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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 September 30, 2023

OR

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 November 6, 2023, the registrant had 41,069,068 shares of common stock 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

 

30

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

46

 

 

 

 

Item 4.

Controls and Procedures

 

47

 

 

 

 

PART II.

OTHER INFORMATION

 

48

 

 

 

 

Item 1.

Legal Proceedings

 

48

 

 

 

 

Item 1A.

Risk Factors

 

48

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Repurchases of Equity Securities

 

48

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

48

 

 

 

 

Item 4.

Mine Safety Disclosures

 

48

 

 

 

 

Item 5.

Other Information

 

48

 

 

 

 

Item 6.

Exhibits

 

51

 

 

 

Signatures

 

52

 

 

 

 

2


 

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, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

97,697

 

 

$

198,725

 

Restricted cash

 

 

2,067

 

 

 

2,046

 

Accounts receivable, net

 

 

92,627

 

 

 

119,986

 

Prepaid expenses

 

 

15,192

 

 

 

13,133

 

Assets held for sale

 

 

22

 

 

 

6,485

 

Deferred costs and other current assets

 

 

36,112

 

 

 

31,866

 

Total current assets

 

 

243,717

 

 

 

372,241

 

Property and equipment, net

 

 

9,218

 

 

 

8,993

 

Capitalized software development costs, net

 

 

30,701

 

 

 

27,370

 

Goodwill

 

 

507,420

 

 

 

508,781

 

Intangible assets, net

 

 

137,670

 

 

 

166,177

 

Restricted cash

 

 

783

 

 

 

823

 

Prepaid expenses

 

 

1,141

 

 

 

1,709

 

Deferred costs and other assets

 

 

42,129

 

 

 

39,570

 

Total assets

 

$

972,779

 

 

$

1,125,664

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

13,244

 

 

$

10,854

 

Accrued payroll and employee related liabilities

 

 

25,072

 

 

 

31,175

 

Accrued expenses

 

 

16,744

 

 

 

13,566

 

Deferred revenue

 

 

223,529

 

 

 

233,106

 

Liabilities held for sale

 

 

170

 

 

 

2,062

 

Other current liabilities

 

 

6,594

 

 

 

10,644

 

Total current liabilities

 

 

285,353

 

 

 

301,407

 

Long-term liabilities:

 

 

 

 

 

 

Deferred revenue, noncurrent

 

 

7,226

 

 

 

9,278

 

Convertible senior notes

 

 

359,153

 

 

 

500,298

 

Deferred tax liabilities

 

 

5,048

 

 

 

6,236

 

Other long-term liabilities

 

 

17,805

 

 

 

19,334

 

Total liabilities

 

 

674,585

 

 

 

836,553

 

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, 2023 and December 31, 2022, respectively

 

 

 

 

 

 

Common stock, $0.001 par value, 100,000,000 shares authorized, 40,968,758 and 40,127,522
   shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

 

41

 

 

 

40

 

Additional paid-in capital

 

 

761,279

 

 

 

721,143

 

Accumulated deficit

 

 

(430,139

)

 

 

(402,124

)

Accumulated other comprehensive loss

 

 

(32,987

)

 

 

(29,948

)

Total stockholders’ equity

 

 

298,194

 

 

 

289,111

 

Total liabilities and stockholders’ equity

 

$

972,779

 

 

$

1,125,664

 

 

See accompanying notes to condensed consolidated financial statements.

3


 

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,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

$

114,191

 

 

$

111,401

 

 

$

333,028

 

 

$

314,762

 

Cost of revenue

 

 

33,069

 

 

 

35,447

 

 

 

98,141

 

 

 

100,543

 

Gross profit

 

 

81,122

 

 

 

75,954

 

 

 

234,887

 

 

 

214,219

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

36,699

 

 

 

46,580

 

 

 

121,556

 

 

 

133,755

 

Research and development

 

 

23,852

 

 

 

25,177

 

 

 

73,469

 

 

 

75,355

 

General and administrative

 

 

31,204

 

 

 

23,357

 

 

 

80,633

 

 

 

72,786

 

Restructuring

 

 

2,109

 

 

 

37

 

 

 

2,794

 

 

 

6,779

 

Total operating expenses

 

 

93,864

 

 

 

95,151

 

 

 

278,452

 

 

 

288,675

 

Operating loss

 

 

(12,742

)

 

 

(19,197

)

 

 

(43,565

)

 

 

(74,456

)

Other income (expense), net

 

 

 

 

 

 

 

 

 

 

 

 

Interest and investment income

 

 

2,140

 

 

 

2,054

 

 

 

6,162

 

 

 

2,795

 

Interest expense

 

 

(724

)

 

 

(1,312

)

 

 

(2,258

)

 

 

(3,919

)

Gain (loss) on extinguishment of convertible notes, capped call modification and change in fair value

 

 

