Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Ordinary shares, no par value | WKME | The Nasdaq Stock Market LLC |
☐ Large accelerated filer | ☒ Accelerated filer | ☐ Non-accelerated filer | ☒ Emerging growth company |
☒ U.S. GAAP | ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board | ☐ Other |
1 | ||
1 | ||
3 | ||
3 | ||
3 | ||
3 | ||
3 | ||
A. | [Reserved.] | 3 |
B. | Capitalization and Indebtedness | 3 |
C. | Reasons for the Offer and Use of Proceeds | 3 |
D. | Risk Factors | 4 |
40 | ||
A. | History and Development of the Company | 40 |
B. | Business Overview | 41 |
C. | Organizational Structure | 57 |
D. | Property, Plants and Equipment | 58 |
58 | ||
58 | ||
A. | Operating Results | 64 |
B. | Liquidity and Capital Resources | 68 |
C. | Research and Development, Patents and Licenses, Etc. | 70 |
D. | Trend Information | 70 |
E. | Critical Accounting Estimates | 70 |
73 | ||
A. | Directors and Senior Management | 73 |
B. | Compensation | 76 |
C. | Board Practices | 80 |
D. | Employees | 89 |
E. | Share Ownership | 89 |
F. | Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation | 89 |
89 | ||
A. | Major Shareholders | 89 |
B. | Related Party Transactions | 92 |
C. | Interests of Experts and Counsel | 93 |
93 | ||
A. | Consolidated Statements and Other Financial Information | 93 |
B. | Significant Changes | 94 |
94 | ||
A. | Offer and Listing Details | 94 |
B. | Plan of Distribution | 94 |
C. | Markets | 94 |
D. | Selling Shareholders | 94 |
E. | Dilution | 94 |
F. | Expenses of the Issue | 94 |
95 | ||
A. | Share Capital | 95 |
B. | Memorandum and Articles of Association | 95 |
C. | Material Contracts | 95 |
D. | Exchange Controls | 95 |
E. | Taxation | 95 |
F. | Dividends and Paying Agents | 103 |
G. | Statement by Experts | 103 |
H. | Documents on Display | 103 |
I. | Subsidiary Information | 104 |
J. | Annual Report to Security Holders | 104 |
104 | |
105 | |
105 | |
105 | |
105 | |
105 | |
106 | |
106 | |
106 | |
106 | |
107 | |
107 | |
107 | |
107 | |
108 | |
108 | |
108 | |
108 | |
109 | |
109 | |
109 | |
110 | |
111 | |
F-1 |
• | our future financial performance, including our expectations regarding our revenue, cost of revenue, gross margin, operating expenses, cash flow and deferred revenue; |
• | our ability to manage our growth effectively, sustain or increase our historical growth rate in the future or achieve or maintain profitability; |
• | the growth and expansion of the markets for our offerings and our ability to adapt and respond effectively to evolving market conditions and demands; |
• | our estimates of, and future expectations regarding, our market opportunity; |
• | the impact of adverse macro-economic changes on our business, financial condition and results of operations; |
• | our ability to attract new customers as well as to retain and expand our revenue from existing customers; |
• | 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; |
• | the success of our sales and marketing operations, including our ability to realize efficiencies and reduce customer acquisition costs as well as our ability to effectively develop and expand our marketing and sales capabilities; |
• | 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 ability to maintain and enhance awareness of our brand; |
• | our ability to offer high quality customer support; |
• | our ability to maintain the sales prices of our offerings and the effects of pricing fluctuations; |
• | our ability to attract and retain the executive leadership and employee talent that we need to be successful; |
• | 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; |
• | risks related to political, economic and security conditions in Israel, including in connection with Israel’s ongoing war with Hamas and other terrorist organizations in the region; our ability to comply with the privacy laws of the various jurisdictions in which we operate; |
• | 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; |
• | the effects of unfavorable conditions in our industry or the global economy or reductions in information technology spending; and |
• | factors that may affect the future trading prices of our ordinary shares. |
A. | [Reserved.] |
B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
D. | Risk Factors |
• | innovating and advancing our platform; |
• | acquiring new customers; |
• | increasing usage by and spend from our existing customers; |
• | international expansion; and |
• | expansion of our ecosystem and go-to-market partnerships. |
• | breadth of applications and technology integrations supported; |
• | support for generative AI, cross-application guidance, automation and analytics; |
• | expertise in third-party application implementations; |
• | integration of robust analytics and visualization capabilities; |
• | cross-platform support for workflows including mobile native applications (iOS and Android) and desktop (Windows and macOS); |
• | ease of implementation and use; |
• | performance, security, scalability and reliability; |
• | quality of customer support; |
• | total cost of ownership; and |
• | brand recognition and reputation. |
• | Non-adoption from enterprises maintaining the status quo of offline, internally developed, or non-dynamic, FAQ-centric application guidance and workflow support; |
• | Point solutions or generative AI alternatives embedded natively or as an add-on to software provided by diversified enterprise software companies such as SAP, Oracle, Microsoft, and Salesforce; and |
• | Providers of software for specific in-app guidance or analytics use cases for SaaS applications. |
• | our ability to attract and retain new customers and expand sales within our existing customer base; |
• | the loss of existing customers; |
• | subscription renewals and the timing of such renewals; |
• | fluctuations in customer usage of our products from period to period; |
• | customer satisfaction with our products and platform capabilities and customer support; |
• | mergers and acquisitions or other transactions affecting our customer base, including the consolidation of affiliates’ multiple accounts into a single account; |
• | mix of our revenue between subscription and professional services; |
• | our ability to gain new partners and retain existing partners, and any changes in the economic terms of our agreements with such partners; |
• | increases or decreases in the number of users or applications in our subscriptions or pricing changes upon any renewals of customer agreements; |
• | fluctuations in share-based compensation expense; |
• | decisions by potential customers to purchase alternative solutions or develop in-house technologies as alternatives to our products; |
• | the amount and timing of operating expenses related to the maintenance and expansion of our business and operations, including investments in research and development, sales and marketing, including the capacity of our sales team, and general and administrative resources; |
• | our ability to manage our cloud services infrastructure costs; |
• | technical disruptions or network outages; |
• | developments or disputes concerning our intellectual property or proprietary rights, our platform or products, or third-party intellectual property or proprietary rights; |
• | negative publicity about our Company, our offerings or our partners, including as a result of actual or perceived breaches of, or failures relating to, data privacy, data protection or data security; |
• | the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; |
• | general economic, industry and market conditions; |
• | the impact of political uncertainty or unrest, including the war in Israel, where our headquarters are located; |
• | changes in our pricing policies or those of our competitors; |
• | fluctuations in the growth rate of the overall markets that our products address; |
• | seasonality in the underlying businesses of our customers, including budgeting cycles and purchasing practices, and any changes in customer spending patterns; |
• | the business strengths or weakness of our customers; |
• | our ability to collect timely on invoices or receivables; |
• | the cost and potential outcomes of litigation or other disputes; |
• | future accounting pronouncements or changes in our accounting policies; |
• | our overall effective tax rate, including impacts caused by any reorganization in our corporate tax structure and any new legislation or regulatory developments; |
• | our ability to successfully expand our business in the U.S. and internationally; |
• | fluctuations in foreign currency exchange rates; |
• | legal and regulatory compliance costs in new and existing markets; and |
• | the timing and success of new products or product features introduced by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or partners. |
• | recruiting and retaining talented and capable employees outside of Israel and the United States, and maintaining our Company culture across all of our offices; |
• | providing our platform and operating our business across a significant distance, in different languages and among different cultures, including the potential need to modify our platform and features to reflect local languages and to ensure that they are culturally appropriate and relevant in different countries; |
• | slower than anticipated availability and adoption of cloud and technology infrastructures by international businesses; |
• | the applicability of evolving and potentially inconsistent international laws and regulations, including laws and regulations with respect to tariffs, privacy, data protection, data security, consumer protection and unsolicited email, and the risk of penalties to our customers, users and individual members of our executive leadership team or other employees if our practices are deemed to be out of compliance; |
• | operating in jurisdictions that do not protect intellectual property rights to the same extent as does the United States; |
• | our need to rely on local partners including in connection with joint venture or other arrangements like our Japanese subsidiary, WalkMe K.K., to penetrate certain geographic regions, which may make us dependent on such local partners to implement our growth strategy. See Item 5. “Operating and Financial Review and Prospects-Commitments and Contractual Obligations-WalkMe K.K.”; |
• | compliance by us and our business partners with anti-corruption laws, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory limitations on our ability to provide our platform in certain international markets; |
• | global political, social and economic instability including, instability arising from the war in Ukraine and the war in Israel; |
• | fluctuations in currency exchange rates; |
• | double taxation of our international earnings and potentially adverse tax consequences due to changes in the income and other tax laws of Israel, the United States or the international jurisdictions in which we operate, including the complexities of foreign value added tax (or other tax) systems, and restrictions on the repatriation of earnings; |
• | higher costs of doing business internationally, including increased accounting, travel, infrastructure and legal compliance costs; |
• | different labor regulations, especially in the European Union, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations; |
• | the implementation of exchange controls, including restrictions promulgated by the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), and other similar trade protection regulations and measures in the United States, Israel or in other jurisdictions; |
• | reduced ability to timely collect amounts owed to us by our customers in countries where our recourse may be more limited; |
• | limitations on our ability to reinvest earnings from operations derived from one country to fund the capital needs of our operations in other countries; |
• | potential changes in laws, regulations, and costs affecting our United Kingdom (“UK”) operations and personnel; |
• | as an Israeli company, we are subject to Israeli laws concerning governmental access to data and the risk, or perception of risk, of such access may making our platform less attractive to organizations outside Israel, and compliance with such Israeli laws may conflict with legal obligations that we, or other organizations on our platform, may be subject to in other countries; and |
• | exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and similar applicable laws and regulations in other jurisdictions. |
• | cease selling or using products or technology that incorporate or cover the intellectual property rights that we allegedly infringe, misappropriate or otherwise violate; |
• | make substantial payments for royalty or license fees, legal fees, settlement payments or other costs or damages; |
• | obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology or intellectual property; or |
• | redesign the allegedly infringing products or technology to avoid infringement, misappropriation or other violation, which could be costly, time-consuming or impossible. |
• | implement usage-based pricing; |
• | discount pricing for competitive products; |
• | otherwise materially change their pricing rates or schemes; |
• | charge us to deliver our traffic at certain levels or at all; |
• | throttle traffic based on its source or type; |
• | implement bandwidth caps or other usage restrictions; or |
• | otherwise try to monetize or control access to their networks. |
• | it is an “orthodox” investment company because it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or |
• | it is an inadvertent investment company because, absent an applicable exemption, (i) it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, or (ii) it owns or proposes to acquire investment securities having a value exceeding 45% of the value of its total assets (exclusive of U.S. government securities and cash items) and/or more than 45% of its income is derived from investment securities on a consolidated basis with its wholly owned subsidiaries. |
• | actual or anticipated changes or fluctuations in our results of operations; |
• | the guidance we may provide to the public, and any changes in, or our failure to perform in line with, such guidance; |
• | announcements by us or our competitors of significant business developments, new offerings or new or terminated significant contracts, commercial relationships or capital commitments; |
• | industry or financial analyst or investor reaction to our press releases, other public announcements, and filings with the SEC; |
• | rumors and market speculation involving us or other companies in our industry; |
• | future sales or expected future sales of our ordinary shares; |
• | investor perceptions of us and the industries and markets in which we operate; |
• | price and volume fluctuations in the overall stock market from time to time; |
• | changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; |
• | failure of industry or financial analysts to maintain coverage of us, changes in financial estimates by any analysts who follow our Company, or our failure to meet these estimates or the expectations of investors; |
• | actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; |
• | litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; |
• | developments or disputes concerning our intellectual property rights or our solutions, or third-party proprietary rights; |
• | announced or completed acquisitions of businesses or technologies by us or our competitors; |
• | actual or perceived breaches of, or failures relating to, privacy, data protection or data security; |
• | new laws or regulations or new interpretations of existing laws or regulations applicable to our business; |
• | actual or anticipated changes in our executive leadership team or our board of directors; |
• | general economic conditions such as inflation, higher interest rates and slow or negative growth of our target markets; and |
• | other events or factors, including those resulting from pandemics, war, incidents of terrorism or responses to these events. |
• | the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; |
• | the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; |
• | the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events; and |
• | Regulation Fair Disclosure (“Regulation FD”), which regulates selective disclosures of material information by issuers. |
• | the Companies Law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares in a company are purchased; |
• | the Companies Law requires special approvals for certain transactions involving directors, officers or certain significant shareholders and regulates other matters that may be relevant to these types of transactions; |
• | the Companies Law does not provide for shareholder action by written consent for public companies, thereby requiring all shareholder actions to be taken at a general meeting of shareholders; |
• | our amended and restates Articles of Association divide our directors into three classes, each of which is elected once every three years, and accordingly, each of our directors serves until the third annual general meeting following his or her election or re-election or until he or she is removed; |
• | an amendment to our amended and restates Articles of Association will generally require, in addition to the approval of our board of directors, a vote of the holders of a majority of our outstanding ordinary shares entitled to vote and present and voting on the matter at a general meeting of shareholders (referred to as simple majority), and the amendment of a limited number of provisions, such as the provision dividing our directors into three classes, requires a vote of the holders of at least 65% of the total voting power of our shareholders; |
• | our amended and restates Articles of Association do not permit a director to be removed except by a vote of the holders of at least 65% of the total voting power of our shareholders and any amendment to such provision shall require the approval of at least 65% of the total voting power of our shareholders; and |
• | our amended and restates Articles of Association provide that director vacancies may be filled by our board of directors. |
We have never declared or paid any cash dividends on our ordinary shares. We currently intend to retain all available funds and any future earnings to finance the operation and expansion of our business and do not anticipate paying any dividends on our ordinary shares in the foreseeable future. Consequently, investors who purchase ordinary shares may be unable to realize a gain on their investment except by selling such shares after price appreciation, which may never occur.
