UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16
OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2022
Commission file number: 001-40490
WalkMe Ltd.
(Translation of registrant’s name into English)
1 Walter Moses St.
Tel Aviv 6789903, Israel
+972 (3) 763-0333
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
EXPLANATORY NOTE
On August 11, 2022, WalkMe Ltd. issued a press release titled “WalkMe Announces Second Quarter 2022 Financial Results.” A copy of the press release is furnished as Exhibit 99.1 herewith.
Other than as indicated below, the information in this Form 6-K (including in Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
The U.S. GAAP financial information contained in the (i) condensed consolidated statements of operations, (ii) condensed consolidated balance sheets and (iii) condensed consolidated statements of cash flow included
in the press release attached as Exhibit 99.1 to this Report on Form 6-K are hereby incorporated by reference into the Company’s Registration Statements on Form S-8 (File Nos. 333-257354 and 333-263823).
The following exhibit is furnished as part of this Form 6-K:
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Exhibit
No. |
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Description
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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WalkMe Ltd.
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By: /s/ Andrew Casey
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Name: Andrew Casey
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Title: Chief Financial Officer
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Date: August 11, 2022
Exhibit 99.1
WalkMe Ltd. Announces Second Quarter 2022 Financial Results
● DAP customers grew to 142 and ARR from DAP Customers grew 60% year-over-year
● Second Quarter Subscription revenue grew 28% year-over-year to $54.2 million
SAN FRANCISCO, August 11, 2022 -- WalkMe Ltd. (NASDAQ:WKME), a leading provider of digital adoption solutions, today announced financial
results for its second quarter ended June 30, 2022.
“Driving digital adoption of business workflows has never been more important for organizations across the globe in order to stay competitive and drive higher ROI in a challenging environment," said Dan Adika, CEO of
WalkMe. "I'm pleased with the strong results of the company highlighted by 60% growth in ARR from our DAP customers who have broadly adopted our platform and are innovators driving greater value for their organizations.”
Second Quarter 2022 Financial Highlights:
| ● |
Revenue. Total revenue was $59.9 million in the second quarter of 2022, an increase of 28% year-over-year. Subscription revenue was $54.2 million, an increase of 28% year-over-year.
|
| ● |
Annualized Recurring Revenue (ARR)*: ARR grew 29% year-over-year to $246 million as of June 30, 2022.
|
| ● |
Remaining Performance Obligation (RPO):
was $346 million as of June 30, 2022, an increase of 33% year-over-year.
|
| ● |
GAAP Operating Loss: was $31.2 million in the second quarter of 2022, or 52% of total revenue, compared to $17.8
million, or 38% of total revenue, in the second quarter of 2021.
|
| ● |
Non-GAAP Operating Loss*: was $16.7 million in the second quarter of 2022, or 28% of total revenue, compared to $11.7 million, or 25% of total revenue, in
the second quarter of 2021.
|
| ● |
Cash Flow: Net cash used in operations in the second quarter of 2022 was $10.0 million, or 17% of total revenue, compared to $6.2 million used in operations
or 13% of total revenue, in the second quarter of 2021.
|
| ● |
Free Cash Flow*: was negative $12.2 million in the second quarter of 2022, or 20% of total revenue, compared to
negative $7.4 million, or 16% of total revenue, in the second quarter of 2021.
|
| ● |
Cash, Cash Equivalents, and Short-term Deposits were $317.9 million as of
June 30, 2022.
|
“Our customers are seeing the value of our platform to
drive business process efficiencies, which resulted in strong subscription revenue growth of 28%. In addition, our operational focus drove significant margin improvement quarter-over-quarter," said Andrew Casey, CFO of WalkMe. "We will continue to focus on our shift up market to serve
customers with greater than 500 employees, while driving improving operational efficiencies throughout 2022. As a result of the improved non-GAAP operating
margins, our goal is to achieve positive free cash flow during 2023."
Second Quarter and Recent Business Highlights:
| ● |
In the second quarter, WalkMe added eight net new Enterprise-Wide DAP* customers for a total of 142, representing DAP customer count growth of 38% year-over-year. ARR* from DAP* customers grew 60% year-over-year.
|
| ● |
Customers with over $100,000 in ARR* grew 23% year-over-year to 490 and customers with over $1 million in ARR grew 19% 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 31% year-over-year and represented 88% 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 93% of total ARR*.
|
| ● |
WalkMe strengthened its executive bench with the appointments of Scott Little, Chief Revenue Officer, and Adriel Sanchez, Chief Marketing Officer.
|
| ● |
Expanded partnership with Deloitte through a strategic alliance with Deloitte Canada to bring digital adoption best practices to Canadian enterprises.
|
Financial Outlook:
For the third quarter of 2022, the Company currently expects:
| ● |
Total revenue of $62.5 to $63.5 million, representing a growth rate of 24% to 25% year-over-year
|
| ● |
Non-GAAP operating loss* of $16.5 to $15.5 million
|
For the full year 2022, the Company currently expects:
| ● |
Total revenue of $246 to $249 million, representing a growth rate of 27% to 29% year-over-year
|
| ● |
Non-GAAP operating loss* of $68 to $65 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 August 11, 2022. 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. Interested parties can access the call by dialing US Toll Free: (800) 289 - 0720, using the passcode 9182251.
