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Everbridge, Inc. (EVBG 0.03%)
Q2Â 2019 Earnings Call
Aug 5, 2019, 4:30 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good afternoon, ladies and gentlemen, and welcome to the Everbridge, Inc. Second Quarter 2019 Earnings Conference Call. [Operator Instructions]. Later, we'll conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.
I'd now like to turn the conference over to host Patrick Brickley, CFO. Please go ahead, sir.
Patrick Brickley -- Senior Vice President and Chief Financial Officer
Good afternoon and welcome to Everbridge's Earnings Conference all for the Second Quarter of 2019. This is Patrick Brickley, Senior Vice President and Chief Financial Officer of Everbridge. With me on the call today are Jaime Ellertson, Executive Chairman and David Meredith, CEO.
After the market closed today, we issued a press release with details regarding our second-quarter results, which can be accessed on the Investor Relations section of our website at ir.everbridge.com. This call is being recorded, and a replay will be available on our IR website following the conclusion of the call.
During today's call, we will make statements related to our business that may be considered forward-looking under federal securities laws. These statements reflect our views only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. These risks are summarized in the press release that we issued today.
For a further discussion of the material risks and other important factors that could affect our actual results, please refer to our filings with the SEC, including our recent 10-Q and 10-K filings. Also, during the course of today's call, we will refer to certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our press release.
Finally, at times in our prepared comments or responses to your questions, we may offer metrics that are incremental to our usual presentation to provide greater insight into the dynamics of our business or our quarterly results. Please be advised that we may or may not continue to provide this additional detail in the future.
With that, let me turn the call over to Jaime and David for their prepared remarks.
Jaime Ellertson -- Executive Chairman
Thanks, Patrick, and thanks to all those joining our Q2 2019 earnings call today. Today, I'm joining the call as our Executive Chairman, a new role I took on as of David Meredith is joining Everbridge's CEO on July 15. I will do the majority of the presentation today given I held the CEO role for all of Q2 and for our next quarter's call, I will switch seats with David and he will address all the Q3 operating results with Patrick covering financial details and I'll refocus on a few strategic topics.
During Q2 and continue into July, we've been very busy. Q2 marks the 12th consecutive quarter of exceeding our guidance, as we continue to expand on our leadership in the critical event management market. Revenue in the second quarter of $48.4 million was up 35% from a year ago and beat the top end of our guidance by $300,000.
Our revenue upside flowed straight to the bottom-line with adjusted EBITDA coming in at $0.4 million also well ahead of guidance.
Before I begin my review of our Q2 highlights, I feel compelled to mention the terrible acts of violence that occurred in America over the past few days. We are deeply saddened by these events. With an increasing number of often deadly critical events affecting all of us, we believe our mission at Everbridge of providing the best technology and people focus on keeping people safe and businesses running is more relevant and important than ever before.
There are numerous customers in both the affected areas of El Paso, Texas and Dayton, Ohio and our teams continue to support and provide outreach during this difficult time.
Now, let me proceed with a review of some of the most important activities occurring in Q2 that position us to further capitalize on the growth opportunities ahead. During the second quarter, we had a big win for our Population Warning Solution with a countrywide Australia deal. This win was complemented by multiple new and expansion population warning projects in Asia and Europe, our best new sales quarter since we acquired UMS. All of which support our strong international growth trends and the very real opportunity for population warning going forward. And in June, we introduced David Meredith to all of you attending our second Analyst Day event in New York City. Dave is now on Board and actively engaged in running the business. I'll ask David to share some of his impressions after his first few weeks as CEO in a moment.
Given the identification of risks and threats, our critical first step in identifying potentially impactful events for our customers, the richness of risk and threat data sources has always been key to our fundamental CEM value proposition. To further extend our leadership in risk data, we announced on Friday of this last week, our latest acquisition NC4 to bring together the best risk and threat data solutions with the leading integrated CEM platform.
I'll get into more detail on this later, but we're excited about both the strategic benefits of this acquisition as well as the compelling financial synergies we expect to achieve.
During the second quarter, all three components of our growth strategy made important contributions to our results and success. Our Critical Event Management or CEM, as I may refer to it, platform is increasingly driving new and growth sales. We are in the early stages of what we believe is a large growth market where every quarter we continue to provide key proof points of the potential for long-term market expansion.
We signed the largest number of new and growth CEM deals ever at eight in Q2. As we previously mentioned, today, we have staggered our initial CEM go-to-market effort, primarily focused on North America corporate and healthcare spaces, and these verticals produced a growing number of new customer transactions in Q2.
We also were pulled into additional markets and geographies during Q2. In response to specific customer requests for CEM. The first was our international win in Asia at the Overseas Chinese Banking Corporation, or OCBC, which is one of the big three Singaporean banks, all of whom have become customers in the last two years, as well as our first CEM win in public transportation market with New York Metropolitan Transit Authority, the largest municipal transport organization in the US, and the second largest in the world with over 10 million passengers per workday.
We believe this pull into new markets that we are not yet proactively addressing provides a positive glimpse at the broader opportunity ahead of us as our CEM go-to-market strategy expands in 2020.
Our second growth driver is the continued success of Population Alerting, including our Population Warning and core Mass Notification applications. In the second quarter, we sign marquee deals like the country of Australia, a very large multi-million dollar per year, multi-year Population Warning deal, as well as Mass Notification deals with two new top 25 US cities. Our third quarter -- our third growth driver is our almost 4,700 enterprise customer base with whom we saw continued high retention rates in Q2 as well as solid momentum with our cross and up sell success, including significant growth deals such as Whirlpool, Thompson Reuters and Nintendo.
Now, a few key metrics in addition to our strong CEM wins in the quarter. Our Q2 results show continued progress in all our key financial metrics. We added a record number, our second highest number of net new enterprise wins at 135 in Q2, ending the quarter at 4,667. Our average selling price for these customers over the trailing four quarters also grew, reaching $79,000 in the second quarter, up 72% from $46,000 a year ago.
As previously mentioned, we added eight new CEM customers in the quarter contributing to our overall ASP growth were 88 multi-product deals that we signed in Q2 compared with 82 a year ago. During Q2, we signed 30 deals valued at over $100,000 per year, up 36% over Q2 of 2018 and 50%-- 57% of all new and growth sales were from new products compared to 46% a year ago.
Our international business continues to grow at a very healthy pace, representing now 23% of total revenue in the quarter compared to 19% a year ago. Our revenue mix was fairly consistent in Q2 at 55%, for our corporate vertical, 33% for local, state and federal government and 12% for healthcare, as we continue to see growth from all our vertical markets.
While every one of our quarterly metrics continues to improve in Q2, some achieving new records, we want to remind you that given the very large deals involved in our CEM and Public Warning business, this quarter metrics can fluctuate, but the long-term trends are clearly going in the right direction.
Now, let me provide some additional color on the deal activity that help drive these strong metrics. In the CEM marketplace, we saw several important trends and events that occurred in Q2. This past quarter marks the first time we saw customers pull us into new markets, both geographies and new verticals where we had previously not targeted or actively sold our CEM solution.
First example is New York Metropolitan Transit Authority, the largest transit authority in North America which sought out our CEM platform and selected Everbridge Critical Event management marking the first time we have sold into this historically strong public, state and local government market.
