Everbridge (EVBG) Q2 2021 Earnings Call Transcript

Everbridge (EVBG 0.03%)
Q2 2021 Earnings Call
Aug 09, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

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

Joshua Young -- Vice President, Investor Relations

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

After the market closed, we issued our earnings release, which can be accessed on the investor relations section of our website at ir.everbridge.com. This call is being recorded and a replay of the teleconference will be available on our IR website at the conclusion of today's event. During today's call, we will make forward-looking statements regarding future events or the financial performance of the company that involve certain risks and uncertainties. The company's actual results may differ materially from the projections described in such statements.

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, August 9 and should not be considered representative of our views of any subsequent date. We explicitly disclaim any obligation to update any forward-looking statements or our outlook. Also during today's call, we will refer to certain non-GAAP financial measures.

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

David Meredith -- Chief Executive Officer

Thank you, Joshua and thanks to all of you for joining us today. We delivered excellent second-quarter results, building off the strong momentum that we established in the first quarter. Both revenue and profitability exceeded our guidance and we achieved a record of -- a number of new records that reflect growing demand for our CEM suite and our Public Warning solutions. The COVID pandemic brought the concept of enterprise resilience into the lexicon of executive board rooms around the world and it continues to raise the priority of critical event management for companies, governments and other organizations.

Years ago, we saw the need to manage a globally distributed workforce and that's why we created our travel and remote worker solution, Safety Connection and made it a cornerstone of our CEM suite. Today, organizations are finding that Safety Connection is perfectly suited to serve them as companies adopt work from wherever you are and hybrid work location policies. Our next frontier of innovation responds to the increasingly blurred line between digital and physical threats. For example, the recent ransomware attack that led to gas shortages on the East Coast illustrates how what starts as a digital event can also have physical ramifications.

As a result, we continue to push the envelope on innovation. We are building on the IP and best practices we've developed over 20 years across thousands of enterprises in the corporate, government and healthcare markets and recently established the first and only proprietary standards framework to define global best practices for enterprise resilience, the CEM Certification program. Fortune 500 industry leaders are among the first organizations who have already earned the Best in Enterprise Resilience designation and many leading brands have since embarked on the process of CEM Certification. During the second quarter, we saw clear signs that organizations are thinking beyond the COVID pandemic, as demonstrated by the strong upturn we saw for larger transactions in key verticals and across multiple use cases, such as the future of work and travel-related applications.

Since our founding nearly 20 years ago, our mission has been to keep people safe and organizations running faster. In parallel, we have also witnessed a growing intensity and number of threats, including extreme weather events, man-made violence and digital threats such as complex cyber attacks and IT outages. With recent events that include massive forest fires in Oregon, flooding in Europe and India and hurricanes impacting the East Coast and the Caribbean as well as cyber and ransomware attacks around the globe, our mission has never been more important. And organizations are recognizing the need for a CEM solution to mitigate the impact of these threats on their people, processes and assets.

In particular, I'd like to acknowledge our team that are helping to support those impacted by the forest fires on the West Coast, burning hundreds of square miles. We've been actively supporting statewide initiatives across a variety of jurisdictions to help respond to the fires and keep people safe. Our Q2 results demonstrate the growing interest in our CEM and Public Warning solutions, driving revenue in the second quarter to $86.6 million, an increase of 33% from a year ago and above our guidance. This revenue beat helped drive adjusted EBITDA to a little over $0.5 million, which was also above our guidance.

The combination of these financial results and our momentum in closing CEM deals give us the confidence to once again raise our revenue and adjusted EBITDA guidance for full-year 2021. Last quarter, we highlighted our growing pipeline of larger deals amid the reopening of businesses, schools and other institutions. I'm pleased to report that we are executing well and closing these large transactions, including a record quarter for CEM wins and a new high watermark for the number of deals over $0.5 million. Both of these drove an increase in our overall average selling price, which nearly doubled from a year ago for the quarter.

In fact, we reached all-time highs for ASPs on both a quarterly and trailing 12-month basis with both above $100,000. Our land-and-expand sales model continues to drive our growth. We closed 19 CEM transactions in Q2, which was a quarterly record. These CEM deals included a healthy mix of new customers adopting CEM and existing customers expanding to the full CEM suite.

And perhaps most importantly, we saw substantive success in our growing CEM channel program within the quarter, demonstrating the expansion of our CEM go-to-market strategy and adding new customers that included a leading mobile retail store operator and an innovative cloud and digital transformation services company. This partner's success represents an important turning point in expanding the global reach of our CEM platform in a way that complements our direct sales efforts. Additionally, a broad cross-section of our target markets continue to drive our recent CEM success. Overall, our second-quarter CEM successes included organizations like one of the largest health insurers in the United States and one of the top 10 biopharmaceutical companies, who both became new Everbridge customers in the quarter, by adopting our CEM suite and deals that were among our top five largest transactions in the quarter.

