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Everbridge Announces Strong First Quarter 2021 Financial Results Highlighted by 40% Revenue Growth Year Over Year

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·20-min read
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First Quarter Revenue Exceeds High-End of Guidance by Record $6.5 million

Operating Cash Flow Reaches New Quarterly High of $19.8 Million

Everbridge, Inc. (NASDAQ: EVBG), the global leader in critical event management (CEM), today announced its financial results for the first quarter ended March 31, 2021.

"We are off to a great start to the year, delivering a record revenue beat with continued momentum for large transactions and establishing a new high watermark for our average selling price," said David Meredith, Chief Executive Officer of Everbridge. "Our top-line outperformance flowed through to our bottom line results. During the first quarter, we saw healthy demand for our Critical Event Management SaaS platform and we announced an expansion of our offering to provide the most comprehensive integrated suite of digital and physical resiliency solutions for global organizations in the post-pandemic world. Another recent highlight was the completion of our acquisition of xMatters. The combination of Everbridge and xMatters will digitally transform how organizations manage, respond to, and mitigate IT and cyber incidents, helping organizations protect and enable revenue while reducing expenses."

First Quarter 2021 Financial Highlights

  • Total revenue was $82.2 million, an increase of 40% compared to $58.9 million for the first quarter of 2020.

  • GAAP operating loss was $(18.2) million, compared to $(21.7) million for the first quarter of 2020.

  • Non-GAAP operating income was $2.3 million, compared to non-GAAP operating loss of $(7.2) million for the first quarter of 2020.

  • GAAP net loss was $(21.8) million, compared to $(25.4) million for the first quarter of 2020. GAAP net loss per share was $(0.60), based on 36.4 million basic and diluted weighted average common shares outstanding, compared to $(0.74) for the first quarter of 2020, based on 34.1 million basic and diluted weighted average common shares outstanding.

  • Non-GAAP net income was $8.0 million, compared to non-GAAP net loss of $(5.5) million in the first quarter of 2020. Non-GAAP diluted net income per share was $0.18, based on 43.6 million diluted weighted average common shares outstanding, compared to non-GAAP net loss per share of $(0.16) for the first quarter of 2020, based on 34.1 million basic and diluted weighted average common shares outstanding.

  • Adjusted EBITDA was $5.3 million, compared to a loss of $(4.8) million in the first quarter of 2020.

  • Cash flow from operations was an inflow of $19.8 million, reaching a new record level, compared to an inflow of $0.8 million for the first quarter of 2020.

  • Free cash flow was an inflow of $15.5 million, compared to an outflow of $(1.7) million for the first quarter of 2020.

Recent Business Highlights

  • Ended the first quarter with 5,748 global enterprise customers, up from 5,218 at the end of the first quarter of 2020.

  • Ranked in the top 50 across over 60,000 U.S. companies for each of the four categories of Best Company Outlook, Best Global Culture, Best Sales Team, and Best Places to Work, as awarded by Comparably based on employee sentiment.

  • Signed a new three-year contract with the U.S. Army for its software solutions to power JARVISS, the U.S. DoD’s enterprise system for threat visibility. The new contract also includes two U.S. Air Force (USAF) major and subordinate commands – Air Force Materiel Command (AFMC) and Air Force North (AFNORTH), which committed to adopting JARVISS to advance their respective threat information sharing and analytics capabilities.

  • Announced that one of the world’s largest intergovernmental organizations, deployed across dozens of countries, selected the company’s Vaccine Distribution software platform to help manage the scheduling, tracking and communications of millions of vaccine doses across remote and mobile workers around the globe.

  • Announced expanding presence in Asia Pacific (APAC), supporting customers across 18 countries in APAC leveraging Everbridge’s market-leading CEM platform and Public Warning solution.

  • Expanded its end-to-end market-leading and global Critical Event Management (CEM) SaaS platform, unveiling the most comprehensive integrated suite of digital and physical resiliency solutions for global organizations preparing for ‘the new normal’ in the post-pandemic world.

  • Granted a new patent related to its revolutionary world class Public Warning system. The patent pertains to technology focused on hybrid population alerting systems and intelligent sending of messages in public mobile networks.

  • Announced the next generation of the industry-leading Resident Connection solution designed to expand the reach of first responders and emergency managers by offering the industry’s most comprehensive contact database to deliver critical alerts to residents and businesses in times of crisis.

  • Announced the availability of its new ManageBridge App, including enhanced crisis management and reporting features that allow organizations to effectively anticipate and respond to natural, manmade and digital critical events in real time from a mobile device.

