UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 8, 2022, Everbridge, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2022. The Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information included in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 2.05 Costs Associated with Exit or Disposal Activities.
On May 3, 2022, the Board of Directors of the Company approved a program (the “2022 Strategic Realignment”) to strategically realign the Company’s resources in order to accelerate and grow the Company’s investments in the Company’s largest growth opportunities while streamlining the Company’s operations. This program is in support of the 2022 strategic initiatives to simplify the Company’s business and accelerate the integration of recent acquisitions, and will help to drive the financial outcomes of sustainable growth and improved profitability and cash flow. The 2022 Strategic Realignment program includes a targeted realignment and reduction of headcount, facilities and other third-party spend.
On November 2, 2022, the Board of Directors of the Company approved an amendment to the 2022 Strategic Realignment program to include additional targeted realignment and reduction of headcount and other third-party spend. Overall, the 2022 Strategic Realignment charges will result in future cash expenditures of approximately $30 million to $33 million. The Company expects to record approximately $14 million to $15 million in restructuring charges associated with the 2022 Strategic Realignment, including employee termination benefits, costs to consolidate facilities and other costs. The Company also expects to incur $17 million to $19 million in business transformation costs associated with the 2022 Strategic Realignment, including employee retention costs, professional fees and investments in automation and technology. The 2022 Strategic Realignment is expected to be substantially completed by the end of fiscal 2023.
Forward-Looking Statements
This Item 2.05 includes forward-looking statements. All statements other than statements of historical facts, the estimated restructuring and restructuring-related charges associated with, and the time frame for completion of, the 2022 Strategic Realignment are forward-looking statements. These forward-looking statements are based on management’s beliefs and assumptions and on information available to management as of the date they are made and inherently involve significant risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. These and other risks and uncertainties that could affect the Company’s future results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 25, 2022, and in Part II-Item 1A under the heading “Risk Factors” in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, as filed with the SEC on May 9, 2022, which are available at www.ir.everbridge.com and on the SEC’s website at www.sec.gov. Further information on potential risks that could affect actual results will be included in other filings the Company makes with the SEC from time to time.
The forward-looking statements in this report reflect the Company’s expectations as of the date hereof. The Company undertakes no obligation to update publicly any forward-looking statements in this Item 2.05 for any reason after the date of this Form 8-K to conform these statements to actual results or to changes in the Company’s expectations.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
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Description |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Everbridge, Inc. |
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Dated: November 8, 2022 |
By: |
/s/ Elliot J. Mark |
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Elliot J. Mark |
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Senior Vice President, General Counsel and Secretary |
Exhibit 99.1
Everbridge Reports Strong Third Quarter 2022 Financial Results
Third Quarter Results Reflect Continuing Progress on Strategic Realignment and Commitment to Sustained, Profitable Growth
Everbridge Plans to Further Detail Financial Model and Long-Term Strategy During Upcoming Investor Day Scheduled for December 13
BURLINGTON, Mass – November 8, 2022 – Everbridge, Inc. (NASDAQ: EVBG), the global leader in critical event management (CEM) and national public warning solutions, today announced its financial results for the third quarter ended September 30, 2022. Revenue was $111.4 million , up 15% year-over-year.
“Our third quarter results demonstrate continued progress in our ongoing evolution to a mature, profitable growth business,” said David Wagner, Everbridge’s President and CEO. “As we focus on our strategic realignment and product integrations, we again delivered solid results with our land-and-expand, go-to-market strategy. 2022 has been a transition year, enabling us to focus on driving profitable growth as we enter the next phase of the company’s life cycle headed into 2023. During the fourth quarter, we are optimizing our cost structure and intend to restructure and reduce Everbridge’s workforce by approximately 200 employees, creating a clear line of sight to adjusted EBITDA of $85 million and a baseline revenue growth rate of 6% to 7% in 2023.”
Patrick Brickley, Everbridge’s CFO, added, “The work we began this year to strategically realign both our product and sales organizations has created a solid foundation for profitability heading into 2023 and beyond. In the meantime, we are continuing to drive consistent performance across the board, as evidenced by a more than $10 million improvement in adjusted EBITDA. Q3 also marked a record for contracts sized over $100,000 in value, supporting Everbridge’s critical and growing role with the Global 2000 community as well as our 6,000 enterprise customers today. We look forward to sharing our progress and strategic plan in more detail at our upcoming Investor Day next month.”
Recent Business Highlights
Third Quarter 2022 Financial Highlights
Financial Outlook
Based on information available as of today, Everbridge is issuing guidance for the fourth quarter and full year 2022 as indicated below.
