SEC Filing | Everbridge, Inc.

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evbg-10q_20190930.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 September 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, $0.001 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

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.

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.

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.

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

	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		—