Everbridge, Inc.

Good evening and welcome to the Everbridge Inc. First Quarter 2022 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 on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Patrick Brickley, Chief Financial Officer and Co-CEO of Everbridge, Inc. Please go ahead, sir.

Thank you. Good afternoon, and welcome to Everbridge's earnings conference call for the first quarter of 2022. This is Patrick Brickley, Executive Vice President and Chief Financial Officer and Interim Co-CEO. With me on today's call is Vernon Ervin, Executive Vice President, Chief Revenue Officer and Interim Co-CEO. 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 involves certain risks and uncertainties. The company's actual results may differ materially from the projections described in such statements. 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 this call reflects our perspective only as of today and should not be considered representative of our views as 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. On today's call, Vernon will review our business highlights, and I will provide more details on the financial results and outlook. And then we will open up the call to Q&A. With that, let me turn the call over to Vernon.

Thank you, Patrick, and thanks to all of you for joining us today. Looking at first quarter, we delivered solid results that exceeded the high end of our guidance in revenue and profitability. Revenue of $100.4 million, which represents an increase of 22% from a year ago. An adjusted EBITDA was $2.6 million. The results serve as positive indication, which validate our strategy to better focus and align our organization to meet the multi-billion dollar opportunity we are pursuing. To quickly recap last quarter, We outline three strategic actions that we are taking to significantly simplify our go-to-market process and drive higher productivity, enhance sustainable growth over time. First, we simplify our product offerings, moving from several dozen individual point products to focus on four strategic CEM bundles, each targeting a specific buyer persona with a unique and differentiated technology solution. These four pillars are CEM for digital operations, CEM for business operations, CEM for people resilience, and CEM for smart security. We believe this will both simplify buying choices for our customers and simplify streamlining our sales processes for our team. Second, in the public morning market, we are continuing to leverage our industry-leading win rates to drive land and expand opportunities, as well as applying increased focus toward driving network effects that multiply the opportunity inside a region once we start to penetrate it. We have over 6,000 private and public warning customers. There's a significant opportunity here to sell into our broader CEM suite. And third, we are positing material new M&A and instead prioritizing development efforts to focus on accelerating product integrations across our existing acquired assets. In addition, as Patrick will discuss in greater depth, today we are announcing that our board and management team have implemented a plan strategically realigning our resources in order to accelerate and grow our investments in our largest growth opportunities while making our operations more efficient. We anticipate this will both produce material improvements in profitability and support sustainable growth. During the quarter, we saw early evidence that our focus on strategic realignment is resonating with our customers, which validates our strategy and gives us increased confidence as we continue to execute on our plans. We also saw positive traction with our partners of evidence by an increase in the mix of our deals, which came through partnerships. Our partners have responded well to our simplification strategy, and we're helping to drive high-velocity deals. During the quarter, resiliency and business continuity remain top of mind for our global 2,000 organizations. The ongoing effects of the COVID-19 pandemic and the impacts on both natural and man-made critical events such as natural disasters and cyber attacks, are causing organizations globally to evaluate their business continuity plans and accelerate their response to disruptions. Of course, recently, the unfortunate events in Ukraine have been at the forefront of the world's news, and we are honored to be able to help customers in impacted areas by providing risk intelligence and other technologies to protect their people and assets. With this backdrop, in the first quarter, we continue to see strong demand for interest in critical event management and public safety technology, as evidenced by healthy year-over-year growth in our trailing 12-month ASP and the number of deals larger than $100,000. Let me now turn to some examples from the first quarter that illustrate the demand we are seeing for our critical event management and public safety. For CEM, we closed 12 new growth deals around the world in the quarter. In particular, we landed a number of deals which illustrate the four strategic solutions we identified as focus areas. For example, CEM for digital operations solves for IT incidents and cybersecurity problems across both digital and physical assets. During the quarter, one of the world's largest credit card processors expanded its use of Everbridge Digital Operations product and platform across an entire enterprise, providing resiliency for its IT and operations, along with visibility at the company's CTO level. Before Everbridge, they relied on a variety of unintegrated tools, which led to errors and inefficient manual efforts. With CEM for digital operations, they are able to streamline data flow and insights across their tool sets, producing valuable efficiency gains. This significant growth deal in Q1 continues to reinforce the value of our X Matters integration into our suite of products. CEM for business operations includes E911 and travel risk components to focus on enterprise resilience for chief risk officers. During the quarter, we expanded our relationship with Kindrel, a spinoff of IBM's infrastructure service business that designs, builds, manages, and develops large-scale information systems. Kindrel selected Everbridge over our competitors due to our ability to drive operational improvements. For example, We estimate Everbridge will reduce their mean time to communicate during critical events by over 80% and drive operational efficiencies of at least $5 million over three years. Also, Harbor Freight Tools, a leading tool and equipment retailer, headquartered in California, expanded to CEM in the quarter. As a current Everbridge Mass Notification customer, Harbor Freight tools upgraded to their CEM Business Operations Solutions package to enable enterprise resilience. The single pane of glass offering that CEM affords them the biggest driving force behind their selection of Everbridge. Our factors include the full automation of notifying their contacts and stores when they are in harm's way of danger, weather, and other situations, and the ability to give their internal teams' eyes on safety and operational situations immediately. Additionally, we expanded our CEMR for one of the five largest banks in the United States, and we are honored to now provide them with CEM for safety and continuity, as well as a crisis management