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Full Year 2022 Guidance |
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Fourth Quarter 2022 |
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Full Year 2022 |
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Issued August 9, 2022 |
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Revenue |
$ |
116.0 |
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to |
$ |
116.4 |
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$ |
430.8 |
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to |
$ |
431.2 |
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$ |
428.2 |
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to |
$ |
432.8 |
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Revenue growth |
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13 |
% |
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13 |
% |
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17 |
% |
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17 |
% |
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16 |
% |
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17 |
% |
GAAP net loss |
$ |
(27.5 |
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$ |
(27.1 |
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$ |
(104.8 |
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$ |
(104.4 |
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$ |
(112.5 |
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$ |
(110.5 |
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GAAP net loss per share |
$ |
(0.69 |
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$ |
(0.68 |
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$ |
(2.65 |
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$ |
(2.64 |
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$ |
(2.80 |
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$ |
(2.75 |
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Non-GAAP net income |
$ |
14.0 |
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$ |
14.4 |
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$ |
27.2 |
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$ |
27.6 |
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$ |
15.7 |
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$ |
17.7 |
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Non-GAAP net income per share |
$ |
0.30 |
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$ |
0.31 |
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$ |
0.59 |
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$ |
0.60 |
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$ |
0.33 |
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$ |
0.38 |
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Adjusted EBITDA |
$ |
18.1 |
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$ |
18.5 |
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$ |
40.7 |
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$ |
41.1 |
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$ |
37.0 |
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$ |
39.0 |
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(All figures in millions, except per share data)
Conference Call Information
What: |
Everbridge's Third Quarter 2022 Financial Results Conference Call |
When: |
Tuesday, November 8, 2022 |
Time: |
8:30 a.m. ET |
Live Call: |
(833) 685-0904, Domestic |
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(412) 317-5740, International |
Replay: |
(877) 344-7529, Passcode 2520854, Domestic |
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(412) 317-0088, Passcode 2520854, International |
Webcast : |
https://edge.media-server.com/mmc/p/9ffgebc6 (live and replay) |
About Everbridge
Everbridge, Inc. (NASDAQ: EVBG) is a global software company that provides enterprise software applications that automate and accelerate organizations’ operational response to critical events in order to Keep People Safe and Organizations Running™. During public safety threats such as active shooter situations, terrorist attacks or severe weather conditions, as well as critical business events including IT outages, cyber-attacks, product recalls or supply-chain interruptions, over 6,400 customers in 76 countries rely on the Company’s Critical Event Management Platform to quickly and reliably aggregate and assess threat data, locate people at risk and responders able to assist, automate the execution of pre-defined communications processes through the secure delivery to over 100 different communication modalities, and track progress on executing response plans. For more information, visit www.everbridge.com, read the company blog, and follow on Twitter and Facebook.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing, non-GAAP research and development, non-GAAP general and administrative, non-GAAP operating expenses, non-GAAP operating income/(loss), non-GAAP net income/(loss), non-GAAP net income/(loss) per share, EBITDA, adjusted EBITDA, free cash flow, and adjusted free cash flow.
Non-GAAP operating income/(loss) excludes amortization of acquired intangible assets, change in fair value of contingent consideration, stock-based compensation and costs related to the 2022 Strategic Realignment. Non-GAAP net income/(loss) excludes amortization of acquired intangible assets, change in fair value of contingent consideration, stock-based compensation, costs related to the 2022 Strategic Realignment, accretion of interest on convertible senior notes, loss on extinguishment of convertible notes, capped call modification and change in fair value and the tax impact of such adjustments. EBITDA represents net income/(loss) before interest income and interest expense, income tax expense and benefit and depreciation and amortization expense. Adjusted EBITDA represents EBITDA as further adjusted for loss on extinguishment of convertible notes, capped call modification and change in fair value, change in fair value of contingent consideration, stock-based compensation expense and costs related to the 2022 Strategic Realignment. Free cash flow represents cash provided by (used in) operating activities minus cash used for capital expenditures and capitalized software development costs. Adjusted free cash flow represents free cash flow as further adjusted for cash payments for the 2022 Strategic Realignment.
We believe that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Everbridge's financial condition and results of operations. We use these non-GAAP measures for financial, operational and budgetary decision-making purposes, to understand and evaluate our core operating performance and trends, and to generate future operating plans. We believe that these non-GAAP financial measures provide useful information regarding past financial performance and future prospects, and permit us to more thoroughly analyze key financial metrics used to make operational decisions. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.
We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release, and not to rely on any single financial measure to evaluate our business.
Cautionary Language Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the anticipated opportunity and trends for growth in our critical communications and enterprise safety applications and our overall business, our market opportunity, our expectations regarding sales of our products, our goal to maintain market leadership and extend the markets in which we compete for customers, and our expected financial results for the fourth quarter of 2022 and the full fiscal year 2022. These forward-looking statements are made as of the date of this press release and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: the ability of our products and services to perform as intended and meet our customers’ expectations; our ability to attract new customers and retain and increase sales to existing customers; our ability to increase sales of our Mass Notification application and/or ability to increase sales of our other applications; our ability to successfully integrate businesses and assets that we have acquired or may acquire in the future; the impact of the global COVID-19 pandemic on our operations and those of our customers and suppliers; the success of the 2022 Strategic Realignment; developments in the market for targeted and contextually relevant critical communications or the associated regulatory environment; our estimates of market opportunity and forecasts of market growth may prove to be inaccurate; we have not been profitable on a consistent basis historically and may not achieve or maintain profitability in the future; the lengthy and unpredictable sales cycles for new customers; nature of our business exposes us to inherent liability risks; our ability to attract, integrate and retain qualified personnel; our ability to maintain successful relationships with our channel partners and technology partners; our ability to manage our growth effectively; our ability to respond to competitive pressures; potential liability related to privacy and security of personally identifiable information; our ability to protect our intellectual property rights, and the other risks detailed in our risk factors discussed in filings with the U.S. Securities and Exchange Commission (“SEC”), including but not limited to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022 filed with the SEC on August 9, 2022
and our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 25, 2022. The forward-looking statements included in this press release represent our views as of the date of this press release. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
All Everbridge products are trademarks of Everbridge, Inc. in the USA and other countries. All other product or company names mentioned are the property of their respective owners.
