Everbridge (EVBG) Q3 2020 Earnings Call Transcript

Everbridge (EVBG)
Q3 2020 Earnings Call
Nov 05, 2020, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Everbridge third-quarter earnings conference call. [Operator instructions] Please note, this event is being recorded. I would now like to turn the conference over to Joshua Young. Mr.

Young, please go ahead.

Joshua Young -- Vice President of Investor Relations

Thank you, Anita, and good afternoon, and welcome to Everbridge's third-quarter 2020 earnings conference call. My name is Joshua Young, vice president of investor relations for Everbridge. With me on today's call are Jaime Ellertson, executive chairman; 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 call 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. Factors that might cause such differences include, but are not limited to, those discussed in our Forms 10-Q and 10-K, as well as other subsequent filings with the SEC.

Information provided on today's call reflects our perspective as of today, November 5, 2020, and should not be considered representative of our views as of any subsequent date. We explicitly disclaim any obligation to update 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 our non-GAAP financial measures is included in our press release.

With that, let me turn the call over to Jaime to begin our prepared remarks. Jaime?

Jaime Ellertson -- Executive Chairman

Thanks, Joshua, and thanks to all of you for joining us today. We're excited to report financial results that not only beat our guidance but also represented the largest revenue beat we've had in the company's history. In fact, our third-quarter results beat every one of our financial guidance metrics. This performance reflects the value that we provide to companies and organizations in order to help protect their people, assets and operations during critical events.

It also demonstrates the fact that the value and benefits of our solutions are elevated during what is the greatest critical event most of us have faced in our lifetimes, and I'm not speaking about the Presidential election but the coronavirus pandemic. Our customers from public safety, government, healthcare organizations and major corporations are all faced with this rising global pandemic, as well as other threats, such as hurricanes and wildfires. We're proud to partner with all these organizations to keep their people safe and their businesses running. During this unprecedented period of critical events, our customers have relied on our robustness and scalability, our CEM solutions literally hundreds of millions of times to mitigate the impact of these various critical events.

As a result, demand for Critical Event Management, or CEM, as we'll refer to it, continued to be strong in the quarter with a dozen customers adopting our CEM platform. We also saw tremendous market demand for our new applications that are extensions of CEM, such as Return to Work and Campus, Contact Tracing and COVID-19 Shield, which collectively contributed to a record result for our mix of sales from new products. In fact, in the third quarter alone, more than three dozen organizations chose our Return to Work and Campus, as well as our Contact Tracing solutions to keep people safe and operations running. Our ability to deliver new solutions that help to mitigate the pandemic begins with our platform's proven scale, augmented by our suite of CEM applications.

We utilize applications, such as safety connection, provide proximity tracing, location-based tracing, user-driven symptom checking and wellness data. This makes our customers well-positioned to realize the broader value of the CEM suite over time as we have already seen happen in several cases. These capabilities allow us to triangulate around different data sources and determine who might be at risk after an exposure. The strong market response to these new applications reinforce our leadership position in the critical event management market.

In addition to strong market reception for our CEM solutions, I'd like to highlight that this is the fifth straight quarter that our team, led by CEO David Meredith, had delivered financial results above our guidance ranges for revenue and profitability. I'm confident that David and the team will continue to execute our plan and deliver increasing value for shareholders in the future. As a result of the strong foundation and performance, I'll be migrating my role from one of executive chairman to a nonoperating role as chairman of the board at the end of this year. As chairman, I will remain committed to our vision of leading the growing multibillion-dollar CEM market.

I'm also steadfast in my support of our dedicated Everbridge team, and I'd like to add that this new role will provide me a bit more time to spend with my family, as well as pursue my interest in establishing a new investment fund that will assist young, growing software businesses in the New England region. Now I'll pass the call over to David and Patrick to provide details of our strong third-quarter results and our outlook going forward. David?

David Meredith -- Chief Executive Officer

Thanks, Jaime. On behalf of the entire senior management team, I want to thank you for your guidance and leadership, which provided instrumental support to our overall success in establishing Everbridge as the clear market leader. I'm looking forward to continuing to work with you as chairman of the company going forward. Now turning to the results.

Our momentum continued in the third quarter with strong top and bottom line performance. In addition to record revenue, we posted our highest ever revenue beat relative to guidance, the most deals valued at more than $500,000, the second highest number of six-figure deals and the highest quarterly ASP in our history, as well as our highest gross margin ever. These results easily exceeded our third-quarter guidance. The combination of growing COVID-19 cases, wildfires, hurricanes and civil unrest that Jaime just spoke about all underscore the value of our critical event management solutions for corporations, government entities and healthcare organizations.

During these unprecedented times, our SaaS platform continues to demonstrate the capacity to successfully handle massive scale with record volumes. Our solutions are working over time to help keep people safe and operations running. Our third-quarter outperformance was broad-based and included numerous large CEM wins, highly strategic government transactions and rapid adoption of our new Return to Work, Return to Campus, Contact Tracing and COVID-19 Shield solutions. In troubled times, both customers and prospects turn to best-in-class providers.

As a result, they continue to turn to Everbridge due to our proven industry leadership. This flight to quality remained evident in Everbridge's third-quarter results and validates the confidence in our outlook for the business. Revenue in the third quarter was $71.3 million, $2.6 million above the top end of our previous guidance of $68.7 million, representing a year-over-year increase of 36%. Our revenue upside flows through to operating profitability as we reported adjusted EBITDA of $5.1 million, which was significantly above the high end of our guidance for adjusted EBITDA of breakeven.

