Everbridge, Inc.

Good day, and welcome to the Everbridge Second Quarter Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note that this event is being recorded. I would now like to turn the conference over to Joshua Young. Please go ahead.

Thank you, Tom. Good afternoon, and welcome to Everbridge's earnings conference call for the second quarter of 2021. My name is Joshua Young, Vice President of Investor Relations for Everbridge, and with me on today's call are David Meredith, CEO, and Patrick Brickley, Senior Vice President and Chief Financial Officer. After the market closed, we issued our earnings release, which can be accessed on the Investor Relations section of our website at ir.everbridge.com. This call is being recorded, and a replay of the teleconference will be available on our IR website at the conclusion of today's event. During today's call, we will make forward-looking statements regarding future events or the financial performance of the company that involve certain risks and uncertainties. The company's actual results may differ materially from the projections described in such statements. The factors that might cause such differences include, but are not limited to, those discussed in our Forms 10Q and 10K, as well as other subsequent filings with the SEC. Information provided on today's call reflects our perspective only as of today, August 9th, and should not be considered representative of our views of any subsequent date. We explicitly disclaim any obligation to update any forward-looking statements or our outlook. Also, during today's call, we will refer to certain non-GAAP financial measures. A reconciliation of our GAAP to non-GAAP financial measures is included in our press release. With that, let me turn the call over to David for our prepared remarks. David?

Thank you, Joshua, and thanks to all of you for joining us today. We delivered excellent second quarter results, building off the strong momentum that we established in the first quarter. Both revenue and profitability exceeded our guidance, and we achieved a number of new records that reflect growing demand for our CEM suite and our public warning solutions. The COVID pandemic brought the concept of enterprise resilience into the lexicon of executive boardrooms around the world, and it continues to raise the priority of critical event management for companies, governments, and other organizations. Years ago, we saw the need to manage a globally distributed workforce, and that's why we created our travel and remote worker solution, Safety Connection, and made it a cornerstone of our CEM suite. Today, organizations are finding that safety connection is perfectly suited to serve them as companies adopt work from wherever you are and hybrid work location policies. Our next frontier of innovation responds to the increasingly blurred line between digital and physical threats. For example, the recent ransomware attack that led to gas shortages on the East Coast illustrates how what starts as a digital event can also have physical ramifications. As a result, we continue to push the envelope on innovation. We are building on the IP and best practices we've developed over 20 years across thousands of enterprises in the corporate, government, and healthcare markets, and recently established the first and only proprietary standards framework to define global best practices for enterprise resilience. the CEM certification program. Fortune 500 industry leaders are among the first organizations who have already earned the Best in Enterprise Resilience designation, and many leading brands have since embarked on the process of CEM certification. During the second quarter, we saw clear signs that organizations are thinking beyond the COVID pandemic. as demonstrated by the strong upturn we saw for larger transactions in key verticals and across multiple use cases, such as the future of work and travel-related applications. Since our founding nearly 20 years ago, our mission has been to keep people safe and organizations running faster. In parallel, we have also witnessed a growing intensity and number of threats, including extreme weather events, man-made violence, and digital threats, such as complex cyber attacks and IT outages. With recent events that include massive forest fires in Oregon, flooding in Europe and India, and hurricanes impacting the East Coast and the Caribbean, as well as cyber and ransomware attacks around the globe, our mission has never been more important. Organizations are recognizing the need for a CEM solution to mitigate the impact of these on their people, processes, and assets. In particular, I'd like to acknowledge our teams that are helping to support those impacted by the forest fires on the West Coast, burning hundreds of square miles. We've been actively supporting statewide initiatives across a variety of jurisdictions to help respond to the fires and keep people safe. Our Q2 results demonstrate the growing interest in our CEM and public warning solutions. driving revenue in the second quarter to $86.6 million, an increase of 33% from a year ago and above our guidance. This revenue beat helped drive adjusted EBITDA to a little over a half million dollars, which was also above our guidance. The combination of these financial results and our momentum in closing CEM deals has give us the confidence to once again raise our revenue and adjusted EBITDA guidance for full year 2021. Last quarter, we highlighted our growing pipeline of larger deals amid the reopening of businesses, schools, and other institutions. I'm pleased to report that we are executing well and closing these large transactions, including a record quarter for CEM wins and a new high watermark for the number of deals over half a million dollars. Both of these drove an increase in our overall average selling price, which nearly doubled from a