Consolidated Balance Sheets
(in thousands)
(unaudited)
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September 30, |
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December 31, |
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2022 |
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2021 |
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Current assets: |
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Cash and cash equivalents |
$ |
486,906 |
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$ |
488,035 |
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Restricted cash |
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1,985 |
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3,880 |
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Accounts receivable, net |
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93,330 |
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120,995 |
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Prepaid expenses |
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14,064 |
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13,740 |
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Deferred costs and other current assets |
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28,023 |
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|
28,469 |
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Total current assets |
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624,308 |
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655,119 |
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Property and equipment, net |
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9,387 |
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12,185 |
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Capitalized software development costs, net |
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27,623 |
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22,720 |
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Goodwill |
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492,366 |
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531,163 |
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Intangible assets, net |
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178,510 |
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|
219,319 |
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Restricted cash |
|
782 |
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|
|
843 |
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Prepaid expenses |
|
1,575 |
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|
|
1,916 |
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Deferred costs and other assets |
|
31,791 |
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|
|
35,750 |
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Total assets |
$ |
1,366,342 |
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$ |
1,479,015 |
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Current liabilities: |
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Accounts payable |
$ |
12,397 |
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$ |
16,002 |
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Accrued payroll and employee related liabilities |
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28,392 |
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|
36,725 |
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Accrued expenses |
|
11,946 |
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|
13,884 |
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Deferred revenue |
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220,488 |
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|
223,579 |
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Convertible senior notes |
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8 |
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8 |
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Other current liabilities |
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10,342 |
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|
14,132 |
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Total current liabilities |
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283,573 |
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304,330 |
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Long-term liabilities: |
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Deferred revenue, noncurrent |
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12,550 |