Our key business metrics for the quarter reflect our strong financial performance. We added 125 net new enterprise customers in Q3, bringing our total enterprise customer count to 5,467. We continue to extend our CEM momentum with a dozen customers adopting CEM in Q3, up 33% over the same quarter one year ago. And our newest applications further leverage our CEM capabilities.

Everbridge Control Center, Return-to-Work and Campus, Contact Tracing and COVID-19 Shield, which collectively assists customers to safely mitigate the impact of COVID-19, as well as support their efforts to return to work. And with over three dozen such deals in Q3 alone, our CEM applications continue to see escalating market adoption. In Q3, we eclipsed the important milestone of 100 CEM customers. That said, our impressive CEM growth still represents a small fraction of our more than 5,400 enterprise customers providing considerable growth opportunities within our existing customer base, which complements our new customer acquisition activity.

Our average selling price on a trailing 12-month basis was 79,000 -- I'm sorry, $72,900, up from $67,500 in the second quarter of 2020. This 8% sequential increase resulted from a record high ASP performance within the third quarter as we saw a significant number of large transactions. And speaking of large transactions, we closed 43 six-figure deals in the quarter, up 48% from a year ago, and the second highest number of six-figure deals in our history. Among these, we reached a new high watermark for the number of deals valued at more than $0.5 million per year.

These large deals often included the expansion of a CEM implementation by some of the best-known brands in the world, clearly illustrating the effectiveness of our land and expand strategy. In the third quarter, we completed 96 multiproduct deals as we continue to increase our market penetration. And with our average customers subscribing to an average of only two of our applications, we believe that we still have significant room to grow within our existing base of over 5,400 customers. From a product mix perspective, a record 64% of new and gross sales over the last four quarters came from new products, a testament to growing demand for our newer applications.

Our international business continues its strong growth. In Q3, we saw 27% of revenue from outside the U.S., compared to 20% a year ago. We believe our success in expanding operations in new markets like the Middle East and Latin America helped us achieve this growth and will continue to deliver future results. Finally, our revenue mix by vertical was consistent with recent history, coming in at 63% from corporate, 26% from local, state and countrywide government and 11% from healthcare, indicating that our growth remains broad-based.

As always, we remind you that quarterly metrics can fluctuate, but that the longer-term trends continue to reflect our overall business momentum. Now allow me to provide some additional details on our success in Q3. As a pioneer in critical event management, our two COVID-19 Road to Recovery symposiums attracted tens of thousands of executives from 150 countries. Our industry-leading symposiums brought together many of the top government, healthcare and business leaders from across the globe, which further highlighted our position as a visionary in critical event management.

The fall symposium featured discussions with over 50 world leaders, including Dr. Anthony Fauci; Dr. Sanjay Gupta, CNN's chief medical correspondent; and top leaders from the Centers for Disease Control and Prevention. Additionally, government leaders, such as former United States President George W.

Bush, plus other public figures, such as governors and mayors, as well as representatives from multiple European countries provided their perspectives. The private sector was equally well represented with leading executives including the Virgin Group's Sir Richard Branson and other C-level executives from Capital One, Coca-Cola, Ford, Goldman Sachs, Humana, IBM, JPMorgan, Mayo Clinic and Siemens, all speaking and sharing best practices during the symposium. Events like these generate significant opportunities for new business and expansion conversations, and we're seeing our sales pipeline swell as a result. The general consensus from these experts highlighted that the COVID-19 pandemic will remain a serious threat deep into 2021.

These same experts also agreed that the ability to leverage technology can help mitigate the spread of the coronavirus and ensure a safer return-to-work environment in the months ahead. Companies and populations are facing the overlapping threats of COVID-19 and natural disasters like wildfires and hurricanes, as well as the increased risk of cyberattacks due to a sharp increase in the number of largely home-based workforces. Our flagship CEM suite continues to represent the broadest, most advanced technology solution for keeping people safe and organizations running even when they are remote. During the third quarter, our strong CEM momentum continued to increase with both new and growth opportunities.

Our significant CEM wins in the quarter included great technology brands, such as HubSpot, a marketing sales and service software leader, who selected CEM as a new Everbridge customer. HubSpot will use our CEM solution to automatically correlate threats to assets and improve decision-making when critical events strike their headquarters, global locations or remotely based employees. Another tech win during Q3 included one of the largest and best known multinational Internet search and information companies. They chose Everbridge CEM to gain the situational awareness and context around critical events that could affect their people or operations and to enable them to quickly notify employees when an impactful event is identified to ensure everyone's safety and security.

We also won a Fortune 500 cloud services and data management leader who selected Everbridge CEM to support their global security operations center amid natural and man-made disasters and to improve communications to employees during crises. In addition to these new customers, we also continue to expand our current CEM customers' implementations by cross and up-selling additional capabilities. Bristol Myers Squibb, one of the leading pharmaceutical companies in the world, provides a great example of CEM customer expansion in the quarter. Bristol Myers initially became a new CEM customer in the first quarter of 2020 and expanded their Everbridge platform with a follow-on six-figure multiyear deal in the third quarter.