• | Any business, technology, product or solution that we acquire or invest in could under-perform relative to our expectations and the price that we paid or not perform in accordance with our anticipated timetable, or we could fail to operate any such business or deploy any such technology, product or solution profitably. |
• | We may incur or assume significant debt in connection with our acquisitions and other strategic transactions and relationships, which could also cause a deterioration of our credit ratings, result in increased borrowing costs and interest expense and diminish our future access to the capital markets. |
• | Acquisitions and other strategic transactions and relationships could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term. |
• | Pre-closing and post-closing earnings charges could adversely impact operating results in any given period, and the impact may be substantially different from period to period. |
• | Acquisitions and other strategic transactions and relationships could create demands on our management, operational resources and financial and internal control systems that we are unable to effectively address. |
• | We could experience difficulty in integrating personnel, operations and financial and other controls and systems and retaining key employees and customers. |
• | We may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition or other strategic transaction or relationship. |
• | We may assume unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies or exposure to regulatory sanctions resulting from the acquired company’s or investee’s activities and the realization of any of these liabilities or deficiencies may increase our expenses, adversely affect our financial position and/or cause us to fail to meet our public financial reporting obligations. |
• | In connection with acquisitions and other strategic transactions and relationships, we often enter into post-closing financial arrangements such as purchase price adjustments, earn-out obligations and indemnification obligations, which may have unpredictable financial results. |
• | As a result of our acquisitions, we have recorded goodwill and other assets on our balance sheet and if we are not able to realize the value of these assets, or if the fair value of our investments declines, we may be required to incur impairment charges. |
• | We may have interests that diverge from those of our strategic partners and we may not be able to direct the management and operations of the strategic relationship in the manner we believe is most appropriate, exposing us to additional risk. |
A. | History and Development of the Company |
B. | Business Overview |
• | Visibility into workflow adoption and friction points, optimizing resource allocation; |
• | The ability to design streamlined, people-centric experiences that meet objectives; |
• | Quantifiable metrics tracking ROI on technologies against business goals; and |
• | Data and insights to continually refine processes amid constant change. |
• | Intuitive experiences that simplify cross-application work; |
• | Efficient learning that increases productivity across workflows; |
• | Consolidated interfaces reducing complexity for users; and |
• | More frequent engagement with the business process, not just the software, which leads to increased retention. |
Data: Providing visibility into the real usage and friction points in all the software running in the company, workflow by workflow, task by task so organizations can see what workflows they need to optimize and track success. |
Action: Tools and preconfigured templates to reduce the friction in key workflows by building automations and personalized guidance delivered in the flow of work. | |
Experience: People-first experiences that provide in-app guidance, a conversational text-to-action interface to answer questions and initiative, and helpful notifications; all designed to help people navigate workflows effortlessly, even in the face of constant change. |
• | For IT and Business Leaders, our platform is required equipment for effectively navigating the constant change brought on by technology. It provides unified visibility, data and actionable insights across the organization’s software stack, to optimize key workflows across sales, HR, IT, finance and other domains and drive employees and customers to action. |
• | A leading food and beverage company uses our Digital Adoption Platform to gain visibility into user behavior across applications and focus resources to target employees at the point in their journey that they need help. By automating common workflow processes and providing targeted support for others, they are realizing improved task completion rates of nearly two times prior levels, in some cases. Importantly, user satisfaction has increased and productivity gains have given employees more time to focus on higher value initiatives. |
• | For Employees, our platform provides in-app guidance, a text-to-action conversational interface to kick off tasks and answer questions, and helpful notifications on web, native mobile and desktop applications; all designed to help people navigate workflows effortlessly, even in the face of constant change. |
• | A global pharmacy store chain utilized our technology to drive digital adoption across multiple apps that are relied upon by more than 220,000 employees globally, resulting in an average reduction of 50% in support tickets. During the pandemic, a key driver of WalkMe’s success was its role in standing up new technology with as little friction as possible. |
• | A leading biotechnology company uses WalkMe across over 45 applications in over 11 languages to empower its workforce to be successful while continuing to deliver on its promises to employees and customers. WalkMe is used as a strategy for adoption of existing apps as well as a method of deploying new pieces of software. With WalkMe, they rolled out an enterprise wide HCM to 90,000+ employees with no formal training methods and user satisfaction ranking at 98% in some cases. |
• | For Customers, our platform can be deployed on any customer facing website or application to power self-service onboarding, feature engagement, support and more. |
• | One of the world’s largest technology and consulting companies uses WalkMe to support onboarding, mitigate support tickets, and increase the success of their customers on over 20 B2B offerings. They’ve seen 6x increase in product adoption, 4x higher conversion rate, 80% revenue growth of digital offerings, and a 300% improvement in product usage consumption, and user retention. |
• | Provides Insights to Help Leaders Drive Outcomes Across Workflows Executives leverage WalkMe’s analytics to gain clear insights and visibility into technology usage and experiences across critical workflows. Our proprietary technology surfaces insights like user engagement with third party applications and various features within them as well as comprehensive workflow insights. In addition, our platform provides extensive overview metrics quantifying enterprise-wide adoption rates workflow-by-workflow. Armed with this intelligence, leaders can connect workflows to strategic goals - spotlighting digital adoption levels and exact failure points for users. By shining a light on friction through analytics mapped to objectives, executives can now measure and optimize the processes technology is meant to enable, creating a responsive system to navigate unrelenting change across the digital landscape. |
• | Delivers Immediate Value. Our technology provides leaders immediate visibility into technology adoption levels and friction points across business workflows. These real-time insights allow leaders to instantly spot barriers undermining productivity or compliance. Armed with analytics mapping usage to objectives, organizations can drive business process changes in real-time to smooth adoption even as new tools rollout. As companies rapidly onboard new solutions, WalkMe equips an organization’s employees to produce outcomes in the flow of work rather increasing employee productivity and successful business process adoption. |
• | Optimizes Spend By Driving Full Utilization Across the Tech Stack. We enable organizations to extract greater value from software purchases through increased efficiency. For example, many companies use CRMs narrowly as contact databases rather than fully-featured revenue engines. Our platform provides analytics quantifying unused capabilities alongside guided experiences driving comprehensive usage. With workflows optimizing sales forecasting or service requests, we transform siloed software into integrated productivity drivers. Further, WalkMe Discovery specifically delivers visibility into true licensing utilization rates compared to current limited adoption. These usage insights empower businesses to right-size investments or improve adoption to capture value across the software stack. |
• | Strategic Impact on Digital Adoption. According to a June 2023 IDC study commissioned by WalkMe, our Digital Adoption Platform delivered $41.4 million annually in total revenue gains from reduced customer churn, more repeat customers, and faster employee application adoption. The IDC data shows WalkMe drove 494% return on investment over 3 years by accelerating adoption 60%, cutting business errors 41%, and speeding migrations 45%. Additional results included 35% faster employee onboarding, 51% faster customer application adoption, and over 2X more clients leveraging new features. |
• | Increases Employee Productivity and Reduces Support Costs. By streamlining usage across software investments, WalkMe lifted employee productivity 26% according to the IDC study. The study showed WalkMe cut IT support tickets 41%, leading to 45% faster project turnarounds and enabling 20% faster product launches. |
• | Improves Customer Engagement. By simplifying fragmented tasks, WalkMe grows customer retention and productivity. The IDC study found users adopted new features 51% faster, while 2.3X more clients leverage latest offerings. This boost in user and customer lifecycle success delivered $41M in revenue annually, according to IDC. |
Consumer & Retail | Technology | Financial Services | Energy, Industrial, Transportation & Travel | |||
Nestle Southern Glazers Ulta Overstock Walgreens Boots Alliance GOJO | LinkedIn Sprinklr HP Adobe W.L. Gore & Associates Okta | Citigroup IGM Financial Services Nasdaq Paychex Sun Life Financial Zurich Insurance Group Standard Chartered Bank Paypal H & R Block | American Airlines BMW Chevron Schneider Electric Veolia DB Schenker Origin Energy TUI Flight Center |
Healthcare & Life Science | Federal, State and Education | Communications | ||
AstraZeneca CHRISTUSHealth Geisinger Modernizing Medicine Parexel Quest Diagnostics Smith & Nephew Syneos Health Team Health Thermo Fisher | US Army Dept of Veterans Affairs General Service Administration Amtrak University of California University of Virginia University of Miami University of North Carolina Kaplan Make a Wish Foundation McGraw Hill Stanford University School of Medicine University of Miami University of Virginia Ivy Tech Community College of Indiana | British Telecommunications PLC Cisco Lumen Technologies Warner Music Group |
• | one application or department, after which our sales force focuses on expanding into other applications or departments, or |
• | an enterprise-wide deployment where WalkMe is used across departments, applications and use cases. |
