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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 September 30, 2019

OR

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, $0.001 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 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 November 4, 2019, the registrant had 33,790,452 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

 

3

 

 

 

 

 

Condensed Consolidated Statements of Operations

 

4

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Loss

 

5

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity

 

6

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

 

8

 

 

 

 

 

Notes to the Condensed Consolidated Financial Statements

 

9

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

31

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

44

 

 

 

 

Item 4.

Controls and Procedures

 

45

 

 

 

 

PART II.

OTHER INFORMATION

 

47

 

 

 

 

Item 1.

Legal Proceedings

 

47

 

 

 

 

Item 1A.

Risk Factors

 

47

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

47

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

47

 

 

 

 

Item 4.

Mine Safety Disclosures

 

47

 

 

 

 

Item 5.

Other Information

 

47

 

 

 

 

Item 6.

Exhibits

 

48

 

 

 

Signatures

 

49

 

 

 

 

2


 

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)

 

 

 

September 30, 2019

 

 

December 31, 2018

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

194,742

 

 

$

59,978

 

Restricted cash

 

 

1,026

 

 

 

90

 

Short-term investments

 

 

 

 

 

45,541

 

Accounts receivable, net

 

 

51,824

 

 

 

41,107

 

Prepaid expenses

 

 

10,347

 

 

 

4,890

 

Deferred costs and other current assets

 

 

10,548

 

 

 

10,909

 

Total current assets

 

 

268,487

 

 

 

162,515

 

Property and equipment, net

 

 

6,029

 

 

 

4,650

 

Capitalized software development costs, net

 

 

14,092

 

 

 

12,893

 

Goodwill

 

 

90,706

 

 

 

48,382

 

Intangible assets, net

 

 

70,624

 

 

 

23,197

 

Restricted cash

 

 

3,347

 

 

 

 

Deferred costs and other assets

 

 

26,423

 

 

 

10,543

 

Total assets

 

$

479,708

 

 

$

262,180

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

8,832

 

 

$

2,719

 

Accrued payroll and employee related liabilities

 

 

19,674

 

 

 

17,108

 

Accrued expenses

 

 

5,481

 

 

 

5,565

 

Deferred revenue

 

 

112,058

 

 

 

92,738

 

Note payable

 

 

 

 

 

427

 

Other current liabilities

 

 

6,482

 

 

 

1,490

 

Total current liabilities

 

 

152,527

 

 

 

120,047

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Deferred revenue, noncurrent

 

 

4,371

 

 

 

2,898

 

Convertible senior notes

 

 

97,764

 

 

 

94,097

 

Deferred tax liabilities

 

 

1,197

 

 

 

1,032

 

Other long term liabilities

 

 

12,751

 

 

 

1,948

 

Total liabilities

 

 

268,610

 

 

 

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

  September 30, 2019 and December 31, 2018, respectively

 

 

 

 

 

 

Common stock, $0.001 par value, 100,000,000 shares authorized, 33,778,616 and 29,700,192

   shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively

 

 

34

 

 

 

30

 

Additional paid-in capital

 

 

404,676

 

 

 

194,866

 

Accumulated deficit

 

 

(186,788

)

 

 

(147,670

)

Accumulated other comprehensive loss

 

 

(6,824

)

 

 

(5,068

)

Total stockholders’ equity

 

 

211,098

 

 

 

42,158

 

Total liabilities and stockholders’ equity

 

$

479,708

 

 

$

262,180

 

 

See accompanying notes to condensed consolidated financial statements.

 

3


 

EVERBRIDGE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

$

52,547

 

 

$

38,925

 

 

$

143,771

 

 

$

105,266

 

Cost of revenue

 

 

16,454

 

 

 

12,296

 

 

 

45,174

 

 

 

33,488

 

Gross profit

 

 

36,093

 

 

 

26,629

 

 

 

98,597

 

 

 

71,778

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

21,903

 

 

 

16,348

 

 

 

63,989

 

 

 

51,303

 

Research and development

 

 

12,877

 

 

 

10,350

 

 

 

37,164

 

 

 

30,548

 

General and administrative

 

 

13,435

 

 

 

7,130

 

 

 

34,457

 

 

 

23,609

 

Total operating expenses

 

 

48,215

 

 

 

33,828

 

 

 

135,610

 

 

 

105,460

 

Operating loss

 

 

(12,122

)

 

 

(7,199

)

 

 

(37,013

)

 

 

(33,682

)

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and investment income

 

 

1,032

 

 

 

460

 

 

 

3,541

 

 

 

1,316

 

Interest expense

 

 

(1,697

)

 

 

(1,592

)

 

 

(4,986

)

 

 

(4,736

)

Other expense, net

 

 

(35

)

 

 

(33

)

 

 

(129

)

 

 

(237

)

Total other income (expense), net

 

 

(700

)

 

 

(1,165

)

 

 

(1,574

)

 

 

(3,657

)

Loss before income taxes

 

 

(12,822

)

 

 

(8,364

)

 

 

(38,587

)

 

 

(37,339

)

Provision for income taxes

 

 

(99

)

 

 

(86

)

 

 

(531

)

 

 

(371

)

Net loss

 

$

(12,921

)

 

$

(8,450

)

 

$

(39,118

)

 

$

(37,710

)

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.39

)

 

$

(0.29

)

 

$

(1.19

)

 

$

(1.30

)

Diluted

 

$

(0.39

)

 

$

(0.29

)

 

$

(1.19

)

 

$

(1.30

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

33,524,771

 

 

 

29,460,156

 

 

 

32,941,826

 

 

 

28,918,304

 

Diluted

 

 

33,524,771

 

 

 

29,460,156

 

 

 

32,941,826

 

 

 

28,918,304

 

 

See accompanying notes to condensed consolidated financial statements.

4


 

EVERBRIDGE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net loss

 

$

(12,921

)

 

$

(8,450

)

 

$

(39,118

)

 

$

(37,710

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment, net of taxes

 

 

(2,049

)

 

 

81

 

 

 

(1,756

)

 

 

(2,570

)

Total comprehensive loss

 

$

(14,970

)

 

$

(8,369

)

 

$

(40,874

)

 

$

(40,280

)

 

See accompanying notes to condensed consolidated financial statements.

 

 

5


 

EVERBRIDGE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(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

 

Issuance of common stock in

   connection with acquisition of NC4

 

 

320,998

 

 

 

 

 

 

32,838

 

 

 

 

 

 

 

 

 

32,838

 

Stock-based compensation

 

 

 

 

 

 

 

 

8,383

 

 

 

 

 

 

 

 

 

8,383

 

Vesting of restricted stock units

 

 

229,284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock units withheld to

   settle employee tax withholding liability

 

 

(46,664

)

 

 

 

 

 

(4,082

)

 

 

 

 

 

 

 

 

(4,082

)

Exercise of stock options

 

 

106,464

 

 

 

1

 

 

 

2,334

 

 

 

 

 

 

 

 

 

2,335

 

Issuance of shares under employee

   stock purchase plan

 

 

18,215

 

 

 

 

 

 

1,054

 

 

 

 

 

 

 

 

 

1,054

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,049

)

 

 

(2,049

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(12,921

)

 

 

 

 

 

(12,921

)

Balance at September 30, 2019

 

 

33,778,616

 

 

$

34

 

 

$

404,676

 

 

$

(186,788

)

 

$

(6,824

)

 

$

211,098

 

6


 

 

 

 

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