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14,261 |
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Convertible senior notes |
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812,023 |
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665,695 |
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Deferred tax liabilities |
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4,060 |
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16,082 |
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Other long-term liabilities |
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8,946 |
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|
15,958 |
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Total liabilities |
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1,121,152 |
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1,016,326 |
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Stockholders' equity: |
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Common stock |
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40 |
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39 |
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Additional paid-in capital |
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714,761 |
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853,664 |
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Accumulated deficit |
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(418,285 |
) |
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(388,112 |
) |
Accumulated other comprehensive loss |
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(51,326 |
) |
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(2,902 |
) |
Total stockholders' equity |
|
245,190 |
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|
462,689 |
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Total liabilities and stockholders' equity |
$ |
1,366,342 |
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$ |
1,479,015 |
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Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share data)
(unaudited)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenue |
$ |
111,401 |
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$ |
96,746 |
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$ |
314,762 |
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$ |
265,605 |
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Cost of revenue |
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35,447 |
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|
30,310 |
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|
100,543 |
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|
83,255 |
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Gross profit |
|
75,954 |
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|
66,436 |
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|
|
214,219 |
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|
|
182,350 |
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|
68.18 |
% |
|
|
68.67 |
% |
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|
68.06 |
% |
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|
68.65 |
% |
Operating expenses: |
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Sales and marketing |
|
46,580 |
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|
|
42,426 |
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|
|
133,755 |
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|
|
118,436 |
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Research and development |
|
25,177 |
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|
|
23,197 |
|
|
|
75,355 |
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|
|
61,527 |
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General and administrative |
|
23,357 |
|
|
|
19,904 |
|
|
|
72,786 |
|
|
|
67,130 |
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Restructuring |
|
37 |
|
|
|
— |
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|
6,779 |
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|
|
— |
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Total operating expenses |
|
95,151 |
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|
|
85,527 |
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|
|
288,675 |
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|
|
247,093 |
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Operating loss |
|
(19,197 |
) |
|
|
(19,091 |
) |
|
|
(74,456 |
) |
|
|
(64,743 |
) |
Other expense, net: |
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|