• | CIO or VP IT who is focused on digital transformation to business efficiency, workforce agility and an overall return on software investment; |
• | VP of sales, whose priorities include sales productivity and forecast accuracy; |
• | Head of Human Resources who aims to improve the digital experience of employees, especially in a remote work environment; |
• | Head of Product who is trying to improve revenue and customer retention across an application or platform; and |
• | Head of Contact Center who is looking to reduce support overhead and improve productivity of support teams. |
● | Legacy approaches like outdated training methods that cannot scale or manage change effectively. This "status quo" results in stalled transformation efforts. |
● | Point solutions by large software vendors that address partial problems but lack cross-app guidance, workflow optimization, and change management capabilities. |
● | Niche providers offering basic in-app guidance or analytics lacking enterprise breadth and extensibility across domains. |
● | Breadth of workflows and use cases supported across all core business domains. |
● | Advanced AI to auto-generate experiences that reduce friction and drive adoption. |
● | FedRAMP-certified security and controls for enterprise scale. |
● | Packaged solutions pre-built for common workflows like employee onboarding. |
● | Proof of driving productivity via hard metrics - hours saved, tickets reduced etc. |
● | Ecosystem of global partners providing depth of worldwide support. |
● | Undisputed DAP leader recognized by top industry analysts. |
C. | Organizational Structure |
Name of Subsidiary | Place of Incorporation |
WalkMe, Inc. | Delaware |
WalkMe UK Limited | United Kingdom |
WalkMe Australia PTY Ltd. | Australia |
WalkMe Singapore PTE Ltd. | Singapore |
WalkMe K.K. | Japan |
WalkMe Canada Ltd. | Canada |
WalkMe Germany GmbH | Germany |
D. | Property, Plants and Equipment |
As of December 31, | ||||||||
2022 | 2023 | |||||||
Annualized Recurring Revenue (millions) | $ | 262.3 | $ | 276.3 |
As of December 31, | ||||||||
2022 | 2023 | |||||||
$100,000+ Customers | 514 | 548 |
As of December 31, | ||||||||
2022 | 2023 | |||||||
Dollar-Based Net Retention Rate (all customers) | 113 | % | 100 | % | ||||
Dollar Based Net Retention Rate (customers having 500 or more employees) | 116 | % | 102 | % |
As of December 31, | ||||||||
2022 | 2023 | |||||||
Remaining Performance Obligations (millions) | $ | 374.0 | $ | 384.4 |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
Net cash provided by (used in) operating activities | $ | (46.8 | ) | $ | 15.3 | |||
Less: Purchases of property and equipment | (2.9 | ) | (0.5 | ) | ||||
Less: Capitalized software development costs | (4.3 | ) | (3.3 | ) | ||||
Free Cash Flow | $ | (53.9 | )* | $ | 11.5 |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
GAAP operating loss | $ | (109.8 | ) | $ | (64.9 | ) | ||
Plus: Share-based compensation expense | 50.1 | 55.5 | ||||||
Plus: Amortization and impairment of acquired intangibles | 1.5 | 0.3 | ||||||
Plus: Restructuring expense | - | 1.5 | ||||||
Plus: Legal settlement expense | - | 3.0 | ||||||
Non-GAAP operating loss | $ | (58.3 | ) | $ | (4.7 | ) | ||
GAAP operating margin | (45 | )% | (24 | )% | ||||
Non-GAAP operating margin | (24 | )% | (2 | )% |
Year ended December 31, | ||||||||
2022 | 2023 | |||||||
(in thousands) | ||||||||
Revenue | $ | 245,066 | $ | 266,954 | ||||
Cost of revenue | 53,884 | 44,373 | ||||||
Gross profit | 191,122 | 222,581 | ||||||
Operating expenses: | ||||||||
Research and development | 59,468 | 55,107 | ||||||
Sales and marketing | 176,307 | 161,372 | ||||||
General and administrative | 65,188 | 70,983 | ||||||
Total operating expenses | 300,963 | 287,462 | ||||||
Operating loss | (109,841 | ) | (64,881 | ) | ||||
Financial income, net | 5,322 | 13,195 | ||||||
Loss before income taxes | (104,519 | ) | (51,686 | ) | ||||
Income taxes | (3,831 | ) | (5,067 | ) | ||||
Net loss | $ | (108,350 | ) | $ | (56,753 | ) |
Year ended December 31, | ||||||||
2022 | 2023 | |||||||
(as a % of revenue) | ||||||||
Revenue | 100 | % | 100 | % | ||||
Cost of revenue | 22 | 17 | ||||||
Gross profit | 78 | 83 | ||||||
Operating expenses: | ||||||||
Research and development | 24 | 21 | ||||||
Sales and marketing | 72 | 60 | ||||||
General and administrative | 27 | 27 | ||||||
Total operating expenses | 123 | 108 | ||||||
Operating loss | (45 | ) | (24 | ) | ||||
Financial income, net | 2 | 5 | ||||||
Loss before income taxes | (43 | ) | (19 | ) | ||||
Income taxes | (1 | ) | (2 | ) | ||||
Net loss | (44 | )% | (21 | )% |
Year Ended December 31, | Period-over-Period Change | |||||||||||||||
2022 | 2023 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Subscription revenues | $ | 220,972 | $ | 247,715 | $ | 26,743 | 12 | % | ||||||||
Professional services revenues | 24,034 | 19,239 | (4,795 | ) | (20 | ) | ||||||||||
Total revenue | $ | 245,006 | $ | 266,954 | $ | 21,948 | 9 | % |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
Subscription revenues | 90 | % | 93 | % | ||||
Professional services revenues | 10 | 7 | ||||||
Total revenue | 100 | % | 100 | % |
Year Ended December 31, | Period-over-Period Change | |||||||||||||||
2022 | 2023 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Cost of revenues: | ||||||||||||||||
Cost of subscription revenues | $ | 25,990 | $ | 25,360 | $ | (630 | ) | (2 | )% | |||||||
Cost of professional services revenues | 27,894 | 19,013 | (8,881 | ) | (32 | ) | ||||||||||
Total cost of revenues | $ | 53,884 | $ | 44,373 | $ | (9,511 | ) | (18 | )% | |||||||
Gross margin: | ||||||||||||||||
Subscription | 88 | % | 90 | % | ||||||||||||
Professional services | (16 | ) | 1 | |||||||||||||
Total gross margin | 78 | % | 83 | % |
Year Ended December 31, | Period-over-Period Change | |||||||||||||||
2022 | 2023 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Research and development | $ | 59,468 | $ | 55,107 | $ | (4,361 | ) | (7 | )% |
Year Ended December 31, | Period-over-Period Change | |||||||||||||||
2022 | 2023 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Sales and marketing | $ | 176,307 | $ | 161,372 | $ | (14,935 | ) | (8 | )% |
Year Ended December 31, | Period-over-Period Change | |||||||||||||||
2022 | 2023 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
General and administrative | $ | 65,188 | $ | 70,983 | $ | 5,795 | 9 | % |
Year Ended December 31, | Period-over-Period Change | |||||||||||||||
2022 | 2023 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Financial income, net | $ | 5,322 | $ | 13,195 | $ | 7,873 | 148 | % |
Year Ended December 31, | Period-over-Period Change | |||||||||||||||
2022 | 2023 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Income tax expenses | $ | 3,831 | $ | 5,067 | $ | 1,236 | 32 | % |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
(in thousands) | ||||||||
Net cash provided by (used in) operating activities | $ | (46,808 | ) | $ | 15,280 | |||
Net cash provided by (used in) investing activities | (149,956 | ) | 62,109 | |||||
Net cash provided by financing activities | 14,791 | 5,966 | ||||||
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash | (850 | ) | (560 | ) | ||||
Increase (decrease) in cash, cash equivalents and restricted cash | (182,823 | ) | 82,795 | |||||
Cash, cash equivalents and restricted cash at beginning of year | 277,251 | 94,428 | ||||||
Cash, cash equivalents and restricted cash at end of the year | $ | 94,428 | $ | 177,223 |
• | identify the contract with a customer; |
• | identify the performance obligations in the contract; |
• | determine the transaction price; |
• | allocate the transaction price to the performance obligations in the contract; and |
• | recognize revenue when or as, we satisfy a performance obligation. |
• | Fair Value of Ordinary Shares. The fair value of each ordinary share was based on the closing price of our publicly traded ordinary shares as reported on the date of the grant. |
• | Expected Term. The expected term of the share options reflects the period for which we believe the option will remain outstanding. To determine the expected term, we generally apply the simplified method approach. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. |
• | Expected Volatility. As we do not have sufficient trading history for our ordinary shares, the selected volatility used is representative of expected future volatility. We base expected future volatility on the historical and implied volatility of comparable publicly traded companies over a similar expected term. |
• | Expected Dividend Yield. We have never declared or paid any cash dividends and do not presently intend to pay cash dividends in the foreseeable future. As a result, we used an expected dividend yield of zero. |
• | Risk-Free Interest Rates. We use the U.S. Treasury yield for our risk-free interest rate that corresponds with the expected term. |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
Expected dividend yield | - | - | ||||||
Expected volatility | 60-91.9 | % | 49-76 | % | ||||
Expected term (years) | 0.5-6.98 | 0.5-6.08 | ||||||
Risk-free interest rate | 0.46-3.88 | % | 3.46-5.47 | % |
A. | Directors and Senior Management |
Name | | Age | Position | |
Executive Officers | ||||
Dan Adika | 38 | Chief Executive Officer and Director | ||
Hagit Ynon | 52 | Chief Financial Officer | ||
Scott Little | 56 | Chief Revenue Officer | ||
Non-Employee Directors | ||||
Michele Bettencourt (1)(2) | 63 | Chairperson of the Board | ||
Haleli Barath | 49 | Director | ||
Menashe Ezra (1)(4) | 71 | Director | ||
Ron Gutler (1)(2)(3)(4) | 66 | Director | ||
Jeff Horing (1)(4) | 59 | Director | ||
Rory O’Driscoll (1)(3) | 59 | Director | ||
Michael Risman (1)(4) | 55 | Director | ||
Roy Saar (1)(2)(3) | 53 | Director |
(1) | Independent under the rules of Nasdaq |
(2) | Member of the audit committee |
(3) | Member of the compensation committee |
(4) | Member of the nominating, governance and sustainability committee |
Board Diversity Matrix As of the date of this Annual Report | ||||
Country of Principal Executive Offices: | Israel | |||
Foreign Private Issuer | Yes | |||
Disclosure Prohibited under Home Country Law | No | |||
Total Number of Directors | 9 | |||
Female | Male | Non- Binary/Transgender | Did Not Disclose Gender | |
Part I: Gender Identity | ||||
Directors | 1 | 7 | 1 | 0 |
Part II: Demographic Background | ||||
Underrepresented Individual in Home Country Jurisdiction | 0 | |||
LGBTQ+ | 1 | |||
Did Not Disclose Demographic Background | 3 |
B. | Compensation |
• | at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such matter, present and voting at such meeting, are voted in favor of the compensation package, excluding abstentions; or |
• | the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter voting against the compensation package does not exceed two percent (2%) of the aggregate voting rights in the Company. |
• | Mr. Dan Adika, Chief Executive Officer. Compensation expenses recorded in 2023 of $0.4 million in salary expenses and $0.1 million in social benefits costs. |
• | Ms. Hagit Ynon, Chief Financial Officer. Compensation expenses recorded in 2023 of $0.4 million in salary expenses and $0.1 million in social benefits costs. |
• | Mr. Scott Little, Chief Revenue Officer. Compensation expenses recorded in 2023 of $0.4 million in salary expenses and $0.1 million in social benefits costs. |
• | Ms. Chelsea Pyrzenski, Chief People Officer. Compensation expenses recorded in 2023 of $0.4 million in salary expenses and $0.1 million in social benefits costs. |