Another CEM win involves senior leadership at a Fortune 50 ranked health insurer, who is looking for a technology partner that could enable their commitment to keep associates safe regardless of location during a time of increased risk. They selected Everbridge CEM for their new fusion Center to meet these needs. Similarly, a top 10 biopharma company, an S&P 100 member, discovered that their homegrown, critical event management solution was unable to support the growing number of use cases that they wanted to implement. They realized that with Everbridge, they could quickly deploy a solution to keep their employees safe as well as deliver a high return on investment or ROI.

Other CEM suite customers in the second quarter included one of the top global cybersecurity leaders, Fortinet, who chose CEM to improve business outcomes and support their near- and longer-term growth ambitions. As a global leader in broad, integrated and automated cybersecurity solutions, we're excited to see Fortinet deploy Everbridge CEM for their expanding global footprint and to unify its building access systems across a common physical security integration management solution. And speaking of cybersecurity, with cyber and ransomware attacks regularly making news headlines, our timing for executing the acquisition of xMatters could not have been better. Our integration plans are on schedule and the combination of Everbridge and xMatters solutions to deliver the leading digital and physical critical event management platform is already performing ahead of our initial expectations and we expect this trend to continue.

For example, in the second quarter, one of the largest financial services organizations in the United States chose Everbridge when they needed an enterprise-grade digital security solution to manage major incidents. This financial services firm is leveraging our global reach and scale, out-of-the-box integrations, automation and orchestration across multiple tools for major incident management across their operations. Despite closing the xMatters deal in the middle of the quarter, we're already seeing positive momentum, which illustrates the power of combining the CEM suite and our enhanced digital capabilities. For example, in Q2 and within weeks of completing the acquisition, we were able to identify and close a new logo sale with managed detection and response leader eSentire, who chose xMatters digital security in conjunction with our CEM suite.

Our continued emphasis on land-and-expand resulted in a number of existing customers adding multiple new applications to become CEM suite customers in the second quarter. These customers included a NASDAQ 100 ranked architectural engineering and construction software leader who upgraded to CEM in order to reduce response times from hours, down to minutes. Last year, Panasonic North America, one of the world's largest electronics appliance, mobility and energy companies, became an Everbridge customer, selecting our Risk Center solution. In the second quarter, they broadened their vision to increase efficiency and close security gaps by expanding to the CEM suite.

First Republic Bank, a leading private bank serving high net worth families, first became an Everbridge customer with Risk Center last year and then expand it to a full CEM suite after recognizing the value of a broader enterprise solution in the second quarter. Following our high-profile win with Tesla last year, in the second quarter, we closed a deal with Rivian a new electric vehicle manufacturer based in Michigan, whose environmental, health and safety team previously adopted Everbridge mass notification and Risk Center. In order to consolidate risk management and mobile workforce safety by deploying a global security operations center, Rivian expanded the CEM in the second quarter, enabling them to meet both their current and future strategic objectives. We also expanded our CEM footprint into the higher education market, reflecting our ability to attract leading brands in all categories.

Johns Hopkins University, the first research university in the United States was looking for a way to monitor threat and risk data in order to alert students, faculty, staff and traveling home care workers of dangerous situations in their areas. They chose CEM to do just that, becoming Everbridge's first higher education CEM customer in the process. In addition to a record-breaking number of CEM deals in the quarter, we closed several large transactions that reflect the future of work with distributed workforces. For example, SAP America selected Safety Connection Pro and Risk Center to become an Everbridge customer in the second quarter.

SAP's long-term vision aligns well with our CEM capabilities to manage threats across the enterprise through a single pane of glass. Additional customers who added capabilities like Safety Connection or Risk Center to support the future of work included PPL Services, the electric utility serving 1.4 million customers in Central and Eastern Pennsylvania, a Tier 1 multinational insurance company and a leading CAD software pioneer and market leader, just to name a few. The second quarter also saw continued strong demand for our Public Warning solutions. We are the global leader in populationwide public warning with solutions used by over 1,500 municipalities, counties, cities, states and countries in every major region of the world, including more European countries than any other provider.

During the quarter, we extended this leadership by signing a countrywide deal with Estonia, who Wire magazine has named the most digitally advanced society in the world. In a country where 99% of government services are available online, Estonia required a system that supports multiple robust and reliable means of alerting the public to threats, such as severe weather, forest fires and viral pandemics. They chose Everbridge because we could meet their stringent needs for a public warning system that is easy to use, secure and comprehensive. This win illustrates our time-to-value benefit as we were able to meet Estonia's very tight implementation schedule.