Our CEM wins helped drive our higher ASP within the quarter, and our record number of $0.5 million deals clearly reflects the strategic value customers attribute to our CEM solutions. In addition to supporting our new customer metrics, these new applications represent a key part of our land and expand strategy and will continue to support our future growth prospects. During the quarter, we saw continued demand from industries heavily impacted by the COVID-19 pandemic. Within the retail industry, The Container Store, which is the nation's leading retailer of storage and organization products, chose Everbridge to rapidly assess and mitigate threats through our industry-leading risk intelligence and powerful mass notification capabilities.

We also added numerous new customers in the education market, which represents a meaningful segment of the population returning to offices, campuses and public spaces across the country. Institutions that selected Everbridge to monitor and mitigate the spread of COVID-19 in the quarter included Stetson University, multiple Mississippi public universities, the College of Charleston, the University of Denver and many others. On the corporate side of our business, we saw a number of leading brands adopt our Return to Work and Contact Tracing solutions to become new Everbridge customers in the quarter. These included companies like a leading French fashion house, which comprises a division of one of the largest multinational luxury conglomerates, one of the largest commercial insurance providers in the United States and a unicorn company developing AI for call centers, to name just a few.

This success extended to the government market, driven by customers using our technology amid the pandemic. Key new wins included the Florida State Lottery, the 17th statewide agency in Florida to select Everbridge, which further demonstrates the power of network effects to drive customer adoption. Everbridge now delivers emergency alerts in all 67 of Florida's 67 counties, as well as many schools, hospitals, airports and businesses throughout the state. While Florida represents the most mature statewide network effect ecosystem, we continue to see growth in other states as well.

The state of California added IT alerting to our statewide contract. The state of Massachusetts increased the number of employees and contractors they can reach and state buildings in an emergency, and top U.S. cities, such as New York and Nashville, added additional Everbridge support in anticipation of launching a Resident Connection product. In addition, Tarrant County, one of the most populous in Texas, became a new customer in the quarter, leveraging our Resident Connection product to communicate with citizens about recent COVID-19 test results, testing site locations and other updates.

Network effects also work at the countrywide level, not just at the state level. A great example of this includes Norway's Directorate of Health, which uses Everbridge's location-based public warning solution to alert tens of thousands of Norwegians traveling outside the country of the changing risk landscape related to COVID-19, as well as the latest procedures and protocols, such as recommended quarantine guidelines. Our track record of signing the biggest and most influential states in the U.S. continues to benefit our work with the federal government.

In Q3, we had a very strategic win, a key agency in the Department of Homeland Security. As a result of a competitive RFP process, the agency selected Everbridge to provide a critical component for the Integrated Public Alert and Warning Systems for the United States, known for its abbreviation as IPAWS. With this selection, Everbridge becomes the only vendor providing a front-end solution to the IPAWS gateway for the federal government to supplement their own communication channels and issue live emergency and presidential alerts in the United States. Federal, state, local and tribal authorities rely upon this system to issue wireless emergency alerts and emergency alert system communications.

They will use Everbridge as their public warning system of record to support more than 1,500 local municipalities across the United States who depend on these critical notifications for support in times of crisis. While this win will not have a large initial revenue impact, the agreement represents one of our most strategic wins to date and will extend and accelerate our network effects across all markets, similar to what we've seen within larger state wins, like California and Florida. We believe this can generate hundreds of new ecosystem deals in the future. This important federal win also serves as further validation of our existing leadership position in the public warning to other countries around the world.

Our new federal sector wins in the quarter also included deals, such as a six-figure transaction with the U.S. Department of Defense, as well as a broad deal with the Federal Communications Commission, among others. The FCC chose Everbridge's Mass Notification to support the agency's internal continuity of operations, the evolution, pandemic and reconstitution plans, as well as day-to-day emergency management efforts. Meanwhile, our international business continues to grow as well with third-quarter highlights that included large wins with the General Authority of Civil Aviation of Saudi Arabia, as well as another deal with Abu Dhabi Airports, both of which expand our reach into the Middle East.

With these wins, we have increased our total number of customers in the Middle East region to more than 60. In Europe, we closed a major growth deal with Transport for London, which has responsibility for London's network of principal road routes and various rail networks including the London underground. As the leader in critical event management, we are continuing to further differentiate our solution suite and the power of the Everbridge platform to extend our leadership position. As the world faces an ongoing global pandemic amid many other crises, we realize the opportunity to drive even greater innovation around the experience of every stakeholder during a critical event.

To that end, we hired one of the top experience management and digital transformation experts in the world, John Maeda. In John, we add a globally recognized MIT-trained engineer, public company C-level executive, award-winning designer and celebrated author. He's been recognized as one of the 75 most influential people of the 21st century by Esquire. John has roughly 1 million followers on social media, a Twitter feed that has been ranked among the 140 best by Time Magazine, and he has attracted several million people to his TED Talks and presentations at Davos and around the world.

I want to conclude by saying that we're excited about our performance in Q3. With critical events increasing globally in both number and severity and even overlapping one another, our Critical Event Management solution provides a higher value proposition than ever before. We remain proud of our leadership role in helping organizations and people overcome these adversities. That said, we believe that we are still in the early days of penetrating the opportunity, and we look forward to further extending our leadership position in the quarters and years ahead.