The second example would be our sale to OCBC of Singapore, where the bank requests our platform again by name, ahead of our international launch in 2020. Both of these examples demonstrate our leadership position in this rapidly expanding market as well as our platform differentiation versus other point solutions.
And in Q2, we saw new customers like the largest resort and gaming company in the West Coast to chose our CEM solution, driven by a brand new use-case. This large hospital organization wanted to enhance the security and safety hospitality, excuse me, organization wanted to enhance the security and safety of their over 5,000 mobile employees, including housekeepers and crew working across their large resort property at all hours of the night.
Our CEM solution, powered by Visual Command Center, VCC and Safety Connection will enable the security and operations teams to immediately identify employees that have triggered a panic button, know their exact location, and then respond all to help keep workers safe. And this new use-case is important because it's driven by the surge in wearable devices, a specific growing IoT, safety and security market driven by a growing body of regulatory requirements that mandate industries like hospitality to provide panic button or remote safety solutions for mobile and remote workers.
Legislation requiring hotels to provide panic devices to protect the hotel employees has already been signed in large states like New Jersey and Washington, as well as being adopted in cities like Chicago, Miami Beach and Sacramento to name a few.
The last trend I'd like to highlight is the inclusion of our newest application Crisis Management in our new CEM deals. Customers like Lab Corp. and OCBC, among others shows Crisis Management as a component of their new CEM purchase, as well as existing customers like Red Hat, who added CEM to an existing implementation.
The release of CEM Crisis Management in Q1 marks the fifth application our CEM suite added to our risk data, Visual Command Center, Mass Notification and Safety Connection applications, a total of five apps in our CEM solution, which drove an increased sales price between 10% and 25% in these new CEM deals.
In Q2, these trends helped us in closing our growth win in Singapore with OCBC, the second largest bank in Southeast Asia, who added VCC to their existing implementation. The six figure transaction OCBC represents our first VCC and CEM customer in Asia.
Our win at the New York MTA was a new business deal with a value of over $500,000 in annual contract value. Everbridge now serves all five of the busiest transit agencies in North America. We believe this important new customer win was facilitated by the network effect of our strong existing presence in the tri-state area, where we already have numerous public safety and government implementations from the statewide deals in New York and Connecticut to leading cities and states, departments across the region. In addition to these Q2 CEM deals, we closed several other important wins, including contracts with organizations like Momentum Worldwide, a leading global advertising and marketing agency with employees located around the world, who hosts and staffs global marketing events in diverse locations.
Lab Corp. an S&P 500 Company and World's Leading Health Diagnostic Company who purchased our complete suite of CEM Solutions, as well as one of the largest providers Electronic Design Automation Software, who is also a top 20 software company worldwide. Notably, all of these wins, both new and growth deals represented six figure transactions.
Now a little color on our Population Alerting business. I remind you this category includes our Mass Notification, Instant Communication, Community Engagement and primarily for international markets, our Public Warning Solutions. The second quarter was highlighted by our countrywide win in Australia, a public warning solution to use to power Emergency Alert Australia providing populationwide alerting to help reach the country's over 25 million residents and approximately 9 million annual visitors in a multi-year multi-million dollar contract. This initial award includes our Public Warning front end, which will be connected to each of the three principal Australian carriers', location-based infrastructure applications.
However, in Australia's case, only Telstra, as a carrier has an existing location-based learning solution in place, providing Everbridge the opportunity to upsell two of the carriers, our location-based solutions. Our location-based or LBAS solution, as I"ll refer to the future, can significantly grow this overall new customer relationship.
During the quarter, we added several other new and growth Population Alerting wins across all our markets, including corporate, healthcare, government, education, international.
First, speaking of the potential for a combined population alterting and location-based alerting opportunities, we closed our fourth Singaporean carrier for our joint PAS and LBAS Solution, we will enable this carrier to analyze and identify specific mobile devices connected to its network in an affected area and then communicate via two-way SMS messages in multiple different languages during an emergency situation.
This PAS and LBAS deal came in at over a $1 million in Q2. We also closed several new deals for secondary population warning use-cases within countries who had already purchased our core PAS or LBAS solutions, beginning with Singapore's Ministry of Home Affairs that will utilize the existing solution to work with the Department of Immigration to protect visitors and in the Nordics Pharmaton Corporation will be leveraging our Oslo LBAS implementation to notify its large employee population related to safety concerns. In North America, new population alerting wins with our Mass Notification, Instant Communication and Community Engagement Solutions included a multinational electronic corporation who is focused on standardizing their critical communications across multiple divisions for the organization. Similarly, another leading high-tech organization, in the semiconductor space, shows Everbridge MN and IC to automate their playbooks and provide best-in-class communication to their over 300 global facilities and 40,000 plus employees. Other corporate and community engagement wins, other corporate Mass Notification and Community Engagement wins in this category included large growth deals with name brands like Whirlpool, who committed to a $300,000 annual contract value expansion of the current implementation, DoorDash, who rolled out Mass Notification as well as numerous other leading financial organizations, manufacturers as well as large service organizations.
In healthcare, we signed New York City Health and Hospital Corporation, the largest municipal health system in the US, with over 60,000 employees and 1.4 million patients for an ACV over $300,000. Tower Health, 1,200 bed health system serving over 2.5 million people in Pennsylvania, Rady Children's Hospital in San Diego and Mercy Hospital in Chicago to name but a few.
In the state and local government category, we had a very busy Q2. We closed a number of new top 25 cities in the quarter, like Nashville, one of the 10 fastest growing cities in North America, as well as Colorado's capital and most populous city, Denver.
In addition, other major cities included St. Lewis. We also continue our success with major state agencies, with names like the New Jersey Department of Treasury, whom along with the State Police, Homeland Security and the Department of Environmental Protection, are spearheading a statewide communication solution.
New York, which I've already mentioned, brought us wins like the New York MTA and the New York Municipal Health Corps. And finally, in Florida. Wins at Florida Department of Corrections and the Department of Fishing and Wildlife Conservation Commission became our 14th and 15th respective state agencies to select and implement Everbridge Mass Notification.
Q2 was a strong example of our network effect, where existing customers like the state of New York, the city of New York and all the public transportation and airports can positive influence our ability to win additional customers or Florida, where we are rapidly rolling up the entire state government leveraging our statewide implementation.
Additional public market wins included agencies like Hawaii, Department of Airports, Texas Workforce Commission, Virginia State Police as well as top counties like three more North Carolina counties following our recent success and signing the most populous counties in North Carolina last year, as well as cities like Suffolk in Virginia and La Quinta in California.
In the final state local government segment, Higher Education, we signed new customers such as Tulane University as part of a Proactive Campus Safety initiative, as well as University of North Texas System, Carson University and St. Mary's College to name a few. At the federal level, are fed ramp authorization continue to be a key driver of our success. During the quarter, we continue to expand into the federal and defense space with a Safety Connection contract at the US Nuclear Regulatory Commission. The NRC chose Everbridge for both Critical Communications and Mobile safety travelers and field personnel.
Another federal win was the Bureau of Safety and Environmental Enforcement, which is responsible for promoting safety, protecting the environment and conserving resources offshore through vigorous regulatory oversight enforcement. The agency with a large number of field inspectors was a good fit with our dynamic location capabilities that enabled the notification of mobile personnel whenever and wherever a critical event happens.