  • Closed an offering of $375 million aggregate principal amount of 0% convertible senior notes due 2026 in a private placement to qualified institutional buyers, with proceeds of approximately $364 million, after deducting fees and estimated expenses; concurrently, used approximately $35 million of the net proceeds to pay the cost of certain related capped call transactions and used approximately $59 million of the net proceeds and issued 1,288,994 shares of common stock to repurchase approximately $58.6 million in aggregate principal amount of Everbridge’s existing 1.50% Convertible Senior Notes due 2022.

  • Signed a definitive agreement and subsequently completed the acquisition of xMatters for a base purchase price of approximately $242.3 million in cash and stock. The combination of the two companies’ technologies and teams creates a powerful IT Alerting and Incident Management offering to support next-generation enterprise-wide digital & physical Fusion Centers.

Financial Outlook

Based on information available as of today, Everbridge is issuing guidance for the second quarter and full year 2021 as indicated below.

Second Quarter 2021

Full Year 2021

Revenue

$

83.7

to

$

84.1

$

358.0

to

$

359.6

Revenue growth

28

%

29

%

32

%

33

%

GAAP net loss

$

(44.4

)

$

(44.0

)

$

(143.7

)

$

(141.7

)

GAAP net loss per share

$

(1.18

)

$

(1.17

)

$

(3.85

)

$

(3.80

)

Non-GAAP net loss

$

(8.8

)

$

(8.4

)

$

(7.4

)

$

(5.8

)

Non-GAAP net loss per share

$

(0.23

)

$

(0.22

)

$

(0.20

)

$

(0.16

)

Adjusted EBITDA

$

(5.2

)

$

(4.8

)

$

7.9

$

8.7

(All figures in millions, except per share data)

Conference Call Information

What:

Everbridge First Quarter 2021 Financial Results Conference Call

When:

Monday, May 10, 2021

Time:

4:30 p.m. ET

Live Call:

(833) 685-0904, domestic

(412) 317-5740, international

Replay:

(877) 344-7529, passcode 10155209, domestic

(412) 317-0088, passcode 10155209, international

Webcast (live & replay):

https://edge.media-server.com/mmc/p/quutkv8r

About Everbridge, Inc.

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 or other incidents such as product recalls or supply-chain interruptions, over 5,700 global customers 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 devices, and track progress on executing response plans. Everbridge serves 8 of the 10 largest U.S. cities, 9 of the 10 largest U.S.-based investment banks, 47 of the 50 busiest North American airports, 9 of the 10 largest global consulting firms, 9 of the 10 largest global automakers, 9 of the 10 largest U.S.-based health care providers, and 8 of the 10 largest technology companies in the world. Everbridge is based in Boston with additional offices in 20 cities around the globe. 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, adjusted EBITDA, and free cash flow.

Non-GAAP operating income/(loss) excludes stock-based compensation, change in fair value of contingent consideration and amortization of acquired intangible assets. Non-GAAP net income/(loss) excludes stock-based compensation, change in fair value of contingent consideration, amortization of acquired intangible assets, accretion of interest on convertible senior notes and loss on extinguishment of convertible notes and capped call modification. Adjusted EBITDA represents net income/(loss) before interest income and interest expense, income tax expense and benefit, depreciation and amortization expense, loss on extinguishment of convertible notes and capped call modification, change in fair value of contingent consideration and stock-based compensation expense. Free cash flow is cash flow from operations, less cash used for capital expenditures and additions to capitalized software development costs.

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 second quarter of 2021 and the full fiscal year 2021. 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; 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 Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 26, 2021. 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)

March 31,

December 31,

2021

2020

Current assets:

Cash and cash equivalents

$

734,752

$

467,171

Restricted cash

4,667

4,667

Accounts receivable, net

84,810

94,376

Prepaid expenses

13,479

11,774

Deferred costs and other current assets

22,004

20,464

Total current assets

859,712

598,452

Property and equipment, net

8,501

7,774

Capitalized software development costs, net

16,787

16,329

Goodwill

234,779

187,411

Intangible assets, net

130,874

113,762

Restricted cash

3,788

3,792

Prepaid expenses

1,574

1,943

Deferred costs and other assets

32,188

31,481

Total assets

$

1,288,203

$

960,944

Current liabilities:

Accounts payable

$

8,829

$

9,698

Accrued payroll and employee related liabilities

25,606

27,674

Accrued expenses

12,047

7,246

Deferred revenue

178,822

165,389

Contingent consideration liabilities

19,331

10,619

Other current liabilities

14,698

15,602

Total current liabilities

259,333

236,228

Long-term liabilities:

Deferred revenue, noncurrent

5,637

4,738

Convertible senior notes

638,165

441,514

Deferred tax liabilities

13,608

10,065

Other long-term liabilities

14,880

16,094

Total liabilities

931,623

708,639

Stockholders' equity:

Common stock

38

35

Additional paid-in capital

671,434

542,776

Accumulated deficit

(315,105

)

(293,316

)

Accumulated other comprehensive income

213

2,810

Total stockholders' equity

356,580

252,305

Total liabilities and stockholders' equity

$

1,288,203

$

960,944

Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(unaudited)

Three Months Ended

March 31,

2021

2020

Revenue

$

82,210

$

58,900

Cost of revenue

25,280

20,889

Gross profit

56,930

38,011

69.25

%

64.53

%

Operating expenses:

Sales and marketing

34,527

29,588

Research and development

18,079

14,172

General and administrative

22,562

15,911

Total operating expenses

75,168

59,671

Operating loss

(18,238

)

(21,660

)

Other expense, net:

Interest and investment income

133

1,573

Interest expense

(6,560

)

(5,922

)

Loss on extinguishment of convertible notes and

capped call modification

(2,888

)

Other expense, net

(49

)

(77

)

Total other expense, net

(9,364

)

(4,426

)

Loss before income taxes

(27,602

)

(26,086

)

Benefit from income taxes

5,813

701

Net loss

$

(21,789

)

$

(25,385

)

Net loss per share attributable to common stockholders:

Basic

$

(0.60

)

$

(0.74

)

Diluted

$

(0.60

)

$

(0.74

)

Weighted-average common shares outstanding:

Basic

36,386,819

34,075,071

Diluted

36,386,819

34,075,071

Other comprehensive loss:

Foreign currency translation adjustment

(2,597

)

(6,520

)

Total comprehensive loss

$

(24,386

)

$

(31,905

)

Stock-based compensation expense included in the above:

(in thousands)

Three Months Ended

March 31,

2021

2020

Cost of revenue

$

999

$

608

Sales and marketing

3,742

3,608

Research and development

2,028

1,874

General and administrative

5,916

4,220

Total stock-based compensation

$

12,685

$

10,310

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended

March 31,

2021

2020

Cash flows from operating activities:

Net loss

$

(21,789

)

$

(25,385

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

10,843

6,656

Amortization of deferred costs

3,722

2,922

Deferred income taxes

(6,701

)

(1,246

)

Accretion of interest on debt

6,313

5,436

Loss on extinguishment of convertible notes and

capped call modification

2,888

Provision for credit losses and sales reserve

1,562

925

Stock-based compensation

12,685

10,310

Other non-cash adjustments

(147

)

Changes in operating assets and liabilities:

Accounts receivable

11,482

445

Prepaid expenses

(1,221

)

(3,057

)

Deferred costs

(3,450

)

(4,720

)

Other assets

(2,768

)

(4,069

)

Accounts payable

(911

)

(1,072

)

Accrued payroll and employee related liabilities

(2,130

)

3,221

Accrued expenses

3,012

1,732

Deferred revenue

8,373

5,118

Other liabilities

(1,955

)

3,585

Net cash provided by operating activities

19,808

801

Cash flows from investing activities:

Capital expenditures

(1,812

)

(524

)

Payment for acquisition of business, net of acquired cash

(32,401

)

(34,941

)

Additions to capitalized software development costs

(2,495

)

(2,004

)

Net cash used in investing activities

(36,708

)

(37,469

)

Cash flows from financing activities:

Restricted stock units withheld to settle employee tax withholding liability

(1,610

)

(400

)

Proceeds from issuance of convertible notes

375,000

Payments of debt issuance costs

(9,562

)

(131

)

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

Proceeds from employee stock purchase plan

2,451

1,710

Proceeds from stock option exercises

1,604

2,989

Net cash provided by financing activities

284,792

4,168

Effect of exchange rates on cash, cash equivalents and restricted cash

(315

)

(666

)

Net increase (decrease) in cash, cash equivalents and restricted cash

267,577

(33,166

)

Cash, cash equivalents and restricted cash—beginning of period

475,630

539,662

Cash, cash equivalents and restricted cash—end of period

$

743,207

$

506,496

Reconciliation of GAAP measures to non-GAAP measures

(in thousands, except share and per share data)

(unaudited)

Three Months Ended

March 31,

2021

2020

Cost of revenue

$

25,280

$

20,889

Amortization of acquired intangibles

(2,604

)

(739

)

Stock-based compensation

(999

)

(608

)

Non-GAAP cost of revenue

$

21,677

$

19,542

Gross profit

$

56,930

$

38,011

Amortization of acquired intangibles

2,604

739

Stock-based compensation

999

608

Non-GAAP gross profit

$

60,533

$

39,358

Non-GAAP gross margin

73.6

%

66.8

%

Sales and marketing

$

34,527

$

29,588

Stock-based compensation

(3,742

)

