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evbg-10q_20200630.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, 2020

☐	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		EVBG		The Nasdaq Global 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 August 3, 2020, the registrant had 34,585,115 shares of common stock issued and outstanding.

EVERBRIDGE, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS

		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	36

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50

Item 4.	Controls and Procedures	51

PART II.	OTHER INFORMATION	52

Item 1.	Legal Proceedings	52

Item 1A.	Risk Factors	52

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56

Item 3.	Defaults Upon Senior Securities	56

Item 4.	Mine Safety Disclosures	56

Item 5.	Other Information	57

Item 6.	Exhibits	58

Signatures		59

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)

	June 30, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	483,152		$	531,575
Restricted cash		4,792			4,737
Accounts receivable, net		67,773			68,642
Prepaid expenses		10,519			6,675
Deferred costs and other current assets		18,381			13,501
Total current assets		584,617			625,130
Property and equipment, net		7,214			6,284
Capitalized software development costs, net		15,230			14,287
Goodwill		156,114			91,421
Intangible assets, net		86,785			67,100
Restricted cash		3,354			3,350
Prepaid expenses		2,372			2,009
Deferred costs and other assets		30,810			27,715
Total assets	$	886,496		$	837,296
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	10,279		$	7,808
Accrued payroll and employee related liabilities		23,514			22,248
Accrued expenses		5,649			4,496
Deferred revenue		134,409			129,995
Contingent liabilities		4,292			—
Other current liabilities		7,388			4,819
Total current liabilities		185,531			169,366
Long-term liabilities:
Deferred revenue, noncurrent		4,346			3,471
Convertible senior notes		441,231			430,282
Deferred tax liabilities		4,720			2,002
Other long-term liabilities		16,522			11,863
Total liabilities		652,350			616,984
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, 2020 and December 31, 2019, respectively		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized, 34,463,801 and 33,848,627 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		34			34
Additional paid-in capital		488,561			425,945
Accumulated deficit		(244,525	)		(199,920	)
Accumulated other comprehensive loss		(9,924	)		(5,747	)
Total stockholders’ equity		234,146			220,312
Total liabilities and stockholders’ equity	$	886,496		$	837,296

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 June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenue	$	65,377		$	48,405		$	124,277		$	91,224
Cost of revenue		19,423			14,739			40,312			28,720
Gross profit		45,954			33,666			83,965			62,504
Operating expenses:
Sales and marketing		28,741			22,015			58,329			42,086
Research and development		14,937			12,802			29,109			24,287
General and administrative		16,799			10,464			32,710			21,022
Total operating expenses		60,477			45,281			120,148			87,395
Operating loss		(14,523	)		(11,615	)		(36,183	)		(24,891	)
Other expense, net:
Interest and investment income		235			1,332			1,808			2,509
Interest expense		(5,998	)		(1,654	)		(11,920	)		(3,289	)
Other income (expense), net		(438	)		12			(515	)		(94	)
Total other expense, net		(6,201	)		(310	)		(10,627	)		(874	)
Loss before income taxes		(20,724	)		(11,925	)		(46,810	)		(25,765	)
Benefit from (provision for) income taxes		1,504			(138	)		2,205			(432	)
Net loss	$	(19,220	)	$	(12,063	)	$	(44,605	)	$	(26,197	)
Net loss per share attributable to common stockholders:
Basic	$	(0.56	)	$	(0.37	)	$	(1.30	)	$	(0.80	)
Diluted	$	(0.56	)	$	(0.37	)	$	(1.30	)	$	(0.80	)
Weighted-average common shares outstanding:
Basic		34,402,704			33,015,861			34,238,887			32,645,522
Diluted		34,402,704			33,015,861			34,238,887			32,645,522

See accompanying notes to condensed consolidated financial statements.

EVERBRIDGE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net loss	$	(19,220	)	$	(12,063	)	$	(44,605	)	$	(26,197	)
Other comprehensive loss:
Foreign currency translation adjustment, net of taxes		2,343			271			(4,177	)		293
Total comprehensive loss	$	(16,877	)	$	(11,792	)	$	(48,782	)	$	(25,904	)

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, 2019		33,848,627		$	34	$	425,945		$	(199,920	)	$	(5,747	)	$	220,312
Issuance of common stock in connection with acquisitions		301,941			—		30,434			—			—			30,434
Stock-based compensation		—			—		10,368			—			—			10,368
Vesting of restricted stock units		44,606			—		—			—			—			—
Restricted stock units withheld to settle employee tax withholding liability		(4,483	)		—		(400	)		—			—			(400	)
Exercise of stock options		126,374			—		2,989			—			—			2,989
Issuance of shares under employee stock purchase plan		30,943			—		1,710			—			—			1,710
Other comprehensive loss		—			—		—			—			(6,520	)		(6,520	)
Net loss		—			—		—			(25,385	)		—			(25,385	)
Balance at March 31, 2020		34,348,008			34		471,046			(225,305	)		(12,267	)		233,508
Issuance of common stock in connection with acquisition		38,425			—		5,074			—			—			5,074
Stock-based compensation		—			—		11,372			—			—			11,372
Vesting of restricted stock units		21,507			—		—			—			—			—
Restricted stock units withheld to settle employee tax withholding liability		(3,980	)		—		(527	)		—			—			(527	)
Exercise of stock options		59,841			—		1,596			—			—			1,596
Other comprehensive income		—			—		—			—			2,343			2,343
Net loss		—			—		—			(19,220	)		—			(19,220	)
Balance at June 30, 2020		34,463,801		$	34	$	488,561		$	(244,525	)	$	(9,924	)	$	234,146

	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			—