One more example of our federal market success was one of the largest leading government solution integrators who sought out an Emergency Notification solution. Given our strong track record in Mass Notification and this consulting organization's diverse and field-based mobile workforce, we are able to upsize this win into a six figure MN and Safety Connection deal where a fed ramp authorization was again a key factor.
Finally, one last example in the federal market would be the Marion VA Medical Center, who moved over from a competitor to Everbridge to leverage Safety Connection.
Now some color on our most successful applications, like Visual Command Center, Safety Connection and IT Alerting, which continue to grow rapidly in Q2, including impressive gains with our VCC solution that achieved 129% growth over the same period a year ago.
Key IT Alerting wins in Q2 included one of the largest credit rating agencies in the US, a leading hotel brand, Christ Hospital System in Cincinnati, where this over 500 bed facility spread across over 100 locations in Ohio stopped the competitive process and instead selected our integrated Critical Communications solution, including IT Alerting, an approach that resonated with upper management.
Our overall IT Alerting business grew 41% year-over-year. Our VCC and Safety Connection businesses continue to grow rapidly, in part fueled by inclusion of CEM deals. For VCC, recent quarter wins included the previously mentioned Momentum, Lab Corp., New York MTA and OCBC where the customer specifically added VCC to an existing MN, ICSC implementation in a six-year deal, as well as customers like Thompson Reuter, who added VCC on a stand-alone basis.
On the Safety Connection side, we posted strong new and growth sales that were up 59% on a trailing 12-month basis, including net new wins like the Canadian Imperial Bank and Commerce or CIBC, one of the big five Canadian banks with over 40,000 employees for an over $200,000 ACV deal, including MN and Safety Connection and a leading mass media and entertainment conglomerate, also an existing customer who wanted to optimize their security and business programs and consolidate multiple systems into one single platform, again resulting in another $200,000 plus growth deal.
Another new Safety Connection win was with Alexis, a leading life sciences organization and one final Safety Connection highlight would be one of the largest US companies specializing in tree pruning and vegetation management for utilities and government agencies, Asplundh Tree Experts employs over 34,000 people, many in remote field locations that can be impacted by everything from the rapid onset of inclement weather to broader dangers like wildfire. Ultimately, our ability to help inform and protect employees in these remote locations, depending on the severity of an incident made us the right choice for this employer.
Now allow me to turn for our international segment where we continued our string of strong results. In addition, to the Population Alerting wins already mentioned, we saw key wins in Europe with Edinburgh Airport, a leading banking software company, the Department of Digital Culture, Media and Sport in the UK, as well as booking.com in the Netherlands, a leading conglomerate, Omari of Saudi Arabia and Grupo Bimbo, one of the largest companies in Mexico who became a customer of Everbridge by selecting Safety Connection and IT Alerting to be deployed across thousands of personnel in more than 10 global locations.
All examples of new Europe, Middle East and Latin American new customer wins. In addition to these new wins, we also saw numerous upscale or growth transactions with organizations like Local Lynx purchase of our IT Alerting Solution, our Crisis Management Solution selling into existing customers like Prudential and Euroclear in the UK. In the Scandinavian market wins with every and Norwegian Air. And in Southern Europe, we saw significant expansion of our relationship with Airbus, who added Safety Connection in the second quarter.
In Asia, we saw wins at leading organizations like Etiqa Insurance for MN. SP Power, selecting Safety Connection or CLP, as a cross sale example. All of these new and growth transactions combined with our strong Population Alerting wins lead us to a continuation of a rapid expansion in our international business in Q2.
Shifting gears to our recently announced acquisition of NC4, as I mentioned in my introductory comments, this is a strategic deal. As we've previously stated, our M&A activity would focus on targets that could broaden or deepen our CEM platform or geographic targets that could accelerate our growth in the new markets. The NC4 acquisition accomplishes the former. A combination of NC4's Real-time Threat Intelligence and analyst teams with Everbridge's market-leading CEM platform creates the industry's only end-to-end threat assessment and incident communications and management platform, reducing the impact of internal and external threats to employees and assets to keep people safe and businesses running.
Now a few more specifics about the strategic nature of the transaction. First, NC4 is a company, we know well, as we've been strong partners for more than 10 years and today count over 150 joint customers. Second, NC4 delivers a combination of thousands of the most trustworthy threat data sources from across the globe with an experienced team of over 40 incident analysts to create the industry's leading source of verified data and hyper-local threat intelligence.
NC4 generates nearly 700 incident reports and more than 27,000 geo-tagged alerts each day for many of the world's largest businesses, global organizations and government agencies, including over 100 of the Fortune 500, a key target market for CEM. Our CEM value proposition begins with the ability to identify risk or threat event, either man-made or natural disaster that could impact a customer's assets, people or locations and NC4's broad coverage of the risk and threat landscape enables our CEM customers to identify the events that matter to them most and begin remediation efforts faster to protect their people, operations and brands ultimately, driving better ROI for CEM with our largest customers.
Going forward, we will combine our existing Global Intelligence operations and Risk Intelligence solution with a substantially larger NC4 Real-time Threat Intelligence and analyst teams. Together NC4 and Everbridge will provide the most comprehensive solution for enterprises and government agencies to reduce the time-to-know that a critical that has occurred through to remediation all from an integrated single platform CEM.
With the total deal size of approximate $83 million, this transaction is our largest M&A transaction to-date. As our press release stated, the largest business component of this overall transaction has been closed. However, additional components are not expected to be closed until the end of the third quarter. The acquisition upon completion is expected to be accretive to Everbridge's non-GAAP financial results within 12 months and we plan on providing further financial details after completion of the entire transaction.
Concluding my comments on the acquisition, I'd like to emphasize that we believe NC4 will be a real accelerant for our business. With over 100 of the Fortune 500 customers already in the contract. This combination can help introduce CEM and drive continued penetration in our most strategic markets.
Now, turning to a few operational comments from Q2, I must say our biggest operational news occurred in June as we announced our new CEO, David Meredith. Many of you have heard and met David at our June Analyst Day event. But for those of you new to the story, David is an accomplished tech executive, who most recently served as CEO of a multi-billion dollar cloud leader Rackspace, which I might add is a satisfied customer of Everbridge. His earlier career also includes numerous high-growth, smaller organizations as well as a number of scaled billion dollar plus successes, a key reason why I believe David is the right person for the job to lead Everbridge's continuing growth story. With David's arrival, I have moved into my role -- new role as Executive Chairman of Everbridge and allow me to stress one key management point. We now have one person driving our bus and managing all day-to-day operations at Everbridge and that's David.
I remain committed to Everbridge's success, but will do so as Executive Chairman, assisting David with a strategy, with a particular focus on M&A and leading our Board of Directors. David has already hit the ground running and he'd like to share some of his thoughts after nearly a month at the helm.
David, over to you.
David Meredith -- Chief Executive Officer
Thanks, Jaime. Good evening, everyone. And for those analysts and investors whom I met at the average Analyst Day, it's good to reconnect and to everyone else, I look forward to meeting you at a future industry or investor conference. As Jaime began, this past weekend was a somber reminder of the impact and frequency of critical events around the world.
The Everbridge mission is committed to help our customers and users prepare for and mitigate these events to keep people safe and their businesses running. I can say that after a few weeks here, I am even more convinced about the importance of our mission, the scope of our opportunity and the talent of the Everbridge team.
