Everbridge (EVBG) Q1 2021 Earnings Call Transcript

Everbridge (EVBG)
Q1 2021 Earnings Call
May 10, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Everbridge Inc. first-quarter 2021 earnings conference call. [Operator instructions] Please note this event is being recorded I would now like to turn the conference over to Joshua Young, vice president of investor relations. Please go ahead, sir.

Joshua Young -- Vice President, Investor Relations

Thank you. Good afternoon, and welcome to Everbridge's earnings conference call for the first quarter of 2021. My name is Joshua Young, vice president of investor relations for Everbridge. And with me on today's call are David Meredith, CEO; and Patrick Brickley, senior vice president and chief financial officer.

After the market closed, we issued our earnings release, which can be accessed on the Investor Relations section of our website at ir.everbridge.com. This call is being recorded, and a replay of the teleconference will be available on our IR website at the conclusion of today's event. During today's call, we will make forward-looking statements regarding future events for 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 only as of today, May 10, and should not be considered representative of our views as of any other subsequent date. We explicitly disclaim any obligation to update any forward-looking statements or our outlook. Also during today's call, we will refer to certain non-GAAP financial measures.

A reconciliation of our GAAP to non-GAAP financial measures is included in our press release. With that, let me turn the call over to David for his prepared remarks. David?

David Meredith -- Chief Executive Officer

Thank you, Joshua, and thanks to all of you for joining us today. We feel very excited about our first quarter results, which not only exceeded our guidance, but demonstrate continued positive momentum for our key long-term growth strategies, CEM and Public Warning. During the quarter, we benefited from the reacceleration of non-COVID-related CEM and Public Warning use cases, while still expanding life-saving vaccine distribution and back-to-work solutions. Increased demand for both our CEM and Public Warning platforms drove continued ASP growth that delivered the largest quarterly revenue beat in our history.

In fact, Q1 represented our fourth record quarterly beat in a row, and our 18th consecutive quarter of outperformance as a public company. Revenue in the quarter was $82.2 million, representing growth of 40% from the prior year. This, despite the challenging comparison with last year's outstanding Q1 results. Our strong revenue, coupled with effective cost management, produced a new high watermark for profitability in the first quarter with adjusted EBITDA that landed above the high end of our guidance at $5.3 million.

Last quarter, we discussed the return of larger CEM deals in the sales funnel, as businesses transition from lockdown mode to reopening mode and make plans to support the future of work in a new normal post-vaccine distribution. Accordingly, our Q1 performance reflects strong pipeline conversion, which included more than doubling the number of deals larger than $0.5 million and increasing the number of $200,000 plus deals by 60% from just one year ago. This helped fuel several new high watermarks for Everbridge, including all-time records for revenue, trailing 12-month average selling price, or ASP, international revenue mix and operating cash flow, which was $19.8 million for the quarter. In addition to these records, we also posted our best-ever first quarter results for non-GAAP gross margin, free cash flow, and adjusted EBITDA.

Our long-term growth strategy continues to drive our success through landing and then expanding deployments of our CEM platform at organizations as well as winning Public Warning solutions for governments. Our CEM growth results both from landing new customers from global geographies and vertical markets as well as selling additional solutions to existing customers. We continue to expand the penetration of CEM by increasing the number of use cases and extending our capabilities to additional departments within our customers' organizations. For example, in the first quarter, General Mills, a multinational marketer and manufacturer of branded foods became a new Everbridge customer by adopting CEM to automate threat identification, organizational response and visualized supply chain risk.

One of the world's largest intergovernmental organizations became a new vaccine distribution customer in the quarter. This customer selected our vaccine distribution software platform to help them manage the scheduling, tracking and communications of vaccine immunization and administration for millions of doses across dozens of countries, highlighting the scalability of our platform. More and more frequently, our market reputation enables us to engage with more senior leadership at large organizations, resulting in bigger deal sizes and increased standardization on Everbridge as part of a vendor consolidation strategy. This strategy provides a single pane of glass across digital and physical threats, while also saving money for our customers.

New CEM product features and capabilities announced in the first quarter, combined with our recently closed acquisition of xMatters further support this approach. In our first quarter, this strategy continued to drive greater market acceptance of our CEM platform as illustrated by larger wins. Increasingly, these include seven-figure deals. On the Public Warning side of the business, in Q1, we further expanded our presence in key markets, and we announced two new Public Warning patents, including our latest for technology that focuses on hybrid Population Alerting Systems and intelligent sending of messages in public mobile networks.

We have won customers in more countries than any of our competitors across every major region of the world. When governments and carriers look for global, large-scale referenceable accounts and Public Warning examples, they select Everbridge. During our most strategic -- I'm sorry, driving our most strategic growth engine, we saw customers deploy numerous new critical event management use cases in all of our target markets and across the globe. And we continue to push the technology boundaries as an innovator and pioneer in the CEM space for new applications and use cases in a post-pandemic world.

This past quarter, we also announced the expansion of our industry-leading critical event management platform to provide the most comprehensive integrated suite of digital and physical resiliency solutions for global organizations. Customers can rapidly deploy our CEM platform on a modular basis to support hundreds of positive ROI use cases across five major categories. The first category is CEM for people and life safety, which fulfills the duty of care that an organization has for its customers, remote and on-site employees, travelers and field workers. Next is CEM for operations and business continuity, which helps ensure businesses can keep their operations running faster.