• | Mr. Paul Shinn, General Counsel. Compensation expenses recorded in 2023 of $0.3 million in salary expenses and $0.1 million in social benefits costs. |
• | 1% of the outstanding ordinary shares as of the last day of the immediately preceding fiscal year, determined on a fully diluted basis; or |
• | such other amount as our board of directors may determine. |
C. | Board Practices |
• | the Class I directors are Roy Saar, Michael Risman, Menashe Ezra and Dan Adika, and their terms will expire at our annual general meeting of our shareholders to be held in 2025; |
• | the Class II directors, are Michele Bettencourt and Rory O’Driscoll, and their terms will expire at our annual general meeting of our shareholders to be held in 2026; and |
• | the Class III directors are Jeff Horing, Ron Gutler and Haleli Barath, and their terms will expire at our annual general meeting of our shareholders to be held in 2024. |
• | at least a majority of the shares of non-controlling shareholders and shareholders that do not have a personal interest in the approval voted at the meeting are voted in favor (disregarding abstentions); or |
• | the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such appointment that re voted against such appointment does not exceed two percent (2%) of the aggregate voting rights in the company. |
• | Dan Adika was appointed by a majority vote based on the number of shares held by Mr. Eyal Cohen, Brooks S.M. Projects Ltd. and Mr. Dan Adika; |
• | Haleli Barath was appointed by resolution of our board of directors; |
• | Michele Bettencourt was appointed by resolution of our board of directors; |
• | Menashe Ezra was appointed by Gemini Israel V, L.P. and Gemini Partners Investors V, L.P; |
• | Ron Gutler was appointed by unanimous consent of our board of directors; |
• | Jeff Horing was appointed by Insight Venture Partners IX, L.P., Insight Venture Partners (Cayman) IX, L.P., Insight Venture Partners IX (Co-Investors), L.P. and Insight Venture Partners (Delaware) IX, L.P.; |
• | Rory O’Driscoll was appointed by Scale Venture Partners IV, L.P.; |
• | Michael Risman was appointed by Vitruvian Directors I Limited on behalf of Ambleside S.a.r.l; and |
• | Roy Saar was appointed by Mangrove III Investments S.a.r.l. |
• | retaining and terminating our independent auditors, subject to ratification by our board of directors, and in the case of retention, to ratification by the shareholders; |
• | pre-approving audit and non-audit services to be provided by the independent auditors and related fees and terms; |
• | overseeing the accounting and financial reporting processes of our Company and audits of our financial statements, the effectiveness of our internal control over financial reporting and making such reports as may be required of an audit committee under the rules and regulations promulgated under the Exchange Act; |
• | reviewing with management and our independent auditor our annual and quarterly financial statements prior to publication or filing (or submission, as the case may be) to the SEC; |
• | recommending to our board of directors the retention and termination of the internal auditor, and the internal auditor’s engagement fees and terms, in accordance with the Companies Law as well as approving the yearly or periodic work plan proposed by the internal auditor; |
• | reviewing policies and procedures with respect to transactions (other than transactions related to the compensation or terms of services) between us and our officers and directors, or affiliates of our officers or directors, or transactions that are not in the ordinary course of our business and deciding whether to approve such acts and transactions if so required under the Companies Law; and |
• | establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees. |
• | making recommendations to our board of directors with respect to the approval of the compensation policy for office holders and, once every three years, regarding any extensions to a compensation policy that was adopted for a period of more than three years; |
• | reviewing the implementation of the compensation policy and periodically making recommendations to our board of directors with respect to any amendments or updates of the compensation policy; |
• | resolving whether or not to approve arrangements with respect to the terms of office and employment of office holders; and |
• | exempting, under certain circumstances, a transaction with our Chief Executive Officer from the approval of our shareholders. |
• | recommending to our board of directors for its approval a compensation policy in accordance with the requirements of the Companies Law as well as other compensation policies, incentive-based compensation plans and equity-based compensation plans, and overseeing the development and implementation of such policies and recommending to our board of directors any amendments or modifications the committee deems appropriate, including as required under the Companies Law; |
• | reviewing and approving the granting of options and other incentive awards to our Chief Executive Officer and other executive officers, including reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, including evaluating their performance in light of such goals and objectives; |
• | Reviewing and making recommendations to the Board regarding director compensation; |
• | approving and exempting certain transactions regarding office holders’ compensation pursuant to the Companies Law; and |
• | administering our equity-based compensation plans, including without limitation, approving the adoption of such plans, amending and interpreting such plans and the awards and agreements issued pursuant thereto, and making awards to eligible persons under the plans and determining the terms of such awards. |
• | such majority includes at least a majority of the shares held by shareholders who are not controlling shareholders and shareholders who do not have a personal interest in such compensation policy; or |
• | the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in the compensation policy and who vote against the policy does not exceed two percent (2%) of the aggregate voting rights in the Company. |
• | the education, skills, experience, expertise and accomplishments of the relevant office holder; |
• | the office holder’s position and responsibilities; |
• | prior compensation agreements with the office holder; |
• | the ratio between the cost of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees employed through contractors who provide services to the company, in particular the ratio between such cost to the average and median salary of such employees of the company, as well as the impact of disparities between them on the work relationships in the company; |
• | if the terms of employment include variable components - the possibility of reducing variable components at the discretion of the board of directors and the possibility of setting a limit on the value of non-cash variable equity-based components; and |
• | if the terms of employment include severance compensation - the term of employment or office of the office holder, the terms of the office holder’s compensation during such period, the company’s performance during such period, the office holder’s individual contribution to the achievement of the company goals and the maximization of its profits and the circumstances under which he or she is leaving the company. |
• | with regards to variable components: |
• | with the exception of office holders who report to the chief executive officer, a means of determining the variable components on the basis of long-term performance and measurable criteria; provided that the company may determine that an immaterial part of the variable components of the compensation package of an office holder shall be awarded based on non-measurable criteria, or if such amount is not higher than three months’ salary per annum, taking into account such office holder’s contribution to the company; and |
• | the ratio between variable and fixed components, as well as the limit of the values of variable components at the time of their payment, or in the case of equity-based compensation, at the time of grant; |
• | a condition under which the office holder will return to the company, according to conditions to be set forth in the compensation policy, any amounts paid as part of the office holder’s terms of employment, if such amounts were paid based on information later to be discovered to be wrong, and such information was restated in the company’s financial statements; |
• | the minimum holding or vesting period of variable equity-based components to be set in the terms of office or employment, as applicable, while taking into consideration long-term incentives; and |
• | a limit to retirement grants. |
• | overseeing and assisting our board in reviewing and recommending nominees for election as directors; |
• | overseeing the assessment of the performance of the members of our board; |
• | establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and recommending to our board a set of corporate governance guidelines applicable to our business; and |
• | overseeing our policies, programs and strategies related to environmental, social and governance matters (“ESG”). |
• | information on the business advisability of a given action brought for his, her or its approval or performed by virtue of his, her or its position; and |
• | all other important information pertaining to such action. |
• | refrain from any act involving a conflict of interest between the performance of his, her or its duties in the company and his, her or its other duties or personal affairs; |
• | refrain from any activity that is competitive with the business of the company; |
• | refrain from exploiting any business opportunity of the company for the purpose of gaining a personal advantage for himself, herself or itself or others; and |
• | disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of his, her or its position as an office holder. |
• | an amendment to the company’s articles of association; |
• | an increase of the company’s authorized share capital; |
• | a merger; or |
• | interested party transactions that require shareholder approval. |
• | a financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the above mentioned events and amount or criteria; |
• | reasonable litigation expenses, including legal fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (2) in connection with a monetary sanction; |
• | reasonable litigation expenses, including legal fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third-party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent; and |
• | expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law. |
• | a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
• | a breach of the duty of care to the company or to a third-party, including a breach arising out of the negligent conduct of the office holder; |
• | a financial liability imposed on the office holder in favor of a third-party; |
• | a financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding; and |
• | expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law. |
• | a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
• | a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; |
• | an act or omission committed with intent to derive illegal personal benefit; or |
• | a fine, monetary sanction or forfeit levied against the office holder. |
D. | Employees |
