SEC Filing | Everbridge, Inc.

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evbg-10q_20190630.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37874

Everbridge, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware		26-2919312
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

25 Corporate Drive, Suite 400 Burlington, Massachusetts		01803
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (818) 230-9700

Securities registered pursuant to Section 12(b) of the Securities Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	EVBG	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date

As of August 1, 2019, the registrant had 33,563,285 shares of common stock issued and outstanding.

EVERBRIDGE, INC. AND SUBSIDIARIES

		Page

PART I.	FINANCIAL INFORMATION	3

Item 1.	Condensed Consolidated Financial Statements (unaudited)	3

	Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018	3

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2019 and 2018	4

	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2019 and 2018	5

	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2019 and 2018	6

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018	8

	Notes to the Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43

Item 4.	Controls and Procedures	44

PART II.	OTHER INFORMATION	45

Item 1.	Legal Proceedings	45

Item 1A.	Risk Factors	45

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45

Item 3.	Defaults Upon Senior Securities	45

Item 4.	Mine Safety Disclosures	45

Item 5.	Other Information	45

Item 6.	Exhibits	46

Signatures		47

PART I—FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (Unaudited).

EVERBRIDGE, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share data)

(unaudited)

	As of June 30, 2019			As of December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	235,130		$	59,978
Restricted cash		94			90
Short-term investments		3,496			45,541
Accounts receivable, net		42,400			41,107
Prepaid expenses		8,358			4,890
Deferred costs		6,867			6,503
Other current assets		2,739			4,406
Total current assets		299,084			162,515
Property and equipment, net		6,034			4,650
Capitalized software development costs, net		13,850			12,893
Goodwill		51,466			48,382
Intangible assets, net		25,242			23,197
Deferred costs		10,692			10,265
Restricted cash		3,031			—
Other assets		15,180			278
Total assets	$	424,579		$	262,180
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	5,126		$	2,719
Accrued payroll and employee related liabilities		14,244			17,108
Accrued expenses		4,892			5,565
Deferred revenue		95,046			92,738
Note payable		—			427
Other current liabilities		5,443			1,490
Total current liabilities		124,751			120,047
Long-term liabilities:
Deferred revenue, noncurrent		2,993			2,898
Convertible senior notes		96,521			94,097
Deferred tax liabilities		1,105			1,032
Other long term liabilities		13,669			1,948
Total liabilities		239,039			220,022
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.001, 10,000,000 shares authorized, no shares issued or outstanding as of June 30, 2019 and December 31, 2018, respectively		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized, 33,150,319 and 29,700,192 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively		33			30
Additional paid-in capital		364,149			194,866
Accumulated deficit		(173,867	)		(147,670	)
Accumulated other comprehensive loss		(4,775	)		(5,068	)
Total stockholders’ equity		185,540			42,158
Total liabilities and stockholders’ equity	$	424,579		$	262,180

See accompanying notes to condensed consolidated financial statements.

EVERBRIDGE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Revenue	$	48,405		$	35,822		$	91,224		$	66,341
Cost of revenue		14,739			11,532			28,720			21,192
Gross profit		33,666			24,290			62,504			45,149
Operating expenses:
Sales and marketing		22,015			19,179			42,086			34,955
Research and development		12,802			12,027			24,287			20,198
General and administrative		10,464			8,635			21,022			16,479
Total operating expenses		45,281			39,841			87,395			71,632
Operating loss		(11,615	)		(15,551	)		(24,891	)		(26,483	)
Other income (expense), net:
Interest and investment income		1,332			400			2,509			856
Interest expense		(1,654	)		(1,572	)		(3,289	)		(3,144	)
Other expense, net		12			(6	)		(94	)		(204	)
Total other income (expense), net		(310	)		(1,178	)		(874	)		(2,492	)
Loss before income taxes		(11,925	)		(16,729	)		(25,765	)		(28,975	)
Provision for income taxes		(138	)		(189	)		(432	)		(285	)
Net loss	$	(12,063	)	$	(16,918	)	$	(26,197	)	$	(29,260	)
Net loss per share attributable to common stockholders:
Basic	$	(0.37	)	$	(0.59	)	$	(0.80	)	$	(1.02	)
Diluted	$	(0.37	)	$	(0.59	)	$	(0.80	)	$	(1.02	)
Weighted-average common shares outstanding:
Basic		33,015,861			28,848,809			32,645,522			28,642,887
Diluted		33,015,861			28,848,809			32,645,522			28,642,887

See accompanying notes to condensed consolidated financial statements.

