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Everbridge Announces First Quarter 2018 Financial Results

First Quarter Revenue Increased 34% Year-over-Year

BURLINGTON, Mass.--(BUSINESS WIRE)--May 7, 2018-- Everbridge, Inc. (NASDAQ: EVBG), the global leader in critical event management and incident response automation, today announced its financial results for the first quarter ended March 31, 2018.

“Our first quarter results exceeded our guidance ranges for revenue and profitability,” said Jaime Ellertson, Chief Executive Officer and Chairman of Everbridge. “This strong performance was driven by the continued global adoption of Everbridge Mass Notification, the growing number and size of multi-product deals, highlighted by upgrades to our Critical Event Management platform, and continued success leveraging our global partner network.”

Ellertson continued, “We completed our acquisition of UMS in early April, significantly expanding our global footprint and bringing us capabilities to serve entire countries. We are optimistic that our growing product portfolio and broadening geographic reach will further enable us to extend our market leadership as we pursue the multi-billion-dollar opportunity ahead of us.”

First Quarter 2018 Financial Highlights

  • Total revenue was $30.5 million, an increase of 34% compared to $22.8 million for the first quarter of 2017.
  • GAAP operating loss was $(10.9) million, compared to a GAAP operating loss of $(6.2) million for the first quarter of 2017.
  • Non-GAAP operating loss was $(3.4) million, compared to non-GAAP operating loss of $(4.0) million for the first quarter of 2017. Non-GAAP operating loss excludes stock-based compensation and amortization of intangible assets related to acquisitions.
  • GAAP net loss was $(12.3) million, compared to $(6.2) million for the first quarter of 2017. GAAP net loss per share was $(0.43), based on 28.4 million basic and diluted weighted average common shares outstanding, compared to $(0.23) for the first quarter of 2017, based on 27.2 million basic and diluted weighted average common shares outstanding.
  • Non-GAAP net loss was $(4.8) million, compared to $(4.0) million in the first quarter of 2017. Non-GAAP net loss per share was $(0.17), based on 28.4 million basic and diluted weighted average common shares outstanding, compared to $(0.15) for the first quarter of 2017, based on 27.2 million basic and diluted weighted average common shares outstanding. Non-GAAP net loss excludes stock-based compensation and amortization of intangible assets related to acquisitions.
  • Adjusted EBITDA was a loss of $(1.8) million, compared to a loss of $(2.3) million in the first quarter of 2017. Adjusted EBITDA represents net loss before interest income and interest expense, income tax expense and benefit, depreciation and amortization expense and stock-based compensation expense.
  • Cash flow from operations was $7.5 million compared to $1.5 million for the first quarter of 2017.
  • Free cash flow was $5.3 million compared to an outflow of $(0.3) million for the first quarter of 2017. Free cash flow is cash flow from operations, less cash used for capital expenditures and additions to capitalized software development costs.

Recent Business Highlights

  • Ended the quarter with 3,811 global customers, up from 3,318 at the end of the first quarter of 2017.
  • Announced the launch of its Integration Platform-as-a-Service offering for IT alerting, which allows IT professionals to bring together the key pieces of their end-to-end IT response processes to improve incident response automation and orchestration.
  • Announced the integration of its IT Alerting solution with Cherwell Software. The combined solution provides Cherwell® Service Management (CSM) users with a full end-to-end Incident Response Management platform to enable significant and measurable reduction of IT response engagement times.
  • Completed the acquisition of Unified Messaging Systems to enhance product offerings and expand geographic footprint.

Business Outlook

Based on information available as of today, Everbridge is issuing guidance for the second quarter and full year 2018, including the anticipated impact from its acquisition of Unified Messaging Systems, as indicated below.

     
     

Second Quarter 2018

 

Full Year 2018

Total Revenue

$34.0   to   $34.3 $138.7   to   $139.8

GAAP net income/(loss)

$(14.2) $(13.9) $(46.0) $(45.0)
GAAP net income/(loss) per share $(0.50) $(0.49) $(1.58) $(1.54)

Non-GAAP net income/(loss)

$(6.5) $(6.2) $(17.3) $(16.6)

Non-GAAP net income/(loss) per share

$(0.23) $(0.22) $(0.59) $(0.57)

Basic and diluted weighted average shares outstanding

28.6 28.6 29.2 29.2

Adjusted EBITDA

$(2.7) $(2.4) $(3.7) $(3.0)
 

(All figures in millions, except per share data)

 

Conference Call Information

What:   Everbridge First Quarter 2018 Financial Results Conference Call
When: Monday, May 7, 2018
Time: 4:30 p.m. ET
Live Call: (866) 439-5043, domestic
(409) 220-9843, international
Replay: (855) 859-2056, passcode 1948679, domestic
(404) 537-3406, passcode 1948679, international
Webcast (live & replay):

http://ir.everbridge.com

 

About Everbridge, Inc.