First, one of the things that's usually harder to tell before you actually start working somewhere is what the cultural fit is like and how the company's values and mission will match with your own as it relates both to day-to-day activities as well as to long-term thinking.
On that front, I can now say that we are 100% in alignment on the job at hand and the entire leadership team is committed to our core mission of keeping people safe and businesses running even during the most extreme events. That's been evident in our results to-date, and I expect that our momentum will only strengthen over time.
And my view of Everbridge is fulsome as it's been developed over the last few years, as both a customer and now as the new CEO. As a customer, I got to see Everbridge's capabilities. Not only to give us peace of mind, but also in action at the time of crisis. It was in that latter moment that I really experience and appreciated the power of the Everbridge platform. And those initial customer impressions were cemented further, when I did a fair amount of due diligence to get to know what I would be in for. In speaking with the Board, the senior leadership team, and most importantly, a number of existing customers, I began to appreciate not only the critical nature of our work at Everbridge in protecting people, assets, businesses and their processes but also the size of the opportunity.
And finally, a few words about that opportunity. When you look at many of the high-growth tech companies in the market today, you often see a single large market opportunity driving the long-term success of the entity. I'm excited that Everbridge has a multifaceted growth engine that begins with a customer base that renews that industry leading levels and enables net retention of 110% plus. In other words, a solid base to support growth.
In addition to this healthy customer base, we have three avenues of growth. First, the simple cross-sell and up-sell of nine software applications into our base that currently averages less than two products per customer. Second, a very large population warning opportunity that is shit beginning to hit its stride with new countrywide opportunities like Australia and Singapore in Q2. Well ahead of the massive EU opportunity available to us in 2020 and beyond.
And finally, our most strategic opportunity, CEM, where we continue to expand our solutions suite and establish our position as the de facto leader in this important new multi-billion dollar global market. For all of these reasons and because of the quality and commitment of the team I've met thus far at Everbridge, I can tell you we have a truly special opportunity going forward to continue to build long-term value.
Now, let me turn things back over to Jaime.
Jaime Ellertson -- Executive Chairman
Thanks, David. Finally, before I pass the call to Patrick, I wanted to also mention that in Q2, we received the prestigious ISO 27001 certification. The International Standard outlining best practices for information security management systems. This certification demonstrates Everbridge's global commitment to a repeatable, continuously improving risk-based security program. We also announced that Everbridge is the only US headquartered emerging notification provider to obtain Germany's C5 compliance standard and accreditation for cloud operations.
In summary, in Q2, we delivered another strong quarter with results exceeded our guidance, driven by some exciting new trends, accelerating the demand for our most strategic platform CEM combined with continued strong execution around our global Population Alerting business both internationally with large population warning wins such as Australia, Singapore and the Nordics, but equally with core MN wins in leading top cities and counties in North America.
Our Q2 results also illustrated growing deal sizes, increasing multi-product wins and of course, record number of CEM deals. And finally, our NC4 acquisition further strengthens our leadership position in this market and we are better positioned than ever to capitalize on the multi-billion dollar opportunity we see ahead of us.
Now I'll turn the call over to Patrick for more details on our financial performance and our forward guidance. Patrick?
Patrick Brickley -- Senior Vice President and Chief Financial Officer
Thanks, Jaime. I will provide some financial highlights from the second quarter and then review our guidance for the third quarter and the full-year. Revenue in the second quarter was $48.4 million, an increase of 35% from a year ago and above the high-end of our guidance range. With the anniversary of our UMS acquisition at the beginning of April, our growth in the quarter was primarily organic. As we balance investing in our future growth with managing costs. Our revenue over performance went directly to the bottom line with adjusted EBITDA that was also above the top-end of our guidance range at positive $0.4 million.
Our growth continues to be driven by new customer additions, larger deal sizes and expanding relationships with existing customers. Our dollar-based net retention rate remains above 110%, reflecting the significant value and satisfaction we provide to our customers. We ended the quarter with 4,667 enterprise customers, an increase of 135 from the end of the first quarter.
Looking at the details of our P&L, unless otherwise indicated, I will be discussing income statement metrics on a non-GAAP basis. A reconciliation of GAAP to non-GAAP measures has been provided in the earnings release we issued earlier today.
Gross margin was 71.1%, roughly in line with gross margin of 71.5% a year ago, but an improvement of over 200 basis points from the first quarter due to the combination of a smaller purchase accounting impact on acquired deferred revenue and improving efficiencies with scale.
As always, keep in mind that individual quarterly gross margins may fluctuate from time-to-time and should not be considered indicative of any trends. Total operating expenses in the quarter were $36.4 million, an increase of 24% from a year ago, reflecting the combination of continued products and headcount investments, in addition to incremental expenses of acquired businesses offset by improving operating leverage. Expenses in the second quarter included approximately $350,000 in M&A related costs.
As I mentioned, adjusted EBITDA was a positive $0.4 million compared to a loss of negative $1.8 million in the year-ago period and was above our guidance range even after those M&A related costs.
Net loss in the second quarter was negative $2.4 million or negative $0.07 per basic share, which was also better than our guidance and an improvement from our year ago net loss of negative $5.1 million or negative $0.18 per basic share.
On a GAAP basis, our net loss was negative $12.1 million also better than our guidance range and our performance in the year ago quarter.
Turning to our balance sheet, we ended the quarter with $238.6 million in cash, cash equivalents and short-term investments compared to $258.3 million at the end of the first quarter, primarily due to a free cash outflow of negative $15.2 million in the quarter consistent with historic seasonal trends.
Total deferred revenue was $98.0 million at the end of the quarter, an increase of 19% from a year ago. As we've noted on prior calls, our deferred revenue balance at the end of any given quarter can vary due to a number of factors. As such, deferred revenue is not always a meaningful indicator of the underlying momentum in our business from a quarterly perspective, though, we believe its upward trajectory is directionally relevant on a longer-term basis.
Note that our balance sheet at the end of the second quarter does not include the impact of our NC4 acquisition, which was just announced. As Jaime indicated, we are acquiring NC4 for approximately $83 million made up of approximately $52 million in cash and approximately 321,000 shares of our common stock.
Jaime has reviewed the strategic highlights of the acquisition. Of course, we expect the acquisition to provide significant financial benefits as well. The acquisition includes NC4's Risk Center and Emergency Operations Center solutions as well as the NC4 brand, but does not include NC4 Cyber Security or Law Enforcement solutions. Given that certain components of the transaction will not be finalized until the end of the third quarter and that purchase accounting cannot be completed until then, we will not be updating our guidance for the acquisition until our third quarter call.
That said, as we indicated in our press release last week, we expect the transaction to be accretive to non-GAAP financial results within 12 months.
Now let me turn to our outlook for third quarter and our increased guidance for the year. We had a solid first half and are optimistic about the second half of the year. Our outlook for the rest of the year includes a minimal contribution to revenue for known NC4 contracts, most of which will be recognized in Q4. At the same time, we started incurring expenses related to NC4 this month, which were also considered in our guidance.
We expect this near-term profitability headwind to turn into a tailwind within the next 12 months, and we expect the transaction to ultimately be a healthy contributor to our overall profitability as we realize synergies.
We will provide additional color on the anticipated impact of the NC4 acquisition during our third quarter earnings call following the transaction's anticipated full close near the end of the third quarter, combined with the finalization of the purchase accounting impact on acquired deferred revenue.