|
|
|
|
|
|
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Interest and investment income |
|
2,054 |
|
|
|
83 |
|
|
|
2,795 |
|
|
|
316 |
|
Interest expense |
|
(1,312 |
) |
|
|
(9,792 |
) |
|
|
(3,919 |
) |
|
|
(26,007 |
) |
Loss on extinguishment of convertible notes, capped call modification and change in fair value |
|
(4,770 |
) |
|
|
— |
|
|
|
(4,770 |
) |
|
|
(2,925 |
) |
Other income (expense), net |
|
1,170 |
|
|
|
(623 |
) |
|
|
1,261 |
|
|
|
(1,274 |
) |
Total other expense, net |
|
(2,858 |
) |
|
|
(10,332 |
) |
|
|
(4,633 |
) |
|
|
(29,890 |
) |
Loss before income taxes |
|
(22,055 |
) |
|
|
(29,423 |
) |
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|
(79,089 |
) |
|
|
(94,633 |
) |
Benefit from (provision for) income taxes |
|
(25 |
) |
|
|
745 |
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|
|
1,754 |
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|
|
10,345 |
|
Net loss |
$ |
(22,080 |
) |
|
$ |
(28,678 |
) |
|
$ |
(77,335 |
) |
|
$ |
(84,288 |
) |
Net loss per share attributable to common stockholders: |
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Basic |
$ |
(0.56 |
) |
|
$ |
(0.75 |
) |
|
$ |
(1.95 |
) |
|
$ |
(2.24 |
) |
Diluted |
$ |
(0.56 |
) |
|
$ |
(0.75 |
) |
|
$ |
(1.95 |
) |
|
$ |
(2.24 |
) |
Weighted-average common shares outstanding: |
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|
|
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|
|
|
|
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||||
Basic |
|
39,746,242 |
|
|
|
38,407,313 |
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|
|
39,583,684 |
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|
|
37,610,147 |
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Diluted |
|
39,746,242 |
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|
|
38,407,313 |
|
|
|
39,583,684 |
|
|
|
37,610,147 |
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Other comprehensive loss: |
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|
|
|
|
|
|
|
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||||
Foreign currency translation adjustment |
|
(19,879 |
) |
|
|
(3,095 |
) |
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|
(48,424 |
) |
|
|
(4,461 |
) |
Total comprehensive loss |
$ |
(41,959 |
) |
|
$ |
(31,773 |
) |
|
$ |
(125,759 |
) |
|
$ |
(88,749 |
) |
|
|
|
|
|
|
|
|
|
|
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|
||||
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|
|
|
|
|
|
|
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|
||||
Stock-based compensation expense included in the above: |
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|
|
|
|
|
|
|
|
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|
||||
(in thousands) |
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|
|
|
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|
||||
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
September 30, |
|
|
September 30, |
|
||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Cost of revenue |
$ |
1,938 |
|
|
$ |
1,260 |
|
|
$ |
4,197 |
|
|
$ |
3,078 |
|
Sales and marketing |
|
6,130 |
|
|
|
5,747 |
|
|
|
13,736 |
|
|
|
15,068 |
|
Research and development |
|
4,543 |
|
|
|
3,106 |
|
|
|
10,497 |
|
|
|
7,696 |
|
General and administrative |
|
4,796 |
|
|
|
7,328 |
|
|
|
11,272 |
|
|
|
19,789 |
|
Total stock-based compensation |
$ |
17,407 |
|
|
$ |
17,441 |
|
|
$ |
39,702 |
|
|
$ |
45,631 |
|
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
September 30, |
|
|
September 30, |
|
||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
$ |
(22,080 |
) |
|
$ |
(28,678 |
) |
|
$ |
(77,335 |
) |
|
$ |
(84,288 |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
14,562 |
|
|
|
14,226 |
|
|
|
45,253 |
|
|
|
38,080 |
|
Amortization of deferred costs |
|
4,625 |
|
|
|
3,214 |
|
|
|
13,365 |
|
|
|
10,398 |
|
Loss on disposal of assets |
|
6 |
|
|
|
1 |
|
|
|
940 |
|
|
|
— |
|
Deferred income taxes |
|
436 |
|
|
|
(1,454 |
) |
|
|
(7,132 |
) |
|
|
(11,232 |
) |
Accretion of interest on convertible senior notes |
|
1,168 |
|
|
|
9,649 |
|
|
|
3,492 |
|
|
|
25,470 |
|
Loss on extinguishment of convertible notes, capped call modification and change in fair value |
|
4,770 |
|
|
|
— |
|
|
|
4,770 |
|
|
|
2,925 |
|
Provision for credit losses and sales reserve |
|
(990 |
) |
|
|
774 |
|
|
|
(712 |
) |
|
|
2,679 |
|
Stock-based compensation |
|
17,407 |
|
|
|
17,441 |
|
|
|
39,702 |
|
|
|
45,631 |
|
Change in fair value of contingent consideration obligation |
|
— |
|
|
|
(7,103 |
) |
|
|
(57 |
) |
|
|
(7,046 |
) |