Everbridge, Inc. (NASDAQ: EVBG) is a global software company that provides enterprise software applications that automate and accelerate organizations’ operational response to critical events in order to keep people safe and businesses running faster. During public safety threats such as active shooter situations, terrorist attacks or severe weather conditions, as well as critical business events such as IT outages, cyber-attacks or other incidents such as product recalls or supply-chain interruptions, over 3,800 global customers rely on the company’s SaaS-based platform to quickly and reliably aggregate and assess threat data, locate people at risk and responders able to assist, automate the execution of pre-defined communications processes, and track progress on executing response plans. The company’s platform sent over 2 billion messages in 2017, and offers the ability to reach more than 200 countries and territories with secure delivery to over 100 different communication devices. The company’s critical communications and enterprise safety applications include Mass Notification, Incident Management, Safety Connection™, IT Alerting, Visual Command Center®, Crisis Commander®, Community Engagement™ and Secure Messaging. Everbridge serves 9 of the 10 largest U.S. cities, 8 of the 10 largest U.S.-based investment banks, all 25 of the 25 busiest North American airports, six of the 10 largest global consulting firms, six of the 10 largest global automakers, all four of the largest global accounting firms, four of the 10 largest U.S.-based health care providers and four of the 10 largest U.S.-based health insurers. Everbridge is based in Boston and Los Angeles with additional offices in San Francisco, Lansing, Orlando, Beijing, London and Stockholm. For more information, visit www.everbridge.com, read the company blog, and follow on Twitter and Facebook.

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing, non-GAAP research and development, non-GAAP general and administrative, non-GAAP operating expenses, non-GAAP operating income/(loss), non-GAAP net income/(loss), non-GAAP net income/(loss) per share, adjusted EBITDA, and free cash flow.

We believe that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Everbridge's financial condition and results of operations. We use these non-GAAP measures for financial, operational and budgetary decision-making purposes, to understand and evaluate our core operating performance and trends, and to generate future operating plans. We believe that these non-GAAP financial measures provide useful information regarding past financial performance and future prospects, and permit us to more thoroughly analyze key financial metrics used to make operational decisions. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.

We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release, and not to rely on any single financial measure to evaluate our business.

Cautionary Language Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the anticipated opportunity and trends for growth in our critical communications and enterprise safety applications and our overall business, our market opportunity, our expectations regarding sales of our products, our goal to maintain market leadership and extend the markets in which we compete for customers, and our expected financial results for the first quarter of 2018 and the full fiscal year 2018. These forward-looking statements are made as of the date of this press release and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: the ability of our products and services to perform as intended and meet our customers’ expectations; our ability to attract new customers and retain and increase sales to existing customers; our ability to increase sales of our Mass Notification application and/or ability to increase sales of our other applications; developments in the market for targeted and contextually relevant critical communications or the associated regulatory environment; our estimates of market opportunity and forecasts of market growth may prove to be inaccurate; we have not been profitable on a consistent basis historically and may not achieve or maintain profitability in the future; the lengthy and unpredictable sales cycles for new customers; nature of our business exposes us to inherent liability risks; our ability to attract, integrate and retain qualified personnel; our ability to successfully integrate businesses and assets that we have acquired or may acquire in the future; our ability to maintain successful relationships with our channel partners and technology partners; our ability to manage our growth effectively; our ability to respond to competitive pressures; potential liability related to privacy and security of personally identifiable information; our ability to protect our intellectual property rights, and the other risks detailed in our risk factors discussed in filings with the U.S. Securities and Exchange Commission (“SEC”), including but not limited to our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 12, 2018. The forward-looking statements included in this press release represent our views as of the date of this press release. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

All Everbridge products are trademarks of Everbridge, Inc. in the USA and other countries. All other product or company names mentioned are the property of their respective owners.