(3,608

)

Non-GAAP sales and marketing

$

30,785

$

25,980

Research and development

$

18,079

$

14,172

Stock-based compensation

(2,028

)

(1,874

)

Non-GAAP research and development

$

16,051

$

12,298

General and administrative

$

22,562

$

15,911

Amortization of acquired intangibles

(5,255

)

(3,407

)

Change in fair value of contingent consideration

(42

)

Stock-based compensation

(5,916

)

(4,220

)

Non-GAAP general and administrative

$

11,349

$

8,284

Total operating expenses

$

75,168

$

59,671

Amortization of acquired intangibles

(5,255

)

(3,407

)

Change in fair value of contingent consideration

(42

)

Stock-based compensation

(11,686

)

(9,702

)

Non-GAAP operating expenses

$

58,185

$

46,562

Operating loss

$

(18,238

)

$

(21,660

)

Amortization of acquired intangibles

7,859

4,146

Change in fair value of contingent consideration

42

Stock-based compensation

12,685

10,310

Non-GAAP operating income (loss)

$

2,348

$

(7,204

)

Net loss

$

(21,789

)

$

(25,385

)

Amortization of acquired intangibles

7,859

4,146

Change in fair value of contingent consideration

42

Stock-based compensation

12,685

10,310

Accretion of interest on convertible senior notes

6,313

5,436

Loss on extinguishment of convertible notes and

capped call modification

2,888

Non-GAAP net income (loss)

$

7,998

$

(5,493

)

Non-GAAP net income (loss) per share:

Basic

$

0.22

$

(0.16

)

Diluted

$

0.18

$

(0.16

)

Weighted-average common shares outstanding:

Basic

36,386,819

34,075,071

Diluted

43,554,183

34,075,071

Reconciliation of GAAP measures to non-GAAP measures (Continued)

(in thousands)

(unaudited)

Three Months Ended

March 31,

2021

2020

Net loss

$

(21,789

)

$

(25,385

)

Interest and investment expense, net

6,427

4,349

Benefit from income taxes

(5,813

)

(701

)

Depreciation and amortization

10,843

6,656

EBITDA

(10,332

)

(15,081

)

Loss on extinguishment of convertible notes and

capped call modification

2,888

Change in fair value of contingent consideration

42

Stock-based compensation

12,685

10,310

Adjusted EBITDA

$

5,283

$

(4,771

)

Net cash provided by operating activities

$

19,808

$

801

Capital expenditures

(1,812

)

(524

)

Capitalized software development costs

(2,495

)

(2,004

)

Free cash flow

$

15,501

$

(1,727

)

Remaining Performance Obligations

(in millions)

Remaining Performance Obligations

Remaining Performance Obligations
Next Twelve Months

Subscription and other contracts

$

367

$

223

Professional services contracts

11

10

Financial Outlook

(in millions, except share and per share data)

Three Months Ended

Year Ended

June 30, 2021

December 31, 2021

Low End

High End

Low End

High End

Net loss

$

(44.4

)

$

(44.0

)

$

(143.7

)

$

(141.7

)

Amortization of acquired intangibles

9.5

9.5

35.0

35.0

Accretion of interest on convertible senior notes

9.4

9.4

35.3

35.3

Stock-based compensation

16.7

16.7

66.0

65.6

Non-GAAP net loss

$

(8.8

)

$

(8.4

)

$

(7.4

)

$

(5.8

)

Weighted average common shares outstanding:

Basic

37,600,000

37,600,000

37,300,000

37,300,000

Diluted

37,600,000

37,600,000

37,300,000

37,300,000

Net loss per share

$

(1.18

)

$

(1.17

)

$

(3.85

)

$

(3.80

)

Non-GAAP net loss per share

$

(0.23

)

$

(0.22

)

$

(0.20

)

$

(0.16

)

Net loss

$

(44.4

)

$

(44.0

)

$

(143.7

)

$

(141.7

)

Interest expense, net

9.6

9.6

35.6

35.6

Income taxes, net

0.1

0.1

(4.2

)

(4.0

)

Depreciation and amortization

12.8

12.8

54.2

53.2

EBITDA

(21.9

)

(21.5

)

(58.1

)

(56.9

)

Stock-based compensation

16.7

16.7

66.0

65.6

Adjusted EBITDA

$

(5.2

)

$

(4.8

)

$

7.9

$

8.7

View source version on businesswire.com: https://www.businesswire.com/news/home/20210510005909/en/

Contacts

Everbridge Contacts:
Jeff Young
Media Relations
jeff.young@everbridge.com
781-859-4116

Joshua Young
Investor Relations
joshua.young@everbridge.com
781-236-3695

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