E. | Share Ownership |
F. | Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation |
A. | Major Shareholders |
Name of Beneficial Owner | Number | % | ||||||
Principal Shareholders: | ||||||||
Entities Affiliated with Insight Partners (1) | 24,253,823 | 26.4 | ||||||
Entities Affiliated with StepStone Group (2) | 10,366,855 | 11.3 | ||||||
Scale Venture Management IV, LLC (3) | 9,481,669 | 10.3 | ||||||
Entities Affiliated with Mangrove Capital Partners (4) | 6,278,354 | 6.8 | ||||||
Entities Affiliated with Gemini Israel Ventures (5) | 7,792,833 | 8.5 | ||||||
Entities Affiliated with AMBLESIDE S.À R.L. (6) | 5,462,245 | 5.9 | ||||||
Executive Officers and Directors: | ||||||||
Dan Adika (7) | 3,617,435 | 3.8 | ||||||
Hagit Ynon (8) | 393,073 | * | ||||||
Scott Little (9) | 171,322 | * | ||||||
Michele Bettencourt (10) | 101,723 | * | ||||||
Haleli Barath (11) | 107,435 | * | ||||||
Menashe Ezra (5) | 7,792,833 | 8.5 | ||||||
Ron Gutler (12) | 75,233 | * | ||||||
Jeff Horing (13) | 31,930 | * | ||||||
Rory O’Driscoll(3) | 9,481,669 | 10.3 | ||||||
Michael Risman (14) | - | - | ||||||
Roy Saar (15) | 219,170 | * | ||||||
All directors and executive officers as a group (11 individuals) | 21,991,823 | 23 |
* | Indicates ownership of less than 1%. |
1. | Pursuant to Schedule 13G filed with the SEC on February 11, 2022, consists of (i) 14,719,862 ordinary shares held of record by Insight Venture Partners IX, L.P., (ii) 293,822 ordinary shares held of record by Insight Venture Partners IX (Co-Investors), L.P., (iii) 7,313,935 ordinary shares held of record by Insight Venture Partners (Cayman) IX, L.P., (iv) 1,559,564 ordinary shares held of record by Insight Venture Partners (Delaware) IX, L.P., (v) 163,070 ordinary shares held of record by Insight Partners (Cayman) XI, L.P., (vi) 21,747 ordinary shares held of record by Insight Partners (Delaware) XI, L.P., (vii) 20,202 ordinary shares held of record by Insight Partners (EU) XI, S.C.Sp., (viii) 3,568 ordinary shares held of record by Insight Partners XI (Co-Investors) (B), L.P., (ix) 2,589 ordinary shares held of record by Insight Partners XI (Co-Investors), L.P., and (x) 155,464 shares held of record held by Insight Partners XI, L.P. The general partner of Insight Venture Partners IX, L.P., Insight Venture Partners IX (Co-Investors), L.P., Insight Venture Partners (Cayman) IX, L.P., and Insight Venture Partners (Delaware) IX, L.P. is Insight Venture Associates IX, L.P., (“IVA IX LP”), whose general partner is Insight Venture Associates IX, Ltd., (“IVA IX Ltd”). The general partner of Insight Partners (Cayman) XI, L.P., Insight Partners (Delaware) XI, L.P., Insight Partners XI (Co-Investors) (B), L.P., Insight Partners XI (Co-Investors), L.P. and Insight Partners XI, L.P. is Insight Associates XI, L.P., (“IA XI LP”), whose general partner is Insight Associates XI, Ltd. (“IA XI Ltd”). The general partner of Insight Partners (EU) XI, S.C.Sp. is Insight Associates (EU) XI, S.a.r.l., (“IA EU XI”). The sole shareholder of IVA IX Ltd, IA XI Ltd and IA EU XI is Insight Holdings Group, LLC. Mr. Horing, one of the Company’s directors, is a managing director at Insight Venture Partners. The address for these entities is c/o Insight Partners, 1114 Avenue of the Americas, 36th Floor, New York, NY 10036. |
2. | Pursuant to Schedule 13/G filed with the SEC on June 11, 2022, consists of (i) 10,366,855 ordinary shares held by StepStone Group LP. (“StepStone”); (ii) 3,013,139 ordinary shares held by StepStone VC Global Partners VI-A, L.P. (“Global Partners VI-A”); (iii) 1,203,629 ordinary shares held by StepStone VC Global Partners VI-C, L.P. (“Global Partners VI-C”); (iv) 4,216,768 ordinary shares held by StepStone VC General Partner VI, L.P. (“Partners VI GP”); (v) 5,948,813 ordinary shares held by StepStone VC Opportunities III, L.P. (“Opportunities III”); (vi) 5,948,813 ordinary shares held by StepStone VC Opportunities General Partner III, L.P. (“Opportunities III GP”); (vii) 201,274 ordinary shares held by StepStone VC Secondaries Fund IV, L.P. (“Secondaries Fund IV,” and together with Global Partners VI and Opportunities III, the “Funds”) and (viii) 201,274 ordinary shares held by StepStone VC Secondaries General Partner IV, L.P (“Secondaries IV GP”). Partners VI GP is the general partner of Global Partners VI-A and Global Partners VI-C, Opportunities III GP is the general partner of Opportunities III, and Secondaries IV GP is the general partner of Secondaries Fund IV. StepStone is the investment manager of the Funds. StepStone Group Holdings LLC (“StepStone Group Holdings”) is the general partner of StepStone, and StepStone Group Inc. is the sole managing member of StepStone Group Holdings. On September 20, 2021, StepStone Group Inc., a Delaware corporation, and StepStone Group LP, a Delaware limited partnership, completed the acquisition of Greenspring Associates, LLC and certain of its affiliates or subsidiaries (the “StepStone Acquisition”). As a result of the Stepstone Acquisition, StepStone Group LP became the investment manager of the Funds. The address of these entities is 4225 Executive Square, Suite 1600, La Jolla, CA 90237. |
3. | Pursuant to Schedule 13G/A filed with the SEC on February 13, 2024 and information known to the Company, consists of (i) 9,429,021 ordinary shares held of record by Scale Venture Management IV, LLC (“Scale IV LLC”), (ii) 11,302 ordinary shares held of record by Scale Management, LLC (iii) 20,718 shares held by Rory O’Driscoll and (iv) 20,628 ordinary shares underlying options held by Rory O’Driscoll and exercisable within 60 days of February 29, 2024. Rory O’Driscoll, one of our directors, Andrew Vitus and Stacey Bishop are managers of Scale IV LLC and Scale Management, LLC and share voting and dispositive power over the shares held by Scale IV LLC and Scale Management, LLC with the other managers of Scale IV LLC and Scale Management, LLC. The address for the reporting persons is 950 Tower Lane, Suite 1150, Foster City, California 94404. |
4. | Pursuant to Schedule 13G filed with the SEC on January 19, 2022, consists of (i) 5,638,420 ordinary shares held by Mangrove III Investments S.à r.l (“Mangrove III”) and (ii) 639,934 ordinary shares held by Mangrove V Investments S.à r.l (“Mangrove V”). Mangrove III S.C.A. SICAR is the owner of 100% of the share capital of Mangrove III, and Mangrove V (SCA), RAIF is the owner of 100% of the share capital of Mangrove V. Mangrove III Management S.A. is the liquidator of Mangrove III S.C.A. SICAR. The members of the board of directors of Mangrove III Management S.A. are Mark Tluszcz, Hans-Jurgen Schmitz and Willibrord Ehses. As a result of these relationships, each of Mangrove III S.C.A. SICAR, Mangrove III Management S.A. and Messrs. Tluszcz, Schmitz and Ehses may be deemed to share voting and dispositive power with respect to the securities held by Mangrove III. Mangrove Capital Partners S.A. is the manager of Mangrove V (SCA), RAIF. The members of the board of directors of Mangrove Capital Partners S.A. are Mark Tluszcz, Hans-Jürgen Schmitz, Michael Rabinowicz and Gerardo Lopez Fojaca. As a result of these relationships, each of Mangrove V (SCA), RAIF, Mangrove Capital Partners S.A. and Messrs. Tluszcz, Schmitz, Rabinowicz and Lopez Fojaca may be deemed to share voting and dispositive power with respect to the securities held by Mangrove V. Roy Saar, one of our directors, is a partner at Mangrove Capital Partners. The address for these entities is 31 Boulevard Joseph II, L-1840, Luxembourg. |
5. | Pursuant to Schedule 13G filed with the SEC on February 13, 2024 and information known to the Company, consists of (i) 7,652,748 ordinary shares held of record by Gemini Israel V Limited Partnership (“Gemini V”), (ii) 77,300 ordinary shares held of record by Gemini Partners Investors V L.P. (“Gemini Partners”) (iii) 42,157 ordinary shares held of record by Menashe Ezra and (iv) 20,628 ordinary shares underlying options held by Menashe Ezra and exercisable within 60 days of February 29, 2024. Gemini Capital Associates V LP (“Gemini Associates LP”) is the general partner of Gemini V and Gemini Capital Associates V GP, Ltd. (“Gemini Associates GP”) is the general partner of Gemini Associates LP. Gemini Israel Funds IV Ltd. is the general partner of Gemini Partners. Yossi Sela and Menashe Ezra are the managing partners of Gemini Associates GP, and Gemini Israel Funds IV Ltd. The address for these entities is 1 Shankar St., WeWork, 1st Floor, Herzliya Israel. |
6. | Pursuant to Schedule 13D/A filed with the SEC on December 17, 2021, consists of: (i) 3,404,955 ordinary shares held or record by Ambleside S.à r.l. (“Ambleside”) and (ii) 2,057,290 ordinary shares held of record by Ambleside Lux S.à r.l. (“Ambleside Lux”). Vitruvian III Luxembourg S.à r.l. (“Vitruvian Luxembourg”), is the sole shareholder of Ambleside. VIP III Cortex-B S.à r.l. (“VIP III Cortex-B”) is the sole shareholder of Ambleside Lux. VIP III Nominees Limited (“VIP Nominees”) is the nominee for and on behalf of VIP III LP, and VIP III Co-Invest LP (collectively, the “Funds”), and sole legal shareholder of Vitruvian Luxembourg and VIP III Cortex-B. Vitruvian Partners LLP (“Vitruvian Partners”) is the manager of the Funds and sole shareholder of VIP Nominees. Michael Risman, one of our directors, is a managing partner of Vitruvian Partners. The address of the principal business office of VIP Nominees, VIP III LP and Vitruvian Partners is 105 Wigmore Street, London W1U 1QY, the address of the principal business office of VIP III Co-Invest LP is 12 Castle Street St Helier Jersey JE2 3RT and the address of the principal business office of Ambleside, Ambleside Lux, Vitruvian Luxembourg and VIP III Cortex-B is 21, rue Philippe II, L-2340 Luxembourg. |
7. | Consists of 3,073,750 ordinary shares underlying options exercisable within 60 days of February 29, 2024 and 23,438 restricted share units or performance share units to be vested within 60 days of February 29, 2024. |
8. | Consists of 250,104 ordinary shares underlying options exercisable within 60 days of February 29, 2024 and 2,344 performance share units to be vested within 60 days of February 29, 2024. |
9. | Consists of 83,333 ordinary shares underlying options exercisable within 60 days of February 29, 2024 and 1,250 performance share units to be vested within 60 days of February 29, 2024. |
10. | Consists of 68,709 ordinary shares underlying options exercisable within 60 days of February 29, 2024. |
11. | Consists of 49,421 ordinary shares underlying options exercisable within 60 days of February 29, 2024. |
12. | Consists of 67,219 ordinary shares underlying options exercisable within 60 days of February 29, 2024. |
13. | Consists of 20,628 ordinary shares underlying options exercisable within 60 days of February 29, 2024. Does not include the ordinary shares beneficially held by entities affiliated with Insight Partners as set forth in footnote (1) above. |
14. | Does not include the ordinary shares beneficially held by entities affiliated with Ambleside as set forth in footnote (6) above. |
15. | Consists of 20,628 ordinary shares underlying options exercisable within 60 days of February 29, 2024. Does not include the ordinary shares beneficially held by entities affiliated with Mangrove Capital Partners as set forth in footnote (4) above. |
B. | Related Party Transactions |
C. | Interests of Experts and Counsel |
A. | Consolidated Statements and Other Financial Information |
B. | Significant Changes |
A. | Offer and Listing Details |
B. | Plan of Distribution |