Given that we have yet to completely close the NC4 transaction and with our CEO transition-in process this quarter, we wanted to continue our -prudent and mature approach to forward insight with the third quarter guidance of -- we anticipate revenue of between $51.3 million and $51.6 million, representing growth of 32% to 33%.
We anticipate adjusted EBITDA to be between $1.2 million and $1.5 million, including the impact of acquisition costs and a partial quarter of expenses for NC4. We anticipate a non-GAAP net loss of between negative $2.1 million and negative $1.8 million or loss of between negative $0.06 and negative $0.05 per share based on 33.2 million basic weighted average shares outstanding.
Stock-based compensation expense is expected to be approximately $11 billion in the third quarter. For the full-year, we are increasing our revenue guidance to a range of $198.4 million to $199.0 million, representing growth of 35% based on our strong second quarter performance, continued momentum and a minimal contribution from NC4 based on known contracts.
From a profitability perspective, we are maintaining our adjusted EBITDA guidance in the range of $4.2 million to $5.2 million. While this range is consistent with a prior guidance, the expenses related to the NC4 acquisition could result in adjusted EBITDA toward the lower part of this range.
We now expect a non-GAAP net loss of between negative $8.4 million and negative $7.4 million for the full-year 2019 or between negative $0.25 and negative $0.22 per share based on 33.4 million basic weighted average shares outstanding. This guidance assumes estimated stock-based compensation expenses of approximately $37.5 million for the year.
In summary, we are happy to have extended our track record for exceeding guidance with strong top- and bottom-line results in the second quarter. We are optimistic about the second half of the year and we are excited about both the strategic and financial benefits we expect to achieve from our acquisitions of NC4 as we further strengthen our leadership position in the critical event communication market.
Now, operator, we'd like to open the call for questions.
Questions and Answers:
Operator
[Operator Instructions] Our first question comes from the line of Brad Sills from Bank of America Merrill Lynch. Your line is open.
Sherry Guo -- Bank of America Merrill Lynch -- Analyst
Hi. This is this Sherry Guo on for Brad. I was just wondering about if you could provide more color on deferred revenue like this quarter. Could this be attributed to lumpiness?
Patrick Brickley -- Senior Vice President and Chief Financial Officer
Yes, we -- this is Patrick. We will repeat what we always say. Look, we encourage folks to look at our deferred revenue on a trailing 12-month basis and there have been times in the past where it's been very high and other times very low. And that occurs for a variety of reasons. But again, if you look at it over a trailing 12-month basis, it's directionally indicative.
Jaime Ellertson -- Executive Chairman
As Patrick said, the comment we'll share and the detail we've given multiple times is that, when we sign these large contracts, the implementation of those contracts result in revenue, it becomes lumpy. Last quarter, we think that had one of our highest ever and we warned you that that was some just-in timing benefit. And that flows to this quarter where you may have seen some last quarter, but that it doesn't flow into this quarter.
So with population warning multi-million dollar contracts, as well as the very large CEM contracts we announced last quarter $1.7 million with the consulting firm as an example, just a one contract, It all comes down to timing of revenue. And we caution you to look at any one quarter and look at the trailing 12 to get a sense of where we're at.
Sherry Guo -- Bank of America Merrill Lynch -- Analyst
Got it. Thank you.
Jaime Ellertson -- Executive Chairman
You bet.
Operator
Our next question comes from the line of Brad Zelnick from Credit Suisse. Your line is open.
Brad Zelnick -- Credit Suisse -- Analyst
Great. Thanks so much for taking the questions and congrats on all the recent success. Jaime, just for starters, you mentioned you have a long-standing relationship with NC4 and you know them very well. Why is now the right time to buy it in? And what do you getting owning the business versus continuing to partner?
Jaime Ellertson -- Executive Chairman
Yes. So, I mean, I outlined two or three points as well as the partnership point. So first, we know them very well. We do have 150 joint customers, but they actually have more Fortune 500 customers at a 100 than we have. And so, that's an accelerant to CEM because that's our -- that is the most core of our strategic market approach there.
And then when you think about CEM, managing a crisis and remediating the impact on either people or your business operations, process, assets, it all starts with risk data. And since we have an integrated approach there, it doesn't make much sense to say go to someone else to do the risk data, but come back to us to run the platform. And in many cases, that market, we believe long-term would become competitive. But more importantly, we believe NC4 is an accelerant to our business.
So it's pretty simple. We knew them well. We like the business. It was a privately owned business. And so when the opportunity came that we believed could accelerate CEM, which is again our Number 1 M&A area to focus on is accelerating CEM either with new product or new ways to go-to-market, we just felt that it was kind of a no brainer, because it -- CEM all starts with identifying a risk or threat to the businesses, people or assets.
Brad Zelnick -- Credit Suisse -- Analyst
Thanks. That makes sense and it sounds like a very strong integrated value proposition, and if I could just follow-up, Patrick, you made several comments about the impact to the full-year, but a little bit of confusion still, at least on my part, in appreciating is it in Q3 that you expect to bear expense, but no revenue? And with that, maybe if you can explain how were these contracts booked? What's the typical duration like do they not have agreements that should flow to revenue in Q3? It's a bit confusing, any more color would be helpful. Thanks.
Patrick Brickley -- Senior Vice President and Chief Financial Officer
Sure. Yes. So just because it's closing in multiple pieces and we're not going to be done with the analysis of the revenue, we wanted to provide only minimal contribution from that in our guidance and generally speaking, they're largely a SaaS business. So -- but we'll understand that increasingly as we get through the close and through the purchase accounting. In the meantime, the comment about the bottom-line is a) just like in Q2 and we had to absorb material M&A related costs. We are still absorbing those in Q3. So that's reflected in our guidance. And then we just want to give ourselves a little bit of a wide berth here in terms of the net impact on the bottom-line of the NC4 acquisition assuming that the first couple of quarters with an assumed deferred revenue haircut will put pressure on the bottom-line.
So we wanted to get ahead of that with this guidance. And like we said, we'll update you during the next quarter's earnings call.
Brad Zelnick -- Credit Suisse -- Analyst
Okay. Great. Thanks so much.
Jaime Ellertson -- Executive Chairman
Thank you, Brad.
Operator
Our next question comes from the line of Brian Peterson from Raymond James. Your line is open.
Brian Peterson -- Raymond James -- Analyst
Hi. Thanks for taking my question. So Jaime, just wanted to expand on your federal market opportunity a little bit. You mentioned a couple wins this quarter. I'm curious how have those deal sizes in the sales cycles compared to your initial expectations in that market?
Jaime Ellertson -- Executive Chairman
I think they were roughly in line. I would say in general, it's a new market for us. It's probably not the fastest growing market that we jumped into, because we're riding a huge wave with Population Alerting and the deals are even larger. Obviously, it's larger to close an entire country like Australia versus the department of one government. But they are large deals, they take a little bit longer, but they're worth it.
We're working multiples at any given time in the off quarters, which are Q1, Q2 and Q4 in the federal space, because they have one big quarter a year and everything lumps in that one quarter, especially when the government is being run and continuing resolutions they can't purchase until the end of the budget year. As we've mentioned multiple times. So -- we this quarter had a good quarter, multiple medium-sized opportunities and we're working on a couple large opportunities. Those large opportunities range anything from a $0.25 million like a very, very large MN or Safety Connection deal all the way up to CEM type sizes, which could be $0.5 million to $1 million. Those are the -- if you remember online, the largest online retailer or a big technology company. They're large purchases at the very high-end around a $1 million for us, huge store or something like that.