Now I'll turn the call over to Patrick for more details on our third-quarter financial performance and our guidance for Q4 and full-year 2020. Patrick?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Thanks, David. I will review our financial highlights from the third quarter and then provide guidance for the fourth quarter and the full year. We extended our track record of strong growth in the third quarter and exceeded the high end of our guidance ranges. Revenue in the third quarter was $71.3 million, up 36% from a year ago and up 3% from our previous guidance.

Adjusted EBITDA for the quarter also exceeded our guidance at a gain of $5.1 million. We continue to see net retention rate remain well above 110%, especially during the worldwide pandemic, as we continue to provide significant value to our existing customers. 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 73.8%, a 290-basis-point improvement year over year, representing the highest gross margin since our IPO four years ago, as unit economics continued to improve as we scale. For the trailing 12 months, gross margin was 71%, showing an improvement from 70% in the year-ago metric. Total operating expenses in the quarter were $49.8 million, an increase of 31% from a year ago, reflecting continued investments in our platform and our go-to-market strategy.

Adjusted EBITDA beat our guidance range at $5.1 million, compared to $1.6 million a year ago. Our profitability outperformance was driven by revenue upside combined with the timing of investments in our growth that we still expect to make this year. Net income in the third quarter was positive $1.9 million or $0.05 per diluted share, compared to a net loss of $200,000 or a loss of $0.01 per share a year ago. On a GAAP basis, our net loss was $24.2 million.

Turning to our balance sheet. We ended the quarter with $477.2 million in cash, cash equivalents, restricted cash and short-term investments, compared to $491.3 million at the end of the second quarter, primarily reflecting the impact from the SnapComms acquisition we closed during the quarter, continuing our trend of completing small complementary technology tuck-in acquisitions, this one in the messaging space. Free cash flow was an outflow of $4.1 million in the third quarter, compared to an inflow of $9.9 million a year ago. Total deferred revenue was $149.1 million at the end of the quarter, an increase of 28% from a year ago and a sequential increase of approximately $10 million from the second quarter.

As we note every quarter, our deferred revenue balance at the end of any given quarter can vary due to a number of factors, including the timing of significant new contracts and the timing of annual billings for new and existing customers. For example, one several million dollar transaction that occurred in the third quarter of last year was invoiced early in the fourth quarter of this year and was not reflected in deferred revenue at the end of Q3. As such, the change in deferred revenue in any given quarter is not an accurate indicator of the underlying momentum in our business. We believe our trailing 12-month performance is more indicative of our overall business trends and that our longer-term performance continues to support our target revenue growth of above 30%.

Now let me turn to our outlook for fourth quarter and the year. We are increasing our guidance for the year to take into account a better-than-expected third-quarter performance combined with strong business momentum. Customers and prospects are increasingly realizing the importance of critical event management as a key component of their safety and continuity strategies, and this is resulting in a greater number of larger multiproduct wins, as well as continued success landing new customers to address their more pressing near-term concern. With that backdrop, for the fourth quarter, we anticipate revenue of between $72.3 million and $72.7 million, representing year-over-year growth of 27% for the quarter.

We anticipate adjusted EBITDA of between $3 million and $3.4 million as we anticipate making additional investments to support our anticipated growth in 2021. We anticipate a non-GAAP net income of between $0.2 million and $1.2 million or $0.01 to $0.03 per share based on 36.1 million diluted weighted average shares outstanding. Stock-based compensation expense is expected to be approximately $14.5 million in the fourth quarter. For the full year, we are raising our revenue guidance to be in the range of $267.8 million to $268.2 million, representing growth of 33% to 34%.

We are increasing our expectations for adjusted EBITDA to be in the range of $6.9 to $7.3 million. We expect a non-GAAP net loss of between $1.2 million and $0.2 million or a loss of between $0.03 and $0.01 per share based on 35.7 million basic and diluted weighted average shares outstanding. This guidance assumes estimated stock-based compensation expenses for the year of approximately $49.4 million. In summary, we delivered a strong third quarter and are poised to deliver a record year.

We believe we are better positioned than ever to deliver on our mission, benefiting customers, employees and our shareholders as we continue to penetrate a multibillion-dollar opportunity. Now, operator, we'd like to open the call for questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] The first question today comes from Ryan MacWilliams with Stephens. Please go ahead.

Ryan MacWilliams -- Stephens Inc. -- Analyst

Thanks. And, Jaime, it's been a pleasure, and I bet things haven't been hectic at all for you this year, and this is just how you drew it up, but congrats again on everything done. Now just on the quarter, really nice to see strong $500,000 plus wins and the rising ASP. Was there anything different in the purchasing environment or the macro that drove strength this quarter with larger customers as compared to the second quarter?

David Meredith -- Chief Executive Officer

Yeah, Ryan, this is David. Thanks for your question. So as we talked about in earlier earnings calls, with the COVID environment, we have pivoted our sales strategy a little bit, and we're doing a land and expand strategy. So we're getting in quick.

We're getting new logos contracted and then right away going to cross-sell, upsell. And if you go back and look at Q1, I think we had an all-time record for number of new logos, almost 200. And so we're seeing the cross-sell and upsell kicking in. So a lot of those big deals that we had this quarter came from the new customers that we've gotten.

So we've been able to shorten the cycle on cross-sell, upsell and drive those bigger deals. So it was a real good quarter in terms of ASP.