C. | Markets |
D. | Selling Shareholders |
E. | Dilution |
F. | Expenses of the Issue |
A. | Share Capital |
B. | Memorandum and Articles of Association |
C. | Material Contracts |
D. | Exchange Controls |
E. | Taxation |
• | The expenditures are approved by the relevant Israeli government ministry, determined by the field of research; |
• | The research and development must be for the promotion of the company; and |
• | The research and development is carried out by or on behalf of the company seeking such tax deduction. |
• | banks, financial institutions or insurance companies; |
• | real estate investment trusts or regulated investment companies; |
• | dealers or brokers; |
• | traders that elect to mark to market; |
• | tax-exempt entities or organizations; |
• | “individual retirement accounts” and other tax-deferred accounts; |
• | certain former citizens or long-term residents of the United States; |
• | persons that are resident or ordinarily resident in or have a permanent establishment in a jurisdiction outside the United States; |
• | persons that acquired our ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation for the performance of services; |
• | persons holding our ordinary shares as part of a “hedging,” “integrated” or “conversion” transaction or as a position in a “straddle” for United States federal income tax purposes; |
• | persons subject to special tax accounting as a result of any item of gross income with respect to the ordinary shares being taken into account in an applicable financial statement; |
• | partnerships or other pass-through entities and persons holding the ordinary shares through partnerships or other pass-through entities; or |
• | holders that own directly, indirectly or through attribution 10% or more of the total voting power or value of all of our outstanding shares. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States or any state thereof, including the District of Columbia; |
• | an estate the income of which is subject to United States federal income taxation regardless of its source; or |
• | a trust if such trust has validly elected to be treated as a United States person for United States federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over its administration and (2) one or more United States persons have the authority to control all of the substantial decisions of such trust. |
F. | Dividends and Paying Agents |
G. | Statement by Experts |
H. | Documents on Display |
I. | Subsidiary Information |
J. | Annual Report to Security Holders |
Year ended December 31, | ||||||||
2022 | 2023 | |||||||
(in thousands) | ||||||||
Audit Fees | $ | 500 | $ | 500 | ||||
Audit Related Fees | - | 4 | ||||||
Tax Fees | 39 | 76 | ||||||
Total | $ | 539 | $ | 580 |
● | risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; |
● | a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; |
● | the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; |
● | cybersecurity awareness training of our employees, incident response personnel, and senior management; |
● | a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and |
● | a third-party risk management process for service providers, suppliers, and vendors based on their criticality and risk profile. |
* | Filed herewith. |
** | Furnished herewith. |
† | Indicates management contract or compensatory plan or arrangement. |
WALKME LTD. | |||
Date: March 18, 2024 | By: | /s/ Dan Adika | |
Name: | Dan Adika | ||
Title: | Chief Executive Officer | ||
Date: March 18, 2024 | By: | /s/ Hagit Ynon | |
Name: | Hagit Ynon | ||
Title: | Chief Financial Officer |
Page | |
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 1281) | F - 2 |
F - 3 F - 4 | |
F - 5 | |
F - 6 | |
F - 7 | |
F - 8 | |
F - 9 F - 32 |
Kost Forer Gabbay & Kasierer 144 Menachem Begin Road, Building A, Tel-Aviv 6492102, Israel | Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com |
December 31, | ||||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 177,223 | $ | 94,105 | ||||
Short-term deposits | 28,027 | 125,231 | ||||||
Short-term marketable securities | 60,290 | 42,187 | ||||||
Trade receivables, net | 40,494 | 45,024 | ||||||
Short-term deferred contract acquisition costs | 26,793 | 26,287 | ||||||
Prepaid expenses and other assets | 8,739 | 6,243 | ||||||
Total current assets | 341,566 | 339,077 | ||||||
NON-CURRENT ASSETS: | ||||||||
Long-term deferred contract acquisition costs | 30,267 | 40,110 | ||||||
Other assets | 317 | 584 | ||||||
Long-term marketable securities | 56,282 | 43,334 | ||||||
Property and equipment, net | 12,059 | 13,268 | ||||||
Operating lease right-of-use assets | 12,005 | 7,003 | ||||||
Goodwill and intangible assets, net | 1,561 | 1,830 | ||||||
Total non-current assets | 112,491 | 106,129 | ||||||
TOTAL ASSETS | $ | 454,057 | $ | 445,206 |
December 31, | ||||||||
2023 | 2022 | |||||||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables | $ | 3,508 | $ | 5,957 | ||||
Employees and payroll accruals | 25,041 | 30,720 | ||||||
Accrued expenses and other liabilities | 18,127 | 17,685 | ||||||
Short-term operating lease liabilities | 4,604 | 5,009 | ||||||
Deferred revenues | 110,701 | 108,097 | ||||||
Total current liabilities | 161,981 | 167,468 | ||||||
NON-CURRENT LIABILITIES: | ||||||||
Deferred revenues | 894 | 1,613 | ||||||
Deferred tax liabilities, net | 5,559 | 7,330 | ||||||
Other liabilities | 6,825 | 2,708 | ||||||
Long-term operating lease liabilities | 8,222 | 3,833 | ||||||
Total non-current liabilities | 21,500 | 15,484 | ||||||
TOTAL LIABILITIES | 183,481 | 182,952 | ||||||
COMMITMENTS AND CONTINGENT LIABILITIES (note 7) | ||||||||
REDEEMABLE NON-CONTROLLING INTEREST | 10,429 | 8,080 | ||||||
SHAREHOLDERS’ EQUITY: | ||||||||
Ordinary shares of no par value - Authorized: 900,000,000 shares at December 31, 2023 and 2022; Issued and outstanding: 90,864,662 and 86,780,082 shares at December 31, 2023 and 2022, respectively | - | - | ||||||
Additional paid-in capital | 748,801 | 688,636 | ||||||
Accumulated other comprehensive income (loss) | 478 | (1,817 | ) | |||||
Accumulated deficit | (489,132 | ) | (432,645 | ) | ||||
Total shareholders’ equity | 260,147 | 254,174 | ||||||
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY | $ | 454,057 | $ | 445,206 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Revenues | ||||||||||||
Subscription | $ | 247,715 | $ | 220,972 | $ | 175,328 | ||||||
Professional services | 19,239 | 24,034 | 17,975 | |||||||||
Total revenues | 266,954 | 245,006 | 193,303 | |||||||||
Cost of revenues | ||||||||||||
Subscription | 25,360 | 25,990 | 24,025 | |||||||||
Professional services | 19,013 | 27,894 | 22,632 | |||||||||
Total cost of revenues | 44,373 | 53,884 | 46,657 | |||||||||
Gross profit | 222,581 | 191,122 | �� | 146,646 | ||||||||
Research and development | 55,107 | 59,468 | 48,160 | |||||||||
Sales and marketing | 161,372 | 176,307 | 127,719 | |||||||||
General and administrative | 70,983 | 65,188 | 48,557 | |||||||||
Total operating expenses | 287,462 | 300,963 | 224,436 | |||||||||
Operating loss | (64,881 | ) | (109,841 | ) | (77,790 | ) | ||||||
Financial income (expense), net | 13,195 | 5,322 | (9 | ) | ||||||||
Loss before income taxes | (51,686 | ) | (104,519 | ) | (77,799 | ) | ||||||
Income taxes | (5,067 | ) | (3,831 | ) | (2,494 | ) | ||||||
Net loss | (56,753 | ) | (108,350 | ) | (80,293 | ) | ||||||
Net loss attributable to non-controlling interest | (266 | ) | (743 | ) | (1,169 | ) | ||||||
Adjustment attributable to non-controlling interest | 2,649 | (14,979 | ) | 16,689 | ||||||||
Net loss attributable to WalkMe Ltd. | (59,136 | ) | (92,628 | ) | (95,813 | ) | ||||||
Net loss per share attributable to WalkMe Ltd. basic and diluted | $ | (0.67 | ) | $ | (1.09 | ) | $ | (1.85 | ) | |||
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted | 88,912,397 | 85,116,424 | 51,763,032 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Net loss | $ | (56,753 | ) | $ | (108,350 | ) | $ | (80,293 | ) | |||
Other comprehensive income (loss): | ||||||||||||
Change in unrealized net gain (loss) on cash flow hedges: | ||||||||||||
Unrealized gain (loss) arising during the year | (2,667 | ) | (5,651 | ) | 1,271 | |||||||
Net gain (loss) reclassified into net loss | 4,997 | 3,471 | (669 | ) | ||||||||
2,330 | (2,180 | ) | 602 | |||||||||
Change in net unrealized gains on marketable securities | - | 11 | - | |||||||||
Foreign currency translation adjustments | (69 | ) | (202 | ) | (546 | ) | ||||||
Other comprehensive income (loss) | 2,261 | (2,371 | ) | 56 | ||||||||
Comprehensive loss | (54,492 | ) | (110,721 | ) | (80,237 | ) | ||||||
Less comprehensive loss attributable to redeemable non-controlling interest: | ||||||||||||
Net loss attributable to redeemable non-controlling interest | (266 | ) | (743 | ) | (1,169 | ) | ||||||
Foreign currency translation adjustments attributable to redeemable non-controlling interest | (34 | ) | (99 | ) | (266 | ) | ||||||
Comprehensive loss attributable to redeemable non-controlling interest | (300 | ) | (842 | ) | (1,435 | ) | ||||||
Comprehensive loss attributable to WalkMe Ltd. | $ | (54,192 | ) | $ | (109,879 | ) | $ | (78,802 | ) |
Convertible preferred shares | Ordinary shares | Additional paid-in | Accumulated other comprehensive | Accumulated | Total shareholder's | |||||||||||||||||||||||||||
Number | Amount | Number | Amount | capital | Income (loss) | deficit | equity (deficit) | |||||||||||||||||||||||||
Balance as of December 31, 2020 | 58,724,580 | $ | $ 300,490 | 13,773,000 | $ | - | $ | 21,524 | $ | 131 | $ | (245,914 | ) | $ | (224,259 | ) | ||||||||||||||||
Issuance of Series F convertible preferred shares, net | 455,942 | 10,000 | - | - | - | - | - | - | ||||||||||||||||||||||||
Issuance of ordinary shares in connection with asset acquisition | - | - | 33,150 | - | 776 | - | - | 776 | ||||||||||||||||||||||||
Conversion of convertible preferred shares to ordinary shares upon initial public offering | (59,180,522 | ) | (310,490 | ) | 59,180,522 | - | 310,490 | - | - | 310,490 | ||||||||||||||||||||||
Issuance of ordinary shares upon initial public offering, net of underwriting discounts and commissions and other issuance costs | - | - | 9,250,000 | - | 263,911 | - | - | 263,911 | ||||||||||||||||||||||||
Exercise of share options and vested RSUs | - | - | 1,517,334 | - | 2,849 | - | - | 2,849 | ||||||||||||||||||||||||
Share-based compensation | - | - | - | - | 27,332 | - | - | 27,332 | ||||||||||||||||||||||||
Other comprehensive income | - | - | - | - | - | 324 | - | 324 | ||||||||||||||||||||||||
Net loss attributable to WalkMe Ltd. including adjustment to redeemable non-controlling interest | - | - | - | - - | (16,689 | ) | - | (79,124 | ) | (95,813 | ) | |||||||||||||||||||||
Balance as of December 31, 2021 | - | $ | - | 83,754,006 | $ | - | $ | 610,193 | $ | 455 | $ | (325,038 | ) | $ | 285,610 | |||||||||||||||||
Exercise of share options and vested RSUs | - | - | 2,358,586 | - | 5,036 | - | - | 5,036 | ||||||||||||||||||||||||
Issuance of ordinary shares under Employee Share Purchase Plan | - | - | 667,490 | - | 7,656 | - | - | 7,656 | ||||||||||||||||||||||||
Share-based compensation | - | - | - | - | 50,772 | - | - | 50,772 | ||||||||||||||||||||||||
Other comprehensive loss | - | - | - | - | - | (2,272 | ) | - | (2,272 | ) | ||||||||||||||||||||||
Net loss attributable to WalkMe Ltd. including adjustment to redeemable non-controlling interest | - | - | - | - | 14,979 | - | (107,607 | ) | (92,628 | ) | ||||||||||||||||||||||