Payment of contingent consideration in excess of acquisition date fair value |
|
— |
|
|
|
(2,653 |
) |
|
|
— |
|
|
|
(2,653 |
) |
Other non-cash adjustments |
|
— |
|
|
|
101 |
|
|
|
— |
|
|
|
13 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts receivable |
|
5,729 |
|
|
|
(3,292 |
) |
|
|
28,760 |
|
|
|
16,020 |
|
Prepaid expenses |
|
2,085 |
|
|
|
1,015 |
|
|
|
17 |
|
|
|
93 |
|
Deferred costs |
|
(5,627 |
) |
|
|
(3,280 |
) |
|
|
(16,157 |
) |
|
|
(11,387 |
) |
Other assets |
|
1,368 |
|
|
|
(5,675 |
) |
|
|
7,591 |
|
|
|
(6,525 |
) |
Accounts payable |
|
1,015 |
|
|
|
(3,475 |
) |
|
|
(3,172 |
) |
|
|
(3,535 |
) |
Accrued payroll and employee related liabilities |
|
1,052 |
|
|
|
1,508 |
|
|
|
(6,919 |
) |
|
|
(3,812 |
) |
Accrued expenses |
|
(2,474 |
) |
|
|
1,865 |
|
|
|
(637 |
) |
|
|
2,836 |
|
Deferred revenue |
|
(152 |
) |
|
|
3,924 |
|
|
|
(4,678 |
) |
|
|
3,744 |
|
Other liabilities |
|
(4,865 |
) |
|
|
(798 |
) |
|
|
(11,278 |
) |
|
|
(5,430 |
) |
Net cash provided by (used in) operating activities |
|
18,035 |
|
|
|
(2,690 |
) |
|
|
15,813 |
|
|
|
11,981 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Capital expenditures |
|
(225 |
) |
|
|
(2,042 |
) |
|
|
(2,951 |
) |
|
|
(4,170 |
) |
Proceeds from landlord reimbursement |
|
1,219 |
|
|
|
— |
|
|
|
1,219 |
|
|
|
— |
|
Payments for acquisition of business, net of acquired cash |
|
(1,202 |
) |
|
|
(2,013 |
) |
|
|
(1,249 |
) |
|
|
(199,679 |
) |
Additions to capitalized software development costs |
|
(4,173 |
) |
|
|
(2,797 |
) |
|
|
(11,609 |
) |
|
|
(8,879 |
) |
Net cash used in investing activities |
|
(4,381 |
) |
|
|
(6,852 |
) |
|
|
(14,590 |
) |
|
|
(212,728 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
||||
Proceeds from issuance of convertible notes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
375,000 |
|
Payments of debt issuance costs |
|
— |
|
|
|
(249 |
) |
|
|
— |
|
|
|
(10,640 |
) |
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 |
|
Payments of contingent consideration |
|
— |
|
|
|
(2,540 |
) |
|
|
— |
|
|
|
(2,540 |
) |
Shares withheld to settle employee tax withholding liability |
|
(1,913 |
) |
|
|
(3,556 |
) |
|
|
(4,208 |
) |
|
|
(6,399 |
) |
Proceeds from employee stock purchase plan |
|
1,463 |
|
|
|
2,136 |
|
|
|
3,165 |
|
|
|
4,587 |
|
Proceeds from stock option exercises |
|
17 |
|
|
|
784 |
|
|
|
99 |
|
|
|
2,947 |
|
Other |
|
(17 |
) |
|
|
— |
|
|
|
(55 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
(450 |
) |
|
|
(3,425 |
) |
|
|
(999 |
) |
|
|
279,864 |
|
Effect of exchange rates on cash, cash equivalents and restricted cash |
|
(1,010 |
) |
|
|
(369 |
) |
|
|
(3,309 |
) |
|
|
219 |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
12,194 |
|
|
|
(13,336 |
) |
|
|
(3,085 |
) |
|
|
79,336 |
|
Cash, cash equivalents and restricted cash—beginning of period |
|
477,479 |
|
|
|
568,302 |
|
|
|
492,758 |
|
|
|
475,630 |
|
Cash, cash equivalents and restricted cash—end of period |
$ |
489,673 |
|
|
$ |
554,966 |
|
|
$ |
489,673 |
|
|
$ |
554,966 |
|
Reconciliation of GAAP measures to non-GAAP measures
(in thousands, except share and per share data)
(unaudited)
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
September 30, |
|
|
September 30, |
|
||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Cost of revenue |
$ |
35,447 |
|
|
$ |
30,310 |
|
|
$ |
100,543 |
|
|
$ |
83,255 |
|
Amortization of acquired intangibles |
|
(2,790 |
) |
|
|
(3,191 |
) |
|
|
(9,055 |
) |
|
|
(8,773 |
) |
Stock-based compensation |
|
(1,938 |
) |
|
|
(1,260 |
) |
|
|
(4,197 |
) |
|
|
(3,078 |
) |
2022 Strategic Realignment |
|
(259 |
) |
|
|
— |
|
|
|
(694 |
) |
|
|
— |
|
Non-GAAP cost of revenue |
$ |
30,460 |
|
|
$ |
25,859 |
|
|
$ |
86,597 |
|
|
$ |
71,404 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit |
$ |
75,954 |
|
|
$ |
66,436 |
|
|
$ |
214,219 |
|
|
$ |
182,350 |
|
Amortization of acquired intangibles |
|
2,790 |
|
|
|
3,191 |
|
|
|
9,055 |
|
|
|
8,773 |
|
Stock-based compensation |
|
1,938 |
|
|
|
1,260 |
|
|
|
4,197 |
|
|
|
3,078 |
|
2022 Strategic Realignment |
|
259 |
|
|
|
— |
|
|
|
694 |
|
|
|
— |
|
Non-GAAP gross profit |
$ |
80,941 |
|
|
$ |
70,887 |
|
|
$ |
228,165 |
|
|
$ |
194,201 |
|
Non-GAAP gross margin |
|
72.7 |
% |
|
|
73.3 |
% |
|
|
72.5 |
% |
|
|
73.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing |
$ |
46,580 |
|
|
$ |
42,426 |
|
|
$ |
133,755 |
|
|
$ |
118,436 |
|
Stock-based compensation |
|
(6,130 |
) |
|
|
(5,747 |
) |
|
|
(13,736 |
) |
|
|
(15,068 |
) |
2022 Strategic Realignment |
|
(426 |
) |
|
|
— |
|
|
|
(634 |
) |
|
|
— |
|
Non-GAAP sales and marketing |
$ |
40,024 |
|
|
$ |
36,679 |
|
|