Ryan MacWilliams -- Stephens Inc. -- Analyst

Great. And then on the IPAWS interface win, I didn't even know this was an option for the U.S. market, as it hasn't happened before. Can you just add more color on like the history of IPAWS and why they went with Everbridge? And maybe how do you think about what's the addressable opportunity here on the Everbridge side? Thanks.

David Meredith -- Chief Executive Officer

Yeah. Thanks. I think it's really -- we talk a lot about network effects and network effects can work both ways. If -- and this is almost network effects in reverse because the federal government works with so many other municipalities around the country.

And so many of those municipalities are already customers of ours. So it's just natural and easy to plug in, right? And then it just strengthens our position as we go and try to roll up the ones that aren't already customers. So I think our leadership position, we feel very strongly in terms of having the best products, most scalable, most resilient. We've been the leader in the space for years, and it showed.

And it was a competitive RFP process, and we're honored to be able to continue to serve the U.S. government and to be able to fulfill our mission of keeping people safe and organizations running. But we do think it's a very important strategic win for us.

Operator

The next question comes from Matt Stotler with William Blair. Please go ahead.

Matthew Stotler -- William Blair -- Analyst

Hey, guys. Thanks for taking my questions. I guess to start off with -- obviously, you guys have had some nice wins, continuing to close deals during the pandemic. And as you've kind of highlighted, you're seeing continued traction in large deals, specifically.

This environment has also created some complications with large implementation, specifically with countrywide public warning deals. So I would love to get some color on, if you've been able to start doing more of that on-site work at this point? How those are moving along? And how you expect these dynamics are reflected or will be reflected in billings and revenue?

David Meredith -- Chief Executive Officer

Yeah, Matt, thanks for the question. So yeah, we've been able to make progress on various projects. I mean from time to time, when countries, areas get locked down, it has caused some delays. But overall, I think we're dealing with it.

We're managing it. We're making forward progress. And we feel pretty good about that. I think in the past, Patrick has talked about a lot of our deals that we do don't show up in deferred.

And so we still have, what I would call, kind of a backlog of signed deals that are not in deferred, somewhere in that low eight-figure area that Patrick has talked about before.

Matthew Stotler -- William Blair -- Analyst

Yeah. Super helpful. And then just, I guess, one more on the government wins. Obviously, talked about FCC, Homeland Security, some really solid traction there.

It's good to see, something we've always been tracking since you guys got FedRAMP certified a couple of years ago. Would love to get a broader update on that federal vertical, maybe some thoughts on -- specific to Q3, any sort of seasonality there given the government fiscal year-end would be helpful.

David Meredith -- Chief Executive Officer

Patrick, do you want to comment on that one?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Yeah. Thanks, Matt. We did see seasonal activity, and that continues to tick up for us year over year. These were some great wins that we've had, and we continue to be able to sell the platform into these customers, which is important.

It reflects our broad value proposition as opposed to some of the point solutions that try to play in the market. So we're continuing to make progress in federal. And we anticipate that you'll see a continued progress in years to come.

Operator

The next question comes from Will Power with Baird. Please go ahead.

Charlie Erlikh -- Baird -- Analyst

Hey, this is Charlie Erlikh on for Will. Congrats on the record results. I'm hoping you can talk a little bit about the international strength in the quarter, looked really strong. Can you guys talk about maybe some of the investments that you've made in the past that are coming through to revenue now? And how should we think about international revenue growth going forward?

David Meredith -- Chief Executive Officer

Yeah, Charlie. Thanks for the question. I think one of the things you're seeing in our international results is we're adding and moving into new geographies. So a couple of years ago, we didn't have anything going in the Middle East, and now we have over 60 customers there, including some really significant, big deals, big wins.

And I think good relationships, good reputation, that's going to allow us to continue to grow and expand. Obviously, winning a countrywide deal in Latin America is a great way to kind of break into that market as well. And so -- and then Asia Pac, Europe, we continue to grow and expand. And we have more salespeople and more distribution in those markets than we've ever had before.

And so we're pretty excited about the potential to continue to grow our international footprint. When you look at countrywide public warning deals, we actually have -- we've got deals now in every major geography of the world. So Africa, Middle East, Asia, Oceania, more deals than anyone in Europe, Latin America. And now we're doing presidential alerts for the United States.

So we just think if you want to have a safe pick, the best product, the most bench strength, strongest provider, we're a good choice for that. And we know there's opportunities looking forward in the market on the mandate in the EU and public warning, and we continue to position for that. So overall, we're very excited about international. We continue to invest in that and to grow it.

Charlie Erlikh -- Baird -- Analyst

Great. And I also just wanted to ask a quick one on the big federal win in the quarter. You mentioned it was a very competitive RFP. So I'm wondering if you could talk about who you competed against for that deal? And why Everbridge ultimately won the deal?

David Meredith -- Chief Executive Officer

Well, yeah, as far as who we competed against that, I probably don't know every competitor. I know it was a formal RFP process. I do know there were competitors. As far as my understanding of some of the reasons why we won, one is we have the most scalable, resilient, feature-rich solution in the space.

We have probably the most references. We have many, many customers, as I mentioned earlier, across the country that already interface and plug into the federal agency. And so it just made a lot of sense. It's a good fit.

And then -- and we make the investments every year to keep our product in sync with the requirements of what the federal government is looking for. And so we already do that. And I think all those were reasons why we were a good choice for them.