Then CEM for supply chain risk, which manages and optimizes supply chains and supply routes. Followed by CEM for Smart Enterprise, which accelerates digital transformation through smart automation, secure IoT management, big data and advanced analytics. And finally, CEM for Digital, where our solutions protect an organization's brand and reputation, while providing resiliency for IT systems and cybersecurity in an increasingly virtual world. Demand for these CEM implementations as well as our demonstrated domain expertise and leadership drove numerous wins and expansions in the quarter, including Kimberly Clark, a leading manufacturer of paper-based consumer products, became a new Everbridge customer as part of their effort to fulfill the duty of care to employees with initial emphasis on post-pandemic business travel.

T-Mobile, one of the largest mobile carriers in North America, signed a significant expansion deal by adopting CEM to establish an enterprisewide threat and incident dashboard. A few other examples from Q1 include Ricoh USA that followed the lead of their counterpart in the U.K. to become a new Everbridge customer. Ricoh will be leveraging our risk intelligence and mass notification capabilities to establish a robust threat assessment tool paired with a communication platform to accelerate their security strategy.

Dentsu International, a global advertising and digital marketing company, also expanded their relationship with Everbridge CEM to protect their 46,000 employees from the impact of COVID-19 by leveraging risk intelligence and internal collaboration tools to automate and streamline incident response. Turning to examples of other meaningful wins. You may be aware that Everbridge serves dozens of Native American and First Nation tribes across North America. In Q1, our win with the Muscogee (Creek) Nation Health System of Oklahoma, expanded their relationship with Everbridge by selecting our vaccine distribution solution to more efficiently coordinate and administer the COVID-19 vaccine to its tribal members.

The Muskogee (Creek) Nation, which is the fourth largest Native American tribe in the country, chose Everbridge to automate the registration, scheduling, administration, tracking, and reporting of vaccinations among its more than 90,000 citizens in the Tulsa area. In addition, Citizens Bank, a leading bank in the Northeastern United States with over 1,000 branches, added Safety Connection Pro in order to drive a quantifiable improvement in operational efficiency. In the Federal Government space, we continue to advance Everbridge's position as the leading CEM provider by achieving more FedRAMP Authority to Operate certifications or ATOs for short for our solutions than any of our competitors. In the first quarter, we grew our relationship with the U.S.

Army as well as expanded our relationships with both the U.S. Air Force and the U.S. Navy. During the quarter, we signed a meaningful contract expansion with the U.S.

Army's JARVISS program. As many of you may recall, the Joint Analytic Real-time Virtual Information Sharing System, or JARVISS, represents one of our largest customers overall and an anchor customer for our federal program. JARVISS primarily focuses on antiterrorism and other security threats, such as active shooters and natural disasters that might affect DoD operations. Since the outbreak of COVID-19, JARVISS has also been supporting ongoing threat analysis of the pandemic, giving Army commanders and other DoD users critical insight into the impact of COVID-19 on global operations across 400 military locations in 70 countries.

Our expanded agreement extends this program beyond the U.S. Army to now include support for the Air Force as well. Our federal activity in the quarter also included a significant expansion of business with the U.S. Navy, growing our combined business with another military branch to over seven figures.

Turning back to the Enterprise business. We delivered a strong customer ROI with a CEM supply chain implementation in the medical market. Dexcom, a leading manufacturer of continuous glucose monitoring systems, chose Everbridge to mitigate the impact of supply chain risks on their global operations. Our Q1 results also demonstrate renewed activity in markets negatively impacted by COVID, such as the return of healthcare purchases.

For example, to support their IT systems readiness, New York City Health and Hospitals expanded their IT alerting capabilities while maintaining secure HIPAA-compliant communications. Another healthcare example from Q1 was Alexion, a global biopharmaceutical company who expanded their use of IT alerting. And speaking of IT alerting, we continued to expand our support for next-generation enterprisewide digital and physical fusion centers. For example, our just-closed acquisition of xMatters will help accelerate digital transformation across IT service operations, cybersecurity, and DevOps incident response.

In an increasingly digital world with dramatically more remote employees, the rapid expansion in interconnected devices and systems and rising instances of damaging cyberattacks. IT organizations, super large enterprises, and governments are under more pressure than ever to accelerate their digital transformation while providing solutions for IT resiliency and uptime. By combining forces with xMatters, we believe Everbridge can help organizations discover IT issues more quickly, assemble responders, apply remediation code, manage patches and drive continuous improvement with analytics, significantly increasing an organization's ability to recover from a critical-digital event to keep their businesses running faster. In fact, this combination further strengthens the industry's most compelling end-to-end CEM platform to identify, assess and manage critical events that can impact an organization's digital and physical assets.

Together, our capabilities provide the most compelling IT and cybersecurity solutions for CIOs at the largest Fortune 500 enterprises. Turning to our metrics for the quarter. Our performance clearly reflects the result of our land-and-expand strategy with large new customer wins, multiproduct expansions, and continuing demand for higher ASP products, particularly our CEM solutions. We added 135 net new enterprise customers in the first quarter, slightly above our target range of 110 to 125, increasing our total enterprise customer count to 5,748.