year ago for the quarter. In fact, we reached all time highs for ASPs on both a quarterly and trailing 12 month basis with both above $100,000. Our land and expand sales model continues to drive our growth. We closed 19 CEM transactions in Q2, which was a quarterly record. These CEM deals included a healthy mix of new customers adopting CEM and existing customers expanding to the full CEM suite. And perhaps most importantly, we saw substantive success in our growing CEM channel program within the quarter, demonstrating the expansion of our CEM go-to-market strategy and adding new customers that included a leading mobile retail store operator and an innovative cloud and digital transformation services company. This partner success represents an important turning point in expanding the global reach of our CEM platform in a way that complements our direct sales efforts. Additionally, a broad cross-section of our target markets continue to drive our recent CEM success. Overall, our second quarter CEM successes included organizations like one of the largest health insurers in the United States and one of the top 10 biopharmaceutical companies, who both became new Everbridge customers in the quarter by adopting our CEM suite and deals that were among our top five largest transactions in the quarter. Another CEM win involved senior leadership at a Fortune 50-ranked health insurer who was looking for a technology partner that could enable their commitment to keep associates safe regardless of location during a time of increased risk. They selected Everbridge CEM for their new fusion center to meet these needs. Similarly, a top 10 biopharma company, an S&P 100 member, discovered that their homegrown critical event management solution was unable to support the growing number of use cases that they wanted to implement. They realized that with EverBridge, they could quickly deploy a solution to keep their employees safe, as well as deliver a high return on investment, or ROI. Other CEM suite customers in the second quarter included one of the top global cybersecurity leaders, Fortinet, who chose CEM to improve business outcomes and support their near and longer-term growth ambitions. As a global leader in broad, integrated, and automated cybersecurity solutions, we're excited to see Fortinet deploy Everbridge CEM for their expanding global footprint. and to unify its building access systems across a common physical security integration management solution. And speaking of cybersecurity, with cyber and ransomware attacks regularly making news headlines, our timing for executing the acquisition of X Matters could not have been better. Our integration plans are on schedule, and the combination of EverBridge and X Matters solutions to deliver the leading digital and physical critical event management platform is already performing ahead of our initial expectations. And we expect this trend to continue. For example, in the second quarter, one of the largest financial services organizations in the United States chose Everbridge when they needed an enterprise grade digital security solution to manage major incidents. This financial services firm is leveraging our global reach and scale out-of-the-box integrations, automation, and orchestration across multiple tools for major incident management across their operations. Despite closing the X Matters deal in the middle of the quarter, we're already seeing positive momentum, which illustrates the power of combining the CEM Suite and our enhanced digital capabilities. For example, in Q2 and within weeks of completing the acquisition, We were able to identify and close a new logo sale with managed detection and response leader eSentire, who chose X Matters Digital Security in conjunction with our CEM Suite. Our continued emphasis on LAN and Xpand resulted in a number of existing customers adding multiple new applications to become CEM Suite customers in the second quarter. These customers included a NASDAQ 100-ranked architectural, engineering, and construction software leader who upgraded to CEM in order to reduce response times from hours down to minutes. Last year, Panasonic North America, one of the world's largest electronics, appliance, mobility, and energy companies, became an Everbridge customer, selecting our risk center solution. In the second quarter, they broadened their vision to increase efficiency and close security gaps in by expanding to the CEM suite. First Republic Bank, a leading private bank serving high net worth families, first became an Everbridge customer with Risk Center last year, and then expanded to a full CEM suite after recognizing the value of a broader enterprise solution in the second quarter. Following our high-profile win with Tesla last year, in the second quarter, we closed a deal with Rivian a new electric vehicle manufacturer based in Michigan whose environmental health and safety team previously adopted Everbridge Mass Notification and Risk Center. In order to consolidate risk management and mobile workforce safety by deploying a global security operations center, Rivian expanded to CEM in the second quarter, enabling them to meet both their current and future strategic objectives. We also expanded our CEM footprint into the higher education market, reflecting our ability to attract leading brands in all categories. Johns Hopkins University, the first research university in the United States, was looking for a way to monitor threat and risk data in order to alert students, faculty, staff, and traveling home care workers of dangerous situations in their areas. They chose CEM to do just that, becoming Everbridge's first higher education CEM customer in the process. In addition to a record-breaking number of CEM deals in the quarter, we closed several large transactions that reflect the future of work with distributed workforces. For example, SAP