So they're tracking in that direction and we feel good about it. We've got another quarter to go. Fed ramp is no doubt we're still one of only two people in the Fed ramp business. Our competitors continue to experience problems, both the one that's certified and the ones that aren't. And so that that continues to leave the door open. And we're continuing to march forward in that business. And it's probably meeting our expectation. If maybe a little bit behind, so we give ourselves a little bit of room there again sticking with Patrick's mature and prudent approach.
Brian Peterson -- Raymond James -- Analyst
Got it. And maybe one quick follow-up just. Jaime, you mentioned kind of a focus on M&A. I know we have NC4 come online later this year. Just thoughts about the pace of M&A activity going forward and what products or markets you may look to address? Thank you.
Jaime Ellertson -- Executive Chairman
Yes. I think David and I are aligned that we're pretty bullish on M&A. I would mentioned at the end NC4 deal was a fraction of our valuation. So, when we can find and we'd tell you and talk about M&A all the time, it is bloody hard in a market that's been run up as far as this equity market, capital market has been. But when you can find transactions at a third of your market value or half of your market value, and they are we believe, strategic those are good deals and we want to continue to make them. We thought we used a prudent approach in how we mixed stock and cash to both protect stock and use stock at what we believe is a fair value point at least.
It also keeps the seller engaged with us. And so, going forward, we have to do two things. The same reason you've given us, a credit for these acquisitions in the past, we'd ask you to give us credit for this one, which is we'll make sure it gets implemented and is delivering on our financial commitments. In other words, it's accretive to our results. And I think you'll see that in the first couple of quarters, we just have to get two quarters past. And then in parallel, you can bet that my new job on David's behalf is on a day basis is, is working on identifying other strategic opportunities to accelerate CEM or to expand geographically. We -- our international business certainly is growing as fast as any of our businesses. And we want to continue that momentum given the huge opportunity in population warning in Europe. But make no mistake with deals that we've seen in Singapore, we had deals in Latin America that we're working now in other parts of Asia and Africa. There is a significant opportunity outside of the EU for population warning and where we can open up those markets and leverage that opportunity and our unique differentiation, then we'll seek to do that as well. So those still remain the two key topics. And as long as we can ensure we deliver on behalf of shareholders with these acquisitions, we'll continue to do them. It's part of our model.
We've said forever, right. 3% to 7% depending on the year. This year, I'd point out that our M&A was done very late. Right. It's only going to really contribute in by Q4 because of the full closing of the business.
So last year, we did it in Q1. So there is a difference in timing and we'd like to get ahead of that if we can.
Operator
Our next question comes from the line of Sterling Auty from JP Morgan. Your line is open.
Sterling Auty -- JP Morgan -- Analyst
Yes, thanks. Hi, guys. I apologize if we covered some of this, but jumping between calls. I think you made some comments around the short-term deferred revenue or deferred revenue, but there's a lot of hypersensitivity in the market around the billings number in particular. And just looking at the calculated billings, why shouldn't that be an indication of the health of the business and why in your case, do you think perhaps maybe it's not a great metric for investors to be focused on?
Patrick Brickley -- Senior Vice President and Chief Financial Officer
So, this is Patrick. We would say that it is a relevant indicator of the health of our business, when you look at it on trailing 12 month basis. When you look back over our history, Sterling, at any individual given quarter, you'll see up 9% year-over-year, you'll see up 60% year-over-year. And it does bounce around. There are a variety of reasons for that. It tends to be due in part to just the timing of contract renewals and when those invoices sometimes move in and out of different quarters.
But on a trailing 12-month basis, which we've always encouraged folks to look at as a relative indicator, directionally appropriate, we think that that is still the case with these results as well.
Jaime Ellertson -- Executive Chairman
You'll only have to look back three quarters. Q4 was a lower than normal number, even though it was our Q4. It wasn't indicative of bookings, it was indicative of the timing of contracts. Q1 was one of our highest ever and then Q2 was a little bit lower again. So you have that -- we've said this since going public and we've been -- we've beating this drum mercilessly. It's absolutely an indicator. You have to look at our trailing four quarters or you get misguided by one single quarter potentially.
Sterling Auty -- JP Morgan -- Analyst
Yes. I think that makes sense. And look NC4 just given the business structure, can you help me better understand the gross margin there and what the gross margin impact might be moving forward?
Patrick Brickley -- Senior Vice President and Chief Financial Officer
Well, for our initial view of that, Sterling, is that it's roughly in line with our own. More to be determined as we really are able to dig in once we've closed the entire transaction. But that's our best guess. No major change, Sterling, it's not like it's going to be -- we don't anticipate any way that it will be a material drag, nor necessarily a material boost in the near-term. But we do see plenty of synergies with that business. And over time, we do expect to see some improvement, both in terms of gross margin as well as adjusted EBITDA for sure.
Sterling Auty -- JP Morgan -- Analyst
Thank you.
Operator
Our next question comes from the line of Bhavan Suri from William Blair. Your line is open.
Bhavan Suri -- William Blair -- Analyst
Hey, guys. Thanks for taking my call and I appreciate it. I guess I just had a first question on the CEM space. As we think about that moderate expansion is still relatively early days, roughly 50 customers. But can you talk about like updated thoughts where you might think about expanding the selling motion, the entire sales force and that's obviously expanding the selling motion outside the original vertical sort of, so North America corporate healthcare, outside that? How should we think about that? I'd love to get some color on that. Thank you.
Jaime Ellertson -- Executive Chairman
Yes, I mean, we've been very deliberate with CEM. We did not want to get out of our skis because if you follow it, we have five applications. All of them have to be certified for the market. And then as we just talked about, risk data, for instance, is different what people care about in different markets. In the state and local space, they're not focused on water main breaks and local fires, in other geographies they're only concerned hyperly with their specific geography versus -- and cities don't happen to necessarily care about any other city in the world.
If you're a corporate, you really care about all your locations and you could have, as I mentioned on the call, 300 to 1,000 global locations, if not 10,000, and therefore concerned with a lot of things virtually anywhere there's a bang going on in the world.
And so because of that, with the CEM solution, we have gone into the market focused on corporate, making sure we're fit-for-purpose, got scale and got referenceable customers, as you mention, with a customer base on the order of whatever it is today adding or new customers in Q2, we've gotten to enough that we have referenceable customers. And now what's important is ahead of preparing for the international launch and the opening of new verticals in the US, for instance state and local is 30% of our business and we do not sell CEM there. That's it. That's the great opportunity. I might add that one of the businesses we're still closing with NC4 is called E-Team and they are an Emergency Management solution that's been sold into some of the largest cities in North America and provides an on ramp for us as we convert those accounts over to Everbridge into the state and local as well. So we have a number of people pulling us into new markets, international, state and local, and some of the other geographies, transportation and state and locals, as well city governments. And then in combined with the NC4 component that we'll close later this quarter, we believe we'll have an on ramp in 2020 and with a growing sales force and the referencable, scalable deals that we've already closed. We think we'll be in better shape to continue to grow that as we grow our overall business.
So CEM should continue to be the largest deals we close other than Population Alerting countrywide deals. And it should continue to be one of our most strategic markets, because we continue to add products to that suite as well.