11 customers selected or expanded to CEM, raising the total number of CEM customers to 139, a 62% increase in the number of CEM customers from a year ago. While this demonstrates excellent momentum, it also highlights our significant opportunity for continued expansion at existing customers. As in the fourth quarter, our momentum with large transactions continued in Q1 with quarterly ASPs that were over $100,000, again. This produced an increase in our trailing 12-month ASP metric to $86,500 in the first quarter, a new record.

Contributing to this ASP growth, we closed 45 deals valued more than $100,000 per year, a high watermark for our first quarter, including a record number of deals that were valued at more than $500,000 per year, more than doubling the number of deals greater than $0.5 million from the prior-year period. From a product mix perspective, a record 66% of new and gross sales over the last four quarters came from new products, reflecting high demand for our newer applications as well as continued appetite for our core products. Our international business also continued to post strong growth results in Q1, with 30% of total revenue coming from outside the U.S. compared to 20% a year ago, representing a record high mix of international revenue.

New customers that led this growth included the vaccine distribution program I already mentioned, one of the largest real estate projects in Riyadh, Saudi Arabia, as well as a 100-acre city within a city campus in Southeast Asia. Our revenue mix by vertical was relatively consistent with 63% from corporate, 26% from local, state, and countrywide government, and 11% from healthcare, reflecting growth across all of our target markets. As always, we remind you that quarterly metrics can fluctuate, but that the longer-term trends continue to reflect our overall business momentum. These outstanding metrics demonstrate the growing market acceptance of our overall CEM strategy as well as our ability to close larger transactions from our pipeline as organizations increasingly embrace CEM to address a multitude of high ROI use cases.

Consistent with our mission to keep people safe and organizations running faster, global impact investors increasingly recognize Everbridge as an organization that utilizes our technology platform to address some of the most challenging issues of the day in order to help make the world a better place. Our mission-driven organization also earned recent recognition across several categories including Best Outlook, Best Place to Work, Best Sales Teams, and Best Global Culture. In a competitive technology market, our culture and reputation enable us to continue to attract strong talent. Now turning to the future.

Later this month, we will continue on our Road to Recovery series of executive thought leadership symposia, which draw audiences from a wide range of industries and markets from around the world. Please join us on May 26 and May 27, as Bill Clinton, the 42nd president of the United States, keynotes our first summit in 2021. Bill Clinton will be joined by numerous additional global leaders, luminaries, and experts, including former secretary of State, Madeleine Albright; and Steve Forbes, chairman, and editor-in-chief of Forbes Media. Also presenting are Dr.

Judy Monroe, chief executive officer for the Centers for Disease Control Foundation; and Dr. Jay Butler, CDC deputy director for Infectious Diseases. Additionally, senior sports executives from the NBA, Major League Baseball, the Olympics, and Premier League Football or as we say in the United States, soccer, will share their insights on the future of sports in a post-pandemic world. With the participation of C-suite executives from Fortune 500 companies and board of directors, this summit promises to be an illuminating event, which we look forward to sharing with you.

In summary, we started off the year with exceptional first-quarter results. During 2021, we will build on our success of advancing our CEM and Public Warning solutions to enable organizations around the world to keep people safe and their operations running. We're proud of our accomplishments and believe the best is yet to come as we continue to penetrate and serve a multibillion-dollar market. Now I'll turn the call over to Patrick for more details on our first-quarter financial performance and our guidance for Q2 and the full-year 2021.

Patrick?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Thanks, David. We've begun the year on a high note with record revenue of $82.2 million, an increase of 40% from a year ago and exceeding the high end of our guidance range by more than ever before. This growth was driven primarily by strong subscription revenue that increased by more than 30%, both year over year and on a trailing 12-month basis as well as certain projects that achieved implementation success in the quarter. Our net revenue retention rate continues to track well above 110%, reflecting consistently strong customer satisfaction, combined with demand for additional Everbridge technology at 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 73.6%, an increase of 680 basis points from last year as we continue to benefit from greater scale. Total operating expenses in the quarter were $58.2 million, an increase of 25% from a year ago, reflecting continued investments in our platform and our go-to-market strategy.

Adjusted EBITDA was $5.3 million, well above the high end of our guidance range and reflected the revenue upside in the quarter. This represents a meaningful increase from our adjusted EBITDA loss of negative $4.8 million in the year-ago quarter. Net income in the first quarter was $8 million or $0.18 per diluted share compared to last year's loss of $5.5 million or negative $0.16 per share. On a GAAP basis, our net loss was $21.8 million.

Looking at our balance sheet. We ended the quarter with $743.2 million in cash, cash equivalents, restricted cash, and short-term investments, an increase from $475.6 million at the end of the fourth quarter, reflecting the net proceeds from our 0% convertible debt financing, partially offset by a repayment of our 1.5% convertible notes during the quarter. Cash balances at the end of the quarter also benefited from record operating cash flows of $19.8 million and free cash flow of $15.5 million, which was just shy of our record fourth-quarter performance. Note that our cash balances at the end of the quarter do not include the cash impact of our acquisition of xMatters, which closed this past Friday, and totaled $165 million net of cash acquired.