Our win in Estonia also highlights the countrywide Public Warning deals for Everbridge can serve governments to the front end, carriers at the back end and potentially both. In the case of Estonia, all three carrier networks will also deploy our solution. European wins such as Estonia as well as our previous wins in Sweden, Netherlands, Norway, Iceland and Greece, continue to position Everbridge as the leading population warning solution. Our Estonia win is also a strong reference for other European Union member countries who are evaluating solutions to help them meet the EUwide mandate for population warning systems.

We are actively responding to RFPs and are excited about the opportunities ahead of us. In addition to new wins, our recent successful public warning deployments, such as the new National Public Warning System for the United Kingdom, will both help to protect over 100 million residents and visitors as well as serve as an excellent reference. Another important public safety win in the quarter was the Swiss Canton Vaud, which includes lake Geneva, a busy tourist destination, who selected Everbridge to consolidate more than 100 services for the fire grade, police forces, ambulance services and emergency medical services for the Canton's entire population. This deal demonstrates our powerful network effects when our platform extends across multiple stakeholders in the community.

We also saw several wins at the city, county and state level in geographies around the world, including the Middle East, where network effects are a meaningful driver of our expansion. We've gone from almost no presence in this region just a few years ago to having a presence at over 70 customers -- I'm sorry, over 60 customers and 90 sites across several countries in the Middle East today. In the U.S. federal market, we continue to leverage our strong FedRAMP position with more authority to operate certifications or ATOs than any of our competitors and customers across numerous federal agencies and departments.

One such win from the second quarter was a six figure IT alerting transaction with the Federal Reserve board of Governors, the governing body of the U.S. Federal Reserve System. FRBG oversees the nation's monetary policy and ensures the safety and stability of the financial system and they wanted a solution to help speed up incident response and the ability to connect to numerous systems as part of a very sophisticated technology stack that interacts with the Federal Reserve System, Department of Treasury and private banks when necessary. Based on our security, scale and proven reliability with other federal financial agencies, Everbridge IT learning is going to be the focal point of their collaboration and incident response.

With our FRBG win, Everbridge now supports every federal financial agency with at least one of our products. Turning to our metrics for the second quarter. Our performance clearly reflects the result of our CEM strategy with large new customer wins, multiproduct expansions and continuing demand for higher ASP products, driven by demand for our CEM solutions. We added 142 net new enterprise customers in the second quarter, increasing our enterprise total customer count to 5,890.

A new high watermark of 19 customers selected or expanded to CEM, raising the total number of CEM customers to 158, a 61% increase in the number of CEM customers from a year ago. While this demonstrates excellent momentum, it also highlights our significant opportunity for continued expansion with existing customers. As in the first quarter, our momentum with large transactions continued in Q2 with quarterly ASPs that were over $100,000, driven substantially by our record CEM results. Our growth in deal sizes this year has also pushed our trailing 12-month ASP to above $100,000 for the first time to $107,000, up 59% from a year ago.

Contributing to this ASP growth, we closed 60 deals valued at more than $100,000 per year, including another record number of deals valued at more than $500,000 per year, more than doubling the number of deals greater than $0.5 million from a year ago, also driven by CEM wins. From a product mix perspective, a record 67% of new and gross sales over the last four quarters came from new products, reflecting growing demand for our newer applications. Our international business also continued to post strong growth results in Q2, with 28% of total revenue coming from outside the U.S. compared to 22% a year ago, as we expand our presence in every major region of the world.

Our revenue mix by vertical was relatively consistent with past quarters at 65% from corporate, 25% from local, state and countrywide government and 10% from healthcare, reflecting strong growth in the corporate market with increasing post vaccine use cases. As always, we remind you that quarterly metrics can fluctuate, but that the longer-term trends continue to reflect our overall business momentum. These outstanding metrics demonstrate the growing market acceptance of our overall CEM strategy, as well as our ability to close larger transactions from our pipeline as organizations increasingly embrace CEM to address numerous high ROI use cases. In addition to the expansion of our direct global sales team, our growing number of channel partnerships further extends our sales reach worldwide.

In the second quarter, Fortune 500 IT distribution and solutions aggregator, Tech Data, became one of the latest partners to enable customers to automate the response to critical events from cyber attacks and IT outages to severe weather events and more and to build resilience against such occurrences. Our partnership with WizNucleus also announced in the second quarter provides us with deep vertical domain expertise in the nuclear, electric and utility industries. The recent Colonial Pipeline ransomware attack is just one recent example of the disruption in costs that can be associated with cyber attacks on critical infrastructure. Our digital and physical critical event management solution leadership enhanced by our integration of xMatters and then combined with the WizNucleus software suite enables critical infrastructure providers to address dynamic cyber, physical and emergency management threats much more effectively.

In fact, a large U.S. nuclear plant recently selected our combined solution to replace an existing solution system with our new physical security integration management to comply with industry regulations while also enabling more rapid adoption of new security technologies in the future. And just today, we announced a partnership with the Associated Press, or AP, which augments and enhances our more than 25,000 Risk Center data sources. With this partnership, the AP adds further context to risks, breaking and geopolitical news into our CEM platform.