Operator

Next question comes from Brad Zelnick with Credit Suisse. Please go ahead.

Bhavin Shah -- Credit Suisse -- Analyst

Hi, it's Bhavin on for Brad. Congrats on the success. David, nice to see some of the strengths here with some of the new CEM modules, such as Return to Work and Contact Tracing. How should we think about the longer opportunity -- longer-term opportunity here? Are you mostly targeting current CEM customers? Or are you also seeing traction with some of the traditional Mass Notification customers as well?

David Meredith -- Chief Executive Officer

Yeah. Bhavin, thank you. I really appreciate that question. This was actually a remarkable set of developments in the quarter because some of these solutions, we really just launched them, and the demand was quite remarkable.

So the great thing in terms of longer-term success, we're really selling our normal SaaS platform with specific use cases around Return to Work, Return to Campus, Contact Tracing, but at the end of the day, they're still buying our safety connect product, right? And so we're loading up their people, their assets, all those things into the system that make our platform very sticky for customers who want to stay with us. And then right away, they say, well, now that I've got all my information in here, here's five other use cases I can use it for. So we feel very confident that we're building long-term relationships. In many cases, we're expanding existing relationships.

But we've also been able to drive some really good new logos, some of which I mentioned in my prepared remarks from this. And so we're pretty excited as a way -- and I think it's just a good complement to our product and engineering team to be flexible and be able to turn on a dime and really respond to the feedback we were getting from customers on what they needed to have situational awareness first and then protect from COVID, their people and their assets, their supply chain, and then ultimately, return to work, return to campus. And one of the first sectors that had to kind of return to work were people going back to school. So we had a lot of urgency of demand from higher education, and that's just been a great way to revitalize that higher ed segment for us.

And we think our approach to contact tracing is actually revolutionary. It's really digital transformation for contact tracing because we're able to triangulate around a location and proximity and other factors with our 225 out-of-the-box integrations to just give a faster, better solution and tie it into our mobile app with the wellness checks and everything. It's a very comprehensive solution, and we continue to evolve that as we get additional feedback from our customers. So we're pretty excited about it.

Bhavin Shah -- Credit Suisse -- Analyst

That's good to hear, David. Just a follow-up for Patrick. Patrick, I just wanted to understand a little bit more on your 4Q guidance. You guys continue to put up strong performance.

But has your guidance methodology changed at all? I only ask because the quarter implies some meaningful revenue deceleration? Just want to understand how conservative you are, just given the backdrop. Or anything else that we should be thinking about?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Yeah. Thanks, Bhavin. There is no headline here when it comes to our fourth-quarter revenue guidance. We're doing exactly as we've done all year.

There's the near-term macro environment, uncertainty with COVID, potentially contested election. So we're being mature and prudent in our guidance. And just to remind the backdrop for that guidance, our revenue was a record beat in Q3, it's up sequentially versus Q2 by $6 million, 36% growth year over year. The trailing 12 revenue is up 36% year over year.

We've got a four-year CAGR going of 36%. We've raised the full year to 33% to 34%, whereas we began the year at 30% to 31%. And we hope to continue our performance of meeting and beating shareholder expectations. Among the metrics that will continue to be, I think, useful, as you think about the future, is you'll see when we file our 10-Q that our current RPO is up 36% year over year.

Our total RPO is up despite a huge tough comp. And Q3 of last year, our deferred revenue is up $10 million sequentially. And that excludes that backlog of low eight-digits, that's not on the balance sheet of some of those public warning deals. Our CEM adds are up 33%.

Large deals are up, ASP is up. So -- and we like our funnel. So clearly, we've got strong momentum. But in this near-term macro environment, we're continuing the same playbook that we've executed on all year.

Operator

[Operator instructions] The next question comes from Brian Peterson with Raymond James. Please go ahead.

Kevin Ruth -- Raymond James -- Analyst

Hey, thanks, guys. Kevin here on for Brian. As I think about the buyers for either safety connection or maybe risk intelligence, I imagine that those tend to be more active users of the product and maybe a bit warmer of a buyer. So I'm curious how you'd characterize those customer conversations? And what potential impact could that have looking ahead on your upsell traction?

David Meredith -- Chief Executive Officer

Hey, Kevin, thanks for the question. Yes, risk intelligence has been a red hot product area for us, and we're getting tremendous demand from it. And we're getting really good at the cross-sell, upsell motion from getting in with the risk intelligence and then selling them a bunch of other stuff. So it's just -- people want to know, it's a dynamic situation we're in right now.

Things are changing all the time. The virus is -- has hotspots that go up or down. You've got different travel disruptions, production stoppages. And then you've got overlapping critical events.

We've got wildfires, hurricanes, other forms of potential protests that all could disrupt the normal course of things on top of the COVID. So it's just really important to have situational awareness in real time, it's hyperlocal. And we've got 22,000 data feeds. We did a special data feed for COVID, which we added.

We added special data feed situation report around the election. So we continue to be very responsive around things that are happening. We have a whole rapid response team around any kind of critical event that we mobilize on quickly when things happen to support our customers. And we're just getting great feedback from that.

And we have a real good team, multiple centers working 24/7 of incredibly skilled and talented analysts on top of the AI and machine learning that we use to curate all that data. And it's just an offering that's very well suited to what's happening now. And then people start with that, and then we sell them the other things we have.