Total deferred revenue was $184.5 million at the end of the quarter, an increase of 27% from a year ago. 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. 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 much more indicative of our overall business trends and that our longer-term performance continues to support our growth objectives.

In addition, we continue to have an eight-figure backlog of contracts that are signed but not yet invoiced and whose revenue will be recognized in upcoming quarters. Now I'll turn to our guidance for the second quarter and full year. Our updated guidance for 2021 considers the impact of our acquisition of xMatters. Having just completed the transaction on Friday, our expectations for the financial contribution from xMatters for the remainder of the year have not changed from the view we provided about a month ago.

Similarly, we remain positive about expanding our ability to help customers manage both digital and physical threats to the people, organizations, and operations and are optimistic that xMatters will help support our long-term ambitions. For the second quarter, we anticipate revenue of between $83.7 million and $84.1 million, representing growth of 28% to 29%. We anticipate adjusted EBITDA to be between negative $5.2 million and $4.8 million. We anticipate a non-GAAP net loss of between $8.8 million and $8.4 million, or a loss of between negative $0.23 and $0.22 per share based on 37.6 million basic and diluted weighted average shares outstanding.

Stock-based compensation expense is expected to be approximately $16.7 million for the second quarter. For the full year, we now expect revenue to be in the range of $358 million to $359.6 million, representing growth of 32% to 33%. We anticipate adjusted EBITDA will be in the range of $7.9 million to $8.7 million. We expect a non-GAAP net loss of between $7.4 million and $5.8 million or between negative $0.20 and $0.16 per share based on 37.3 million basic and diluted weighted average shares outstanding.

This guidance assumes estimated stock-based compensation expenses of approximately $66 million for the year. And we continue to anticipate that free cash flow will be approximately breakeven and perhaps slightly positive for the year. In summary, we're off to a great start in 2021 with results that well exceeded our expectations and strong momentum, setting us up for an excellent year. Our acquisition of xMatters advances our position as the leading provider of enterprise-scale digital and physical resiliency solutions.

And we remain optimistic that we can continue to penetrate the multibillion-dollar opportunity we are addressing in the years ahead. Now, operator, we'd like to open the call for questions.

Questions & Answers:

Operator

[Operator instructions] And the first question will come from Sterling Auty with J.P. Morgan. Please go ahead.

Sterling Auty -- J.P. Morgan -- Analyst

Yeah. Thanks, guys. Sterling Auty from J.P. Morgan.

Just actually want to start more of a housekeeping. I want to make sure I understand the guide for the full year. Can you remind us more specifically, what was the expectation that you gave about a month ago for xMatters? Because if I take the beat and kind of add it to kind of the midpoint of what you had, it looks like you're including about $9 million for xMatters. Is that the right way to think about it? And that the guidance was really taking the beat, flowing it through to the full year and then adding xMatters to it?

David Meredith -- Chief Executive Officer

Hey, Sterling, thanks for the question. This is David. We did have a little bit of pull forward in the quarter, things that came in a little early, but I'll let Patrick speak to the -- Patrick, do you want to go ahead and do the full answer?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Yes, sure. So as David said, we did have a little bit of pull-in. Our guidance for Q2 and for the full year, we're doing our usual, we're factoring in uncertainties that impact both revenue and profitability. And we were happy to see implementation success at certain Public Warning projects that results in some additional revenue in Q1.

But really, the strength of Q1 and what we're excited about for the rest of the year reflects a reacceleration of non-COVID-related CEM and Public Warning activity, the increasing number of large deals that you saw. And in fact, subscription revenue grew more than 30%, both at Q end and on a trailing 12-month basis. And our current RPO grew 34%. So these, on top of the existing backlog, which I referenced of signed-but-not-yet-invoiced contracts, which is still measured in the mid-teens of millions of dollars, and which we hope to recognize each revenue into upcoming quarters.

These give us a lot of momentum as we look out toward the rest of the year. But as usual, when we're providing guidance as we've been doing for the past many quarters now, we're just -- we're trying to provide a prudent outlook, and we hope to be able to continue our track record of outperforming expectations.

Sterling Auty -- J.P. Morgan -- Analyst

That makes a lot of sense. And then one follow-up. You talked about over 60% of the business coming from new products over the last 12 months, and you gave some anecdotal examples. But when you look at it as a whole, which of the new products are making up the biggest portions of that? Or is it very evenly diversified?

David Meredith -- Chief Executive Officer

Yeah. Thanks, Sterling. I mean we really had strength across our product portfolio. I think we did mention, for example, our IT Alerting was one of our faster-growing segments.

And that's one of the reasons why we're so excited about completing the xMatters acquisition because, really, xMatters has been the leader in the enterprise play for that space, and we've been focused on the enterprise in the last four or five years since we launched that product. So putting those two together, I think, squarely positions us as the leader if you're a Fortune 500 company looking for an enterprise cloud solution in that space. So that's an area that definitely stuck out. And I think we talked about that earlier with the announcement of the acquisition.

Sterling Auty -- J.P. Morgan -- Analyst

Got it. Thank you.

Operator

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

Matt Stotler -- William Blair -- Analyst

Hey, guys. Thank you for taking my questions. I guess I'll just start off with, you know, kind of one on the broader M&A front. Obviously, congrats on the xMatters acquisition.