Bhavan Suri -- William Blair -- Analyst
Got it. It was really helpful. I guess, a quick short-term question here, tough question, I guess. Was there any pull? Like there's obviously lumpiness in balance, we totally get how these contracts work. But was there any pull in the quarter or was there in last quarter, as we should think about how the billings number works? Would love some color on that. Thank you.
Jaime Ellertson -- Executive Chairman
Well, as we said, we don't give individually, if you look at it over four quarters, but we absolutely said if you look at our specific script from last quarter, we said all time high, we're telling you got to watch it because I want to point it out.
As we did last quarter and that was because some things came into revenue at the extreme end of the quarter that probably should have been in this quarter. So that creates a balloon in the bookings, the deferred revenue for last quarter. And in this quarter, since those are already in last quarter, you get, less going this quarter. And so you just -- you just have to look at it over four quarters, but other than normal timing of deals and the very large deals that get lumpy for us, and if they don't close exactly where we want them to, that's your explanation for the lumpiness in the up and down quarters.
And it's the same explanation we've been getting since literally, I think our second quarter, we decide to start pointing it out because we could see it was going to trip us up if we didn't get in front of it. So common answer, we've given it for 12 straight quarters, we give it to you again today. Just look at it trailing..
Bhavan Suri -- William Blair -- Analyst
I really appreciate it. Absolutely. I appreciate it. And I think it just needed to be clarified again. So thank you. Thanks for taking my questions and congrats.
Jaime Ellertson -- Executive Chairman
You bet. Thank you.
Operator
Our next question comes from the line of Tom Roderick from Stifel. Your line is open.
Tom Roderick -- Stifel -- Analyst
Hi, guys. Thank you for taking my questions. So, Jaime, I wanted to just ask a little bit more here about NC4 and so the makeup of the team and where some of the synergies can come from? Yes, you sort of pointedly mentioned that the valuation, I think came at a fraction of your own valuation. So that suggests you got a pretty good deal on a property. But perhaps are some mitigating factors on the business model and the growth profile could be a little bit slower than your own. Can you just speak a little bit toward what we ought to expect to see when you do integrate the financials? Is this a company that was growing a bit slower than yours and you felt like you could accelerate the growth rate given your distribution? And sort of relative to the notion of analyst teams and threat intelligent analyst teams being a part of the model?
Is there a higher mix of professional services or consulting revenue in the NC4 model that we ought to sort of expect to brace for when it's integrated into the model?
Jaime Ellertson -- Executive Chairman
No and no. So, I mean, first, the deal value -- yes, I should say, and then professional services, no. So on the deal value, all we can tell you is that, you know, I think you're just asking that question as a good analyst would do, Tom, but a different way. We don't have the -- we're not share the full details, until we close everything because we've got to do the deferred accounting, everything else.
But we're not shy to say that we have historically purchased things that we believe are prudent and sensible levels. We will not -- it's hard for us to chase in our business that 10 times the 15 times businesses. And it makes it a very difficult M&A environment. Right? Because everyone wants at least your multiple if you're trading at 12 or 14, if not Google's multiple trading at 30. And so those are -- that's makes it a tough market. And therefore you don't find companies that are in equality unless there's something that's holding them back.
In this case, think of it as a private enterprise that was driven specifically to provide value to the owner. So it was risk-averse. I can tell you that they had a total sales force of four people. We're going to be able to pull that into our broad 100 plus sales team and we think make pretty good hay out of that. So we believe that there's definite upside, as there was in UMS. It's a model. You've heard Patrick say we like to rinse and repeat once we find those patterns. We don't think we have to be rocket scientists to find something new that no one can figure out each time. So in this case, it was a business managed by a private owner who did it for different purposes, very wealthy, and could do it the way they wanted to do it. We will be able to apply better go-to-market leverage and we have dramatic synergy because we're already in similar accounts, but they are very much in our sweet spot for CEM. So we see acceleration for CEM with this, our largest deals on the corporate side. And then on the model, it is essentially a pure SaaS business like we are there 95, mid 90s subscription. And so depending on getting through the close, we'll be able announce a little bit of insight into more synergies. But they are even in similar locations to us. They are in Washington D.C. area, that's where our [Indecipherable] our risk data business is based. And then they are in LA and as you know that's where our former headquarters was. And we have one of our largest offices. So we believe we have good synergies. They're a pure subscription business. We will do a lot to migrate them on to our single platform. And so we believe we'll have some savings there long-term. But we want to get through the close here at the end of Q3 and then we'll give you that guidance as we move into Q4 and start to see the revenue going into our model versus having to guess that right now.
Tom Roderick -- Stifel -- Analyst
Good. I got it. That's really helpful. Patrick you talked about this at the Analyst Day, briefly, I think maybe a little bit of additive time might have given you some additive information, perhaps. So it seems as though the Australia deal did not, in fact, come in on a perpetual license basis. And no big spike in perpetual license this quarter.
How are you doing sort of getting through the mechanics of the model as you'd look at these Population Alerting deals both on the front-end and on the back-end to try and structure these deals on a pure subscription basis as opposed to adding some spikes in the model?
Patrick Brickley -- Senior Vice President and Chief Financial Officer
So, hey, Tom, we did do -- we did recognize some revenue in Q2 and in particular as we kick off the deployment of the front-end, which will persist over the next few quarters. We'll be recognizing some implementation revenue and then we'll have the license revenue kick in next year for the front-end. And as we guide for next year, we'll provide some more color on that both in terms of magnitude and timing.
Tom Roderick -- Stifel -- Analyst
Got it. Okay. I'll keep checking in. Thank you.
Patrick Brickley -- Senior Vice President and Chief Financial Officer
Thank you.
Jaime Ellertson -- Executive Chairman
Thanks, Tom.
Operator
Our next question comes from the line of Brent Bracelin from KeyBanc Capital. Your line is open.
Brent Bracelin -- KeyBanc Capital -- Analyst
One quick one for Jaime, then a follow up for Patrick. Jaime, Fed ramp, you're now got a one-year end and now we're heading into the seasonally strongest kind of fiscal year-end for the government. Can you provide any sort of color relative to RFP activity, around the Fed now that you've again had a Fed ramp approval for about a year and had lots of sales reps, I'm sure trying to solicit some opportunities for there? And then again, one follow-up for Patrick. Thanks.
Jaime Ellertson -- Executive Chairman
Yes. My answer will be quick, I think I've already addressed this, but it's just the -- I would stick with the same answer, which is of course, we've seen because of a Fed team now, and a slight uptick in both our RFPs that we're getting through agencies. We are announcing more deals. You've seen more deal flow that specifically related to the federal whether it's NRC or a different agency or a large system integrator.
And I think, but the big quarters, Q3 and so that's yet to come. And we're certainly working on large deals for Q3. So well more news to follow would be the answer. Yes, a progress being made and more news to follow.
Brent Bracelin -- KeyBanc Capital -- Analyst
Great. And then, Patrick, as a follow-up. Obviously, everyone is asking here on deferred revenue. You guys have been warning us about large deals. But just looking back over the last three years, this is only the second quarter, I think deferred revenue was down sequentially. So my question -- just clarification was the Australia deal -- I know there's some contract terms there, but was the Australia a large deal? Was that in deferred or because of the contract terms, it wasn't in deferred this quarter?