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 metrics 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 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 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 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 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 U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited
to, statements regarding our current expectations and views of future events, statements regarding the Company’s future financial results and guidance, and expectations regarding our revenue, operating loss and free cash flow.
In some cases, these forward-looking statements can be identified by words or phrases such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,”
“continue,” “contemplate,” “possible” or similar words. 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
|
Six months ended
|
||||||||||||||
|
|
June 30,
|
June 30,
|
||||||||||||||
|
|
2022
|
2021
|
2022
|
2021
|
||||||||||||
|
Revenues
|
||||||||||||||||
|
Subscription
|
$
|
54,200
|
$
|
42,211
|
$
|
105,589
|
$
|
80,685
|
||||||||
|
Professional services
|
5,742
|
4,591
|
11,201
|
8,771
|
||||||||||||
|
Total revenues
|
59,942
|
46,802
|
116,790
|
89,456
|
||||||||||||
|
|
||||||||||||||||
|
Cost of revenues
|
||||||||||||||||
|
Subscription(1)(2)
|
6,696
|
5,784
|
13,571
|
11,473
|
||||||||||||
|
Professional services(1)
|
7,394
|
5,409
|
14,287
|
10,489
|
||||||||||||
|
Total cost of revenues
|
14,090
|
11,193
|
27,858
|
21,962
|
||||||||||||
|
|
||||||||||||||||
|
Gross profit
|
45,852
|
35,609
|
88,932
|
67,494
|
||||||||||||
|
|
||||||||||||||||
|
Operating expenses
|
||||||||||||||||
|
Research and development(1)
|
16,120
|
11,554
|
31,595
|
21,976
|
||||||||||||
|
Sales and marketing(1)
|
43,113
|
29,405
|
85,192
|
54,540
|
||||||||||||
|
General and administrative(1)(2)
|
17,850
|
12,488
|
33,018
|
21,861
|
||||||||||||
|
Total operating expenses
|
77,083
|
53,447
|
149,805
|
98,377
|
||||||||||||
|
Operating loss
|
(31,231
|
)
|
(17,838
|
)
|
(60,873
|
)
|
(30,883
|
)
|
||||||||
|
Financial income, net
|
551
|
2
|
1,127
|
47
|
||||||||||||
|
Loss before income taxes
|
(30,680
|
)
|
(17,836
|
)
|
(59,746
|
)
|
(30,836
|
)
|
||||||||
|
Income taxes
|
(479
|
)
|
(798
|
)
|
(1,158
|
)
|
(1,202
|
)
|
||||||||
|
Net loss
|
(31,159
|
)
|
(18,634
|
)
|
(60,904
|
)
|
(32,038
|
)
|
||||||||
|
Net loss attributable to non-controlling interest
|
(91
|
)
|
(375
|
)
|
(349
|
)
|
(621
|
)
|
||||||||
|
Adjustment attributable to non-controlling interest
|
(3,174
|
)
|
4,287
|
(9,632
|
)
|
15,103
|
||||||||||
|
Net loss attributable to WalkMe Ltd.
|
$
|
(27,894
|
)
|
$
|
(22,546
|
)
|
$
|
(50,923
|
)
|
$
|
(46,520
|
)
|
||||
|
Net loss per share attributable to WalkMe Ltd. basic and diluted
|
$
|
(0.33
|
)
|
$
|
(0.90
|
)
|
$
|
(0.60
|
)
|
$
|
(2.38
|
)
|
||||
|
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted
|
84,727,799
|
24,960,581
|
84,348,046
|
19,509,660
|
||||||||||||
(1) Includes share-based compensation expense as follows:
|
|
Three months ended
|
Six months ended
|
||||||||||||||
|
|
June 30,
|
June 30,
|
||||||||||||||
|
|
2022
|
2021
|
2022
|
2021
|
||||||||||||
|
Cost of subscription revenues
|
$
|
279
|
$
|
88
|
$
|
539
|
$
|
142
|
||||||||
|
Cost of professional services
|
681
|
191
|
1,272
|
314
|
||||||||||||
|
Research and development
|
2,074
|
811
|
3,640
|
1,282
|
||||||||||||
|
Sales and marketing
|
4,645
|
1,262
|
8,457
|
2,055
|
||||||||||||
|
General and administrative
|
5,739
|
3,733
|
10,386
|
5,824
|
||||||||||||
|
Total share-based compensation expense
|
$
|
13,418
|
$
|
6,085
|
$
|
24,294
|
$
|
9,617
|
||||||||
(2) Includes amortization and impairment of acquired intangibles as follows:
|
|
Three months ended
|
Six months ended
|
||||||||||||||
|
|
June 30,
|
June 30,
|
||||||||||||||
|
|
2022
|
2021
|
2022
|
2021
|
||||||||||||
|
Cost of revenues
|
$
|
176
|
$
|
56
|
$
|
352
|
$
|
56
|
||||||||
|
General and administrative
|
979
|
-
|
979
|
-
|
||||||||||||
|
Total amortization and impairment
|
$
|
1,155
|
$
|
56
|
$
|
1,331
|
$
|
56
|
||||||||