You know, a bunch of other ones here this year. It seems like, you know, on one hand, M&A has always been a core part of the Everbridge product strategy, right? I think, historically, it's been kind of low 30% organic growth and a few points from acquisitions. But it seems like the appetite definitely has picked up on both a frequency and size perspective. So I'd love to understand kind of the factors that are driving this adjustment strategy.

You obviously always been looking at, you know, where the puck is going, if we're looking at multiple years down the road. But just kind of a temporary dislocations around COVID and being opportunistic? Or is this more of a permanent shift relative to what we used to historically?

David Meredith -- Chief Executive Officer

Hey, Matt, thanks for the question. So M&A has always been part of the strategy for Everbridge. And I think Jamie always talked about something in the mid- to high single-digit of the growth rate coming from acquisition and the rest coming from non-acquisition. And what really drives those decisions are the strategic fit of the products.

So if you look at one too many, that was an area where we were the leader in location-based SMS. And we really felt like we could transform that industry by having a hybrid solution where you could do cell broadcast or location-based SMS. So acquiring a leader in cell broadcast just made sense. I think, similarly, with xMatters, seeing that – you know, and we're seeing even over the weekend, a lot of media around cyberattacks and, you know, just the need for an enterprise to be secure on the digital side with all the digital transformation, employees being remote, future of work, the opportunity to take the growth we were seeing on the ITA side and put it with the leader on enterprise ITA, we feel is very strong.

Because when you put the digital CEM for digital along with physical and we can really own the Fusion Center for the enterprise where they can have one single pane of glass and look across all their digital and physical risks. And so we think that was a really compelling strategic fit from a product road map perspective, and that's why we did it. So I don't think the strategy has really changed from what Jamie was doing for years, which is targeted tuck-ins that allow us to strengthen or accelerate our technology road map or to help us get into geographies, particularly internationally that we're not in currently. So we don't really see it as a big strategy shift.

I think, you know, the law of large numbers supplies as we get bigger, you know, the percentage, the numbers will look bigger, but we don't view it as a strategy shift.

Matt Stotler -- William Blair -- Analyst

Got it. Got it. OK, that's helpful. And then maybe just one on the partner channel.

I would love to just get an update on that front, specifically maybe, you know, how much of the business at this point is being influenced by partners? And how that pipeline is shaping up for additional partnerships? I know that still relatively new, but obviously, some exciting opportunities with Telarus and the expanded relationship to Atos. I would love to also – you know, any examples of, you know, additional situations like California, where you're seeing partners like pulling you into new opportunities, that would be helpful as well.

David Meredith -- Chief Executive Officer

Yeah. Great. So we've talked a lot about partners. We don't break it out right now, but I mean I can tell you that we did exceed our internal targets for the quarter on our partner bookings.

So we're pleased with that. And we're getting more leads coming in from partners than we've ever had in the history of the company. We've got some pretty exciting partnerships that we'll probably be announcing later this year. And then we've already earlier talked about partners like Atos, who've made a multiyear, multimillion-dollar minimum commitment to sell more of our stuff on a global basis.

And that's -- you mentioned Cal OES is a great example where we had success with them in California first, and now we've expanded the relationship and they've made a commitment and, you know, other types of partners like Northland Controls, where they've also made a similar minimum commitment going forward as a really good fit for people that want to turnkey outsource the whole operation, and they can provide the bodies and we provide the technology. And one of our big CEM Fortune 500 deals that we've announced previously actually came from that partnership. So we're getting a lot of traction. And then there are partners like Control Risks that we've been working with for a while.

They were thought leaders on a global basis around risk management into the C-suite, and they're very much a professional services-led organization. And so it's very synergistic where they can pull in our technology platform, and it just works well for them. It works well for us. So I think we're getting – you know, we've done a lot of foundational building over the last year.

Better partner portal, better tools, better processes, more awareness, building out a partner marketing organization. And all that's starting to kick in now. So I think, you know, we expect to continue to see more growth and more success in that space.

Matt Stotler -- William Blair -- Analyst

That's helpful. Thanks, again.

Operator

Thank you. The next question will come from Scott Berg with Needham and Company. Please go ahead.

Scott Berg -- Needham & Company -- Analyst

David and Patrick, congrats on a good quarter. David, I guess I'd like to start off on the JARVISS extension. That as you mentioned, was one of your -- or has been one of your largest customers. But can you help us understand what's in this contract? Is it more modules? You know, it looks like you're probably expanding the functionality to a couple of other units within the armed services.

But any data there would be helpful.

David Meredith -- Chief Executive Officer

Yeah. Thanks, Scott. Appreciate the question. We're very excited about this expansion.

And this is a really good example where, you know, the power of our platform, it lends itself to so many different use cases. So originally, JARVISS started as antiterrorism and physical safety. And when COVID came on, we were able to pivot and they were able to leverage the platform to help with COVID as well. And so now we are, as we've been wanting to do, and we're really excited to be extending that platform to help different parts of the Air Force.

And we see opportunity for continued growth across the Department of Defense and then getting a multiyear extension as well as there's always additional things that they want to use the platform for and enhancements and things that they ask for that we continue to do for them. So overall, it's just a great, great news, and we're very excited about it, and it's a big important customer for us with a lot of headroom to continue to grow across the DoD.

