Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Everbridge Announces Fourth Quarter and Full Year 2023 Financial Results By: Everbridge, Inc. via Business Wire February 26, 2024 at 16:02 PM EST Everbridge, Inc. (Nasdaq: EVBG), the global leader in critical event management (CEM) and national public warning solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2023. Revenue for the fourth quarter was down 1% year-over-year to $115.8 million, and GAAP net loss was $(19.3) million, compared to net income of $16.2 million for the fourth quarter of 2022. Revenue for the full year was up 4% year-over-year to $448.8 million, and GAAP net loss was $(47.3) million, compared to $(61.2) million for 2022. Fourth Quarter 2023 Financial Highlights Total revenue was $115.8 million, a decrease of 1% compared to $117.1 million for the fourth quarter of 2022. Revenue from subscription services was $105.6 million, an increase of 4% compared to $101.4 million for the fourth quarter of 2022. Revenue from professional services, software licenses and other was $10.2 million, a decrease of 35% compared to $15.7 million for the fourth quarter of 2022. GAAP operating loss was $(17.8) million, compared to $(9.7) million for the fourth quarter of 2022. Non-GAAP operating income was $20.7 million, compared to $15.6 million for the fourth quarter of 2022. GAAP net loss was $(19.3) million, compared to GAAP net income of $16.2 million for the fourth quarter of 2022. GAAP diluted net loss per share was $(0.47) based on 41.1 million diluted weighted average common shares outstanding, compared to $(0.15) for the fourth quarter of 2022, based on 45.3 million diluted weighted average common shares outstanding. Non-GAAP net income was $20.2 million, compared to $18.7 million for the fourth quarter of 2022. Non-GAAP diluted net income per share was $0.47, based on 43.4 million diluted weighted average common shares outstanding, compared to $0.41 for the fourth quarter of 2022, based on 45.6 million diluted weighted average common shares outstanding. Adjusted EBITDA was $27.0 million, compared to $20.6 million for the fourth quarter of 2022. Cash flow from operations was an inflow of $29.6 million, compared to $4.4 million for the fourth quarter of 2022. Adjusted for one-time cash payments related to our 2022 Strategic Realignment program, adjusted free cash flow was an inflow of $26.7 million, compared to $4.6 million for the fourth quarter of 2022. Annualized Recurring Revenue (ARR) was $408 million and 55 CEM customers were added during the quarter. Deal metrics: 48 deals over $100,000; 3 deals over $500,000; 1 deal over $1 million. Full Year 2023 Financial Highlights Total revenue was $448.8 million, an increase of 4% compared to $431.9 million for 2022. Revenue from subscription services was $410.5 million, an increase of 7% compared to $384.6 million for 2022. Revenue from professional services, software licenses and other was $38.3 million, a decrease of 19% compared to $47.3 million for 2022. GAAP operating loss was $(61.4) million, compared to $(84.2) million for 2022. Non-GAAP operating income was $62.1 million, compared to $24.7 million for 2022. GAAP net loss was $(47.3) million, compared to $(61.2) million for 2022. GAAP diluted net loss per share was $(1.31) based on 43.6 million diluted weighted average common shares outstanding, compared to $(1.76) for 2022, based on 45.6 million diluted weighted average common shares outstanding. Non-GAAP net income was $64.7 million compared to $31.9 million for 2022. Non-GAAP diluted net income per share was $1.48, based on 43.8 million diluted weighted average common shares outstanding, compared to $0.70 for 2022, based on 45.9 million diluted weighted average common shares outstanding. Adjusted EBITDA was $84.9 million, compared to $43.1 million for 2022. Cash flow from operations was an inflow of $72.6 million, compared to $20.2 million for 2022. Adjusted for one-time cash payments related to our 2022 Strategic Realignment program, adjusted free cash flow was an inflow of $63.8 million, compared to $13.9 million for 2022. About Everbridge Everbridge (Nasdaq: EVBG) empowers enterprises and government organizations to anticipate, mitigate, respond to, and recover stronger from critical events. In today’s unpredictable world, resilient organizations minimize impact to people and operations, absorb stress, and return to productivity faster when deploying critical event management (CEM) technology. Everbridge digitizes organizational resilience by combining intelligent automation with the industry’s most comprehensive risk data to Keep People Safe and Organizations Running™. For more information, visit https://www.everbridge.com/, read the company blog, and follow on LinkedIn. Everbridge… Empowering Resilience. Key Performance Metric Annualized Recurring Revenue (ARR) is defined as the expected recurring revenue in the next twelve months from active customer contracts, assuming no increases or reductions in the subscriptions from that cohort of customers. Investors should not place undue reliance on ARR as an indicator of future or expected results. Our presentation of this metric may differ from similarly titled metrics presented by other companies and therefore comparability may be limited. Non-GAAP Financial Measures This press release contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income/(loss), non-GAAP net income/(loss), non-GAAP net income/(loss) per share, EBITDA, adjusted EBITDA, free cash flow, adjusted free cash flow and adjusted EBITDA margin. Non-GAAP operating income/(loss) excludes amortization of acquired intangible assets, stock-based compensation, costs related to the 2022 Strategic Realignment, Anvil legal dispute accrual and change in fair value of contingent consideration. Non-GAAP net income/(loss) excludes amortization of acquired intangible assets, stock-based compensation, costs related to the 2022 Strategic Realignment, Anvil legal dispute accrual, change in fair value of contingent consideration, accretion of interest on convertible senior notes, gain (loss) on extinguishment of debt, 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 stock-based compensation expense, costs related to the 2022 Strategic Realignment, Anvil legal dispute accrual, change in fair value of contingent consideration and gain (loss) on extinguishment of debt, capped call modification and change in fair value. 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 may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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 successfully integrate businesses and assets that we may acquire; 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; 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, 2023, which we expect to file with the SEC on or before February 29, 2024 and other subsequent filings with the SEC. 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) December 31, 2023 2022 Current assets: Cash and cash equivalents $ 122,440 $ 198,725 Restricted cash 2,120 2,046 Accounts receivable, net 119,389 119,986 Prepaid expenses 12,880 13,133 Assets held for sale — 6,485 Deferred costs and other current assets 36,604 31,866 Total current assets 293,433 372,241 Property and equipment, net 8,305 8,993 Capitalized software development costs, net 31,630 27,370 Goodwill 517,184 508,781 Intangible assets, net 130,264 166,177 Restricted cash 811 823 Prepaid expenses 902 1,709 Deferred costs and other assets 43,356 39,570 Total assets $ 1,025,885 $ 1,125,664 Current liabilities: Accounts payable $ 15,013 $ 10,854 Accrued payroll and employee related liabilities 32,824 31,175 Accrued expenses 36,346 13,566 Deferred revenue 242,789 233,106 Convertible senior notes, current 63,110 — Liabilities held for sale — 2,062 Other current liabilities 8,918 10,644 Total current liabilities 399,000 301,407 Long-term liabilities: Deferred revenue, noncurrent 6,429 9,278 Convertible senior notes, noncurrent 296,561 500,298 Deferred tax liabilities 4,318 6,236 Other long-term liabilities 17,268 19,334 Total liabilities 723,576 836,553 Stockholders' equity: Common stock 41 40 Additional paid-in capital 771,779 721,143 Accumulated deficit (449,429 ) (402,124 ) Accumulated other comprehensive loss (20,082 ) (29,948 ) Total stockholders' equity 302,309 289,111 Total liabilities and stockholders' equity $ 1,025,885 $ 1,125,664 Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except share and per share data) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Revenue $ 115,760 $ 117,130 $ 448,788 $ 431,892 Cost of revenue 33,346 34,391 131,487 134,934 Gross profit 82,414 82,739 317,301 296,958 Gross margin 71.19 % 70.64 % 70.70 % 68.76 % Operating expenses: Sales and marketing 37,536 39,866 159,092 173,621 Research and development 21,999 20,631 95,468 95,986 General and administrative 39,886 26,579 120,519 99,365 Restructuring 827 5,390 3,621 12,169 Total operating expenses 100,248 92,466 378,700 381,141 Operating loss (17,834 ) (9,727 ) (61,399 ) (84,183 ) Other income, net Interest and investment income 958 2,902 7,120 5,697 Interest expense (538 ) (1,187 ) (2,796 ) (5,106 ) Gain on extinguishment of convertible notes, capped call modification and change in fair value — 24,013 12,658 19,243 Other income (expense), net 647 (484 ) 820 777 Total other income, net 1,067 25,244 17,802 20,611 Income (loss) before income taxes (16,767 ) 15,517 (43,597 ) (63,572 ) (Provision for) benefit from income taxes (2,523 ) 644 (3,708 ) 2,398 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Net income (loss) per share attributable to common stockholders: Basic $ (0.47 ) $ 0.40 $ (1.16 ) $ (1.54 ) Diluted $ (0.47 ) $ (0.15 ) $ (1.31 ) $ (1.76 ) Weighted-average common shares outstanding: Basic 41,055,293 39,967,553 40,668,327 39,680,440 Diluted 41,055,293 45,338,189 43,622,341 45,583,459 Other comprehensive income (loss): Foreign currency translation adjustment 12,905 21,378 9,866 (27,046 ) Total comprehensive income (loss) $ (6,385 ) $ 37,539 $ (37,439 ) $ (88,220 ) Stock-based compensation expense included in the above: (in thousands) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Cost of revenue $ 1,414 $ 1,192 $ 6,171 $ 5,468 Sales and marketing 3,967 1,597 17,313 15,917 Research and development 1,919 600 12,225 9,967 General and administrative 3,412 4,529 13,180 16,268 Total stock-based compensation $ 10,712 $ 7,918 $ 48,889 $ 47,620 Consolidated Statements of Cash Flows (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Cash flows from operating activities: Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 14,527 15,347 58,815 60,600 Amortization of deferred costs 5,090 4,886 19,568 18,251 Deferred income taxes (875 ) 1,949 (1,912 ) (5,183 ) Accretion of interest on convertible senior notes 518 1,069 2,640 4,561 (Gain) loss on disposal of assets (356 ) (213 ) (708 ) 727 Gain on extinguishment of convertible notes, capped call modification and change in fair value — (24,013 ) (12,658 ) (19,243 ) Provision for (benefit from) credit losses and sales reserve (202 ) 1,122 2,001 410 Stock-based compensation 10,712 7,918 48,889 47,620 Other non-cash adjustments — — — (57 ) Changes in operating assets and liabilities: Accounts receivable (26,503 ) (29,608 ) (1,064 ) (848 ) Prepaid expenses 2,551 543 984 560 Deferred costs (9,747 ) (6,906 ) (28,562 ) (23,063 ) Other assets 3,027 (11,118 ) 947 (3,527 ) Accounts payable 2,251 (1,683 ) 4,187 (4,855 ) Accrued payroll and employee related liabilities 7,752 2,783 1,649 (4,136 ) Accrued expenses 19,602 1,629 21,741 992 Deferred revenue 18,763 13,424 6,878 8,746 Other liabilities 1,801 11,064 (3,515 ) (214 ) Net cash provided by operating activities 29,621 4,354 72,575 20,167 Cash flows from investing activities: Capital expenditures (1,093 ) (511 ) (5,217 ) (3,462 ) Proceeds from landlord reimbursement — — 88 1,219 Proceeds from sale of assets — — 4,368 — Payment for acquisition of business, net of acquired cash — (336 ) — (1,585 ) Additions to capitalized software development costs (3,836 ) (3,456 ) (16,540 ) (15,065 ) Net cash used in investing activities (4,929 ) (4,303 ) (17,301 ) (18,893 ) Cash flows from financing activities: Repurchase of convertible notes — (288,761 ) (129,579 ) (288,761 ) Proceeds from termination of convertible notes capped call hedge 33 1,312 33 1,312 Payments associated with shares withheld to settle employee tax withholding liability (1,666 ) (2,098 ) (7,885 ) (6,307 ) Proceeds from employee stock purchase plan — — 4,291 3,165 Proceeds from stock option exercises 19 45 1,319 144 Other (21 ) (19 ) (77 ) (73 ) Net cash used in financing activities (1,635 ) (289,521 ) (131,898 ) (290,520 ) Effect of exchange rates on cash, cash equivalents and restricted cash 1,767 1,391 401 (1,918 ) Net increase (decrease) in cash, cash equivalents and restricted cash 24,824 (288,079 ) (76,223 ) (291,164 ) Cash, cash equivalents and restricted cash—beginning of period 100,547 489,673 201,594 492,758 Cash, cash equivalents and restricted cash—end of period $ 125,371 $ 201,594 $ 125,371 $ 201,594 Reconciliation of GAAP measures to non-GAAP measures (unaudited) The following table reconciles our GAAP gross profit to non-GAAP gross profit (in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Gross profit $ 82,414 $ 82,739 $ 317,301 $ 296,958 Amortization of acquired intangibles 1,915 2,602 8,445 11,657 Stock-based compensation 1,414 1,192 6,171 5,468 2022 Strategic Realignment 24 259 814 953 Non-GAAP gross profit $ 85,767 $ 86,792 $ 332,731 $ 315,036 The following table reconciles our GAAP gross margin to non-GAAP gross margin(1): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Gross margin 71.2 % 70.6 % 70.7 % 68.8 % Amortization of acquired intangibles margin 1.7 % 2.2 % 1.9 % 2.7 % Stock-based compensation margin 1.2 % 1.0 % 1.4 % 1.3 % 2022 Strategic Realignment margin 0.0 % 0.2 % 0.2 % 0.2 % Non-GAAP gross margin 74.1 % 74.1 % 74.1 % 72.9 % (1) Columns may not add up due to rounding. The following table reconciles our GAAP operating loss to non-GAAP operating income. For comparability purposes, non-GAAP operating income results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation (in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Operating loss $ (17,834 ) $ (9,727 ) $ (61,399 ) $ (84,183 ) Amortization of acquired intangibles 8,852 9,854 36,840 42,982 Stock-based compensation 10,712 7,918 48,889 47,620 2022 Strategic Realignment 3,015 6,539 13,751 17,357 Anvil legal dispute accrual 15,936 1,000 24,000 1,000 Change in fair value of contingent consideration — — — (57 ) Non-GAAP operating income $ 20,681 $ 15,584 $ 62,081 $ 24,719 The following table reconciles our GAAP net income (loss) to non-GAAP net income. For comparability purposes, non-GAAP net income results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation (in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Amortization of acquired intangibles 8,852 9,854 36,840 42,982 Stock-based compensation 10,712 7,918 48,889 47,620 2022 Strategic Realignment 3,015 6,537 13,733 17,358 Anvil legal dispute accrual 15,936 1,000 24,000 1,000 Change in fair value of contingent consideration — — — (57 ) Accretion of interest on convertible senior notes 518 1,069 2,640 4,561 �� Gain on extinguishment of convertible notes, capped call modification and change in fair value — (24,013 ) (12,658 ) (19,243 ) Income tax adjustments 491 170 (1,427 ) (1,151 ) Non-GAAP net income $ 20,234 $ 18,696 $ 64,712 $ 31,896 Reconciliation of GAAP measures to non-GAAP measures (Continued) (unaudited) The following table reconciles our GAAP net income (loss) per basic share to non-GAAP net income per basic share. For comparability purposes, non-GAAP net income per basic share results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation(1): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) per basic share⁽ᵃ⁾ $ (0.47 ) $ 0.40 $ (1.16 ) $ (1.54 ) Amortization of acquired intangibles per basic share⁽ᵇ⁾ 0.22 0.25 0.91 1.08 Stock-based compensation per basic share⁽ᵇ⁾ 0.26 0.20 1.20 1.20 2022 Strategic Realignment per basic share⁽ᵇ⁾ 0.07 0.16 0.34 0.44 Anvil legal dispute accrual per basic share⁽ᵇ⁾ 0.39 0.03 0.59 0.03 Change in fair value of contingent consideration per basic share⁽ᵇ⁾ — — — — Accretion of interest on convertible senior notes per basic share⁽ᵇ⁾ 0.01 0.03 0.06 0.11 Gain on extinguishment of convertible notes, capped call modification and change in fair value per basic share⁽ᵇ⁾ — (0.60 ) (0.31 ) (0.48 ) Income tax adjustments per basic share⁽ᵇ⁾ 0.01 — (0.04 ) (0.03 ) Non-GAAP net income per basic share⁽ᵇ⁾ $ 0.49 $ 0.47 $ 1.59 $ 0.80 (1) Amounts may not add up due to rounding. The following table reconciles our GAAP net loss per diluted share to non-GAAP net income per diluted share. For comparability purposes, non-GAAP net income per diluted share results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation(1): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net loss per diluted share⁽ᵃ⁾ $ (0.47 ) $ (0.15 ) $ (1.31 ) $ (1.76 ) Amortization of acquired intangibles per diluted share⁽ᵇ⁾ 0.20 0.22 0.84 0.94 Stock-based compensation per diluted share⁽ᵇ⁾ 0.25 0.17 1.12 1.04 2022 Strategic Realignment per diluted share⁽ᵇ⁾ 0.07 0.14 0.31 0.38 Anvil legal dispute accrual per diluted share⁽ᵇ⁾ 0.37 0.02 0.55 0.02 Change in fair value of contingent consideration per diluted share⁽ᵇ⁾ — — — — Accretion of interest on convertible senior notes per diluted share⁽ᵇ⁾ 0.01 0.02 0.06 0.10 Gain on extinguishment of convertible notes, capped call modification and change in fair value per diluted share⁽ᵇ⁾ — (0.53 ) (0.29 ) (0.42 ) Income tax adjustments per diluted share⁽ᵇ⁾ 0.01 — (0.03 ) (0.03 ) Non-GAAP net income per diluted share⁽ᵇ⁾ $ 0.47 $ 0.41 $ 1.48 $ 0.70 (1) Amounts may not add up due to differences in GAAP and non-GAAP net income (loss) and diluted shares. (a) GAAP weighted-average common shares outstanding: Basic 41,055,293 39,967,553 40,668,327 39,680,440 Diluted 41,055,293 45,338,189 43,622,341 45,583,459 (b) Non-GAAP weighted-average common shares outstanding: Basic 41,055,293 39,967,553 40,668,327 39,680,440 Diluted 43,355,513 45,592,690 43,770,884 45,867,120 GAAP and Non-GAAP diluted weighted-average shares include dilutive potential common shares related to convertible notes and stock-based compensation grants. Reconciliation of GAAP measures to non-GAAP measures (Continued) (unaudited) The following tables reconcile our net income (loss) to EBITDA and adjusted EBITDA, net cash provided by operating activities to free cash flow and adjusted free cash flow and net income (loss) margin to EBITDA margin and adjusted EBITDA margin. For comparability purposes, adjusted EBITDA and adjusted EBITDA margin results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute and to conform to the current year presentation (dollars in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Interest and investment expense, net (420 ) (1,715 ) (4,324 ) (591 ) Provision for (benefit from) income taxes 2,523 (644 ) 3,708 (2,398 ) Depreciation and amortization 14,527 15,347 58,815 60,600 EBITDA (2,660 ) 29,149 10,894 (3,563 ) Stock-based compensation 10,712 7,918 48,889 47,620 2022 Strategic Realignment 3,015 6,537 13,733 17,358 Anvil legal dispute accrual 15,936 1,000 24,000 1,000 Change in fair value of contingent consideration — — — (57 ) Gain on extinguishment of convertible notes, capped call modification and change in fair value — (24,013 ) (12,658 ) (19,243 ) Adjusted EBITDA $ 27,003 $ 20,591 $ 84,858 $ 43,115 Net cash provided by operating activities $ 29,621 $ 4,354 $ 72,575 $ 20,167 Capital expenditures (1,093 ) (511 ) (5,217 ) (3,462 ) Capitalized software development costs (3,836 ) (3,456 ) (16,540 ) (15,065 ) Free cash flow 24,692 387 50,818 1,640 Cash payments for 2022 Strategic Realignment 1,989 4,187 12,940 12,266 Adjusted free cash flow $ 26,681 $ 4,574 $ 63,758 $ 13,906 Net income (loss) margin (16.7 )% 13.8 % (10.5 )% (14.2 )% Interest and investment expense, net margin (0.4 )% (1.5 )% (1.0 )% (0.1 )% Provision for (benefit from) income taxes margin 2.2 % (0.5 )% 0.8 % (0.6 )% Depreciation and amortization margin 12.5 % 13.1 % 13.1 % 14.0 % EBITDA margin (2.3 )% 24.9 % 2.4 % (0.8 )% Stock-based compensation margin 9.3 % 6.8 % 10.9 % 11.0 % 2022 Strategic Realignment margin 2.6 % 5.6 % 3.1 % 4.0 % Anvil legal dispute accrual margin 13.8 % 0.9 % 5.3 % 0.2 % Change in fair value of contingent consideration margin — — — — Gain on extinguishment of convertible notes, capped call modification and change in fair value margin — (20.5 )% (2.8 )% (4.5 )% Adjusted EBITDA margin 23.3 % 17.6 % 18.9 % 10.0 % (margin % columns may not add up due to rounding) Remaining Performance Obligations as of December 31, 2023 (in millions) Remaining Performance Obligations Remaining Performance Obligations Next Twelve Months Subscription and other contracts $ 494 $ 305 Professional services contracts 10 9 Reconciliation of Basic and Diluted Net Income (Loss) per Share The following table summarizes the computations of basic net income (loss) per share and diluted net loss per share (in thousands, except share and per share data): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Dilutive effect of convertible notes, net of tax — (22,804 ) (9,682 ) (18,890 ) Adjusted net loss $ (19,290 ) $ (6,643 ) $ (56,987 ) $ (80,064 ) Weighted-average common stock outstanding — basic 41,055,293 39,967,553 40,668,327 39,680,440 Dilutive potential common shares related to convertible notes — 5,370,636 2,954,014 5,903,019 Weighted-average common stock outstanding — diluted 41,055,293 45,338,189 43,622,341 45,583,459 Basic net income (loss) per share $ (0.47 ) $ 0.40 $ (1.16 ) $ (1.54 ) Diluted net loss per share $ (0.47 ) $ (0.15 ) $ (1.31 ) $ (1.76 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20240226895912/en/Contacts Everbridge: Investors: Nandan Amladi Investor Relations nandan.amladi@everbridge.com 617-665-7197 Media: Jeff Young Media Relations jeff.young@everbridge.com 781-859-4116 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Everbridge Announces Fourth Quarter and Full Year 2023 Financial Results By: Everbridge, Inc. via Business Wire February 26, 2024 at 16:02 PM EST Everbridge, Inc. (Nasdaq: EVBG), the global leader in critical event management (CEM) and national public warning solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2023. Revenue for the fourth quarter was down 1% year-over-year to $115.8 million, and GAAP net loss was $(19.3) million, compared to net income of $16.2 million for the fourth quarter of 2022. Revenue for the full year was up 4% year-over-year to $448.8 million, and GAAP net loss was $(47.3) million, compared to $(61.2) million for 2022. Fourth Quarter 2023 Financial Highlights Total revenue was $115.8 million, a decrease of 1% compared to $117.1 million for the fourth quarter of 2022. Revenue from subscription services was $105.6 million, an increase of 4% compared to $101.4 million for the fourth quarter of 2022. Revenue from professional services, software licenses and other was $10.2 million, a decrease of 35% compared to $15.7 million for the fourth quarter of 2022. GAAP operating loss was $(17.8) million, compared to $(9.7) million for the fourth quarter of 2022. Non-GAAP operating income was $20.7 million, compared to $15.6 million for the fourth quarter of 2022. GAAP net loss was $(19.3) million, compared to GAAP net income of $16.2 million for the fourth quarter of 2022. GAAP diluted net loss per share was $(0.47) based on 41.1 million diluted weighted average common shares outstanding, compared to $(0.15) for the fourth quarter of 2022, based on 45.3 million diluted weighted average common shares outstanding. Non-GAAP net income was $20.2 million, compared to $18.7 million for the fourth quarter of 2022. Non-GAAP diluted net income per share was $0.47, based on 43.4 million diluted weighted average common shares outstanding, compared to $0.41 for the fourth quarter of 2022, based on 45.6 million diluted weighted average common shares outstanding. Adjusted EBITDA was $27.0 million, compared to $20.6 million for the fourth quarter of 2022. Cash flow from operations was an inflow of $29.6 million, compared to $4.4 million for the fourth quarter of 2022. Adjusted for one-time cash payments related to our 2022 Strategic Realignment program, adjusted free cash flow was an inflow of $26.7 million, compared to $4.6 million for the fourth quarter of 2022. Annualized Recurring Revenue (ARR) was $408 million and 55 CEM customers were added during the quarter. Deal metrics: 48 deals over $100,000; 3 deals over $500,000; 1 deal over $1 million. Full Year 2023 Financial Highlights Total revenue was $448.8 million, an increase of 4% compared to $431.9 million for 2022. Revenue from subscription services was $410.5 million, an increase of 7% compared to $384.6 million for 2022. Revenue from professional services, software licenses and other was $38.3 million, a decrease of 19% compared to $47.3 million for 2022. GAAP operating loss was $(61.4) million, compared to $(84.2) million for 2022. Non-GAAP operating income was $62.1 million, compared to $24.7 million for 2022. GAAP net loss was $(47.3) million, compared to $(61.2) million for 2022. GAAP diluted net loss per share was $(1.31) based on 43.6 million diluted weighted average common shares outstanding, compared to $(1.76) for 2022, based on 45.6 million diluted weighted average common shares outstanding. Non-GAAP net income was $64.7 million compared to $31.9 million for 2022. Non-GAAP diluted net income per share was $1.48, based on 43.8 million diluted weighted average common shares outstanding, compared to $0.70 for 2022, based on 45.9 million diluted weighted average common shares outstanding. Adjusted EBITDA was $84.9 million, compared to $43.1 million for 2022. Cash flow from operations was an inflow of $72.6 million, compared to $20.2 million for 2022. Adjusted for one-time cash payments related to our 2022 Strategic Realignment program, adjusted free cash flow was an inflow of $63.8 million, compared to $13.9 million for 2022. About Everbridge Everbridge (Nasdaq: EVBG) empowers enterprises and government organizations to anticipate, mitigate, respond to, and recover stronger from critical events. In today’s unpredictable world, resilient organizations minimize impact to people and operations, absorb stress, and return to productivity faster when deploying critical event management (CEM) technology. Everbridge digitizes organizational resilience by combining intelligent automation with the industry’s most comprehensive risk data to Keep People Safe and Organizations Running™. For more information, visit https://www.everbridge.com/, read the company blog, and follow on LinkedIn. Everbridge… Empowering Resilience. Key Performance Metric Annualized Recurring Revenue (ARR) is defined as the expected recurring revenue in the next twelve months from active customer contracts, assuming no increases or reductions in the subscriptions from that cohort of customers. Investors should not place undue reliance on ARR as an indicator of future or expected results. Our presentation of this metric may differ from similarly titled metrics presented by other companies and therefore comparability may be limited. Non-GAAP Financial Measures This press release contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income/(loss), non-GAAP net income/(loss), non-GAAP net income/(loss) per share, EBITDA, adjusted EBITDA, free cash flow, adjusted free cash flow and adjusted EBITDA margin. Non-GAAP operating income/(loss) excludes amortization of acquired intangible assets, stock-based compensation, costs related to the 2022 Strategic Realignment, Anvil legal dispute accrual and change in fair value of contingent consideration. Non-GAAP net income/(loss) excludes amortization of acquired intangible assets, stock-based compensation, costs related to the 2022 Strategic Realignment, Anvil legal dispute accrual, change in fair value of contingent consideration, accretion of interest on convertible senior notes, gain (loss) on extinguishment of debt, 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 stock-based compensation expense, costs related to the 2022 Strategic Realignment, Anvil legal dispute accrual, change in fair value of contingent consideration and gain (loss) on extinguishment of debt, capped call modification and change in fair value. 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 may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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 successfully integrate businesses and assets that we may acquire; 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; 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, 2023, which we expect to file with the SEC on or before February 29, 2024 and other subsequent filings with the SEC. 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) December 31, 2023 2022 Current assets: Cash and cash equivalents $ 122,440 $ 198,725 Restricted cash 2,120 2,046 Accounts receivable, net 119,389 119,986 Prepaid expenses 12,880 13,133 Assets held for sale — 6,485 Deferred costs and other current assets 36,604 31,866 Total current assets 293,433 372,241 Property and equipment, net 8,305 8,993 Capitalized software development costs, net 31,630 27,370 Goodwill 517,184 508,781 Intangible assets, net 130,264 166,177 Restricted cash 811 823 Prepaid expenses 902 1,709 Deferred costs and other assets 43,356 39,570 Total assets $ 1,025,885 $ 1,125,664 Current liabilities: Accounts payable $ 15,013 $ 10,854 Accrued payroll and employee related liabilities 32,824 31,175 Accrued expenses 36,346 13,566 Deferred revenue 242,789 233,106 Convertible senior notes, current 63,110 — Liabilities held for sale — 2,062 Other current liabilities 8,918 10,644 Total current liabilities 399,000 301,407 Long-term liabilities: Deferred revenue, noncurrent 6,429 9,278 Convertible senior notes, noncurrent 296,561 500,298 Deferred tax liabilities 4,318 6,236 Other long-term liabilities 17,268 19,334 Total liabilities 723,576 836,553 Stockholders' equity: Common stock 41 40 Additional paid-in capital 771,779 721,143 Accumulated deficit (449,429 ) (402,124 ) Accumulated other comprehensive loss (20,082 ) (29,948 ) Total stockholders' equity 302,309 289,111 Total liabilities and stockholders' equity $ 1,025,885 $ 1,125,664 Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except share and per share data) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Revenue $ 115,760 $ 117,130 $ 448,788 $ 431,892 Cost of revenue 33,346 34,391 131,487 134,934 Gross profit 82,414 82,739 317,301 296,958 Gross margin 71.19 % 70.64 % 70.70 % 68.76 % Operating expenses: Sales and marketing 37,536 39,866 159,092 173,621 Research and development 21,999 20,631 95,468 95,986 General and administrative 39,886 26,579 120,519 99,365 Restructuring 827 5,390 3,621 12,169 Total operating expenses 100,248 92,466 378,700 381,141 Operating loss (17,834 ) (9,727 ) (61,399 ) (84,183 ) Other income, net Interest and investment income 958 2,902 7,120 5,697 Interest expense (538 ) (1,187 ) (2,796 ) (5,106 ) Gain on extinguishment of convertible notes, capped call modification and change in fair value — 24,013 12,658 19,243 Other income (expense), net 647 (484 ) 820 777 Total other income, net 1,067 25,244 17,802 20,611 Income (loss) before income taxes (16,767 ) 15,517 (43,597 ) (63,572 ) (Provision for) benefit from income taxes (2,523 ) 644 (3,708 ) 2,398 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Net income (loss) per share attributable to common stockholders: Basic $ (0.47 ) $ 0.40 $ (1.16 ) $ (1.54 ) Diluted $ (0.47 ) $ (0.15 ) $ (1.31 ) $ (1.76 ) Weighted-average common shares outstanding: Basic 41,055,293 39,967,553 40,668,327 39,680,440 Diluted 41,055,293 45,338,189 43,622,341 45,583,459 Other comprehensive income (loss): Foreign currency translation adjustment 12,905 21,378 9,866 (27,046 ) Total comprehensive income (loss) $ (6,385 ) $ 37,539 $ (37,439 ) $ (88,220 ) Stock-based compensation expense included in the above: (in thousands) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Cost of revenue $ 1,414 $ 1,192 $ 6,171 $ 5,468 Sales and marketing 3,967 1,597 17,313 15,917 Research and development 1,919 600 12,225 9,967 General and administrative 3,412 4,529 13,180 16,268 Total stock-based compensation $ 10,712 $ 7,918 $ 48,889 $ 47,620 Consolidated Statements of Cash Flows (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Cash flows from operating activities: Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 14,527 15,347 58,815 60,600 Amortization of deferred costs 5,090 4,886 19,568 18,251 Deferred income taxes (875 ) 1,949 (1,912 ) (5,183 ) Accretion of interest on convertible senior notes 518 1,069 2,640 4,561 (Gain) loss on disposal of assets (356 ) (213 ) (708 ) 727 Gain on extinguishment of convertible notes, capped call modification and change in fair value — (24,013 ) (12,658 ) (19,243 ) Provision for (benefit from) credit losses and sales reserve (202 ) 1,122 2,001 410 Stock-based compensation 10,712 7,918 48,889 47,620 Other non-cash adjustments — — — (57 ) Changes in operating assets and liabilities: Accounts receivable (26,503 ) (29,608 ) (1,064 ) (848 ) Prepaid expenses 2,551 543 984 560 Deferred costs (9,747 ) (6,906 ) (28,562 ) (23,063 ) Other assets 3,027 (11,118 ) 947 (3,527 ) Accounts payable 2,251 (1,683 ) 4,187 (4,855 ) Accrued payroll and employee related liabilities 7,752 2,783 1,649 (4,136 ) Accrued expenses 19,602 1,629 21,741 992 Deferred revenue 18,763 13,424 6,878 8,746 Other liabilities 1,801 11,064 (3,515 ) (214 ) Net cash provided by operating activities 29,621 4,354 72,575 20,167 Cash flows from investing activities: Capital expenditures (1,093 ) (511 ) (5,217 ) (3,462 ) Proceeds from landlord reimbursement — — 88 1,219 Proceeds from sale of assets — — 4,368 — Payment for acquisition of business, net of acquired cash — (336 ) — (1,585 ) Additions to capitalized software development costs (3,836 ) (3,456 ) (16,540 ) (15,065 ) Net cash used in investing activities (4,929 ) (4,303 ) (17,301 ) (18,893 ) Cash flows from financing activities: Repurchase of convertible notes — (288,761 ) (129,579 ) (288,761 ) Proceeds from termination of convertible notes capped call hedge 33 1,312 33 1,312 Payments associated with shares withheld to settle employee tax withholding liability (1,666 ) (2,098 ) (7,885 ) (6,307 ) Proceeds from employee stock purchase plan — — 4,291 3,165 Proceeds from stock option exercises 19 45 1,319 144 Other (21 ) (19 ) (77 ) (73 ) Net cash used in financing activities (1,635 ) (289,521 ) (131,898 ) (290,520 ) Effect of exchange rates on cash, cash equivalents and restricted cash 1,767 1,391 401 (1,918 ) Net increase (decrease) in cash, cash equivalents and restricted cash 24,824 (288,079 ) (76,223 ) (291,164 ) Cash, cash equivalents and restricted cash—beginning of period 100,547 489,673 201,594 492,758 Cash, cash equivalents and restricted cash—end of period $ 125,371 $ 201,594 $ 125,371 $ 201,594 Reconciliation of GAAP measures to non-GAAP measures (unaudited) The following table reconciles our GAAP gross profit to non-GAAP gross profit (in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Gross profit $ 82,414 $ 82,739 $ 317,301 $ 296,958 Amortization of acquired intangibles 1,915 2,602 8,445 11,657 Stock-based compensation 1,414 1,192 6,171 5,468 2022 Strategic Realignment 24 259 814 953 Non-GAAP gross profit $ 85,767 $ 86,792 $ 332,731 $ 315,036 The following table reconciles our GAAP gross margin to non-GAAP gross margin(1): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Gross margin 71.2 % 70.6 % 70.7 % 68.8 % Amortization of acquired intangibles margin 1.7 % 2.2 % 1.9 % 2.7 % Stock-based compensation margin 1.2 % 1.0 % 1.4 % 1.3 % 2022 Strategic Realignment margin 0.0 % 0.2 % 0.2 % 0.2 % Non-GAAP gross margin 74.1 % 74.1 % 74.1 % 72.9 % (1) Columns may not add up due to rounding. The following table reconciles our GAAP operating loss to non-GAAP operating income. For comparability purposes, non-GAAP operating income results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation (in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Operating loss $ (17,834 ) $ (9,727 ) $ (61,399 ) $ (84,183 ) Amortization of acquired intangibles 8,852 9,854 36,840 42,982 Stock-based compensation 10,712 7,918 48,889 47,620 2022 Strategic Realignment 3,015 6,539 13,751 17,357 Anvil legal dispute accrual 15,936 1,000 24,000 1,000 Change in fair value of contingent consideration — — — (57 ) Non-GAAP operating income $ 20,681 $ 15,584 $ 62,081 $ 24,719 The following table reconciles our GAAP net income (loss) to non-GAAP net income. For comparability purposes, non-GAAP net income results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation (in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Amortization of acquired intangibles 8,852 9,854 36,840 42,982 Stock-based compensation 10,712 7,918 48,889 47,620 2022 Strategic Realignment 3,015 6,537 13,733 17,358 Anvil legal dispute accrual 15,936 1,000 24,000 1,000 Change in fair value of contingent consideration — — — (57 ) Accretion of interest on convertible senior notes 518 1,069 2,640 4,561 �� Gain on extinguishment of convertible notes, capped call modification and change in fair value — (24,013 ) (12,658 ) (19,243 ) Income tax adjustments 491 170 (1,427 ) (1,151 ) Non-GAAP net income $ 20,234 $ 18,696 $ 64,712 $ 31,896 Reconciliation of GAAP measures to non-GAAP measures (Continued) (unaudited) The following table reconciles our GAAP net income (loss) per basic share to non-GAAP net income per basic share. For comparability purposes, non-GAAP net income per basic share results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation(1): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) per basic share⁽ᵃ⁾ $ (0.47 ) $ 0.40 $ (1.16 ) $ (1.54 ) Amortization of acquired intangibles per basic share⁽ᵇ⁾ 0.22 0.25 0.91 1.08 Stock-based compensation per basic share⁽ᵇ⁾ 0.26 0.20 1.20 1.20 2022 Strategic Realignment per basic share⁽ᵇ⁾ 0.07 0.16 0.34 0.44 Anvil legal dispute accrual per basic share⁽ᵇ⁾ 0.39 0.03 0.59 0.03 Change in fair value of contingent consideration per basic share⁽ᵇ⁾ — — — — Accretion of interest on convertible senior notes per basic share⁽ᵇ⁾ 0.01 0.03 0.06 0.11 Gain on extinguishment of convertible notes, capped call modification and change in fair value per basic share⁽ᵇ⁾ — (0.60 ) (0.31 ) (0.48 ) Income tax adjustments per basic share⁽ᵇ⁾ 0.01 — (0.04 ) (0.03 ) Non-GAAP net income per basic share⁽ᵇ⁾ $ 0.49 $ 0.47 $ 1.59 $ 0.80 (1) Amounts may not add up due to rounding. The following table reconciles our GAAP net loss per diluted share to non-GAAP net income per diluted share. For comparability purposes, non-GAAP net income per diluted share results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation(1): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net loss per diluted share⁽ᵃ⁾ $ (0.47 ) $ (0.15 ) $ (1.31 ) $ (1.76 ) Amortization of acquired intangibles per diluted share⁽ᵇ⁾ 0.20 0.22 0.84 0.94 Stock-based compensation per diluted share⁽ᵇ⁾ 0.25 0.17 1.12 1.04 2022 Strategic Realignment per diluted share⁽ᵇ⁾ 0.07 0.14 0.31 0.38 Anvil legal dispute accrual per diluted share⁽ᵇ⁾ 0.37 0.02 0.55 0.02 Change in fair value of contingent consideration per diluted share⁽ᵇ⁾ — — — — Accretion of interest on convertible senior notes per diluted share⁽ᵇ⁾ 0.01 0.02 0.06 0.10 Gain on extinguishment of convertible notes, capped call modification and change in fair value per diluted share⁽ᵇ⁾ — (0.53 ) (0.29 ) (0.42 ) Income tax adjustments per diluted share⁽ᵇ⁾ 0.01 — (0.03 ) (0.03 ) Non-GAAP net income per diluted share⁽ᵇ⁾ $ 0.47 $ 0.41 $ 1.48 $ 0.70 (1) Amounts may not add up due to differences in GAAP and non-GAAP net income (loss) and diluted shares. (a) GAAP weighted-average common shares outstanding: Basic 41,055,293 39,967,553 40,668,327 39,680,440 Diluted 41,055,293 45,338,189 43,622,341 45,583,459 (b) Non-GAAP weighted-average common shares outstanding: Basic 41,055,293 39,967,553 40,668,327 39,680,440 Diluted 43,355,513 45,592,690 43,770,884 45,867,120 GAAP and Non-GAAP diluted weighted-average shares include dilutive potential common shares related to convertible notes and stock-based compensation grants. Reconciliation of GAAP measures to non-GAAP measures (Continued) (unaudited) The following tables reconcile our net income (loss) to EBITDA and adjusted EBITDA, net cash provided by operating activities to free cash flow and adjusted free cash flow and net income (loss) margin to EBITDA margin and adjusted EBITDA margin. For comparability purposes, adjusted EBITDA and adjusted EBITDA margin results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute and to conform to the current year presentation (dollars in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Interest and investment expense, net (420 ) (1,715 ) (4,324 ) (591 ) Provision for (benefit from) income taxes 2,523 (644 ) 3,708 (2,398 ) Depreciation and amortization 14,527 15,347 58,815 60,600 EBITDA (2,660 ) 29,149 10,894 (3,563 ) Stock-based compensation 10,712 7,918 48,889 47,620 2022 Strategic Realignment 3,015 6,537 13,733 17,358 Anvil legal dispute accrual 15,936 1,000 24,000 1,000 Change in fair value of contingent consideration — — — (57 ) Gain on extinguishment of convertible notes, capped call modification and change in fair value — (24,013 ) (12,658 ) (19,243 ) Adjusted EBITDA $ 27,003 $ 20,591 $ 84,858 $ 43,115 Net cash provided by operating activities $ 29,621 $ 4,354 $ 72,575 $ 20,167 Capital expenditures (1,093 ) (511 ) (5,217 ) (3,462 ) Capitalized software development costs (3,836 ) (3,456 ) (16,540 ) (15,065 ) Free cash flow 24,692 387 50,818 1,640 Cash payments for 2022 Strategic Realignment 1,989 4,187 12,940 12,266 Adjusted free cash flow $ 26,681 $ 4,574 $ 63,758 $ 13,906 Net income (loss) margin (16.7 )% 13.8 % (10.5 )% (14.2 )% Interest and investment expense, net margin (0.4 )% (1.5 )% (1.0 )% (0.1 )% Provision for (benefit from) income taxes margin 2.2 % (0.5 )% 0.8 % (0.6 )% Depreciation and amortization margin 12.5 % 13.1 % 13.1 % 14.0 % EBITDA margin (2.3 )% 24.9 % 2.4 % (0.8 )% Stock-based compensation margin 9.3 % 6.8 % 10.9 % 11.0 % 2022 Strategic Realignment margin 2.6 % 5.6 % 3.1 % 4.0 % Anvil legal dispute accrual margin 13.8 % 0.9 % 5.3 % 0.2 % Change in fair value of contingent consideration margin — — — — Gain on extinguishment of convertible notes, capped call modification and change in fair value margin — (20.5 )% (2.8 )% (4.5 )% Adjusted EBITDA margin 23.3 % 17.6 % 18.9 % 10.0 % (margin % columns may not add up due to rounding) Remaining Performance Obligations as of December 31, 2023 (in millions) Remaining Performance Obligations Remaining Performance Obligations Next Twelve Months Subscription and other contracts $ 494 $ 305 Professional services contracts 10 9 Reconciliation of Basic and Diluted Net Income (Loss) per Share The following table summarizes the computations of basic net income (loss) per share and diluted net loss per share (in thousands, except share and per share data): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Dilutive effect of convertible notes, net of tax — (22,804 ) (9,682 ) (18,890 ) Adjusted net loss $ (19,290 ) $ (6,643 ) $ (56,987 ) $ (80,064 ) Weighted-average common stock outstanding — basic 41,055,293 39,967,553 40,668,327 39,680,440 Dilutive potential common shares related to convertible notes — 5,370,636 2,954,014 5,903,019 Weighted-average common stock outstanding — diluted 41,055,293 45,338,189 43,622,341 45,583,459 Basic net income (loss) per share $ (0.47 ) $ 0.40 $ (1.16 ) $ (1.54 ) Diluted net loss per share $ (0.47 ) $ (0.15 ) $ (1.31 ) $ (1.76 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20240226895912/en/Contacts Everbridge: Investors: Nandan Amladi Investor Relations nandan.amladi@everbridge.com 617-665-7197 Media: Jeff Young Media Relations jeff.young@everbridge.com 781-859-4116
Everbridge, Inc. (Nasdaq: EVBG), the global leader in critical event management (CEM) and national public warning solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2023. Revenue for the fourth quarter was down 1% year-over-year to $115.8 million, and GAAP net loss was $(19.3) million, compared to net income of $16.2 million for the fourth quarter of 2022. Revenue for the full year was up 4% year-over-year to $448.8 million, and GAAP net loss was $(47.3) million, compared to $(61.2) million for 2022. Fourth Quarter 2023 Financial Highlights Total revenue was $115.8 million, a decrease of 1% compared to $117.1 million for the fourth quarter of 2022. Revenue from subscription services was $105.6 million, an increase of 4% compared to $101.4 million for the fourth quarter of 2022. Revenue from professional services, software licenses and other was $10.2 million, a decrease of 35% compared to $15.7 million for the fourth quarter of 2022. GAAP operating loss was $(17.8) million, compared to $(9.7) million for the fourth quarter of 2022. Non-GAAP operating income was $20.7 million, compared to $15.6 million for the fourth quarter of 2022. GAAP net loss was $(19.3) million, compared to GAAP net income of $16.2 million for the fourth quarter of 2022. GAAP diluted net loss per share was $(0.47) based on 41.1 million diluted weighted average common shares outstanding, compared to $(0.15) for the fourth quarter of 2022, based on 45.3 million diluted weighted average common shares outstanding. Non-GAAP net income was $20.2 million, compared to $18.7 million for the fourth quarter of 2022. Non-GAAP diluted net income per share was $0.47, based on 43.4 million diluted weighted average common shares outstanding, compared to $0.41 for the fourth quarter of 2022, based on 45.6 million diluted weighted average common shares outstanding. Adjusted EBITDA was $27.0 million, compared to $20.6 million for the fourth quarter of 2022. Cash flow from operations was an inflow of $29.6 million, compared to $4.4 million for the fourth quarter of 2022. Adjusted for one-time cash payments related to our 2022 Strategic Realignment program, adjusted free cash flow was an inflow of $26.7 million, compared to $4.6 million for the fourth quarter of 2022. Annualized Recurring Revenue (ARR) was $408 million and 55 CEM customers were added during the quarter. Deal metrics: 48 deals over $100,000; 3 deals over $500,000; 1 deal over $1 million. Full Year 2023 Financial Highlights Total revenue was $448.8 million, an increase of 4% compared to $431.9 million for 2022. Revenue from subscription services was $410.5 million, an increase of 7% compared to $384.6 million for 2022. Revenue from professional services, software licenses and other was $38.3 million, a decrease of 19% compared to $47.3 million for 2022. GAAP operating loss was $(61.4) million, compared to $(84.2) million for 2022. Non-GAAP operating income was $62.1 million, compared to $24.7 million for 2022. GAAP net loss was $(47.3) million, compared to $(61.2) million for 2022. GAAP diluted net loss per share was $(1.31) based on 43.6 million diluted weighted average common shares outstanding, compared to $(1.76) for 2022, based on 45.6 million diluted weighted average common shares outstanding. Non-GAAP net income was $64.7 million compared to $31.9 million for 2022. Non-GAAP diluted net income per share was $1.48, based on 43.8 million diluted weighted average common shares outstanding, compared to $0.70 for 2022, based on 45.9 million diluted weighted average common shares outstanding. Adjusted EBITDA was $84.9 million, compared to $43.1 million for 2022. Cash flow from operations was an inflow of $72.6 million, compared to $20.2 million for 2022. Adjusted for one-time cash payments related to our 2022 Strategic Realignment program, adjusted free cash flow was an inflow of $63.8 million, compared to $13.9 million for 2022. About Everbridge Everbridge (Nasdaq: EVBG) empowers enterprises and government organizations to anticipate, mitigate, respond to, and recover stronger from critical events. In today’s unpredictable world, resilient organizations minimize impact to people and operations, absorb stress, and return to productivity faster when deploying critical event management (CEM) technology. Everbridge digitizes organizational resilience by combining intelligent automation with the industry’s most comprehensive risk data to Keep People Safe and Organizations Running™. For more information, visit https://www.everbridge.com/, read the company blog, and follow on LinkedIn. Everbridge… Empowering Resilience. Key Performance Metric Annualized Recurring Revenue (ARR) is defined as the expected recurring revenue in the next twelve months from active customer contracts, assuming no increases or reductions in the subscriptions from that cohort of customers. Investors should not place undue reliance on ARR as an indicator of future or expected results. Our presentation of this metric may differ from similarly titled metrics presented by other companies and therefore comparability may be limited. Non-GAAP Financial Measures This press release contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income/(loss), non-GAAP net income/(loss), non-GAAP net income/(loss) per share, EBITDA, adjusted EBITDA, free cash flow, adjusted free cash flow and adjusted EBITDA margin. Non-GAAP operating income/(loss) excludes amortization of acquired intangible assets, stock-based compensation, costs related to the 2022 Strategic Realignment, Anvil legal dispute accrual and change in fair value of contingent consideration. Non-GAAP net income/(loss) excludes amortization of acquired intangible assets, stock-based compensation, costs related to the 2022 Strategic Realignment, Anvil legal dispute accrual, change in fair value of contingent consideration, accretion of interest on convertible senior notes, gain (loss) on extinguishment of debt, 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 stock-based compensation expense, costs related to the 2022 Strategic Realignment, Anvil legal dispute accrual, change in fair value of contingent consideration and gain (loss) on extinguishment of debt, capped call modification and change in fair value. 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 may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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 successfully integrate businesses and assets that we may acquire; 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; 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, 2023, which we expect to file with the SEC on or before February 29, 2024 and other subsequent filings with the SEC. 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) December 31, 2023 2022 Current assets: Cash and cash equivalents $ 122,440 $ 198,725 Restricted cash 2,120 2,046 Accounts receivable, net 119,389 119,986 Prepaid expenses 12,880 13,133 Assets held for sale — 6,485 Deferred costs and other current assets 36,604 31,866 Total current assets 293,433 372,241 Property and equipment, net 8,305 8,993 Capitalized software development costs, net 31,630 27,370 Goodwill 517,184 508,781 Intangible assets, net 130,264 166,177 Restricted cash 811 823 Prepaid expenses 902 1,709 Deferred costs and other assets 43,356 39,570 Total assets $ 1,025,885 $ 1,125,664 Current liabilities: Accounts payable $ 15,013 $ 10,854 Accrued payroll and employee related liabilities 32,824 31,175 Accrued expenses 36,346 13,566 Deferred revenue 242,789 233,106 Convertible senior notes, current 63,110 — Liabilities held for sale — 2,062 Other current liabilities 8,918 10,644 Total current liabilities 399,000 301,407 Long-term liabilities: Deferred revenue, noncurrent 6,429 9,278 Convertible senior notes, noncurrent 296,561 500,298 Deferred tax liabilities 4,318 6,236 Other long-term liabilities 17,268 19,334 Total liabilities 723,576 836,553 Stockholders' equity: Common stock 41 40 Additional paid-in capital 771,779 721,143 Accumulated deficit (449,429 ) (402,124 ) Accumulated other comprehensive loss (20,082 ) (29,948 ) Total stockholders' equity 302,309 289,111 Total liabilities and stockholders' equity $ 1,025,885 $ 1,125,664 Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except share and per share data) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Revenue $ 115,760 $ 117,130 $ 448,788 $ 431,892 Cost of revenue 33,346 34,391 131,487 134,934 Gross profit 82,414 82,739 317,301 296,958 Gross margin 71.19 % 70.64 % 70.70 % 68.76 % Operating expenses: Sales and marketing 37,536 39,866 159,092 173,621 Research and development 21,999 20,631 95,468 95,986 General and administrative 39,886 26,579 120,519 99,365 Restructuring 827 5,390 3,621 12,169 Total operating expenses 100,248 92,466 378,700 381,141 Operating loss (17,834 ) (9,727 ) (61,399 ) (84,183 ) Other income, net Interest and investment income 958 2,902 7,120 5,697 Interest expense (538 ) (1,187 ) (2,796 ) (5,106 ) Gain on extinguishment of convertible notes, capped call modification and change in fair value — 24,013 12,658 19,243 Other income (expense), net 647 (484 ) 820 777 Total other income, net 1,067 25,244 17,802 20,611 Income (loss) before income taxes (16,767 ) 15,517 (43,597 ) (63,572 ) (Provision for) benefit from income taxes (2,523 ) 644 (3,708 ) 2,398 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Net income (loss) per share attributable to common stockholders: Basic $ (0.47 ) $ 0.40 $ (1.16 ) $ (1.54 ) Diluted $ (0.47 ) $ (0.15 ) $ (1.31 ) $ (1.76 ) Weighted-average common shares outstanding: Basic 41,055,293 39,967,553 40,668,327 39,680,440 Diluted 41,055,293 45,338,189 43,622,341 45,583,459 Other comprehensive income (loss): Foreign currency translation adjustment 12,905 21,378 9,866 (27,046 ) Total comprehensive income (loss) $ (6,385 ) $ 37,539 $ (37,439 ) $ (88,220 ) Stock-based compensation expense included in the above: (in thousands) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Cost of revenue $ 1,414 $ 1,192 $ 6,171 $ 5,468 Sales and marketing 3,967 1,597 17,313 15,917 Research and development 1,919 600 12,225 9,967 General and administrative 3,412 4,529 13,180 16,268 Total stock-based compensation $ 10,712 $ 7,918 $ 48,889 $ 47,620 Consolidated Statements of Cash Flows (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Cash flows from operating activities: Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 14,527 15,347 58,815 60,600 Amortization of deferred costs 5,090 4,886 19,568 18,251 Deferred income taxes (875 ) 1,949 (1,912 ) (5,183 ) Accretion of interest on convertible senior notes 518 1,069 2,640 4,561 (Gain) loss on disposal of assets (356 ) (213 ) (708 ) 727 Gain on extinguishment of convertible notes, capped call modification and change in fair value — (24,013 ) (12,658 ) (19,243 ) Provision for (benefit from) credit losses and sales reserve (202 ) 1,122 2,001 410 Stock-based compensation 10,712 7,918 48,889 47,620 Other non-cash adjustments — — — (57 ) Changes in operating assets and liabilities: Accounts receivable (26,503 ) (29,608 ) (1,064 ) (848 ) Prepaid expenses 2,551 543 984 560 Deferred costs (9,747 ) (6,906 ) (28,562 ) (23,063 ) Other assets 3,027 (11,118 ) 947 (3,527 ) Accounts payable 2,251 (1,683 ) 4,187 (4,855 ) Accrued payroll and employee related liabilities 7,752 2,783 1,649 (4,136 ) Accrued expenses 19,602 1,629 21,741 992 Deferred revenue 18,763 13,424 6,878 8,746 Other liabilities 1,801 11,064 (3,515 ) (214 ) Net cash provided by operating activities 29,621 4,354 72,575 20,167 Cash flows from investing activities: Capital expenditures (1,093 ) (511 ) (5,217 ) (3,462 ) Proceeds from landlord reimbursement — — 88 1,219 Proceeds from sale of assets — — 4,368 — Payment for acquisition of business, net of acquired cash — (336 ) — (1,585 ) Additions to capitalized software development costs (3,836 ) (3,456 ) (16,540 ) (15,065 ) Net cash used in investing activities (4,929 ) (4,303 ) (17,301 ) (18,893 ) Cash flows from financing activities: Repurchase of convertible notes — (288,761 ) (129,579 ) (288,761 ) Proceeds from termination of convertible notes capped call hedge 33 1,312 33 1,312 Payments associated with shares withheld to settle employee tax withholding liability (1,666 ) (2,098 ) (7,885 ) (6,307 ) Proceeds from employee stock purchase plan — — 4,291 3,165 Proceeds from stock option exercises 19 45 1,319 144 Other (21 ) (19 ) (77 ) (73 ) Net cash used in financing activities (1,635 ) (289,521 ) (131,898 ) (290,520 ) Effect of exchange rates on cash, cash equivalents and restricted cash 1,767 1,391 401 (1,918 ) Net increase (decrease) in cash, cash equivalents and restricted cash 24,824 (288,079 ) (76,223 ) (291,164 ) Cash, cash equivalents and restricted cash—beginning of period 100,547 489,673 201,594 492,758 Cash, cash equivalents and restricted cash—end of period $ 125,371 $ 201,594 $ 125,371 $ 201,594 Reconciliation of GAAP measures to non-GAAP measures (unaudited) The following table reconciles our GAAP gross profit to non-GAAP gross profit (in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Gross profit $ 82,414 $ 82,739 $ 317,301 $ 296,958 Amortization of acquired intangibles 1,915 2,602 8,445 11,657 Stock-based compensation 1,414 1,192 6,171 5,468 2022 Strategic Realignment 24 259 814 953 Non-GAAP gross profit $ 85,767 $ 86,792 $ 332,731 $ 315,036 The following table reconciles our GAAP gross margin to non-GAAP gross margin(1): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Gross margin 71.2 % 70.6 % 70.7 % 68.8 % Amortization of acquired intangibles margin 1.7 % 2.2 % 1.9 % 2.7 % Stock-based compensation margin 1.2 % 1.0 % 1.4 % 1.3 % 2022 Strategic Realignment margin 0.0 % 0.2 % 0.2 % 0.2 % Non-GAAP gross margin 74.1 % 74.1 % 74.1 % 72.9 % (1) Columns may not add up due to rounding. The following table reconciles our GAAP operating loss to non-GAAP operating income. For comparability purposes, non-GAAP operating income results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation (in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Operating loss $ (17,834 ) $ (9,727 ) $ (61,399 ) $ (84,183 ) Amortization of acquired intangibles 8,852 9,854 36,840 42,982 Stock-based compensation 10,712 7,918 48,889 47,620 2022 Strategic Realignment 3,015 6,539 13,751 17,357 Anvil legal dispute accrual 15,936 1,000 24,000 1,000 Change in fair value of contingent consideration — — — (57 ) Non-GAAP operating income $ 20,681 $ 15,584 $ 62,081 $ 24,719 The following table reconciles our GAAP net income (loss) to non-GAAP net income. For comparability purposes, non-GAAP net income results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation (in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Amortization of acquired intangibles 8,852 9,854 36,840 42,982 Stock-based compensation 10,712 7,918 48,889 47,620 2022 Strategic Realignment 3,015 6,537 13,733 17,358 Anvil legal dispute accrual 15,936 1,000 24,000 1,000 Change in fair value of contingent consideration — — — (57 ) Accretion of interest on convertible senior notes 518 1,069 2,640 4,561 �� Gain on extinguishment of convertible notes, capped call modification and change in fair value — (24,013 ) (12,658 ) (19,243 ) Income tax adjustments 491 170 (1,427 ) (1,151 ) Non-GAAP net income $ 20,234 $ 18,696 $ 64,712 $ 31,896 Reconciliation of GAAP measures to non-GAAP measures (Continued) (unaudited) The following table reconciles our GAAP net income (loss) per basic share to non-GAAP net income per basic share. For comparability purposes, non-GAAP net income per basic share results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation(1): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) per basic share⁽ᵃ⁾ $ (0.47 ) $ 0.40 $ (1.16 ) $ (1.54 ) Amortization of acquired intangibles per basic share⁽ᵇ⁾ 0.22 0.25 0.91 1.08 Stock-based compensation per basic share⁽ᵇ⁾ 0.26 0.20 1.20 1.20 2022 Strategic Realignment per basic share⁽ᵇ⁾ 0.07 0.16 0.34 0.44 Anvil legal dispute accrual per basic share⁽ᵇ⁾ 0.39 0.03 0.59 0.03 Change in fair value of contingent consideration per basic share⁽ᵇ⁾ — — — — Accretion of interest on convertible senior notes per basic share⁽ᵇ⁾ 0.01 0.03 0.06 0.11 Gain on extinguishment of convertible notes, capped call modification and change in fair value per basic share⁽ᵇ⁾ — (0.60 ) (0.31 ) (0.48 ) Income tax adjustments per basic share⁽ᵇ⁾ 0.01 — (0.04 ) (0.03 ) Non-GAAP net income per basic share⁽ᵇ⁾ $ 0.49 $ 0.47 $ 1.59 $ 0.80 (1) Amounts may not add up due to rounding. The following table reconciles our GAAP net loss per diluted share to non-GAAP net income per diluted share. For comparability purposes, non-GAAP net income per diluted share results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute to conform to the current year presentation(1): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net loss per diluted share⁽ᵃ⁾ $ (0.47 ) $ (0.15 ) $ (1.31 ) $ (1.76 ) Amortization of acquired intangibles per diluted share⁽ᵇ⁾ 0.20 0.22 0.84 0.94 Stock-based compensation per diluted share⁽ᵇ⁾ 0.25 0.17 1.12 1.04 2022 Strategic Realignment per diluted share⁽ᵇ⁾ 0.07 0.14 0.31 0.38 Anvil legal dispute accrual per diluted share⁽ᵇ⁾ 0.37 0.02 0.55 0.02 Change in fair value of contingent consideration per diluted share⁽ᵇ⁾ — — — — Accretion of interest on convertible senior notes per diluted share⁽ᵇ⁾ 0.01 0.02 0.06 0.10 Gain on extinguishment of convertible notes, capped call modification and change in fair value per diluted share⁽ᵇ⁾ — (0.53 ) (0.29 ) (0.42 ) Income tax adjustments per diluted share⁽ᵇ⁾ 0.01 — (0.03 ) (0.03 ) Non-GAAP net income per diluted share⁽ᵇ⁾ $ 0.47 $ 0.41 $ 1.48 $ 0.70 (1) Amounts may not add up due to differences in GAAP and non-GAAP net income (loss) and diluted shares. (a) GAAP weighted-average common shares outstanding: Basic 41,055,293 39,967,553 40,668,327 39,680,440 Diluted 41,055,293 45,338,189 43,622,341 45,583,459 (b) Non-GAAP weighted-average common shares outstanding: Basic 41,055,293 39,967,553 40,668,327 39,680,440 Diluted 43,355,513 45,592,690 43,770,884 45,867,120 GAAP and Non-GAAP diluted weighted-average shares include dilutive potential common shares related to convertible notes and stock-based compensation grants. Reconciliation of GAAP measures to non-GAAP measures (Continued) (unaudited) The following tables reconcile our net income (loss) to EBITDA and adjusted EBITDA, net cash provided by operating activities to free cash flow and adjusted free cash flow and net income (loss) margin to EBITDA margin and adjusted EBITDA margin. For comparability purposes, adjusted EBITDA and adjusted EBITDA margin results have been recast for the three and twelve months ended December 31, 2022 to include costs related to the Anvil legal dispute and to conform to the current year presentation (dollars in thousands): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Interest and investment expense, net (420 ) (1,715 ) (4,324 ) (591 ) Provision for (benefit from) income taxes 2,523 (644 ) 3,708 (2,398 ) Depreciation and amortization 14,527 15,347 58,815 60,600 EBITDA (2,660 ) 29,149 10,894 (3,563 ) Stock-based compensation 10,712 7,918 48,889 47,620 2022 Strategic Realignment 3,015 6,537 13,733 17,358 Anvil legal dispute accrual 15,936 1,000 24,000 1,000 Change in fair value of contingent consideration — — — (57 ) Gain on extinguishment of convertible notes, capped call modification and change in fair value — (24,013 ) (12,658 ) (19,243 ) Adjusted EBITDA $ 27,003 $ 20,591 $ 84,858 $ 43,115 Net cash provided by operating activities $ 29,621 $ 4,354 $ 72,575 $ 20,167 Capital expenditures (1,093 ) (511 ) (5,217 ) (3,462 ) Capitalized software development costs (3,836 ) (3,456 ) (16,540 ) (15,065 ) Free cash flow 24,692 387 50,818 1,640 Cash payments for 2022 Strategic Realignment 1,989 4,187 12,940 12,266 Adjusted free cash flow $ 26,681 $ 4,574 $ 63,758 $ 13,906 Net income (loss) margin (16.7 )% 13.8 % (10.5 )% (14.2 )% Interest and investment expense, net margin (0.4 )% (1.5 )% (1.0 )% (0.1 )% Provision for (benefit from) income taxes margin 2.2 % (0.5 )% 0.8 % (0.6 )% Depreciation and amortization margin 12.5 % 13.1 % 13.1 % 14.0 % EBITDA margin (2.3 )% 24.9 % 2.4 % (0.8 )% Stock-based compensation margin 9.3 % 6.8 % 10.9 % 11.0 % 2022 Strategic Realignment margin 2.6 % 5.6 % 3.1 % 4.0 % Anvil legal dispute accrual margin 13.8 % 0.9 % 5.3 % 0.2 % Change in fair value of contingent consideration margin — — — — Gain on extinguishment of convertible notes, capped call modification and change in fair value margin — (20.5 )% (2.8 )% (4.5 )% Adjusted EBITDA margin 23.3 % 17.6 % 18.9 % 10.0 % (margin % columns may not add up due to rounding) Remaining Performance Obligations as of December 31, 2023 (in millions) Remaining Performance Obligations Remaining Performance Obligations Next Twelve Months Subscription and other contracts $ 494 $ 305 Professional services contracts 10 9 Reconciliation of Basic and Diluted Net Income (Loss) per Share The following table summarizes the computations of basic net income (loss) per share and diluted net loss per share (in thousands, except share and per share data): Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ (19,290 ) $ 16,161 $ (47,305 ) $ (61,174 ) Dilutive effect of convertible notes, net of tax — (22,804 ) (9,682 ) (18,890 ) Adjusted net loss $ (19,290 ) $ (6,643 ) $ (56,987 ) $ (80,064 ) Weighted-average common stock outstanding — basic 41,055,293 39,967,553 40,668,327 39,680,440 Dilutive potential common shares related to convertible notes — 5,370,636 2,954,014 5,903,019 Weighted-average common stock outstanding — diluted 41,055,293 45,338,189 43,622,341 45,583,459 Basic net income (loss) per share $ (0.47 ) $ 0.40 $ (1.16 ) $ (1.54 ) Diluted net loss per share $ (0.47 ) $ (0.15 ) $ (1.31 ) $ (1.76 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20240226895912/en/
Everbridge: Investors: Nandan Amladi Investor Relations nandan.amladi@everbridge.com 617-665-7197 Media: Jeff Young Media Relations jeff.young@everbridge.com 781-859-4116