EVERBRIDGE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Net loss	$	(12,063	)	$	(16,918	)	$	(26,197	)	$	(29,260	)
Other comprehensive income (loss):
Foreign currency translation adjustment, net of taxes		271			(2,384	)		293			(2,651	)
Total comprehensive loss	$	(11,792	)	$	(19,302	)	$	(25,904	)	$	(31,911	)

See accompanying notes to condensed consolidated financial statements.

EVERBRIDGE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands)

(unaudited)

	Common stock					Additional paid-in			Accumulated			Accumulated— other comprehensive
	Shares			Par value		capital			deficit			income (loss)			Total
Balance at December 31, 2018		29,700,192		$	30	$	194,866		$	(147,670	)	$	(5,068	)	$	42,158
Issuance of common stock, net of cost		2,645,000			3		138,836			—			—			138,839
Stock-based compensation		—			—		7,849			—			—			7,849
Vesting of restricted stock units		16,849			—		—			—			—			—
Restricted stock units withheld to settle employee tax withholding liability		(5,301	)		—		(333	)		—			—			(333	)
Exercise of stock options		501,083			—		8,746			—			—			8,746
Issuance of shares under employee stock purchase plan		24,266			—		1,283			—			—			1,283
Other comprehensive income		—			—		—			—			22			22
Net loss		—			—		—			(14,134	)		—			(14,134	)
Balance at March 31, 2019		32,882,089		$	33	$	351,247		$	(161,804	)	$	(5,046	)	$	184,430
Issuance of common stock, net of cost		—			—		(5	)		—			—			(5	)
Stock-based compensation		—			—		8,282			—			—			8,282
Vesting of restricted stock units		25,720			—		—			—			—			—
Restricted stock units withheld to settle employee tax withholding liability		(1,410	)		—		(116	)		—			—			(116	)
Exercise of stock options		243,920			—		4,741			—			—			4,741
Other comprehensive income		—			—		—			—			271			271
Net loss		—			—		—			(12,063	)		—			(12,063	)
Balance at June 30, 2019		33,150,319		$	33	$	364,149		$	(173,867	)	$	(4,775	)	$	185,540

	Common stock					Additional paid-in			Accumulated			Accumulated— other comprehensive
	Shares			Par value		capital			deficit			income (loss)			Total
Balance at December 31, 2017		28,330,460		$	28	$	164,995		$	(109,252	)	$	220		$	55,991
Cumulative effect of adoption of ASU 2014-09, net of taxes		—			—		—			9,097			—			9,097
Stock-based compensation		—			—		6,694			—			—			6,694
Vesting of restricted stock units		222,624			—		—			—			—			—
Restricted stock units withheld to settle employee tax withholding liability		(27,771	)		—		(1,022	)		—			—			(1,022	)
Exercise of stock options		153,744			1		1,465			—			—			1,466
Issuance of shares under employee stock purchase plan		44,193			—		881			—			—			881
Other comprehensive loss		—			—		—			—			(267	)		(267	)
Net loss		—			—		—			(12,342	)		—			(12,342	)
Balance at March 31, 2018		28,723,250		$	29	$	173,013		$	(112,497	)	$	(47	)	$	60,498
Stock-based compensation		—			—		10,022			—			—			10,022
Vesting of restricted stock units		221,624			—		—			—			—			—
Restricted stock units withheld to settle employee tax withholding liability		(53,326	)		—		(2,750	)