Kevin Ruth -- Raymond James -- Analyst

OK. Thanks for that. And then on the win for IPAWS, can you help to frame where your prior market share was as the front-end platform for that system? And do you see that as a potential driver to broaden your reach in some of the areas where you aren't as highly penetrated today?

David Meredith -- Chief Executive Officer

Yeah. Patrick, do you want to take that one?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Yeah. We're very excited about this. So now that we are the front-end to IPAWS, that means that anyone who is in our space, competing against us, who wants to enable their customers to leverage that very critical channel has to connect to us. So when you think about large municipalities, states, major municipalities and them considering their options for this very critical solution of being able to protect citizens and message to them effectively, this is yet one more reason why it becomes a no-brainer to choose Everbridge because we are now the official and the only gateway to that very important channel.

So as David mentioned earlier with regards to network effects, we are excited that -- about the prospects of leveraging this position to be able to improve our capability to win all of those future deals as they come to market.

Operator

The next question comes from Tom Roderick with Stifel. Please go ahead.

Tom Roderick -- Stifel Financial Corp. -- Analyst

Thank you, guys, for taking my question. Patrick, I appreciate the detail on the commentary around the deferreds in the quarter and the one particular several million dollar transaction that got pushed into the fourth quarter. So as I sort of revisit the calculated billings, bookings, again, I understand you don't want to focus on the quarter-to-quarter stuff. But looks doubly good in light of that.

But would love to hear some commentary around that one particular customer. You've highlighted in the past some of the state deals, federal deals where there are sub-agencies, sub-municipalities, things like that, where they can add on purchases. Would love to just hear a little bit about why this one, in particular, customer pushed the billing into the fourth quarter. And when you look at that customer, are they sort of fit into that book of big opportunity to expand that footprint?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Thanks, Tom. Yes. This is an opportunity to expand to this larger footprint that we're creating by virtue of that federal win. And the timing of the invoicing for this customer was by design from the outset of the contract.

It was part of the relationship that we built with them as we worked through terms that work for both parties. And it is one yet another kind of large illustration of why, as you know, we don't run the business to that metric of calculated billings. We don't guide to it. I think running the business to that kind of metric could lead to outcomes that aren't as positive for shareholders.

So whereas forcing terms that are a net negative to us just so that we can line up the timing of invoicing to make sure that each quarter looks a certain way, we've never done that, we never will. And so like I said, with this agreement, that was by design. And we've got a couple of others like that. And then there are, as you were referring to, Tom, sometimes there are customers who will come and say, hey, we want to tweak it by a day, and that will push it from one period to another forward or backwards.

And we're always happy to do that, in particular, when we're working to expand that relationship. So again, kind of know, we don't focus on that quarterly billings metric. And yes, we are excited about the ability to expand small customers, large customers and win the areas of the market that we haven't won yet as a result of this federal deal.

Tom Roderick -- Stifel Financial Corp. -- Analyst

Yup. Great. Good detail. David, just switching over to CEM.

So a dozen CEM deals in the quarter, fantastic. Can you talk a little bit about what you're seeing on the European side of CEM? Really intrigued given that you kind of made a larger push early this year -- earlier this year into EMEA. And we saw that nice Siemens deal earlier in the year. Just talk a little bit about the footprint, the traction and the go-to-market in terms of the number of sales heads you might be able to have on the ground over there right now.

Thanks.

David Meredith -- Chief Executive Officer

Yeah, Tom, thank you. We just did the formal launch for CEM at the end of June for Europe. And so we -- it was a major kickoff. We had C-level executives.

You mentioned Siemens, very influential CSO at Siemens, who we had speak at our symposium, as well as our CEM kickoff. And I think starting with a highly respected thought leader, big global brands like Siemens and then I don't think we're able to name others that we had there yet. But we're off to a solid start there. We've got a nice funnel.

And our sales team is very excited now to be able to have the bigger ticket items now that they can go sell in Europe. And we have been building out our distribution and go-to-market, both in terms of through partnerships, as well as direct sales internationally, and we'll continue to scale that over time.

Operator

The next question comes from Nick Negulic with Truist Securities. Please go ahead.

Nick Negulic -- Truist Securities -- Analyst

Hey, guys. How are you? I just had a quick question on partners. So I was wondering if you guys could give us an update on just the partner selling motion overall and where you believe partners have helped, even those over the past six to nine months. And then as partner selling been mostly focused on breaking into new regions, have you seen some success with partners and selling into the existing base as well? Thanks.

David Meredith -- Chief Executive Officer

Nick, thanks for the question. Yeah, we've talked about partners. We see it as a big growth opportunity. It's a multiyear pivot because we've been so reliant on direct sales for so long.

But we continue to see traction. I think if you look at our total just opportunities coming from partners, all types of partners this last quarter compared to a year ago, I think it was like three times more opportunities that we're getting coming across the transom. So we think we're making progress there. We still see a lot of opportunity to grow.

You've got system integrator partners. We've got large global consultancies. We talked a lot about Control Risks, which helps us quite a bit internationally. You've got some regions where we don't have as much sales force coverage, where we can work with our partners to get there, a lot of referral partners.