capability. They chose Everbridge due to the breadth of our CEM platform, and its ability to handle all aspects of dealing with critical events via a single platform, as well as the ability to scale to the needs of a large organization. CDM for People Resilience serves the needs of chief security officers and their duty of care concerns for on-site, remote, and field employees. In Q1, we're excited to have won a new deal with Surgeon one of the largest open-pit coal export mining operations in the world. This deal that was won with one of our strategic partners, ControlRisk, demonstrating the effectiveness of our partners in extending our reach. Sir John was looking to protect their corporate and mining personnel, and it chose Everbridge due to the completeness of our platform and our local presence in Latin America. This is the first time CEM deal in Latin America, and we are optimistic that we will be able to open up many, many more opportunities for us in that region. And lastly, CEM for Smart Security helps CIOs and CISOs secure government and enterprise IoT assets to protect their people and facilities. During the quarter, we entered into a contract to support the Saudi Arabia's future plan, Smart City. named Neom. The deal leveraged our smart security capabilities to keep Saudi Arabia residents, visitors, and assets safe in the face of potential threats. This was aided by the network effects of having already won Saudi Arabia's countrywide public warning system. Turning the public safety market, we continue to leverage our industry-leading win rates to drive land and expand opportunities as well as to apply increased focus towards driving network effects that multiply the opportunity inside a region once we start to penetrate it. For example, during the quarter, two of the largest mobile network operators in Germany selected Everbridge to deliver their cell broadcast emergency alerting capabilities to power the German government's nationwide public warning systems. Widescale flooding in western Germany in July of 2021 was the major trigger for Germany to implement our cell broadcasting technology to reach entire populations across Germany and will serve as an enhancement to the country's emergency response. Everbridge now powers the national public warning system for nine European countries and over 20 governments worldwide. more than any other provider. In India, the network effects from public warning contracts in four states led to the fifth state win during the quarter with the government of Maharashtra, the second most populous state in India. The state of Maharashtra was looking for a public safety incident response system to manage critical events and disasters such as cycles, such as cycles which regularly strike the Indian coast. And Madarasta chose Everbridge to provide that platform. And thirdly, the city and county of Denver, Colorado added Everbridge's resident connection feature to its mass notification system to maximize the reach of critical citizen alerts, allowing public safety officials to notify a higher percentage of their residents in the event of public health risk. and disasters such as wildfires. EverBridge already serves more than 150 customers across the state of California, and this deal is an additional demonstration of successful network effects of our solution in the state of Colorado. These examples of powerful network effects illustrate why we remain optimistic that we can expand our public safety business globally and drive enormous strategic value from it. We remain confident that we will see a continuation of our high win rates for key public warning opportunities. And just as, if not more importantly, we'll continue to benefit from network effect opportunities that expand our global presence in Europe and around the globe. During the quarter, we also are pleased that Everbridge was recognized by Frost and Sullivan for its innovative leadership by earning top spot in the Frost radar command and control software for critical national infrastructure, or CNI. Airports and safe cities global for 2021. According to Frost and Sullivan, global command and control software spending for airports, safe cities, and the CNI market will reach $5.37 billion in 2030. And we selected Everbridge as a market-leading innovator in the market. Viewed as a whole, we believe these notable customer wins and industry recognition serve as affirmation of our decision to simplify our products and go to market and to pivot our four strategic CEM bundles. Turning some specific business metrics for the quarter, we added 89 net new enterprise customers in the first quarter, ending the quarter with 6,224 enterprise customers. The decline in net ads from the recent trends was anticipated as we begin to wind down non-core applications, with approximately 45 existing customers choosing not to renew on non-core applications during the quarter. As I mentioned, 12 customers either selected or expanded to our CEM platform, bringing the number of CEM customers to 204. That's up 47% from a year ago. Our momentum with large transactions this year continue in Q1, resulting in trailing 12-month ASPs that were again above $100,000. Contributing to this ASP growth was 56 deals worth more than $100,000 per year, up from 45 deals a year ago. From a product mix perspective, 67% of the new growth sales over the last four quarters came from CEM-related solutions beyond simply our core mass notification. Our international revenue mix was 28% in the quarter, and we continue to expand in every major region of the world. Our revenue mix by vertical remains relatively consistent, with 69% from our corporate, 23% from local, state, and countrywide governments, and 8% from healthcare, reflecting a strong growth in 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 growth. Another focus area this year is realizing the leverage that is inherent in our business model. Our first quarter results with positive adjusted EBITDA that exceeded our guidance range is an example of this. We are optimistic that our strategic realignment of resources will drive attractive growth of sustainable revenue while yielding adjusted EBITDA margins that will reach double digits by the year end and which will continue to grow. Looking ahead, we are encouraged that we are seeing a return to more face-to-face meetings as we emerge from COVID-19 pandemic. We remain confident that our bundled solutions, which offer a path for growing levels of engagement, can make it easier for existing customers to expand with their CEM bundles over time, demonstrating the effectiveness of our land and expand strategy. We are optimistic that strong industry tailwinds, signs of customer re-engagement, and our simplified strategy should translate to further opportunities as demonstrated by our guidance increase. Overall, we delivered solid first quarter financial results driven by continued success of our core strategic market of CEM. We believe the actions we have taken to pause material M&A and to streamline, integrate, and reduce complexity will drive attractive, sustainable revenue growth with a meaningful increase in profitability and positive cash flow. Now allow me to turn the call over to Patrick for more details on our financial results, as well as our guidance for Q2 and for 2022. Patrick, over to you. Thanks, Ryan.