$ |
119,385 |
|
|
$ |
103,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
$ |
25,177 |
|
|
$ |
23,197 |
|
|
$ |
75,355 |
|
|
$ |
61,527 |
|
Stock-based compensation |
|
(4,543 |
) |
|
|
(3,106 |
) |
|
|
(10,497 |
) |
|
|
(7,696 |
) |
2022 Strategic Realignment |
|
(396 |
) |
|
|
— |
|
|
|
(609 |
) |
|
|
— |
|
Non-GAAP research and development |
$ |
20,238 |
|
|
$ |
20,091 |
|
|
$ |
64,249 |
|
|
$ |
53,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
$ |
23,357 |
|
|
$ |
19,904 |
|
|
$ |
72,786 |
|
|
$ |
67,130 |
|
Amortization of acquired intangibles |
|
(7,538 |
) |
|
|
(7,798 |
) |
|
|
(24,073 |
) |
|
|
(20,051 |
) |
Change in fair value of contingent consideration |
|
— |
|
|
|
7,103 |
|
|
|
57 |
|
|
|
7,046 |
|
Stock-based compensation |
|
(4,796 |
) |
|
|
(7,328 |
) |
|
|
(11,272 |
) |
|
|
(19,789 |
) |
2022 Strategic Realignment |
|
(106 |
) |
|
|
— |
|
|
|
(2,102 |
) |
|
|
— |
|
Non-GAAP general and administrative |
$ |
10,917 |
|
|
$ |
11,881 |
|
|
$ |
35,396 |
|
|
$ |
34,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restructuring (2022 Strategic Realignment) |
$ |
37 |
|
|
$ |
— |
|
|
$ |
6,779 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
$ |
95,151 |
|
|
$ |
85,527 |
|
|
$ |
288,675 |
|
|
$ |
247,093 |
|
Amortization of acquired intangibles |
|
(7,538 |
) |
|
|
(7,798 |
) |
|
|
(24,073 |
) |
|
|
(20,051 |
) |
Change in fair value of contingent consideration |
|
— |
|
|
|
7,103 |
|
|
|
57 |
|
|
|
7,046 |
|
Stock-based compensation |
|
(15,469 |
) |
|
|
(16,181 |
) |
|
|
(35,505 |
) |
|
|
(42,553 |
) |
2022 Strategic Realignment |
|
(965 |
) |
|
|
— |
|
|
|
(10,124 |
) |
|
|
— |
|
Non-GAAP operating expenses |
$ |
71,179 |
|
|
$ |
68,651 |
|
|
$ |
219,030 |
|
|
$ |
191,535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating loss |
$ |
(19,197 |
) |
|
$ |
(19,091 |
) |
|
$ |
(74,456 |
) |
|
$ |
(64,743 |
) |
Amortization of acquired intangibles |
|
10,328 |
|
|
|
10,989 |
|
|
|
33,128 |
|
|
|
28,824 |
|
Change in fair value of contingent consideration |
|
— |
|
|
|
(7,103 |
) |
|
|
(57 |
) |
|
|
(7,046 |
) |
Stock-based compensation |
|
17,407 |
|
|
|
17,441 |
|
|
|
39,702 |
|
|
|
45,631 |
|
2022 Strategic Realignment |
|
1,224 |
|
|
|
— |
|
|
|
10,818 |
|
|
|
— |
|
Non-GAAP operating income |
$ |
9,762 |
|
|
$ |
2,236 |
|
|
$ |
9,135 |
|
|
$ |
2,666 |
|
Reconciliation of GAAP measures to non-GAAP measures (Continued)
(in thousands)
(unaudited)
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
September 30, |
|
|
September 30, |
|
||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Net loss |
$ |
(22,080 |
) |
|
$ |
(28,678 |
) |
|
$ |
(77,335 |
) |
|
$ |
(84,288 |
) |
Amortization of acquired intangibles |
|
10,328 |
|
|
|
10,989 |
|
|
|
33,128 |
|
|
|
28,824 |
|
Change in fair value of contingent consideration |
|
— |
|
|
|
(7,103 |
) |
|
|
(57 |
) |
|
|
(7,046 |
) |
Stock-based compensation |
|
17,407 |
|
|
|
17,441 |
|
|
|
39,702 |
|
|
|
45,631 |
|
2022 Strategic Realignment |
|
1,227 |
|
|
|
— |
|
|
|
10,821 |
|
|
|
— |
|
Accretion of interest on convertible senior notes |
|
1,168 |
|
|
|
9,649 |
|
|
|
3,492 |
|
|
|
25,470 |
|
Loss on extinguishment of convertible notes, capped call modification and change in fair value |
|
4,770 |
|
|
|
— |
|
|
|
4,770 |
|
|
|
2,925 |
|
Income tax adjustments |
|
(510 |
) |
|
|
(185 |
) |
|
|
(1,321 |
) |
|
|
70 |
|
Non-GAAP net income |
$ |
12,310 |
|
|
$ |
2,113 |
|
|
$ |
13,200 |
|
|
$ |
11,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP net income per share: |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
0.31 |
|
|
$ |
0.06 |
|
|
$ |
0.33 |
|
|
$ |
0.31 |
|
Diluted |
$ |
0.27 |
|
|
$ |
0.05 |
|
|
$ |
0.29 |
|
|
$ |
0.26 |
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
39,746,242 |
|
|
|
38,407,313 |
|
|
|
39,583,684 |
|
|
|
37,610,147 |
|
Diluted |
|
46,061,330 |
|
|
|
45,548,246 |
|
|
|
45,957,546 |
|
|
|
44,726,800 |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
September 30, |
|
|
September 30, |
|
||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Net loss |
$ |
(22,080 |
) |
|
$ |
(28,678 |
) |
|
$ |
(77,335 |
) |
|
$ |
(84,288 |
) |
Interest and investment expense, net |
|
(742 |
) |
|
|
9,709 |
|
|
|
1,124 |
|
|
|
25,691 |
|
(Benefit from) provision for income taxes |
|
25 |
|
|
|
(745 |
) |
|
|
(1,754 |
) |
|
|
(10,345 |
) |
Depreciation and amortization |
|
14,562 |
|
|
|
14,226 |
|
|
|
45,253 |
|
|
|
38,080 |
|
EBITDA |
|
(8,235 |
) |
|
|
(5,488 |
) |
|
|
(32,712 |
) |
|
|
(30,862 |
) |
Loss on extinguishment of convertible notes, capped call modification and change in fair value |
|
4,770 |
|
|
|
— |
|
|
|