Balance as of December 31, 2022 | - | $ | - | 86,780,082 | $ | - | $ | 688,636 | $ | (1,817 | ) | $ | (432,645 | ) | $ | 254,174 | ||||||||||||||||
Exercise of share options and vested RSUs | - | - | 3,492,917 | - | 1,864 | - | - | 1,864 | ||||||||||||||||||||||||
Issuance of ordinary shares under Employee Share Purchase Plan | - | - | 591,663 | - | 4,874 | - | - | 4,874 | ||||||||||||||||||||||||
Share-based compensation | - | - | - | - | 56,076 | - | - | 56,076 | ||||||||||||||||||||||||
Other comprehensive income | - | - | - | - | - | 2,295 | - | 2,295 | ||||||||||||||||||||||||
Net loss attributable to WalkMe Ltd. including adjustment to redeemable non-controlling interest | - | - | - | - | (2,649 | ) | - | (56,487 | ) | (59,136 | ) | |||||||||||||||||||||
Balance as of December 31, 2023 | - | $ | - | 90,864,662 | $ | - | $ | 748,801 | $ | 478 | $ | (489,132 | ) | $ | 260,147 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (56,753 | ) | $ | (108,350 | ) | $ | (80,293 | ) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
Share-based compensation | 55,457 | 50,104 | 27,332 | |||||||||
Depreciation, amortization and impairment | 6,157 | 7,878 | 4,773 | |||||||||
Operating lease right-of-use assets and liabilities, net | (1,318 | ) | (551 | ) | - | |||||||
Finance (income) expenses | 2,125 | (1,758 | ) | (59 | ) | |||||||
Amortization of premium and accretion of discount on marketable securities, net | (2,245 | ) | (370 | ) | - | |||||||
Decrease (increase) in trade receivables, net | 4,530 | (7,417 | ) | (6,976 | ) | |||||||
Decrease (increase) in prepaid expenses and other assets | 7,878 | (8,882 | ) | (29,763 | ) | |||||||
Increase (decrease) in trade payables | (2,449 | ) | (354 | ) | 906 | |||||||
Increase (decrease) in employees and payroll accruals | (4,907 | ) | (5,782 | ) | 15,010 | |||||||
Increase in accrued expenses and other liabilities | 6,147 | 3,215 | 4,574 | |||||||||
Increase in deferred revenues | 2,429 | 22,924 | 28,577 | |||||||||
Increase (decrease) in deferred taxes, net | (1,771 | ) | 2,535 | 1,694 | ||||||||
Net cash provided by (used in) operating activities | 15,280 | (46,808 | ) | (34,225 | ) | |||||||
Cash flows from investing activities: | ||||||||||||
Purchase of intangible assets | - | - | (1,338 | ) | ||||||||
Capitalization of software development costs | (3,255 | ) | (4,260 | ) | (3,912 | ) | ||||||
Purchase of property and equipment | (540 | ) | (2,867 | ) | (2,642 | ) | ||||||
Investment in short-term deposits | (28,000 | ) | (170,500 | ) | (66,260 | ) | ||||||
Proceeds from short-term deposits | 123,500 | 112,257 | 45,003 | |||||||||
Investment in restricted deposits | - | - | (1,298 | ) | ||||||||
Proceeds from restricted deposits | - | 295 | 2,924 | |||||||||
Investment in marketable securities | (75,653 | ) | (84,881 | ) | - | |||||||
Proceeds from maturity of marketable securities | 46,057 | - | - | |||||||||
Net cash provided by (used in) investing activities | 62,109 | (149,956 | ) | (27,523 | ) | |||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from initial public offering, net of underwriting discounts and commissions and other issuance costs | - | - | 263,922 | |||||||||
Proceeds from exercise of options | 1,864 | 5,074 | 2,867 | |||||||||
Proceeds from employees share purchase plan | 4,102 | 9,717 | - | |||||||||
Issuance of preferred shares, net of issuance costs | - | - | 10,000 | |||||||||
Net cash provided by financing activities | 5,966 | 14,791 | 276,789 | |||||||||
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash | (560 | ) | (850 | ) | (685 | ) | ||||||
Increase (decrease) in cash, cash equivalents and restricted cash | 82,795 | (182,823 | ) | 214,356 | ||||||||
Cash, cash equivalents and restricted cash - Beginning of year | 94,428 | 277,251 | 62,895 | |||||||||
Cash, cash equivalents and restricted cash - End of year | $ | 177,223 | $ | 94,428 | $ | 277,251 | ||||||
Supplemental disclosures of cash flow information: | ||||||||||||
Cash paid for income taxes, net of refunds | $ | 3,310 | $ | (572 | ) | $ | 365 | |||||
Supplemental disclosures of noncash investing and financing activities: | ||||||||||||
Lease liabilities arising from obtaining right-of-use-assets | $ | 10,155 | $ | 14,240 | $ | - | ||||||
Purchase of property and equipment, accrued but not paid | $ | (35 | ) | $ | 268 | $ | 180 | |||||
Issuance of ordinary shares in connection with asset acquisition | $ | - | $ | - | $ | 776 | ||||||
Conversion of convertible preferred shares | $ | - | $ | - | $ | 310,490 | ||||||
Reconciliation of cash, cash equivalents and restricted cash within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows above: | ||||||||||||
Cash and cash equivalents | $ | 177,223 | $ | 94,105 | $ | 276,889 | ||||||
Restricted cash – included in short-term and long-term restricted deposits. | $ | - | $ | 323 | $ | 362 | ||||||
$ | 177,223 | $ | 94,428 | $ | 277,251 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
a. | Principles of consolidation: |
b. | Use of estimates: |
c. | Foreign currency: |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
d. | Cash and cash equivalents: |
e. | Short-term bank deposits: |
f. | Restricted deposits: |
g. | Investments in marketable securities: |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
h. | Fair value of financial instruments: |
i. | Concentration of credit Risk: |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
j. | Derivative Financial Instruments |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cost of revenues | $ | (429 | ) | $ | (365 | ) | $ | 72 | ||||
Research and development | (2,563 | ) | (1,709 | ) | 331 | |||||||
Sales and marketing | (741 | ) | (614 | ) | 129 | |||||||
General and administrative | (1,264 | ) | (783 | ) | 137 | |||||||
Total | $ | (4,997 | ) | $ | (3,471 | ) | $ | 669 |
k. | Trade receivables: |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
l. | Property and equipment: |
% | ||
Software, computers and peripheral equipment | 33 | |
Office furniture and equipment | 10-33 | |
Capitalized software development costs | 33 | |
Leasehold improvement | By the shorter of remaining lease term or estimated useful life of the asset |
m. | Long-lived assets: |
n. | Leases: |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
o. | Business combinations: |
p. | Goodwill and intangible assets: |
q. | Severance pay: |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
r. | U.S. defined contribution plan: |
s. | Self-Insurance: |
t. | Contingencies: |
u. | Revenue recognition: |
1. | Identification of the contract, or contracts, with a customer; |
2. | Identification of the performance obligations in the contract; |
3. | Determination of the transaction price; |
4. | Allocation of the transaction price to the performance obligations in the contract; and |
5. | Recognition of revenue when, or as, the performance obligations are satisfied. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
v. | Cost to obtain a contract: |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Beginning balance | $ | 66,397 | $ | 56,374 | $ | 29,729 | ||||||
Additions to deferred contract acquisition costs | 19,477 | 33,711 | 41,396 | |||||||||
Amortization of deferred contract acquisition costs | (28,814 | ) | (23,688 | ) | (14,751 | ) | ||||||
Ending balance | $ | 57,060 | $ | 66,397 | $ | 56,374 | ||||||
Deferred contract acquisition costs (to be recognized in next 12 months) | $ | 26,793 | $ | 26,287 | $ | 20,405 | ||||||
Deferred contract acquisition costs, non-current | $ | 30,267 | $ | 40,110 | $ | 35,969 |
w. | Deferred revenues and remaining performance obligations: |
Deferred revenue primarily consists of billings or payments received in advance of revenue recognition and is recognized as the revenue recognition criteria are met. The Company recognized revenue of $106,267 and $82,080 for the years ended December 31, 2023 and 2022, respectively, that were included in the corresponding contract liability balance at the beginning of the period.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
x. | Software development costs: |
y. | Research and development: |
Research and development costs include personnel-related costs associated with the Company’s engineering, data science, product and design teams as well as consulting and professional fees, for third-party development resources, third-party licenses for software development tools and allocated overhead costs. Research and development are generally expensed as incurred except for certain internal-use software development costs, which may be capitalized as noted above.
z. | Advertising expenses: |
aa. | Basic and diluted net loss per share: |
bb. | Share-based compensation: |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
cc. | Income taxes: |
dd. | Recently adopted accounting pronouncements: |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
ee. | Accounting pronouncements not yet adopted: |
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which requires disaggregated information about the effective tax rate reconciliation as well as information on income taxes paid. The guidance will be effective for the Company for annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact on its financial statement disclosures.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Balance, beginning of period | $ | 8,080 | $ | 23,901 | $ | 8,647 | ||||||
Net loss attributable to redeemable non-controlling interest | (266 | ) | (743 | ) | (1,169 | ) | ||||||
Adjustment to redeemable non-controlling interest | 2,649 | (14,979 | ) | 16,689 | ||||||||
Foreign currency translation | (34 | ) | (99 | ) | (266 | ) | ||||||
Balance, end of period | $ | 10,429 | $ | 8,080 | $ | 23,901 |
December 31, 2023 | ||||||||||||||||
Amortized cost | Gross unrealized losses | Gross unrealized gains | Fair Value | |||||||||||||
U.S. Treasuries | $ | 84,811 | $ | (124 | ) | $ | 81 | $ | 84,768 | |||||||
U.S. Government Agencies | 31,750 | (22 | ) | 76 | 31,804 | |||||||||||
Total | $ | 116,561 | $ | (146 | ) | $ | 157 | $ | 116,572 |
December 31, 2022 | ||||||||||||||||
Amortized cost | Gross unrealized losses | Gross unrealized gains | Fair Value | |||||||||||||
U.S. Treasuries | $ | 68,084 | $ | (64 | ) | $ | 86 | $ | 68,106 | |||||||
U.S. Government Agencies | 17,426 | (30 | ) | 19 | 17,415 | |||||||||||
Total | $ | 85,510 | $ | (94 | ) | $ | 105 | $ | 85,521 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
December 31, 2023 | ||||||||
Amortized cost | Fair Value | |||||||
Due within one year | $ | 60,310 | $ | 60,290 | ||||
Due between one and three years | 56,251 | 56,282 | ||||||
Total | $ | 116,561 | $ | 116,572 |
December 31, 2022 | ||||||||
Amortized cost | Fair Value | |||||||
Due within one year | $ | 42,214 | $ | 42,187 | ||||
Due between one and three years | 43,296 | 43,334 | ||||||
Total | $ | 85,510 | $ | 85,521 |
December 31, | ||||||||
2023 | 2022 | |||||||
Cost: | ||||||||
Software, computers and peripheral equipment | $ | 8,220 | $ | 8,378 | ||||
Office furniture and equipment | 687 | 887 | ||||||
Capitalized software development costs | 22,821 | 18,750 | ||||||
Leasehold improvements | 4,027 | 3,999 | ||||||
35,755 | 32,014 | |||||||
Accumulated depreciation | 23,696 | 18,746 | ||||||
Depreciated cost | $ | 12,059 | $ | 13,268 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Both acquisitions were accounted as an asset acquisition in accordance with ASC 805 as substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset. The purchase price was allocated to the developed technology acquired with an estimated useful life of three years.