America selected Safety Connection Pro and Risk Center to become an Everbridge customer in the second quarter. SAP's long-term vision aligns well with our CEM capabilities to manage threats across the enterprise through a single pane of glass. Additional customers who added capabilities like safety connection or risk center to support the future of work included PPL Services, the electric utility serving 1.4 million customers in Central and Eastern Pennsylvania, a Tier 1 multinational insurance company, and a leading CAD software pioneer and market leader, just to name a few. The second quarter also saw continued strong demand for our public warning solutions. We are the global leader in population-wide public warning, with solutions used by over 1,500 municipalities, counties, cities, states, and countries in every major region of the world, including more European countries than any other provider. During the quarter, we extended this leadership by signing a countrywide deal with Estonia. who Wired Magazine has named the most digitally advanced society in the world. In a country where 99% of government services are available online, Estonia required a system that supports multiple robust and reliable means of alerting the public to threats, such as severe weather, forest fires, and viral pandemics. They chose Everbridge because we could meet their stringent needs for a public warning system that is easy to use, secure, and comprehensive. This win illustrates our time to value benefit as we were able to meet Estonia's very tight implementation schedule. Our win in Estonia also highlights that countrywide public warning deals for Everbridge can serve governments at the front end, carriers at the back end, and potentially both. In the case of Estonia, all three carrier networks will also deploy our solution. European wins, such as Estonia, as well as our previous wins in Sweden, Netherlands, Norway, Iceland, and Greece, continue to position Everbridge as the leading population warning solution. Our Estonia win is also a strong reference for other European Union member countries who are evaluating solutions to help them meet the EU-wide mandate for population warning systems. We are actively responding to RFPs and are excited about the opportunities ahead of us. In addition to new wins, our recent successful public warning deployments, such as the new National Public Warning System for the United Kingdom, will both help to protect over 100 million residents and visitors, as well as serve as an excellent reference. Another important public safety win in the quarter was the Swiss Canton of Vaude, which includes Lake Geneva, a busy tourist destination, who selected Everbridge to consolidate more than 100 services for the fire brigade, police forces, ambulance services, and emergency medical services for the Canton's entire population. This deal demonstrates our powerful network effects when our platform extends across multiple stakeholders in a community. We also saw several wins at the city, county, and state level in geographies around the world, including the Middle East, where network effects are a meaningful driver of our expansion. We've gone from almost no presence in this region in this region just a few years ago to having a presence at over 60 customers and 90 sites across several countries in the Middle East today. In the US federal market, we continue to leverage our strong FedRAMP position with more authority to operate certifications or ATOs than any of our competitors and customers across numerous federal agencies and departments. One such win from the second quarter was a six-figure IT alerting transaction with the Federal Reserve Board of Governors, the governing body of the U.S. Federal Reserve System. FRBG oversees the nation's monetary policy and ensures the safety and stability of the financial system, and they wanted a solution to help speed up incident response. and the ability to connect to numerous systems as part of a very sophisticated technology stack that interacts with the Federal Reserve System, Department of Treasury, and private banks when necessary. Based on our security, scale, and proven reliability with other federal financial agencies, Everbridge IT Learning is going to be the focal point of their collaboration and incident response. With our FRBG win, Everbridge now supports every federal financial agency with at least one of our products. Turning to our metrics for the second quarter, our performance clearly reflects the result of our CEM strategy with large new customer wins, multi-product expansions, and continuing demand for higher ASP products driven by demand for our CEM solutions. We added 142 net new enterprise customers in the second quarter, increasing our enterprise total customer count to 5,890. A new high watermark of 19 customers selected or expanded to CEM, raising the total number of CEM customers to 158, a 61% increase in the number of CEM customers from a year ago. While this demonstrates excellent momentum, it also highlights our significant opportunity for continued expansion with existing customers. As in the first quarter, our momentum with large transactions continued in Q2 with quarterly ASPs that were over $100,000, driven substantially by our record CEM results. Our growth in deal sizes this year has also pushed our trailing 12-month ASP to above $100,000 for the first time to $107,000 up 59% from a year ago. Contributing to this ASP growth, we closed 60 deals valued at more than $100,000 per year, including another record number of deals valued at more than $500,000 per year, more than doubling the number of deals greater than a half million from a year ago, also driven by CEM wins. From a product mix perspective, a record 67% of new and gross sales over the last four quarters came from new products, reflecting growing demand for our newer applications. Our