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evbg-10q_20200930.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, 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 November 3, 2020, the registrant had 34,955,945 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	38

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52

Item 4.	Controls and Procedures	53

PART II.	OTHER INFORMATION	54

Item 1.	Legal Proceedings	54

Item 1A.	Risk Factors	54

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58

Item 3.	Defaults Upon Senior Securities	59

Item 4.	Mine Safety Disclosures	59

Item 5.	Other Information	59

Item 6.	Exhibits	60

Signatures		61

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, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	468,908		$	531,575
Restricted cash		4,767			4,737
Accounts receivable, net		80,927			68,642
Prepaid expenses		12,049			6,675
Deferred costs and other current assets		20,286			13,501
Total current assets		586,937			625,130
Property and equipment, net		7,254			6,284
Capitalized software development costs, net		15,952			14,287
Goodwill		183,548			91,421
Intangible assets, net		98,923			67,100
Restricted cash		3,558			3,350
Prepaid expenses		2,437			2,009
Deferred costs and other assets		31,944			27,715
Total assets	$	930,553		$	837,296
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	10,232		$	7,808
Accrued payroll and employee related liabilities		28,140			22,248
Accrued expenses		6,188			4,496
Deferred revenue		144,341			129,995
Contingent consideration liabilities		7,996			—
Other current liabilities		10,366			4,819
Total current liabilities		207,263			169,366
Long-term liabilities:
Deferred revenue, noncurrent		4,789			3,471
Convertible senior notes		445,915			430,282
Deferred tax liabilities		10,343			2,002
Other long-term liabilities		16,266			11,863
Total liabilities		684,576			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 September 30, 2020 and December 31, 2019, respectively		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized, 34,946,958 and 33,848,627 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		35			34
Additional paid-in capital		521,141			425,945
Accumulated deficit		(268,730	)		(199,920	)
Accumulated other comprehensive loss		(6,469	)		(5,747	)
Total stockholders’ equity		245,977			220,312
Total liabilities and stockholders’ equity	$	930,553		$	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 September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Revenue	$	71,256		$	52,547		$	195,533		$	143,771
Cost of revenue		20,885			16,454			61,197			45,174
Gross profit		50,371			36,093			134,336			98,597
Operating expenses:
Sales and marketing		31,395			21,903			89,724			63,989
Research and development		16,948			12,877			46,057			37,164
General and administrative		19,766			13,435			52,476			34,457
Total operating expenses		68,109			48,215			188,257			135,610
Operating loss		(17,738	)		(12,122	)		(53,921	)		(37,013	)
Other expense, net:
Interest and investment income		107			1,032			1,915			3,541
Interest expense		(6,062	)		(1,697	)		(17,982	)		(4,986	)
Other expense, net		(239	)		(35	)		(754	)		(129	)
Total other expense, net		(6,194	)		(700	)		(16,821	)		(1,574	)
Loss before income taxes		(23,932	)		(12,822	)		(70,742	)		(38,587	)
Benefit from (provision for) income taxes		(273	)		(99	)		1,932			(531	)
Net loss	$	(24,205	)	$	(12,921	)	$	(68,810	)	$	(39,118	)
Net loss per share attributable to common stockholders:
Basic	$	(0.70	)	$	(0.39	)	$	(2.00	)	$	(1.19	)
Diluted	$	(0.70	)	$	(0.39	)	$	(2.00	)	$	(1.19	)
Weighted-average common shares outstanding:
Basic		34,738,572			33,524,771			34,406,665			32,941,826
Diluted		34,738,572			33,524,771			34,406,665			32,941,826

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,
	2020			2019			2020			2019
Net loss	$	(24,205	)	$	(12,921	)	$	(68,810	)	$	(39,118	)
Other comprehensive loss:
Foreign currency translation adjustment, net of taxes		3,455			(2,049	)		(722	)		(1,756	)
Total comprehensive loss	$	(20,750	)	$	(14,970	)	$	(69,532	)	$	(40,874	)

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
Issuance of common stock in connection with acquisition		121,858			—		17,685			—			—			17,685
Stock-based compensation		—			—		13,442			—			—			13,442
Vesting of restricted stock units		247,669			—		—			—			—			—
Restricted stock units withheld to settle employee tax withholding liability		(23,618	)		—		(3,342	)		—			—			(3,342	)
Exercise of stock options		88,974			1		2,178			—			—			2,179
Issuance of shares under employee stock purchase plan		18,376			—		1,679			—			—			1,679
Settlement of convertible notes due 2022		29,898			—		938			—			—			938
Other comprehensive income		—			—		—			—			3,455			3,455
Net loss		—			—		—			(24,205	)		—			(24,205	)
Balance at September 30, 2020		34,946,958		$	35	$	521,141		$	(268,730	)	$	(6,469	)	$	245,977