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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, 2022

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 7, 2022, the registrant had 39,925,589 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

 

37

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

53

 

 

 

 

Item 4.

Controls and Procedures

 

54

 

 

 

 

PART II.

OTHER INFORMATION

 

56

 

 

 

 

Item 1.

Legal Proceedings

 

56

 

 

 

 

Item 1A.

Risk Factors

 

56

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

57

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

57

 

 

 

 

Item 4.

Mine Safety Disclosures

 

57

 

 

 

 

Item 5.

Other Information

 

57

 

 

 

 

Item 6.

Exhibits

 

59

 

 

 

Signatures

 

60

 

 

 

 

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, 2022

 

 

December 31, 2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

486,906

 

 

$

488,035

 

Restricted cash

 

 

1,985

 

 

 

3,880

 

Accounts receivable, net

 

 

93,330

 

 

 

120,995

 

Prepaid expenses

 

 

14,064

 

 

 

13,740

 

Deferred costs and other current assets

 

 

28,023

 

 

 

28,469

 

Total current assets

 

 

624,308

 

 

 

655,119

 

Property and equipment, net

 

 

9,387

 

 

 

12,185

 

Capitalized software development costs, net

 

 

27,623

 

 

 

22,720

 

Goodwill

 

 

492,366

 

 

 

531,163

 

Intangible assets, net

 

 

178,510

 

 

 

219,319

 

Restricted cash

 

 

782

 

 

 

843

 

Prepaid expenses

 

 

1,575

 

 

 

1,916

 

Deferred costs and other assets

 

 

31,791

 

 

 

35,750

 

Total assets

 

$

1,366,342

 

 

$

1,479,015

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

12,397

 

 

$

16,002

 

Accrued payroll and employee related liabilities

 

 

28,392

 

 

 

36,725

 

Accrued expenses

 

 

11,946

 

 

 

13,884

 

Deferred revenue

 

 

220,488

 

 

 

223,579

 

Convertible senior notes

 

 

8

 

 

 

8

 

Other current liabilities

 

 

10,342

 

 

 

14,132

 

Total current liabilities

 

 

283,573

 

 

 

304,330

 

Long-term liabilities:

 

 

 

 

 

 

Deferred revenue, noncurrent

 

 

12,550

 

 

 

14,261

 

Convertible senior notes

 

 

812,023

 

 

 

665,695

 

Deferred tax liabilities

 

 

4,060

 

 

 

16,082

 

Other long-term liabilities

 

 

8,946

 

 

 

15,958

 

Total liabilities

 

 

1,121,152

 

 

 

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 September 30, 2022 and December 31, 2021, respectively

 

 

 

 

 

 

Common stock, $0.001 par value, 100,000,000 shares authorized, 39,886,939 and 39,389,733
   shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

 

40

 

 

 

39

 

Additional paid-in capital

 

 

714,761

 

 

 

853,664

 

Accumulated deficit

 

 

(418,285

)

 

 

(388,112

)

Accumulated other comprehensive loss

 

 

(51,326

)

 

 

(2,902

)

Total stockholders’ equity

 

 

245,190

 

 

 

462,689

 

Total liabilities and stockholders’ equity

 

$

1,366,342

 

 

$

1,479,015

 

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

$

111,401

 

 

$

96,746

 

 

$

314,762

 

 

$

265,605

 

Cost of revenue

 

 

35,447

 

 

 

30,310

 

 

 

100,543

 

 

 

83,255

 

Gross profit

 

 

75,954

 

 

 

66,436

 

 

 

214,219

 

 

 

182,350

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

46,580

 

 

 

42,426

 

 

 

133,755

 

 

 

118,436

 

Research and development

 

 

25,177

 

 

 

23,197

 

 

 

75,355

 

 

 

61,527

 

General and administrative

 

 

23,357

 

 

 

19,904

 

 

 

72,786

 

 

 

67,130

 

Restructuring

 

 

37

 

 

 

 

 

 

6,779

 

 

 

 

Total operating expenses

 

 

95,151

 

 

 

85,527

 

 

 

288,675

 

 

 

247,093

 

Operating loss

 

 

(19,197

)

 

 

(19,091

)

 

 

(74,456

)

 

 

(64,743

)

Other expense, net:

 

 

 

 

 

 

 

 

 

 

 

 

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

)

 

 

(79,089

)

 

 

(94,633

)

Benefit from (provision for) income taxes

 

 

(25

)

 

 

745

 

 

 

1,754

 

 

 

10,345

 

Net loss

 

$

(22,080

)

 

$

(28,678

)

 

$

(77,335

)

 

$

(84,288

)

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.56

)

 

$

(0.75

)

 

$

(1.95

)

 

$

(2.24

)

Diluted

 

$

(0.56

)

 

$

(0.75

)

 

$

(1.95

)

 

$

(2.24

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

39,746,242

 

 

 

38,407,313

 

 

 

39,583,684

 

 

 

37,610,147

 

Diluted

 

 

39,746,242

 

 

 

38,407,313

 

 

 

39,583,684

 

 

 

37,610,147

 

 

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net loss

 

$

(22,080

)

 

$

(28,678

)

 

$

(77,335

)

 

$

(84,288

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment, net of taxes

 

 

(19,879

)

 

 

(3,095

)

 

 

(48,424

)

 

 

(4,461

)

Total comprehensive loss

 

$

(41,959

)

 

$

(31,773

)

 

$

(125,759

)

 

$

(88,749

)

 

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, 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

)

 

 

(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

 

Stock-based compensation

 

 

 

 

 

 

 

 

16,578

 

 

 

 

 

 

 

 

 

16,578

 

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

 

 

219,765

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock award shares withheld to settle employee tax
   withholding liability

 

 

(50,305

)

 

 

 

 

 

(1,724

)

 

 

 

 

 

 

 

 

(1,724

)

Exercise of stock options

 

 

3,286

 

 

 

 

 

 

65

 

 

 

 

 

 

 

 

 

65

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,185

)

 

 

(23,185

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(36,182

)

 

 

 

 

 

(36,182

)

Balance at June 30, 2022

 

 

39,677,100

 

 

 

40

 

 

 

690,903

 

 

 

(396,205

)

 

 

(31,447

)

 

 

263,291

 

Modification of 2022 Notes capped call options and resulting reclassification to derivative asset