4,770 |
|
|
|
2,925 |
|
Change in fair value of contingent consideration |
|
— |
|
|
|
(7,103 |
) |
|
|
(57 |
) |
|
|
(7,046 |
) |
Stock-based compensation |
|
17,407 |
|
|
|
17,441 |
|
|
|
39,702 |
|
|
|
45,631 |
|
2022 Strategic Realignment |
|
1,227 |
|
|
|
— |
|
|
|
10,821 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
15,169 |
|
|
$ |
4,850 |
|
|
$ |
22,524 |
|
|
$ |
10,648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net cash provided by (used in) operating activities |
$ |
18,035 |
|
|
$ |
(2,690 |
) |
|
$ |
15,813 |
|
|
$ |
11,981 |
|
Capital expenditures |
|
(225 |
) |
|
|
(2,042 |
) |
|
|
(2,951 |
) |
|
|
(4,170 |
) |
Capitalized software development costs |
|
(4,173 |
) |
|
|
(2,797 |
) |
|
|
(11,609 |
) |
|
|
(8,879 |
) |
Free cash flow |
|
13,637 |
|
|
|
(7,529 |
) |
|
|
1,253 |
|
|
|
(1,068 |
) |
Cash payments for 2022 Strategic Realignment |
|
1,760 |
|
|
|
— |
|
|
|
8,079 |
|
|
|
— |
|
Adjusted free cash flow |
$ |
15,397 |
|
|
$ |
(7,529 |
) |
|
$ |
9,332 |
|
|
$ |
(1,068 |
) |
Remaining Performance Obligations as of September 30, 2022
(in millions)
|
Remaining Performance Obligations |
|
|
Remaining Performance Obligations |
|
||
Subscription and other contracts |
$ |
454 |
|
|
$ |
284 |
|
Professional services contracts |
|
17 |
|
|
|
14 |
|
Financial Outlook
(in millions, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|||||||||
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31, 2022 |
|
|||||||||||||||
|
December 31, 2022 |
|
|
December 31, 2022 |
|
|
Issued August 9, 2022 |
|
|||||||||||||||
|
Low End |
|
|
High End |
|
|
Low End |
|
|
High End |
|
|
Low End |
|
|
High End |
|
||||||
Net loss |
$ |
(27.5 |
) |
|
$ |
(27.1 |
) |
|
$ |
(104.8 |
) |
|
$ |
(104.4 |
) |
|
|
(112.5 |
) |
|
|
(110.5 |
) |
Amortization of acquired intangibles |
|
11.9 |
|
|
|
11.9 |
|
|
|
45.0 |
|
|
|
45.0 |
|
|
|
47.0 |
|
|
|
47.0 |
|
Change in fair value of contingent consideration |
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
Accretion of interest on convertible senior notes |
|
1.2 |
|
|
|
1.2 |
|
|
|
4.7 |
|
|
|
4.7 |
|
|
|
4.8 |
|
|
|
4.8 |
|
Loss on extinguishment of convertible notes, capped call modification and change in fair value |
|
— |
|
|
|
— |
|
|
|
4.8 |
|
|
|
4.8 |
|
|
|
— |
|
|
|
— |
|
2022 Strategic Realignment |
|
9.6 |
|
|
|
9.6 |
|
|
|
20.4 |
|
|
|
20.4 |
|
|
|
16.5 |
|
|
|
16.5 |
|
Stock-based compensation |
|
19.3 |
|
|
|
19.3 |
|
|
|
59.0 |
|
|
|
59.0 |
|
|
|
62.0 |
|
|
|
62.0 |
|
Income tax adjustments |
|
(0.5 |
) |
|
|
(0.5 |
) |
|
|
(1.8 |
) |
|
|
(1.8 |
) |
|
|
(2.0 |
) |
|
|
(2.0 |
) |
Non-GAAP net income |
$ |
14.0 |
|
|
$ |
14.4 |
|
|
$ |
27.2 |
|
|
$ |
27.6 |
|
|
$ |
15.7 |
|
|
$ |
17.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic |
|
39,900,000 |
|
|
|
39,900,000 |
|
|
|
39,500,000 |
|
|
|
39,500,000 |
|
|
|
40,200,000 |
|
|
|
40,200,000 |
|
Diluted |
|
46,500,000 |
|
|
|
46,500,000 |
|
|
|
46,300,000 |
|
|
|
46,300,000 |
|
|
|
47,000,000 |
|
|
|
47,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss per share |
$ |
(0.69 |
) |
|
$ |
(0.68 |
) |
|
$ |
(2.65 |
) |
|
$ |
(2.64 |
) |
|
$ |
(2.80 |
) |
|
$ |
(2.75 |
) |
Non-GAAP net income per share |
$ |
0.30 |
|
|
$ |
0.31 |
|
|
$ |
0.59 |
|
|
$ |
0.60 |
|
|
$ |
0.33 |
|
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net loss |
$ |
(27.5 |
) |
|
$ |
(27.1 |
) |
|
$ |
(104.8 |
) |
|
$ |
(104.4 |
) |
|
$ |
(112.5 |
) |
|
$ |
(110.5 |
) |
Interest expense, net |
|
0.6 |
|
|
|
0.6 |
|
|
|
1.7 |
|
|
|
1.7 |
|
|
|
4.8 |
|
|
|
4.8 |
|
Income taxes, net |
|
(0.6 |
) |
|
|
(0.6 |
) |
|
|
(2.3 |
) |
|
|
(2.3 |
) |
|
|
(2.0 |
) |
|
|
(2.0 |
) |
Depreciation and amortization |
|
16.7 |
|
|
|
16.7 |
|
|
|
62.0 |
|
|
|
62.0 |
|
|
|
68.3 |
|
|
|
68.3 |
|
EBITDA |
|
(10.8 |
) |
|
|
(10.4 |
) |
|
|
(43.4 |
) |
|
|
(43.0 |
) |
|
|
(41.4 |
) |
|
|
(39.4 |
) |
Change in fair value of contingent consideration |
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
Loss on extinguishment of convertible notes, capped call modification and change in fair value |
|
— |
|
|
|
— |
|
|
|
4.8 |
|
|
|
4.8 |
|
|
|
— |
|
|
|
— |
|
2022 Strategic Realignment |
|
9.6 |
|
|
|
9.6 |
|
|
|
20.4 |
|
|
|
20.4 |
|
|
|
16.5 |
|
|
|
16.5 |
|
Stock-based compensation |
|
19.3 |
|
|
|
19.3 |
|
|
|
59.0 |
|
|
|
59.0 |
|
|
|
62.0 |
|
|
|
62.0 |
|
Adjusted EBITDA |
$ |
18.1 |
|
|
$ |
18.5 |
|
|
$ |
40.7 |
|
|
$ |
41.1 |
|
|
$ |
37.0 |
|
|
$ |
39.0 |
|
Everbridge Contacts:
Investors:
Nandan Amladi
Investor Relations
nandan.amladi@everbridge.com
617-665-7197
Media:
Jeff Young
Media Relations
jeff.young@everbridge.com
781-859-4116
Source: Everbridge, Inc.