Scott Berg -- Needham & Company -- Analyst

Excellent. Then from a follow-up perspective, I wanted to ask Sterling's question in a slightly different manner. I guess if you look at your pipeline activity, sales pipeline today, you've obviously talked about deals reaccelerating for non-COVID-related functionality. But if you look at that pipeline going out in the next couple of three, four months, relative to what you saw in maybe the year time before the pandemic, does that composition differ at all? Just trying to understand if your customers' priorities maybe have changed at all over the last 12 to 18 months.

David Meredith -- Chief Executive Officer

Well, yeah. Thank you. The -- what we're seeing now is people are starting to focus on the sort of post-vaccine distribution future of work and how do we go forward. And that's really exciting for us because if you look at the three quarters before COVID kicked in, I think we posted, you know, mid-50% billings growth those three quarters.

So we were getting a ton of momentum, and there are a lot of use cases that we're used to selling that really we didn't sell as much during COVID. So we're starting to see those use cases coming back, and so, you know, our sales team loves that. For example, travel risk management, people are starting to travel again. We mentioned a few examples of deals that were catalyzed by wanting to cover travel.

Healthcare is one wherein the midst of COVID, you know, a lot of the healthcare entities were not in a position to be buying new software. They were just dealing with the crisis at hand. And now they're able to start to come back, and we're seeing those deals in that funnel start to come back. So we're really excited about getting back to some of the use cases that we have and the general awareness has risen about why CEM is a must-have, not a nice to have.

So we think that awareness is going to stick around with the Board and the CEO and the C-suite. But now some of the use cases that we really are good at selling are going to be turned back on, and we're starting to see that happen, and we're starting to see that in the funnel. So we're really excited as we exit Q1.

Scott Berg -- Needham & Company -- Analyst

Congrats, again. Thank you.

Operator

[Operator instructions] Our next question will come from Brian Peterson with Raymond James. Please go ahead.

Alex Sklar -- Raymond James -- Analyst

Great. Thank you. This is Alex Sklar on for Brian. David or Patrick, one question on the international growth.

I know the countrywide deals are probably the biggest opportunity, but international revenue accelerated again this quarter to over 100% growth. I'm just curious if you could talk about what's driving that? And with that, any traction you're seeing on the corporate side internationally? Thanks.

David Meredith -- Chief Executive Officer

Patrick, do you want to take that one?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

We've been diligently building out our international go-to-market expansion for the past few years. A number of years ago, our percent of revenue from outside the United States was in the single digits. And right now, we're approaching a third. And we think it could be half or two-thirds or even more of our revenue.

We've been investing a lot in the European region, not just the Public Warning opportunity with the EU. But last year, we did a formal launch of CEM in EMEA, and we've got an office in the Middle East, where we've been landing a lot of large deals, and now we're seeding APAC. So on the one hand, it's very early days. But on the other hand, we're proud of the success that we've had to date.

We anticipate that you'll see continued success going forward. It's -- because it's early, I don't know that it will be linear. It might bounce around a bit, but we think that the trend will remain up into the right for a long time.

Alex Sklar -- Raymond James -- Analyst

OK. Great. And Patrick, one more for you, following up on Sterling's guidance question. But on the profitability side.

Really nice EBITDA beat this quarter. So the 2Q guide looks like a fairly sizable move. Could you just help parse out the impact from the acquisition and the deferred revenue haircut versus just increasing growth investments?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Well, it's hard to do. We just closed the deal last Friday. We're certainly giving ourselves a wide birth here in the first quarter post-acquisition on the bottom line. And -- but you did see that for the full year, we raised a little bit.

We do think that net-net, this acquisition is going to be accretive -- squarely accretive to adjusted EBITDA in 2022. So we just want to be prudent as we put the acquired company's financials through public accounting and -- but we're optimistic that we're going to do this year what we said we were going to do, which is continue to make incremental improvements on the bottom line, whether that's adjusted EBITDA or non-GAAP net income or free cash flow. We anticipate gradual improvement versus last year, despite any purchase accounting impact to this acquisition.

Alex Sklar -- Raymond James -- Analyst

All right. Great. Thank you.

Operator

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

Will Power -- Robert W. Baird -- Analyst

OK. Great. I just wanted to ask on Population Alerting, I know in the press release, you alluded to expanding presence in APAC. I wonder if you could just kind of speak toward the pipeline of opportunities you're seeing within Population Alerting there? And then I guess likewise, just any kind of update on the European opportunity.

What are you seeing in terms of, you know, RFI, RFP activity? When do you think we might start to get some announcements? Was that the end of this year? Is that into 2022? Any update there would be great.

David Meredith -- Chief Executive Officer

Yeah, Will, thanks for the question. We're very excited about the Public Warning opportunity. We've got a pretty aggressive outreach all across the globe, and we're engaged in a lot of discussions currently In terms of the quarter, we hit some significant milestones on some of the projects we've got going. You know, we had some expansion opportunities, and we're engaged in various, you know, RFIs, RFPs.

One of the big things we're seeing, and I think it's really good, we talked a lot about the front end and the back end of these deals. The front end being sold into the government, but then the back end is you sell the back end to all the wireless carriers in the market, and that gives you an opportunity to potentially double or triple the total opportunity size in a region. So what we're seeing is the ability now for us to go in and sell to the carriers, sometimes even ahead of the government or give us an opportunity if the government is not ready, we can still do something with a carrier. So we're seeing a really good mix of funnel activity on the carrier side as well.