We also have OEM partner model, which has helped us to drive international deals as well. So -- and then the agent community. We've talked about our partnering with the largest agent entity, Telarus, which has over 4,000 technology consultants. And after initially doing that partnership in North America, we've actually expanded that with them internationally.

So there's multiple different types of partnerships. We continue to grow that. We recently announced STI, which is a really interesting technology company with a lot of good relationships, and we're already starting to see additional opportunities come in the funnel from STI. And so we're pretty excited about that one.

And I'm sure we'll be talking more about that in the future. Thank you.

Operator

The next question comes from Brad Sills with Bank of America. Please go ahead.

Sherry Guo -- Bank of America Merrill Lynch -- Analyst

Hi. This is actually Sherry Guo on for Brad. Thanks for taking my question. I know that you had a higher mix of deals last quarter that were lower deal sizes.

I was wondering how this looked this past quarter and if ASP maybe came back. Thanks again.

David Meredith -- Chief Executive Officer

Yeah, Sherry, thank you for the question. Actually, we just had our best quarter ever in terms of ASP on the quarter. So on a trailing 12-month basis, it was up 8% sequentially from last quarter. Part of that was because of last quarter being in the mix.

But just for this Q3, it was our best ever. So that was driven by, as I mentioned, I think, a 48% increase in the number of six-figure deals, which is our second highest, 43 of those deals, second highest quarter ever. And then we had our best quarter ever for number of deals over $500,000 recurring. So when you put all that together, it was a really, really strong performance on ASP.

And a lot of that was part of this land and expand strategy, where we've got them in as a new logo and then immediately started cross-selling and upselling to larger deals, and led by CEM. So we feel good about it. Thank you.

Operator

The next question comes from Sterling Auty with JP Morgan. Please go ahead.

Drew Glaeser -- J.P. Morgan -- Analyst

Hi. This is Drew on for Sterling. I was just wondering if you could provide some more color on what you're seeing around the EU opportunity for the countrywide alerting notifications. And yeah, just anything you could give on that would be great.

Thank you.

David Meredith -- Chief Executive Officer

Thank you, Drew. Yeah. So the EU mandate requires that the EU countries have a public warning solution in place by June of 2022. So we've continued to have discussions with countries over there.

What we're doing right now is we're focusing on the COVID use cases related to how you can leverage that public warning technology. So we've done, I think, some really groundbreaking work with the Directorate of Health in Norway, where they're leveraging our technology with specific use cases to help enforce social distancing in the country and to help notify all of the citizens and visitors in Norway, over 5 million messages at a time with no network congestion, around COVID updates, keeping in touch with Norwegians traveling in countries around the world, where there are various hotspots or if they've been exposed, what the latest quarantine guidelines are. And just really using the technology to help keep their citizens safe and reopen their economy faster while everyone's waiting for a vaccine. And I think it's probably not totally coincidental that some of the best countries in the world in terms of the metrics on managing COVID also are customers of a public warning.

But I think Norway has been the most advanced in leveraging the technology for those types of use cases. So we're trying to educate other countries around opportunities to utilize this technology to mitigate against COVID. And that's something -- we're leading on those discussions. We used our symposium recently.

We had Dr. Anthony Fauci from NIH. We had some of the top leaders from the CDC. We had representatives from multiple European countries.

Other government leaders from around the world were in attendance and speaking and participating. And so we're driving education on that. But short of that, we do expect, as we've always said, to see pickup on those deals probably in the second half of next year going into the first half of 2022 in terms of countries responding to the mandate. In the meantime, they're actively engaged in talking and educating.

And we've been -- we also had the EENA, which sets a lot of the best practices in Europe. They were also participating in our symposium recently. And so we think the EENA message is completely aligned with what we're doing, which is a hybrid platform, where we can do best cell broadcast, best location-based SMS for a complete solution around how to do public warning for a country. And so we think we're well-positioned, and that's sort of how we see the landscape right now.

Operator

This concludes our question-and-answer session. I would now like to turn the conference back over to David Meredith for any closing remarks.

David Meredith -- Chief Executive Officer

Thank you. I'd like to conclude by saying that we're excited about our performance in Q3. With critical events increasing globally in both number and severity and even overlapping one another, our Critical Event Management solution provides a higher value proposition than ever before. We remain proud of our leadership role in helping organizations and people overcome these adversities.

That said, we believe that we're still in the early days of penetrating that opportunity, and we look forward to further extending our leadership position in the quarters and the years ahead. We'll be attending the Needham, Credit Suisse, Wells Fargo and UBS conferences this quarter, and we welcome the opportunity to meet investors at these events. We look forward to speaking with you again soon. Thank you.

Bye-bye.

Operator

[Operator signoff]

Duration: 61 minutes

Call participants:

Joshua Young -- Vice President of Investor Relations

Jaime Ellertson -- Executive Chairman

David Meredith -- Chief Executive Officer

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Ryan MacWilliams -- Stephens Inc. -- Analyst

Matthew Stotler -- William Blair -- Analyst

Charlie Erlikh -- Baird -- Analyst

Bhavin Shah -- Credit Suisse -- Analyst

Kevin Ruth -- Raymond James -- Analyst

Tom Roderick -- Stifel Financial Corp. -- Analyst

Nick Negulic -- Truist Securities -- Analyst

Sherry Guo -- Bank of America Merrill Lynch -- Analyst

Drew Glaeser -- J.P. Morgan -- Analyst

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