   
Consolidated Balance Sheets
(in thousands)
(unaudited)

March 31,
2018

 

December 31,
2017

 
Current assets:
Cash and cash equivalents $ 103,633 $ 103,051
Short-term investments 48,499 42,908
Accounts receivable, net 22,393 31,699
Prepaid expenses 4,214 2,563
Deferred costs 5,038 2,429
Other current assets   3,079       811  
Total current assets 186,856 183,461
Property and equipment, net 2,481 2,796
Capitalized software development costs, net 10,755 10,005
Goodwill 31,077 31,328
Intangible assets, net 7,952 8,634
Deferred costs 7,478 -
Other assets   247       189  
Total assets $ 246,846     $ 236,413  
 
Current liabilities:
Accounts payable $ 3,029 $ 2,446
Accrued payroll and employee related liabilities 15,513 11,111
Accrued expenses 3,209 1,825
Deferred revenue 68,514 70,090
Contingent consideration liabilities 674 682
Other current liabilities   1,331       808  
Total current liabilities 92,270 86,962
Long-term liabilities:
Deferred revenue, noncurrent 2,486 2,982
Convertible debt 90,615 89,481
Deferred tax liabilities 512 482
Other long term liabilities   465       515  
Total liabilities $ 186,348     $ 180,422  
 
Stockholders' equity:
Common stock 29 28
Additional paid-in capital 173,013 164,995
Accumulated deficit (112,497 ) (109,252 )
Accumulated other comprehensive income (loss)   (47 )     220  
Total stockholders' equity   60,498       55,991  
Total liabilities and stockholders' equity $ 246,846     $ 236,413  
 
   
Consolidated Statements of Comprehensive Loss
(in thousands, except share and per share data)
(unaudited)
Three months ended
March 31,
  2018       2017  
 
Revenue $ 30,519 $ 22,844
Cost of revenue   9,660       7,654  
Gross profit 20,859 15,190
68.35 % 66.49 %
Operating expenses:
Sales and marketing 15,776 10,906
Research and development 8,171 5,277
General and administrative   7,844       5,200  
Total operating expenses   31,791       21,383  
Operating loss   (10,932 )     (6,193 )
 
Other income (expense):
Interest and investment income 456 51
Interest expense (1,572 ) (1 )
Other income (expense), net   (198 )     (32 )
Total other income (expense), net   (1,314 )     18  
Loss before income taxes (12,246 ) (6,175 )
Income taxes, net   (96 )     (27 )
Net loss $ (12,342 )   $ (6,202 )
 
Net loss per share attributable to common stockholders:
Basic $ (0.43 ) $ (0.23 )
Diluted $ (0.43 ) $ (0.23 )
 
Weighted-average common shares outstanding:
Basic 28,434,678 27,170,827
Diluted 28,434,678 27,170,827
 
Other comprehensive income (loss):
Foreign currency translation adjustment, net (267 ) 41
of tax      
Total comprehensive loss $ (12,609 )   $ (6,161 )
 
 
Stock-based compensation expense included in the above:
(in thousands)
Three months ended
March 31,
  2018       2017  
 
Cost of revenue $ 625 $ 65
Sales and marketing 2,435 277
Research and development 1,310 146
General and administrative   2,324       480  
Total stock-based compensation $ 6,694     $ 968  
 
   
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three months ended
March 31,
  2018       2017  
Cash flows from operating activities:
Net loss $ (12,342 ) $ (6,202 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 2,638 2,933
Amortization of deferred costs 1,233 1,421
Loss on disposal of assets 84 -
Deferred income taxes 34 -
Accretion of interest on convertible senior notes 1,134 -
Non-cash investment income (159 ) -
Provision for doubtful accounts (192 ) 80
Stock-based compensation 6,586 955
Increase (decrease) in operating assets and liabilities:
Accounts receivable, net 9,595 4,277
Prepaid expenses (1,651 ) (1,071 )
Deferred costs (2,223 ) (984 )
Other assets (2,018 ) (99 )
Accounts payable 702 (4 )
Accrued payroll and employee related liabilities 4,402 888
Accrued expenses 1,384 94
Deferred revenue (2,072 ) (816 )
Other liabilities   373       (13 )
Net cash provided by operating activities   7,508       1,459  
 
Cash flows from investing activities:
Capital expenditures (253 ) (223 )
Additions to capitalized software development costs (1,999 ) (1,487 )
Additions to intangibles (136 ) -
Payment for acquisition of business, net of acquired cash - (21,235 )
Purchase of cost investment (308 ) -
Purchase of short-term investments (30,932 ) -
Maturities of short-term investments   25,500       -  
Net cash used in investing activities   (8,128 )     (22,945 )
 
Cash flows from financing activities:
RSUs withheld to settle employee tax withholding liability (1,022 ) -
Payments of public offering costs - (298 )
Payments of debt issuance costs (84 ) -
Proceeds from employee stock purchase plan 881 854
Proceeds from stock option exercises   1,466       12  
Net cash provided by financing activities   1,241       568  
 