December 31, | ||||||||
2023 | 2022 | |||||||
Acquired technology | $ | 3,004 | $ | 3,004 | ||||
Accumulated amortization and Impairment | 2,924 | 2,655 | ||||||
Depreciated cost | $ | 80 | $ | 349 |
a. | Legal contingencies: |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 7: COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
b. | Non-cancellable material commitments: |
December 31, 2023 | ||||
Years ending December 31, | ||||
2024 | $ | 13,963 | ||
2025 | 14,506 | |||
2026 | 12,848 | |||
2027 | 9,161 | |||
2028 | 2,318 | |||
Total | $ | 52,796 |
c. | Pledges and bank guarantees: |
d. | Revolving Credit Facility: |
Year ended December 31, | ||||||||
2023 | 2022 | |||||||
Operating lease cost | $ | 5,660 | $ | 6,227 | ||||
Short-term lease cost | 826 | 787 | ||||||
Variable lease cost | 28 | 35 | ||||||
Total lease cost | $ | 6,514 | $ | 7,049 |
December 31, | ||||||||
2023 | 2022 | |||||||
Weighted average remaining lease term (in years) | 4.6 | 1.8 | ||||||
Weighted average discount rate | 4.4 | % | 1 | % |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Year ended December 31, | ||||||||
2023 | 2022 | |||||||
Cash paid for amounts included in the measurement of lease operating liabilities | $ | 6,467 | $ | 5,399 |
As of December 31, 2023 | ||||
2024 | $ | 5,065 | ||
2025 | 2,111 | |||
2026 | 1,734 | |||
2027 | 1,715 | |||
2028 | 1,749 | |||
Thereafter | 2,010 | |||
Total undiscounted lease payments | 14,384 | |||
Less: imputed interest | (1,558 | ) | ||
Present value of lease liabilities | $ | 12,826 |
December 31, 2023 | December 31, 2022 | |||||||||||||||
Level 1 | Level 2 | Level 1 | Level 2 | |||||||||||||
Financial Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 133,211 | $ | - | $ | 290 | $ | - | ||||||||
U.S. Treasuries | - | 1,997 | - | - | ||||||||||||
Foreign currency derivative contracts | - | 825 | - | - | ||||||||||||
Marketable securities: | ||||||||||||||||
U.S. Treasuries | - | 84,768 | - | 68,106 | ||||||||||||
U.S. Government Agencies | - | 31,804 | - | 17,415 | ||||||||||||
Total assets measured at fair value | $ | 133,211 | $ | 119,394 | $ | 290 | $ | 85,521 | ||||||||
Financial Liabilities | ||||||||||||||||
Foreign currency derivative contracts | - | (72 | ) | - | (1,577 | ) | ||||||||||
Total liabilities measured at fair value | $ | - | $ | (72 | ) | $ | - | $ | (1,577 | ) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
a. | Composition of share capital |
December 31, 2023 | December 31, 2022 | |||||||||||||||
Authorized | Issued and outstanding | Authorized | Issued and outstanding | |||||||||||||
Number of shares no par value | ||||||||||||||||
Ordinary shares | 900,000,000 | 90,864,662 | 900,000,000 | 86,780,082 |
b. | Ordinary shares: |
c. | Convertible preferred shares: |
d. | Share option plan: |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Number of options | Weighted average exercise price | Weighted average remaining contractual term (in years) | Aggregate intrinsic value | |||||||||||||
Balance as of December 31, 2022 | 12,412,197 | $ | 8.96 | 6.93 | $ | 49,209 | ||||||||||
Granted | 596,782 | $ | 9.11 | |||||||||||||
Forfeited | (802,728 | ) | $ | 18.28 | ||||||||||||
Exercised | (982,717 | ) | $ | 1.9 | $ | 7,662 | ||||||||||
Balance as of December 31, 2023 | 11,223,534 | $ | 8.92 | 6.17 | $ | 37,473 | ||||||||||
Exercisable options at end of year | 8,140,268 | $ | 7.47 | 5.54 | $ | 35,597 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Expected volatility | 60%-76% | 60% | 60% | |||||||||
Expected dividend yield | - | - | - | |||||||||
Expected term (in years) | 1.44-6.08 | 5.5-6.98 | 5-6.55 | |||||||||
Risk free interest | 3.46%-4.93% | 1.98%-3.88% | 0.49%-1.06% |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Number of RSUs | Weighted- Average Grant Date Fair Value Per Share | |||||||
Balance as of December 31, 2022 | 6,559,826 | $ | 16.23 | |||||
Granted | 4,814,253 | $ | 9.44 | |||||
Forfeited | (2,021,312 | ) | $ | 15.91 | ||||
Released | (2,510,169 | ) | $ | 15.22 | ||||
Balance as of December 31, 2023 | 6,842,598 | $ | 11.89 |
e. | Employee Share Purchase Plan |
The Company estimated the fair value of ESPP purchase rights using a Monte-Carlo option pricing model with the following assumptions:
Year ended December 31, | |||||||||
2023 | 2022 | 2021 | |||||||
Expected volatility | 49%-63.8% | 77%-91.9% | 41% | ||||||
Expected dividend yield | - | - | - | ||||||
Expected term (in years) | 0.5 | 0.5 | 0.57 | ||||||
Risk free interest | 4.92%-5.47% | 0.46%-2.85% | 0.06% |
f. | Share-based compensation expense by award type was as follows: |
Year ended December 31 | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Options | $ | 18,392 | $ | 20,167 | $ | 21,359 | ||||||
RSUs | 35,262 | 27,001 | 4,842 | |||||||||
ESPP | 1,803 | 2,936 | 1,131 | |||||||||
$ | 55,457 | $ | 50,104 | $ | 27,332 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Year ended December 31 | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cost of revenues | $ | 2,590 | $ | 3,896 | $ | 1,804 | ||||||
Research and development | 11,041 | 7,285 | 3,863 | |||||||||
Sales and marketing | 17,671 | 19,126 | 8,205 | |||||||||
General and administrative | 24,155 | 19,797 | 13,460 | |||||||||
$ | 55,457 | $ | 50,104 | $ | 27,332 |
a. | Ordinary taxable income in Israel is subject to a corporate tax rate of 23%. |
• | Introduction of a benefit regime for “Preferred Technology Enterprises” (“PTE”), granting a 12% tax rate in central Israel on income deriving from Benefited Intangible Assets, subject to a number of conditions being fulfilled, including a minimal amount or ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual income derived from exports to large markets. PTE is defined as an enterprise which meets the aforementioned conditions and for which total consolidated revenues of its parent company and all subsidiaries are less than NIS 10 billion. | |
• | A 12% capital gains tax rate on the sale of a preferred intangible asset to a foreign affiliated enterprise, provided that the asset was initially purchased from a foreign resident at an amount of NIS 200 million or more. |
• | A withholding tax rate of 20% for dividends paid from PTE income (with an exemption from such withholding tax applying to dividends paid to an Israeli company) may be reduced to 4% on dividends paid to a foreign resident company, subject to certain conditions regarding percentage of foreign ownership of the distributing entity. |
b. | Income (Loss) before income taxes is comprised as follows: |
Year ended December 31 | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Israel | $ | (59,200 | ) | $ | (102,013 | ) | $ | (68,924 | ) | |||
Foreign | 7,514 | (2,506 | ) | (8,875 | ) | |||||||
$ | (51,686 | ) | $ | (104,519 | ) | $ | (77,799 | ) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
c. | Income taxes are comprised as follows: |
Year ended December 31 | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Current: | ||||||||||||
Israel | $ | 69 | $ | (93 | ) | $ | 103 | |||||
Foreign | 6,769 | 1,389 | 697 | |||||||||
Total current taxes | 6,838 | 1,296 | 800 | |||||||||
Deferred: | ||||||||||||
Israel | - | - | - | |||||||||
Foreign | (1,771 | ) | 2,535 | 1,694 | ||||||||
Total deferred taxes | (1,771 | ) | 2,535 | 1,694 | ||||||||
Total income taxes | $ | 5,067 | $ | 3,831 | $ | 2,494 |
d. | A reconciliation of the Company's theoretical income tax benefit to actual income tax expense is as follows: |
Year ended December 31 | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Loss before income taxes | $ | 51,686 | $ | 104,519 | $ | 77,799 | ||||||
Statutory tax rate | 23 | % | 23 | % | 23 | % | ||||||
Theoretical income tax benefit | $ | (11,888 | ) | $ | (24,039 | ) | $ | (17,894 | ) | |||
Preferred technology enterprise | 6,512 | 11,221 | 7,582 | |||||||||
Foreign rate differential | 16 | (300 | ) | (597 | ) | |||||||
Unrecognized tax benefits | 373 | 1,348 | 3,159 | |||||||||
Changes in valuation allowance | 4,329 | 11,421 | 7,498 | |||||||||
Share-based compensation | 5,589 | 3,745 | 2,519 | |||||||||
Non-deductible expenses | 69 | 513 | 234 | |||||||||
Other | 67 | (78 | ) | (7 | ) | |||||||
Actual tax expense | $ | 5,067 | $ | 3,831 | $ | 2,494 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
e. | The following table presents the significant components of the Company's deferred taxes: |
December 31, | ||||||||
2023 | 2022 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforwards | $ | 48,348 | $ | 43,437 | ||||
Research and development expenses | 4,878 | 5,398 | ||||||
Accruals and reserves | 2,574 | 2,088 | ||||||
Issuance costs | - | 914 | ||||||
Share-based compensation | 4,396 | 4,318 | ||||||
Operating lease liability | 1,968 | 2,115 | ||||||
Other deferred assets | 1,083 | 805 | ||||||
Gross deferred tax assets | 63,247 | 59,075 | ||||||
Valuation allowance | (55,758 | ) | (51,164 | ) | ||||
Total deferred tax assets | 7,489 | 7,911 | ||||||
Deferred tax liabilities: | ||||||||
Deferred contract costs | (10,989 | ) | (13,313 | ) | ||||
Operating lease ROU asset | (1,760 | ) | (1,667 | ) | ||||
Other deferred tax liabilities | (299 | ) | (261 | ) | ||||
Gross deferred tax liabilities | (13,048 | ) | (15,241 | ) | ||||
Net deferred taxes | $ | (5,559 | ) | $ | (7,330 | ) |
f. | Net operating losses carry forward: |
g. | Tax assessments |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
h. | Unrecognized tax benefits |
Unrecognized Tax Benefits | ||||
Balance - December 31, 2020 | 1,709 | |||
Increases related to prior years’ tax positions | 175 | |||
Increases related to current years’ tax positions | 2,984 | |||
Balance - December 31, 2021 | 4,868 | |||
Decrease related to prior years’ tax positions | (287 | ) | ||
Increases related to current years’ tax positions | 1,635 | |||
Balance - December 31, 2022 | 6,216 | |||
Increase related to prior years’ tax positions | 10 | |||
Increases related to current years’ tax positions | 317 | |||
Balance - December 31, 2023 | $ | 6,543 |
a. | Operating segments |
b. | Geographical information |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
United States | $ | 186,937 | $ | 172,733 | $ | 135,291 | ||||||
Rest of world | 79,518 | 71,510 | 56,914 | |||||||||
Israel | 499 | 763 | 1,098 | |||||||||
$ | 266,954 | $ | 245,006 | $ | 193,303 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Year ended December 31, | ||||||||
2023 | 2022 | |||||||
Israel | $ | 20,221 | $ | 11,537 | ||||
United States | 2,642 | 6,800 | ||||||
Rest of world | 1,201 | 1,934 | ||||||
Total long-lived assets, net | $ | 24,064 | $ | 20,271 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Numerator: | ||||||||||||
Net loss | $ | (56,753 | ) | $ | (108,350 | ) | $ | (80,293 | ) | |||
Net loss attributable to non-controlling interest | (266 | ) | (743 | ) | (1,169 | ) | ||||||
Adjustment attributable to non-controlling interest | 2,649 | (14,979 | ) | 16,689 | ||||||||
Net loss attributable to WalkMe Ltd. | $ | (59,136 | ) | $ | (92,628 | ) | $ | (95,813 | ) | |||
Denominator: | ||||||||||||
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted | 88,912,397 | 85,116,424 | 51,763,032 | |||||||||
Net loss per share attributable to ordinary shareholders, basic and diluted | $ | (0.67 | ) | $ | (1.09 | ) | $ | (1.85 | ) |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Convertible preferred shares | - | - | 26,972,186 | |||||||||
RSU’s | 7,141,801 | 5,759,365 | 732,157 | |||||||||
Outstanding share options and share purchase rights under ESPP | 11,991,061 | 13,676,853 | 14,143,816 | |||||||||
Total | 19,132,862 | 19,436,218 | 41,848,159 |
F-32