20,000  7,716  112,257  45,003 
Investment in debt securities  (84,881) -  (84,881) - 
Investment in restricted deposits  -  -  -  (1,298)
Proceeds from restricted deposits  -  266  295  2,924 
Capitalization of software development costs  (1,196) (1,189) (4,260) (3,912)
              
Net cash provided by (used in) investing activities  (96,271) 3,931  (149,956) (27,523)
          
Cash flows from financing activities:         
          
Proceeds from initial public offering, net of underwriting discounts and commissions and other issuance costs  -  (2,367) -  263,922 
Proceeds from exercise of options  2,489  622  5,074  2,867 
Proceeds from employees share purchase plan  1,494  -  9,717  - 
Issuance of preferred shares, net  -  -  -  10,000 
              
Net cash provided by (used in) financing activities  3,983  (1,745) 14,791  276,789 
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash  295  (141) (850) (685)
Increase (decrease) in cash, cash equivalents and restricted cash  (100,792) (11,859) (182,823) 214,356 
Cash, cash equivalents and restricted cash - Beginning of period 195,220  289,110  277,251  62,895 
Cash, cash equivalents and restricted cash - End of period $94,428 $277,251 $94,428 $277,251 
          


WalkMe Ltd.
Reconciliation from GAAP to Non-GAAP Results
(in thousands, except share and per share data; unaudited)
           
   Three months ended   Year ended
   December 31,   December 31,
   2022 2021  2022 2021
Reconciliation of gross profit and gross margin          
GAAP gross profit $52,414 $40,281  $191,122 $146,646 
Plus: Share-based compensation expense  1,010  807   3,896  1,804 
Plus: Amortization of acquired intangibles  68  176   488  299 
               
Non-GAAP gross profit $53,492 $41,264  $195,506 $148,749 
GAAP gross margin  81% 76%  78% 76%
Non-GAAP gross margin  82% 77%  80% 77%
           
Reconciliation of operating loss and operating margin          
GAAP operating loss $(22,551)$(29,059) $(109,841)$(77,790)
Plus: Share-based compensation expense  11,996  10,031   50,104  27,332 
Plus: Amortization and impairment of acquired intangibles  68  176   1,467  299 
               
Non-GAAP operating loss $(10,487)$(18,852) $(58,270)$(50,159)
GAAP operating margin  (35)% (55)%  (45)% (40)%
Non-GAAP operating margin  (16)% (35)%  (24)% (26)%
           
Reconciliation of net loss          
GAAP net loss attributable to WalkMe Ltd. $(18,615)$(26,481) $(92,628)$(95,813)
Plus: Share-based compensation expense  11,996  10,031   50,104  27,332 
Plus: Amortization and impairment of acquired intangibles  68  176   1,467  299 
Plus: Adjustment attributable to non-controlling interest  (2,337) (2,703)  (14,979) 16,689 
               
Non-GAAP net loss attributable to WalkMe Ltd. $(8,888)$(18,977) $(56,036)$(51,493)
           
Non-GAAP net loss per share attributable to WalkMe Ltd. basic and diluted $(0.10)$(0.23) $(0.66)$(0.65)
Shares used in non-GAAP per share calculations:          
GAAP weighted-average shares used to compute net loss per share, basic and diluted  86,235,574  83,633,127   85,116,424  51,763,032 
Add:          
Additional weighted average shares giving effect to exchange of convertible preferred shares at the beginning of the period  -  -   -  26,972,186 
Non-GAAP weighted-average shares used to compute net loss per share, basic and diluted  86,235,574  83,633,127   85,116,424  78,735,218 
           


WalkMe Ltd.
Reconciliation of GAAP Cash Flow from Operating Activities to Free Cash Flow
(in thousands; unaudited)
          
   Three months ended  Year ended
   December 31,  December 31,
   2022 2021 2022 2021
Net cash used in operating activities $(8,799)$(13,904)$(46,808)$(34,225)
Less: Purchases of property and equipment  (194) (1,267) (2,867) (2,642)
Less: Capitalized software development costs  (1,196) (1,189) (4,260) (3,912)
              
Free Cash Flow $(10,189)$(16,360)$(53,935)$(40,779)

FAQ

What is WalkMe's revenue growth for Q4 2022?

WalkMe reported a revenue growth of 22% year-over-year, reaching $64.9 million for Q4 2022.

What were WalkMe's expected revenues for 2023?

WalkMe expects total revenue to be between $269 million and $276 million for the full year 2023.

What is the annualized recurring revenue (ARR) for WalkMe as of Q4 2022?

The annualized recurring revenue for WalkMe as of Q4 2022 was $262 million, a 19% increase year-over-year.

Who was appointed as the new CFO of WalkMe?

Hagit Ynon was named Chief Financial Officer of WalkMe.

What is WalkMe's projected operating loss for the first quarter of 2023?

WalkMe projects a non-GAAP operating loss of between $11 million and $10 million for Q1 2023.

WalkMe Ltd. Ordinary Shares

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87.18%
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Software - Application
Technology
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United States of America
Tel Aviv