international business also continued to post strong growth results in Q2, with 28% of total revenue coming from outside the U.S. compared to 22% a year ago, as we expand our presence in every major region of the world. Our revenue mix by vertical was relatively consistent with past quarters, at 65% from corporate, 25% from local, state, and countrywide government, and 10% from healthcare, reflecting strong growth in the corporate market with increasing post-vaccine use cases. As always, we remind you that quarterly metrics can fluctuate, but that the longer-term trends continue to reflect our overall business momentum. These outstanding metrics demonstrate the growing market acceptance of our overall CEM strategy, as well as our ability to close larger transactions from our pipeline as organizations increasingly embrace CEM to address numerous high ROI use cases. In addition to the expansion of our direct global sales team, our growing number of channel partnerships further extends our sales reach worldwide. In the second quarter, Fortune 500 IT distribution and solutions aggregator TechData became one of the latest partners to enable customers to automate the response to critical events from cyber attacks and IT outages to severe weather events and more, and to build resilience against such occurrences. Our partnership with WizNucleus, also announced in the second quarter, provides us with deep vertical domain expertise in the nuclear, electric, and utility industries. The recent Colonial Pipeline ransomware attack is just one recent example of the disruption in cost that can be associated with cyber attacks on critical infrastructure. Our digital and physical critical event management solution leadership, enhanced by our integration of X Matters and then combined with the WISNucleus software suite, enables critical infrastructure providers to address dynamic cyber, physical, and emergency management threats much more effectively. In fact, a large U.S. nuclear plant recently selected our combined solution to replace an existing system with our new physical security integration management to comply with industry regulations while also enabling more rapid adoption of new security technologies in the future. And just today, we announced a partnership with the Associated Press, or AP, which augments and enhances our more than 25,000 risk-centered data sources. With this partnership, the AP adds further context to risks breaking in geopolitical news into our CEM platform. This will provide our customers with enhanced contextualization of risk data, leveraging the reporting speed and deep expertise of AP journalists in 250 locations across 100 countries, enabling our customers to better evaluate the potential impact of threats on their people, processes, and assets. As a global pioneer and creator of the CEM category, we regularly aim to bring together leaders from around the world to drive thought leadership and innovation. Our strong market position helped us attract thousands of executives from around the globe to the most recent installment of our Road to Recovery series of executive thought leadership symposia in May. Luminaries, C-level executives, and experts presenting included President Bill Clinton, former Secretary of State Madeleine Albright, Steve Forbes, Chairman and Editor-in-Chief of Forbes Media, as well as CDC Foundation Chief Executive Officer, Dr. Judy Monroe, and CDC Deputy Director for Infectious Diseases, Dr. J.C. Butler, as well as a special address by Director General of the World Health Organization, Dr. Tedros. If you missed the event, replays of keynotes on topics ranging from leadership at a time of crisis to assessing risks and building organizational resiliency are still available on demand. Finally, we recently launched the first and only global certification program for critical event management. This new initiative provides an assessment of an organization's readiness and resilience ahead of the next pandemic or critical event, whether it's digital or physical. Leveraging 20 years of best practices and know-how, serving nearly 6,000 enterprise customers, the assessment provides a ranking of how the organization compares to those following the latest industry best practices, which companies can share to attract and retain customers, partners, and employees. Some of the biggest brands in the world have already adopted CEM certification. such as financial services giants Goldman Sachs and Discover, mass media and entertainment conglomerate NBC Universal, multinational chemical corporation Dow, and global pharmaceutical leader Alexion, which was recently acquired by AstraZeneca. All of these leaders have attained Best in Enterprise Resilience designation. To do so, these organizations met or surpassed benchmarks in key measurable areas, demonstrating their commitment to enterprise resilience. Enterprises who go through the certification process are delivered a comprehensive analysis, including details, covering what they can do to raise their preparedness and resiliency to today's standards, a top priority for boards and C-suites. As a CEM visionary and pioneer, we believe Everbridge is well positioned to become the de facto standard for enterprise digital and physical threat preparedness, protection, and mitigation. In summary, we are excited about our progress at the midpoint of the year with momentum from CEM and public warning, growing demand for combined digital and physical resiliency solutions, and expanded use cases for the future of work. We're looking forward to sustaining our momentum in the second half of the year as we continue to execute on our strategy to penetrate and lead a multi-billion dollar market. Now, I'll turn the call over to Patrick for more details on our second quarter financial performance, as well as our guidance for Q3 and full year 2021. Patrick?