And I think that's also really good that we have the ability to do both cell broadcast and location-based SMS because in some cases, you've got customers that have one, and they're thinking they want the other or they want a hybrid solution and our ability to play in both those spaces with the leading solution serves us very well. So we don't have any other announcements to make at this time in terms of specific countries. But overall, you know, we like the progress we're seeing.

Will Power -- Robert W. Baird -- Analyst

OK. And if I could just maybe follow up quickly on one of the other comments or questions with respect to JARVISS. I mean I know you alluded to working with the U.S. Air Force.

Is that something that could be the same size as what you were doing with Army? Or are you just kind of getting started there? Any further kind of color about the, you know, opportunity there?

David Meredith -- Chief Executive Officer

Yeah. Thank you for the question. We are just getting started there. So this is our entry into it with parts of the Air Force, but it's not as comprehensive as our current -- the current maturity level we're out with the Army.

So there's still room to do more there.

Will Power -- Robert W. Baird -- Analyst

OK, great. Thanks.

David Meredith -- Chief Executive Officer

Sure.

Operator

The next question will come from Terry Tillman with Truist Securities. Please go ahead.

Terry Tillman -- Truist Securities -- Analyst

Thanks for taking my questions. Hi, David and Patrick, and congrats on the quarter and the xMatters acquisition. Maybe, David, for you, the first question just relates to, you know, with xMatters now having in your portfolio on a stronger kind of IT alerting or kind of a digital approach strategy. What does this do where maybe -- like when you're involved in a fusion center opportunity or a big CEM deal, how often was the IT alerting side coming up and maybe you didn't have enough of strength and capabilities there, and so this is going to shore that up? I'm kind of curious what this could do on even accelerating further CEM wins in these fusion center initiatives?

David Meredith -- Chief Executive Officer

Yeah. Terry, thank you very much. It definitely is extremely relevant to what we're doing with CEM. We talk about CEM for digital, and that really is IT, cyber.

And when you think about the Internet of Things, you're going to have 75 billion devices on the Internet with an IP address. So you're exponentially increasing the threat surface there. Post-COVID, you got more people working remotely. So it's just -- our customers are telling us they want a single pane of glass for any risk, whether it's digital or physical.

And I just don't think there's anybody else in the industry that can do what we can do now for that. So it's a very powerful strategic combination. And I think our customers, so far, feedback is coming in very strong, and we're excited about it. As far as what they bring versus what we have, I think there's definitely capabilities there that are complementary.

And so just I would -- as Patrick mentioned, we literally just closed the deal Friday. Today's Monday, so it's one business day later. So we had Hart-Scott-Rodino, so we -- there were things we couldn't get into and now we're able to really get into it. So we'll be more into the specific details.

But I do think -- they've always focused on the enterprise, and that's really been their space. We've been focused on the enterprise. So I think when you put the 2 together, you've really got the default choice for an enterprise buyer.

Terry Tillman -- Truist Securities -- Analyst

Yeah, sounds good. And I guess, Patrick, in terms of the four quarters, straight quarters of record beat or increasing size of beat, could you remind us again in terms of stack ranking, is it a certain products or SKUs that there's just more variability? And/or maybe it's just been the non-COVID-related business that you've just been more conservative around? And has anything changed in your outlook going forward? Thank you.

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Hey, Terry, well, we just continue to remain prudent. We're really in about the back half of the year given the momentum that we're exiting Q1 with and entering Q2 with. As I mentioned earlier there, we did pull some revenue forward into Q1. And we do have some onetime revenue in our quarterly revenue.

And sometimes that's a little bit harder to predict, but it's generally very immaterial to results, less than 1% and -- in any given quarter. And that's the case -- or I'm sorry, usually, around 2% or 3%, excuse me, in any given quarter. And this quarter was a little bit more than that, and that was about half of the beat was a couple of million dollars of incremental onetime revenue related to some deliveries. But going back to that backlog that we've mentioned of deals that we have signed and are on schedule for delivery in the upcoming quarters, but we have not yet invoiced, these are things that are not in our deferred revenues.

It's harder to see them coming. And sometimes the delivery for us is -- isn't entirely predictable, but we were excited that Q1 we got a number of those projects across the line, and we hope to be able to continue to do that for the next many quarters.

Operator

The next question will come from Koji Ikeda with Bank of America. Please go ahead.

Koji Ikeda -- Bank of America Merrill Lynch -- Analyst

Hey, David and Patrick, congrats on the nice quarter, and thank you for taking my questions. I have another question on xMatters for you. You know, it sounds like it's very relevant with your deal flow out there. But I'm just kind of wondering, is the buyer the same for xMatters as it would be for your CEM products? And if it is or even if it's not, does this change your go-to-market motion at all?

David Meredith -- Chief Executive Officer

Yeah. Koji, thanks for the question. And by the way, I just want to point out, too. I know on the ASP that we did hit an all-time record high this quarter on our ASP.

