SEC Filing | Everbridge, Inc.

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evbg-10q_20220331.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 March 31, 2022

☐	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 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 May 5, 2022, the registrant had 39,540,606 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	7

	Notes to the Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48

Item 4.	Controls and Procedures	49

PART II.	OTHER INFORMATION	50

Item 1.	Legal Proceedings	50

Item 1A.	Risk Factors	51

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51

Item 3.	Defaults Upon Senior Securities	52

Item 4.	Mine Safety Disclosures	52

Item 5.	Other Information	52

Item 6.	Exhibits	53

Signatures		54

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)

	March 31, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	492,054		$	488,035
Restricted cash		2,088			3,880
Accounts receivable, net		109,484			120,995
Prepaid expenses		16,512			13,740
Deferred costs and other current assets		28,277			28,469
Total current assets		648,415			655,119
Property and equipment, net		12,521			12,185
Capitalized software development costs, net		24,501			22,720
Goodwill		525,264			531,163
Intangible assets, net		208,871			219,319
Restricted cash		867			843
Prepaid expenses		1,591			1,916
Deferred costs and other assets		36,268			35,750
Total assets	$	1,458,298		$	1,479,015
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	9,990		$	16,002
Accrued payroll and employee related liabilities		34,839			36,725
Accrued expenses		16,509			13,884
Deferred revenue		235,726			223,579
Convertible senior notes		8			8
Other current liabilities		14,281			14,132
Total current liabilities		311,353			304,330
Long-term liabilities:
Deferred revenue, noncurrent		10,083			14,261
Convertible senior notes		809,690			665,695
Deferred tax liabilities		5,070			16,082
Other long-term liabilities		14,363			15,958
Total liabilities		1,150,559			1,016,326
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.001, 10,000,000 shares authorized, no shares issued or outstanding as of March 31, 2022 and December 31, 2021, respectively		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized, 39,504,354 and 39,389,733 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		40			39
Additional paid-in capital		675,984			853,664
Accumulated deficit		(360,023	)		(388,112	)
Accumulated other comprehensive loss		(8,262	)		(2,902	)
Total stockholders’ equity		307,739			462,689
Total liabilities and stockholders’ equity	$	1,458,298		$	1,479,015

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 March 31,
	2022			2021
Revenue	$	100,375		$	82,210
Cost of revenue		31,857			25,280
Gross profit		68,518			56,930
Operating expenses:
Sales and marketing		41,816			34,527
Research and development		23,559			18,079
General and administrative		22,336			22,562
Total operating expenses		87,711			75,168
Operating loss		(19,193	)		(18,238	)
Other expense, net:
Interest and investment income		62			133
Interest expense		(1,300	)		(6,560	)
Loss on extinguishment of convertible notes and capped call modification		—			(2,888	)
Other income (expense), net		280			(49	)
Total other expense, net		(958	)		(9,364	)
Loss before income taxes		(20,151	)		(27,602	)
Benefit from income taxes		1,078			5,813
Net loss	$	(19,073	)	$	(21,789	)
Net loss per share attributable to common stockholders:
Basic	$	(0.48	)	$	(0.60	)
Diluted	$	(0.48	)	$	(0.60	)
Weighted-average common shares outstanding:
Basic		39,429,686			36,386,819
Diluted		39,429,686			36,386,819

See accompanying notes to condensed consolidated financial statements.

EVERBRIDGE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2022			2021
Net loss	$	(19,073	)	$	(21,789	)
Other comprehensive loss:
Foreign currency translation adjustment, net of taxes		(5,360	)		(2,597	)
Total comprehensive loss	$	(24,433	)	$	(24,386	)

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			loss			Total
Balance at December 31, 2021		39,389,733		$	39	$	853,664		$	(388,112	)	$	(2,902	)	$	462,689
Cumulative effect of adoption of ASU 2020-06, net of taxes		—			—		(185,141	)		47,162			—			(137,979	)
Stock-based compensation		—			—		6,314			—			—			6,314
Vesting of restricted stock units and performance-based restricted stock units		68,560			1		—			—			—			1
Shares withheld related to net share settlement of stock awards		(13,411	)		—		(572	)		—			—			(572	)
Exercise of stock options		725			—		17			—			—			17
Issuance of shares under employee stock purchase plan		58,747			—		1,702			—			—			1,702
Other comprehensive loss		—			—		—			—			(5,360	)		(5,360	)
Net loss		—			—		—			(19,073	)		—			(19,073	)
Balance at March 31, 2022		39,504,354		$	40	$	675,984		$	(360,023	)	$	(8,262	)	$	307,739

	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
Shares withheld related to net share settlement of stock awards		(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

See accompanying notes to condensed consolidated financial statements.

EVERBRIDGE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2022			2021
Cash flows from operating activities:
Net loss	$	(19,073	)	$	(21,789	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		15,434			10,843
Amortization of deferred costs		3,963			3,722
Deferred income taxes		(6,553	)		(6,701	)
Accretion of interest on convertible senior notes		1,158			6,313
Loss on extinguishment of convertible notes and capped call modification		—			2,888
Provision for credit losses and sales reserve		213			1,562
Stock-based compensation		6,084			12,685
Other non-cash adjustments		(52	)		(147	)
Changes in operating assets and liabilities:
Accounts receivable		11,420			11,482
Prepaid expenses		(2,447	)		(1,221	)
Deferred costs		(6,221	)		(3,450	)
Other assets		1,819			(2,768	)
Accounts payable		(6,124	)		(911	)
Accrued payroll and employee related liabilities		(1,862	)		(2,130	)
Accrued expenses		3,246			3,012
Deferred revenue		8,036			8,373
Other liabilities		(1,339	)		(1,955	)
Net cash provided by operating activities		7,702			19,808
Cash flows from investing activities:
Capital expenditures		(1,847	)		(1,812	)
Payment for acquisition of business, net of acquired cash		(47	)		(32,401	)
Additions to capitalized software development costs		(4,330	)		(2,495	)
Net cash used in investing activities		(6,224	)		(36,708	)
Cash flows from financing activities:
Proceeds from issuance of convertible notes		—			375,000
Payments of debt issuance costs		—			(9,562	)
Purchase of convertible notes capped call hedge		—			(35,100	)
Repurchase of convertible notes		—			(58,641	)
Proceeds from termination of convertible notes capped call hedge		—			10,650
Stock award shares withheld to settle employee tax withholding liability		(571	)		(1,610	)
Proceeds from employee stock purchase plan		1,702			2,451
Proceeds from stock option exercises		17			1,604
Other		(19	)		—
Net cash provided by financing activities		1,129			284,792
Effect of exchange rates on cash, cash equivalents and restricted cash		(356	)		(315	)
Net increase in cash, cash equivalents and restricted cash		2,251			267,577
Cash, cash equivalents and restricted cash—beginning of period		492,758			475,630
Cash, cash equivalents and restricted cash—end of period	$	495,009		$	743,207
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$	—		$	318
Taxes, net of refunds received		335			674
Supplemental disclosure of non-cash activities: