Everbridge(EVBG) - 2023 Q4 - Annual Results

Everbridge Q4 and Full Year 2023 Financial Results Fourth Quarter 2023 Financial Highlights Q4 2023 saw a 1% revenue decrease to $115.8 million, but non-GAAP net income rose to $20.2 million, Adjusted EBITDA increased to $27.0 million, and operating cash flow reached $29.6 million Q4 2023 Key Financial Metrics (vs. Q4 2022) | Metric | Q4 2023 (in millions) | Q4 2022 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $115.8M | $117.1M | -1% | | GAAP Operating Loss | $(17.8)M | $(9.7)M | Increased Loss | | GAAP Net (Loss)/Income | $(19.3)M | $16.2M | Loss vs. Income | | GAAP Diluted EPS | $(0.47) | $(0.15) | Increased Loss | | Non-GAAP Net Income | $20.2M | $18.7M | +8.0% | | Non-GAAP Diluted EPS | $0.47 | $0.41 | +14.6% | | Adjusted EBITDA | $27.0M | $20.6M | +31.1% | | Cash Flow from Operations | $29.6M | $4.4M | +572.7% | - Key deal metrics for the quarter included adding 55 CEM customers, securing 48 deals over $100,000, 3 deals over $500,000, and 1 deal over $1 million[4] - Annualized Recurring Revenue (ARR) was $408 million[4] Full Year 2023 Financial Highlights For the full year 2023, Everbridge achieved 4% revenue growth to $448.8 million, significantly improving GAAP net loss to $(47.3) million and more than doubling non-GAAP net income to $64.7 million, with Adjusted EBITDA reaching $84.9 million Full Year 2023 Key Financial Metrics (vs. FY 2022) | Metric | FY 2023 (in millions) | FY 2022 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $448.8M | $431.9M | +4% | | GAAP Operating Loss | $(61.4)M | $(84.2)M | Reduced Loss | | GAAP Net Loss | $(47.3)M | $(61.2)M | Reduced Loss | | GAAP Diluted EPS | $(1.31) | $(1.76) | Reduced Loss | | Non-GAAP Net Income | $64.7M | $31.9M | +102.8% | | Non-GAAP Diluted EPS | $1.48 | $0.70 | +111.4% | | Adjusted EBITDA | $84.9M | $43.1M | +97.0% | | Cash Flow from Operations | $72.6M | $20.2M | +259.9% | Company Overview and Key Metrics Everbridge specializes in Critical Event Management (CEM) and national public warning solutions, with Annualized Recurring Revenue (ARR) as a key performance metric - Everbridge's core business is empowering enterprises and governments to anticipate, mitigate, respond to, and recover from critical events using its CEM technology[5] - Annualized Recurring Revenue (ARR) is a key metric defined as the expected recurring revenue in the next twelve months from active customer contracts[6] Non-GAAP Financial Measures The company uses non-GAAP financial measures like non-GAAP operating income, net income, and Adjusted EBITDA to present core operating performance, excluding specific non-recurring or non-cash items - The report includes several non-GAAP financial measures, including non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, Adjusted EBITDA, and free cash flow[7] - Key adjustments to derive non-GAAP figures include excluding amortization of acquired intangible assets, stock-based compensation, costs from the 2022 Strategic Realignment, and an Anvil legal dispute accrual[8] - The company states that these non-GAAP measures are used by management for financial and operational decision-making and to evaluate core performance and trends[9] Forward-Looking Statements This press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially, as detailed in SEC filings - The document contains forward-looking statements subject to a 'safe harbor' provision, which are based on current expectations and are not guarantees of future performance[11] - Key risks that could affect results include the ability to attract and retain customers, market developments, competition, and potential liability related to data privacy and security[11][12] Financial Statements Consolidated Balance Sheets As of December 31, 2023, total assets decreased to $1.026 billion, while total liabilities reduced to $723.6 million, and total stockholders' equity increased to $302.3 million Key Balance Sheet Items (in thousands) | Account | Dec 31, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $122,440 | $198,725 | | Total Assets | $1,025,885 | $1,125,664 | | Convertible senior notes (current & non-current) | $359,671 | $500,298 | | Total Liabilities | $723,576 | $836,553 | | Total Stockholders' Equity | $302,309 | $289,111 | Consolidated Statements of Operations and Comprehensive Income (Loss) For FY 2023, revenue grew 4% to $448.8 million, gross profit reached $317.3 million, and both operating loss and net loss significantly narrowed to $(61.4) million and $(47.3) million respectively Full Year Income Statement Summary (in thousands) | Metric | Twelve Months Ended Dec 31, 2023 (in thousands) | Twelve Months Ended Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Revenue | $448,788 | $431,892 | | Gross Profit | $317,301 | $296,958 | | Operating Loss | $(61,399) | $(84,183) | | Net Loss | $(47,305) | $(61,174) | | Diluted Net Loss per Share | $(1.31) | $(1.76) | - Total stock-based compensation expense for the full year 2023 was $48.9 million, a slight increase from $47.6 million in 2022[15] Consolidated Statements of Cash Flows For FY 2023, cash from operations significantly increased to $72.6 million, while financing activities used $131.9 million, resulting in a net cash decrease of $76.2 million Full Year Cash Flow Summary (in thousands) | Cash Flow Activity | Twelve Months Ended Dec 31, 2023 (in thousands) | Twelve Months Ended Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $72,575 | $20,167 | | Net cash used in investing activities | $(17,301) | $(18,893) | | Net cash used in financing activities | $(131,898) | $(290,520) | | Net (decrease) in cash | $(76,223) | $(291,164) | Reconciliation of GAAP to Non-GAAP Measures Reconciliation of Gross Profit and Operating Income For FY 2023, non-GAAP gross profit was $332.7 million and non-GAAP operating income was $62.1 million, a significant improvement from GAAP operating loss after various adjustments FY 2023 Reconciliation of Operating Loss to Non-GAAP Operating Income (in thousands) | Description | FY 2023 (in thousands) | FY 2022 (in thousands) | | :--- | :--- | :--- | | Operating loss (GAAP) | $(61,399) | $(84,183) | | Amortization of acquired intangibles | $36,840 | $42,982 | | Stock-based compensation | $48,889 | $47,620 | | 2022 Strategic Realignment | $13,751 | $17,357 | | Anvil legal dispute accrual | $24,000 | $1,000 | | Non-GAAP operating income | $62,081 | $24,719 | Reconciliation of Net Income (Loss) and EPS For FY 2023, GAAP net loss of $(47.3) million was reconciled to a non-GAAP net income of $64.7 million, resulting in a non-GAAP diluted EPS of $1.48 FY 2023 Reconciliation of Net Loss to Non-GAAP Net Income (in thousands) | Description | FY 2023 (in thousands) | FY 2022 (in thousands) | | :--- | :--- | :--- | | Net loss (GAAP) | $(47,305) | $(61,174) | | Adjustments (Amortization, SBC, etc.) | $112,017 | $83,070 | | Non-GAAP net income | $64,712 | $31,896 | FY 2023 GAAP vs. Non-GAAP Diluted EPS | Metric | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net loss per diluted share (GAAP) | $(1.31) | $(1.76) | | Non-GAAP net income per diluted share | $1.48 | $0.70 | Reconciliation to EBITDA, Adjusted EBITDA, and Free Cash Flow For FY 2023, Adjusted EBITDA nearly doubled to $84.9 million, with an 18.9% margin, and Adjusted free cash flow significantly increased to $63.8 million FY 2023 Reconciliation to Adjusted EBITDA and Adjusted Free Cash Flow (in thousands) | Metric | FY 2023 (in thousands) | FY 2022 (in thousands) | | :--- | :--- | :--- | | Net loss | $(47,305) | $(61,174) | | EBITDA | $10,894 | $(3,563) | | Adjustments (SBC, Realignment, etc.) | $73,964 | $46,678 | | Adjusted EBITDA | $84,858 | $43,115 | | Net cash from operating activities | $72,575 | $20,167 | | Free cash flow | $50,818 | $1,640 | | Cash payments for 2022 Strategic Realignment | $12,940 | $12,266 | | Adjusted free cash flow | $63,758 | $13,906 | Supplementary Information Remaining Performance Obligations As of December 31, 2023, total Remaining Performance Obligations (RPO) were $504 million, with $314 million expected to be recognized as revenue within the next twelve months Remaining Performance Obligations as of Dec 31, 2023 (in millions) | Contract Type | Total RPO (in millions) | RPO in Next Twelve Months (in millions) | | :--- | :--- | :--- | | Subscription and other | $494 | $305 | | Professional services | $10 | $9 | | Total | $504 | $314 | Company Contacts This section provides contact information for investor and media inquiries - Investors: Nandan Amladi, nandan.amladi@everbridge.com, 617-665-7197[25] - Media: Jeff Young, jeff.young@everbridge.com, 781-859-4116[25]