I just want to make sure that you guys noted that as well. The -- on the buyer, it's a great question because what's happening now is the Audit Committee of the Board of Directors is being expected to keep an eye on all forms of risk, not just financial risk. So there's board-level awareness of this, I think coming out of COVID. And then you've got different personas within the C-suite that we deal with.

So physical threats, we're dealing with the Chief Security Officer. For our IT Alerting, for IT, for cyber, we're dealing with the CIO. Sometimes now an empowered CTO, Digital Officer, CSO. For the future of work, you're dealing with the Chief Human Resources Officer, sometimes even Chief Legal as some of these things with these COVID steering committees that we're seeing.

So there's multiple different personas in the C-suite that we deal with. And each one has different use cases that they're focused on. But definitely, we like the fact that xMatters really strengthen our positioning with some of the better-funded personas, like the CIO, like the CTO. And so when we can say, look, we've got one platform to support your entire enterprise across all digital and physical risks and remediation different parts of that works on with different people, but we definitely felt we need to be very strong on the IT piece, given where the industry is going with digital transformation, and we think this really puts us there.

Koji Ikeda -- Bank of America Merrill Lynch -- Analyst

Got it. Got it. That's super helpful. And just one follow-up for me on xMatters, too.

Thinking about the contribution for this year, that's somewhere in the $9 million to $11 million. I guess, how much revenue from a high level was coming international from them? And just another buyer mindset question. You know, internationally, given the great performance that you had in this first quarter and the accelerating revenue there. I guess, how do we think about the buyer's mindset internationally for a product like xMatters? Thank you.

David Meredith -- Chief Executive Officer

Yeah, Patrick, you want to take that one?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Yeah. We -- thanks, Koji. It's great to hear you on the call. The mix, domestic, international, it's a little bit lower in terms of international as a percent of total for xMatters.

But that being said, one of the elements of the strategic rationale for the acquisition was they do, at least in our experience, seem to have very good brand recognition outside the United States and our buyers know at the xMatters value proposition and they like it and they appreciate it, and that's been part of the xMatters ability to grow over the past few years. So that's -- given that international expansion is such an important part of our growth story for years to come, that was yet one more reason why we were attracted to that team and the offering and the opportunity to pull that into the CEM Suite and bring that to buyers outside of the U.S. And in fact, buyers outside of the U.S. who are looking at xMatters bring them the CEM suite now.

Koji Ikeda -- Bank of America Merrill Lynch -- Analyst

Got it. Got it. Thanks for taking my question, guys. Appreciate it.

Yeah. Thanks, guys.

Operator

The next question will come from Sterling Auty with J.P. Morgan. Please go ahead.

Sterling Auty -- J.P. Morgan -- Analyst

Yeah, thanks. Just a follow-up. We're in such a volatile market where everything is under heightened scrutiny. So I want to make sure we're clear.

You said half of the upside came from upfront revenue. But I want to make sure, is that completely exclusive of the pull forward? So was the pull forward something separate? Or were they part of the same thing? And could you quantify the pull forward if you could?

David Meredith -- Chief Executive Officer

Patrick, do you want to jump on that?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Yeah. I mean, look, we're going to try not to get too precise here at Q1. I mean, like I said, we usually do a couple of percentage points of onetime revenue. And in the last Q3 and Q4 of last year, that was 4%.

And this quarter, that was 7%. And that incremental portion has -- some that was pulled forward, some that's upside for the year, that was sort of unexpected. But I wouldn't really encourage people not to try to parse it too much, especially if you're thinking about the impact on the rest of the year. Like I said, the guidance for the rest of the year, on the one hand, we're trying to be very prudent.

We've got this acquisition that we need to digest. We've got deals that we're competing on that we need to sort through. On the other hand, we've got subscription revenue growth of more than 30%. We've got RPO, which for an RPO has just grown 34%.

We've got record high ASP. We're seeing a reacceleration of non-COVID-related opportunities. So we're really excited about the rest of the year. And we hope that we're setting expectations that we'll be able to outperform just like we have for the past 19 quarters.

Sterling Auty -- J.P. Morgan -- Analyst

Excellent. Thank you.

Operator

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

David Meredith -- Chief Executive Officer

Thank you for joining our call today. We're very excited about our strong start to 2021, as we benefit from a reacceleration of non-COVID-related CEM and Public Warning use cases. With our acquisition of xMatters now complete, we are further strengthening our solutions for digital and physical security as more and more customers choose Everbridge. With the most proven, scalable, and reliable solution on the market, we are well-positioned to continue penetrating a multibillion-dollar opportunity to drive increasing value for all of our stakeholders.

We look forward to meeting with those of you who will be attending the JPMorgan and Bank of America Conferences in the coming weeks and in other events. In the meantime, thank you for your interest, and good night.

Operator

[Operator signoff]

Duration: 60 minutes

Call participants:

Joshua Young -- Vice President, Investor Relations

David Meredith -- Chief Executive Officer

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Sterling Auty -- J.P. Morgan -- Analyst

Matt Stotler -- William Blair -- Analyst

Scott Berg -- Needham & Company -- Analyst

Alex Sklar -- Raymond James -- Analyst

Will Power -- Robert W. Baird -- Analyst

Terry Tillman -- Truist Securities -- Analyst

Koji Ikeda -- Bank of America Merrill Lynch -- Analyst

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