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evbg-10q_20210630.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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, 2021

☐	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 ☒

As of August 3, 2021, the registrant had 38,385,479 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	39

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53

Item 4.	Controls and Procedures	54

PART II.	OTHER INFORMATION	56

Item 1.	Legal Proceedings	56

Item 1A.	Risk Factors	56

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)

	June 30, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	559,851		$	467,171
Restricted cash		4,666			4,667
Accounts receivable, net		83,183			94,376
Prepaid expenses		13,301			11,774
Deferred costs and other current assets		21,348			20,464
Total current assets		682,349			598,452
Property and equipment, net		9,567			7,774
Capitalized software development costs, net		18,368			16,329
Goodwill		405,223			187,411
Intangible assets, net		216,723			113,762
Restricted cash		3,785			3,792
Prepaid expenses		1,795			1,943
Deferred costs and other assets		37,214			31,481
Total assets	$	1,375,024		$	960,944
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	10,964		$	9,698
Accrued payroll and employee related liabilities		26,860			27,674
Accrued expenses		10,235			7,246
Deferred revenue		196,481			165,389
Contingent consideration liabilities		18,775			10,619
Other current liabilities		14,376			15,602
Total current liabilities		277,691			236,228
Long-term liabilities:
Deferred revenue, noncurrent		13,509			4,738
Convertible senior notes		646,533			441,514
Deferred tax liabilities		14,022			10,065
Other long-term liabilities		17,940			16,094
Total liabilities		969,695			708,639
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, 2021 and December 31, 2020, respectively		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized, 38,288,685 and 35,449,447 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively		38			35
Additional paid-in capital		752,773			542,776
Accumulated deficit		(348,926	)		(293,316	)
Accumulated other comprehensive income		1,444			2,810
Total stockholders’ equity		405,329			252,305
Total liabilities and stockholders’ equity	$	1,375,024		$	960,944

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,
	2021			2020			2021			2020
Revenue	$	86,649		$	65,377		$	168,859		$	124,277
Cost of revenue		27,665			19,423			52,945			40,312
Gross profit		58,984			45,954			115,914			83,965
Operating expenses:
Sales and marketing		41,483			28,741			76,010			58,329
Research and development		20,251			14,937			38,330			29,109
General and administrative		24,664			16,799			47,226			32,710
Total operating expenses		86,398			60,477			161,566			120,148
Operating loss		(27,414	)		(14,523	)		(45,652	)		(36,183	)
Other expense, net:
Interest and investment income		100			235			233			1,808
Interest expense		(9,655	)		(5,998	)		(16,215	)		(11,920	)
Loss on extinguishment of convertible notes and capped call modification		(37	)		—			(2,925	)		—
Other expense, net		(602	)		(438	)		(651	)		(515	)
Total other expense, net		(10,194	)		(6,201	)		(19,558	)		(10,627	)
Loss before income taxes		(37,608	)		(20,724	)		(65,210	)		(46,810	)
Benefit from income taxes		3,787			1,504			9,600			2,205
Net loss	$	(33,821	)	$	(19,220	)	$	(55,610	)	$	(44,605	)
Net loss per share attributable to common stockholders:
Basic	$	(0.89	)	$	(0.56	)	$	(1.49	)	$	(1.30	)
Diluted	$	(0.89	)	$	(0.56	)	$	(1.49	)	$	(1.30	)
Weighted-average common shares outstanding:
Basic		38,014,107			34,402,704			37,204,958			34,238,887
Diluted		38,014,107			34,402,704			37,204,958			34,238,887

See accompanying notes to condensed consolidated financial statements.

EVERBRIDGE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Net loss	$	(33,821	)	$	(19,220	)	$	(55,610	)	$	(44,605	)
Other comprehensive income (loss):
Foreign currency translation adjustment, net of taxes		1,231			2,343			(1,366	)		(4,177	)
Total comprehensive loss	$	(32,590	)	$	(16,877	)	$	(56,976	)	$	(48,782	)

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			Total
Balance at December 31, 2020		35,449,447		$	35	$	542,776		$	(293,316	)	$	2,810		$	252,305
Issuance of common stock in connection with acquisition		162,820			—		23,032			—			—			23,032
Stock-based compensation		—			—		12,770			—			—			12,770
Vesting of restricted stock units and performance-based restricted stock units		64,304			1		—			—			—			1
Restricted stock units and performance-based restricted stock units withheld to settle employee tax withholding liability		(11,649	)		—		(1,611	)		—			—			(1,611	)
Exercise of stock options		52,955			—		1,604			—			—			1,604
Issuance of shares under employee stock purchase plan		23,499			—		2,451			—			—			2,451
Equity component of convertible notes due 2026, net of allocated issuance costs and taxes		—			—		99,000			—			—			99,000
Purchase of capped call hedge for the convertible notes due 2026, including issuance costs		—			—		(35,124	)		—			—			(35,124	)
Settlement of convertible notes due 2022		1,870,823			2		15,650			—			—			15,652
Termination and modification of capped call hedge for convertible notes due 2022		—			—		10,886			—			—			10,886
Other comprehensive loss		—			—		—			—			(2,597	)		(2,597	)
Net loss		—			—		—			(21,789	)		—			(21,789	)
Balance at March 31, 2021		37,612,199			38		671,434			(315,105	)		213			356,580
Issuance of common stock in connection with acquisition		555,332			—		64,482			—			—			64,482
Issuance of common stock for contingent consideration		6,188			—		720			—			—			720
Stock-based compensation		—			—		15,635			—			—			15,635
Vesting of restricted stock units and performance-based restricted stock units		65,364			—		—			—			—			—
Restricted stock units and performance-based restricted stock units withheld to settle employee tax withholding liability		(9,929	)		—		(1,233	)		—			—			(1,233	)
Exercise of stock options		22,898			—		559			—			—			559
Settlement of convertible notes due 2022		36,633			—		1,176			—			—			1,176
Other comprehensive income		—			—		—			—			1,231			1,231
Net loss		—			—		—			(33,821	)		—			(33,821	)
Balance at June 30, 2021		38,288,685		$	38	$	752,773		$	(348,926	)	$	1,444		$	405,329

	Common stock				Additional paid-in		Accumulated			Accumulated- other comprehensive
	Shares		Par value		capital		deficit			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