12,658

 

 

 

(4,770

)

 

 

12,658

 

 

 

(4,770

)

Other income (expense), net

 

 

(573

)

 

 

1,170

 

 

 

173

 

 

 

1,261

 

Total other income (expense), net

 

 

13,501

 

 

 

(2,858

)

 

 

16,735

 

 

 

(4,633

)

Income (loss) before income taxes

 

 

759

 

 

 

(22,055

)

 

 

(26,830

)

 

 

(79,089

)

(Provision for) benefit from income taxes

 

 

924

 

 

 

(25

)

 

 

(1,185

)

 

 

1,754

 

Net income (loss)

 

$

1,683

 

 

$

(22,080

)

 

$

(28,015

)

 

$

(77,335

)

Net income (loss) per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.04

 

 

$

(0.56

)

 

$

(0.69

)

 

$

(1.95

)

Diluted

 

$

(0.23

)

 

$

(0.56

)

 

$

(0.87

)

 

$

(1.95

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

40,782,696

 

 

 

39,746,242

 

 

 

40,537,922

 

 

 

39,583,684

 

Diluted

 

 

43,844,334

 

 

 

39,746,242

 

 

 

43,734,429

 

 

 

39,583,684

 

 

See accompanying notes to condensed consolidated financial statements.

4


 

EVERBRIDGE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income (loss)

 

$

1,683

 

 

$

(22,080

)

 

$

(28,015

)

 

$

(77,335

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment, net of taxes

 

 

(7,776

)

 

 

(19,879

)

 

 

(3,039

)

 

 

(48,424

)

Total comprehensive loss

 

$

(6,093

)

 

$

(41,959

)

 

$

(31,054

)

 

$

(125,759

)

 

See accompanying notes to condensed consolidated financial statements.

5


 

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, 2022

 

 

40,127,522

 

 

$

40

 

 

$

721,143

 

 

$

(402,124

)

 

$

(29,948

)

 

$

289,111

 

Stock-based compensation

 

 

 

 

 

 

 

 

13,931

 

 

 

 

 

 

 

 

 

13,931

 

Vesting of restricted stock units and performance-based
   restricted stock units

 

 

250,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock award shares withheld to settle employee tax
   withholding liability

 

 

(56,062

)

 

 

 

 

 

(1,866

)

 

 

 

 

 

 

 

 

(1,866

)

Exercise of stock options

 

 

71,166

 

 

 

 

 

 

1,263

 

 

 

 

 

 

 

 

 

1,263

 

Issuance of shares under employee stock purchase plan

 

 

88,863

 

 

 

 

 

 

2,546

 

 

 

 

 

 

 

 

 

2,546

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,426

 

 

 

2,426

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(14,648

)

 

 

 

 

 

(14,648

)

Balance at March 31, 2023

 

 

40,481,616

 

 

 

40

 

 

 

737,017

 

 

 

(416,772

)

 

 

(27,522

)

 

 

292,763

 

Stock-based compensation

 

 

 

 

 

 

 

 

17,494

 

 

 

 

 

 

 

 

 

17,494

 

Vesting of restricted stock units and performance-based
   restricted stock units

 

 

245,850

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Stock award shares withheld to settle employee tax
   withholding liability

 

 

(69,388

)

 

 

 

 

 

(1,824

)

 

 

 

 

 

 

 

 

(1,824

)

Exercise of stock options

 

 

870

 

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

12

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,311

 

 

 

2,311

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(15,050

)

 

 

 

 

 

(15,050

)

Balance at June 30, 2023

 

 

40,658,948

 

 

 

41

 

 

 

752,699

 

 

 

(431,822

)

 

 

(25,211

)

 

 

295,707

 

Stock-based compensation

 

 

 

 

 

 

 

 

9,339

 

 

 

 

 

 

 

 

 

9,339

 

Vesting of restricted stock units and performance-based
   restricted stock units

 

 

320,961

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock award shares withheld to settle employee tax
   withholding liability

 

 

(96,411

)

 

 

 

 

 

(2,529

)

 

 

 

 

 

 

 

 

(2,529

)

Exercise of stock options

 

 

2,001

 

 

 

 

 

 

25

 

 

 

 

 

 

 

 

 

25

 

Issuance of shares under employee stock purchase plan

 

 

83,259

 

 

 

 

 

 

1,745

 

 

 

 

 

 

 

 

 

1,745

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,776

)

 

 

(7,776

)

Net income

 

 

 

 

 

 

 

 

 

 

 

1,683

 

 

 

 

 

 

1,683

 

Balance at September 30, 2023

 

 

40,968,758

 

 

$

41

 

 

$

761,279

 

 

$

(430,139

)

 

$

(32,987

)

 

$

298,194

 

 

 

6


 

 

 

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

 

Stock award shares withheld to settle employee tax
   withholding liability

 

 

(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

)