Effect of exchange rates on cash, cash equivalents and restricted cash   (39 )     (168 )
Net increase (decrease) in cash, cash equivalents and restricted cash 582 (21,086 )
 
Cash, cash equivalents and restricted cash, beginning of period   103,051       60,765  
Cash, cash equivalents and restricted cash, end of period $ 103,633     $ 39,679  
 
   
Reconciliation of GAAP measures to non-GAAP measures
(in thousands, except share and per share data)
(unaudited)
Three months ended
March 31,
  2018       2017  
 
Cost of revenue $ 9,660 $ 7,654
Amortization of acquired intangibles (252 ) (741 )
Stock-based compensation   (625 )     (65 )
Non-GAAP cost of revenue 8,783 6,848
 
Gross profit 20,859 15,190
Amortization of acquired intangibles 252 741
Stock-based compensation   625       65  
Non-GAAP gross profit 21,736 15,996
Non-GAAP gross margin 71.22 % 70.02 %
 
Sales and marketing 15,776 10,906
Stock-based compensation   (2,435 )     (277 )
Non-GAAP sales and marketing 13,341 10,629
 
Research and development 8,171 5,277
Stock-based compensation   (1,310 )     (146 )
Non-GAAP research and development 6,861 5,131
 
General and administrative 7,844 5,200
Amortization of acquired intangibles (571 ) (448 )
Stock-based compensation   (2,324 )     (480 )
Non-GAAP general and administrative 4,949 4,272
 
Total operating expenses 31,791 21,383
Amortization of acquired intangibles (571 ) (448 )
Stock-based compensation   (6,069 )     (903 )
Non-GAAP operating expenses $ 25,151 $ 20,032
 
Operating loss $ (10,932 ) $ (6,193 )
Amortization of acquired intangibles 823 1,189
Stock-based compensation   6,694       968  
Non-GAAP operating loss $ (3,415 ) $ (4,036 )
 
Net loss $ (12,342 ) $ (6,202 )
Amortization of acquired intangibles 823 1,189
Stock-based compensation   6,694       968  
Non-GAAP net loss $ (4,825 ) $ (4,045 )
 
Weighted average common shares outstanding, basic and diluted 28,434,678 27,170,827
 
Non-GAAP net loss per share $ (0.17 ) $ (0.15 )
 
Net loss $ (12,342 ) $ (6,202 )
Interest (income) expense, net 1,116 (50 )
Income taxes, net 96 27
Depreciation and amortization   2,638       2,933  
EBITDA (8,492 ) (3,292 )
Stock-based compensation   6,694       968  
Adjusted EBITDA $ (1,798 ) $ (2,324 )
 
Net cash provided by operating activities $ 7,508 $ 1,459
Capital expenditures (253 ) (223 )
Additions to capitalized software development costs   (1,999 )     (1,487 )
Free cash flow $ 5,256 $ (251 )
 
       
(Continued) Reconciliation of GAAP measures to non-GAAP measures
(in millions, except share and per share data)
(unaudited)
Business outlook: Three months ended Year ended
June 30, 2018 December 31, 2018
Low end   High end Low end   High end
 
Net loss $ (14.2 ) $ (13.9 ) $ (46.0 ) $ (45.0 )
Amortization of acquired intangibles 1.4 1.4 5.0 4.7
Stock-based compensation   6.3       6.3     23.7       23.7  
Non-GAAP net loss $ (6.5 ) $ (6.2 ) $ (17.3 ) $ (16.6 )
 
Weighted average common shares outstanding, basic and diluted 28,600,000 28,600,000 29,200,000 29,200,000
 
Net loss per share $ (0.50 ) $ (0.49 ) $ (1.58 ) $ (1.54 )
Non-GAAP net loss per share $ (0.23 ) $ (0.22 ) $ (0.59 ) $ (0.57 )
 
Net loss $ (14.2 ) $ (13.9 ) $ (46.0 ) $ (45.0 )
Interest (income) expense, net 1.2 1.2 5.1 5.1
Income taxes, net 0.1 0.1 - -
Depreciation and amortization   3.9       3.9     13.5       13.2  
EBITDA (9.0 ) (8.7 ) (27.4 ) (26.7 )
Stock-based compensation   6.3       6.3     23.7       23.7  
Adjusted EBITDA $ (2.7 ) $ (2.4 ) $ (3.7 ) $ (3.0 )

Source: Everbridge, Inc.

Media Contact:
Everbridge
Jeff Young, 781-859-4116
jeff.young@everbridge.com
or
Investor Contact:
ICR
Garo Toomajanian, 818-230-9712
ir@everbridge.com

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