Patrick Brickley -- Senior Vice President and Chief Financial Officer
There is a little bit in deferred as of the end of the quarter.
Brent Bracelin -- KeyBanc Capital -- Analyst
Got it. So but nowhere near the size of that contract that you added?
Patrick Brickley -- Senior Vice President and Chief Financial Officer
No, no.
Brent Bracelin -- KeyBanc Capital -- Analyst
Okay. That's all I wanted to ask there. It's helpful clarification. Thank you.
Jaime Ellertson -- Executive Chairman
You bet.
Operator
Our next question comes from the line of Will Power from Baird. Your line is open.
Will Power -- Baird -- Analyst
Thank you. I Just a couple of quick ones. Maybe, Patrick, of course, the conditions for me as well. As you looked at the full-year revenue guidance which was raised, can you provide any further color to how much of that was attributed NC4 versus core trends?
Patrick Brickley -- Senior Vice President and Chief Financial Officer
Well. Yes, we have to guess a little bit at this point. So I would just say it's not a lot, but what we in particular try to do is stick to our script, which is we've said that we're a low-to-mid 30s organic grown. We layer on 3% to 7% of M&A on top of that. And, if we can end the year in the mid-to-upper 30s, then we feel good about that financially and particularly with improving bottom-line results. And so you see how we've guided for the remainder of the year and more to come on the Q3 call.
Will Power -- Baird -- Analyst
Okay. And maybe just to bring David in quickly. I appreciate the comments earlier on cultural fit and key growth priorities, but I would love to hear what your focus areas are over the next couple of months?
David Meredith -- Chief Executive Officer
Yes. Thanks, Will. And beginning with the team -- and I've been very busy, the strategy looks straight on. So we're going to look at how we execute and how we continue to scale the business to new heights.
So main focus execution we talked about the growth area is continuing to cross-sell and up-sell the base, positioning ourselves for the big Population Alerting wins in EU and winning deals in the meantime in Asia PAC and then the CEM. I'm getting tremendous feedback and with this NC4 acquisition, I actually had customers reaching out proactively where both companies are there and the feedback has been very positive on that. So using that as an accelerant to move faster on the CEM as well. So I don't have any big strategy changes at this time.
Will Power -- Baird -- Analyst
Okay, great, thanks.
David Meredith -- Chief Executive Officer
Thank you.
Operator
[Operator Instructions] Next question comes from the line of Terry Tillman from SunTrust. Your line is open.
Terry Tillman -- SunTrust -- Analyst
Hey, thanks for taking my question. Good afternoon, gentlemen. I guess my first question on billing. No, I'm kidding. I want to ask first about CEM, and then I want to follow-up on Germany. In terms of CEM, expectation wise, is this business young enough and non-seasonal enough that we just continue to see the ramp in new business volume each quarter? And how do you feel about the caliber of your sales team selling CEM at this point?
Jaime Ellertson -- Executive Chairman
Well, I think yes, and then some and then good. Right? Yes, we believe that CEM is going to continue to ramp. There's a healthy pipeline. We're working some very strategic and important transactions. And we've shown you that the deals are getting kind of larger as we grow and the number is getting larger.
Now they're big deals. When you're only doing eight in a quarter or six in a quarter, we could do six deals in a quarter, as we pointed out before. If they are all $2 million deals we'll double what we did this quarter with eight deals. So be careful because those large top-end deals, Population Alerting, CEM can be lumpy. But those are -- that's going well and that we would expect you to consider to see us publish and demonstrate real market success and growing market success as we scale the CEM and the salespeople scale it. On the pure sales side, we probably would just reiterate what we said in the past. No one of our challenges is to make sure we're getting through our enterprise sales transition, which means we're bringing on new salespeople and upgrading that team. And as we do that, internally, we've got to make sure we continue to have enough people focused on that while we still have enough people focused on the blocking and tackling, a person internationally that's selling Population Alerting we don't want to take his eye off the ball of a $20 million countrywide deal to go sell a CEM deal. So the sales force is segmented for most of those groups and as we roll out the products that hopefully will allow us to scale the salesforce, add to it with new stronger people, while we mature and grow our existing people. That's a -- and that's a continuing challenge for us as we go into next year. But we feel good about it.
Terry Tillman -- SunTrust -- Analyst
Okay. And just the follow up question was on Germany or Deutschland in terms of -- I thought was interesting, you were talking about your security certification in Germany. I guess what are we -- what's our a takeaway from that in terms of expectations for CEM business, there or public sector business? Just a little bit more color on Germany. Thank you.
Jaime Ellertson -- Executive Chairman
Yes, I think we mentioned that because as we've rolled out our full stack in Germany and have capabilities in Europe, Germany, and the UK now, and it may be seen as a separate country pretty soon. I don't know. But -- and the rest of Europe is a very strong potential market for us. Those two and France being the three largest economies there. Right? So naturally, we're going to focus on those markets as roll out CEM and our broad products suite and the key customer wins like Airbus or some of the others that we mentioned internationally are key to us because that allows us a footprint in our 500 plus customer base in Europe to grow into CEM, just as we've done in the US.
So I wouldn't -- I -- we mentioned Germany because it's some of the strictest privacy requirements all of Europe. And if you meet that, you can do anywhere and remember, regionally, like in DACH, Germany, Switzerland, Austria, the Germanic speaking countries, as an example, you often if you don't have a local capability and host locally, you can't sell even a SaaS product. Ours is spread in multiple centers throughout Europe, and so we believe we cover Europe well.
With some of the larger opportunities, we certainly will be not prohibited by having that. But the local regional players, the largest players we compete with on the point solution. The guys that are selling Mass Notification in Germany or Crisis Management is a point solution in Europe somewhere, cannot compete with us that has a global reach for those larger enterprises and doesn't want to go with a solely German player or solely French player. And that's where our public size and nature, as well as our global reach and a accreditation like the German one comes into to be meaningful, not just because we're going after Germany. Of course, we are with its large, GDP, but it's more that we want to be able to sell Pan-European Europe customers. And that's where we have a distinct advantage. We meet the toughest privacy and security requirements while having a distributed, scalable global platform that really none of our competitors can match. And it's all a single pane of glass when it comes to CEM. So next year is a big year for us in Europe with that infrastructure and with CEM.
Operator
There are no further questions at this time. I would now like to turn the call to Jaime Ellertson, Chairman.
Jaime Ellertson -- Executive Chairman
Well, thanks for joining and listening to our positive results where we exceeded our guidance on this quarter. And we look forward to seeing you at an Investor Conference or an industry event in the near future. Thanks again for joining. Bye-bye.
Operator
[Operator Closing Remarks]
Duration: 77 minutes
Call participants:
Patrick Brickley -- Senior Vice President and Chief Financial Officer
Jaime Ellertson -- Executive Chairman
David Meredith -- Chief Executive Officer
Sherry Guo -- Bank of America Merrill Lynch -- Analyst
Brad Zelnick -- Credit Suisse -- Analyst
Brian Peterson -- Raymond James -- Analyst
Sterling Auty -- JP Morgan -- Analyst
Bhavan Suri -- William Blair -- Analyst
Tom Roderick -- Stifel -- Analyst
Brent Bracelin -- KeyBanc Capital -- Analyst
Will Power -- Baird -- Analyst
Terry Tillman -- SunTrust -- Analyst