This will provide our customers with enhanced contextualization of risk data, leveraging the reporting, speed and deep expertise of AP journalists in 250 locations across 100 countries, enabling our customers to better evaluate the potential impact of threats on their people, processes and assets. As a global pioneer and creator of the CEM category, we regularly aim to bring together leaders from around the world to drive thought leadership and innovation. Our strong market position helped us attract thousands of executives from around the globe to the most recent installment of our road to recovery series of executive thought leadership symposia in May. Luminaries, C-level executives and experts presenting included president Bill Clinton; former Secretary of State, Madeleine Albright; Steve Forbes, chairman and editor-in-chief of Forbes Media; as well as CDC Foundation chief executive officer; Dr.

Judy Monroe; and CDC deputy director for infectious diseases, Dr. Jay C. Butler; as well as a special address by director general of the World Health Organization, Dr. Tedros.

If you miss the event, replays of keynotes on topics ranging from leadership at a time of crisis to assessing risks and building organizational resiliency are still available on demand. Finally, we recently launched the first and only global certification program for critical event management. This new initiative provides an assessment of an organization's readiness and resilience ahead of the next pandemic or critical event, whether it's digital or physical. Leveraging 20 years of best practices and know-how serving nearly 6,000 enterprise customers, the assessment provides a ranking of how the organization compares to those following the latest industry best practices, which companies can share to attract and retain customers, partners and employees.

Some of the biggest brands in the world have already adopted CEM Certification, such as financial services giants, Goldman Sachs and Discover, mass media and entertainment conglomerate NBCUniversal, multinational chemical corporation, Dow and global pharmaceutical leader, Alexion, which was recently acquired by AstraZeneca. All of these leaders have attained Best in Enterprise Resilience designation. To do so, these organizations met or surpassed benchmarks in key measurable areas, demonstrating their commitment to Enterprise Resilience. Enterprises who go through the certification process are delivered a comprehensive analysis, including details covering what they can do to raise their preparedness and resiliency to today's standards, a top priority for boards and C-suites.

As the CEM visionary and pioneer, we believe Everbridge is well positioned to become the de facto standard for enterprise, digital and physical threat preparedness, protection and mitigation. In summary, we are excited about our progress at the midpoint of the year with momentum from CEM and public warning, growing demand for combined digital and physical resiliency solutions and expanded use cases for the future of work. We're looking forward to sustaining our momentum in the second half of the year as we continue to execute on our strategy to penetrate and lead a multibillion-dollar market. Now, I'll turn the call over to Patrick for more details on our second-quarter financial performance as well as our guidance for Q3 and full-year 2021.

Patrick?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Thanks, David. We had another very strong quarter with record revenue of $86.6 million, an increase of 33% from a year ago and above the high end of our guidance range. Our net retention rate continues to track 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 72.5%, relatively consistent from a year ago, with the short-term impact of acquisitions offset by efficiencies from greater scale. Total operating expenses in the quarter were $64.7 million, an increase of 40% from a year ago, reflecting continued investments in our platform and our go-to-market strategy. Adjusted EBITDA was $515,000, well above the high end of our guidance range due primarily to the revenue upside in the quarter.

Net income in the second quarter was $1.5 million or $0.03 per diluted share compared to net income of $1.2 million or $0.03 per share a year ago. On a GAAP basis, our net loss was $33.8 million. Looking at our balance sheet. We ended the quarter with $568.3 million in cash, cash equivalents, restricted cash and short-term investments compared to $743.2 million at the end of the first quarter, reflecting cash used to acquire xMatters and seasonal cash flow patterns during the quarter.

Operating cash flow was an outflow of $5.1 million and free cash flow was an outflow of $9 million. Total deferred revenue was $210 million at the end of the quarter, an increase of 51% 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 trend and that our longer-term performance continues to support our growth objectives. In addition, we continue to have eight figures in uninvoiced backlog. In other words, backlog that is not in deferred revenue, which reflects contracts that has been signed, but whose revenue will be recognized in future periods, along with being invoiced in future periods. Now, I'll turn to our guidance for the third quarter and full year, which includes the impact of our second-quarter outperformance and our continued business momentum.

For the third quarter, we anticipate revenue of between $94.1 million and $94.5 million, representing growth of 32% to 33%. We anticipate adjusted EBITDA to be between negative $2.1 million and $1.7 million. We anticipate a non-GAAP net loss of between $5.7 million and $5.3 million or a loss of between $0.15 and $0.14 per share based on 38.3 million basic and diluted weighted average shares outstanding. Stock-based compensation expense is expected to be approximately $19.8 million in the quarter.

For the full year, we now expect revenue to be in the range of $362.8 million to $363.8 million, representing year-over-year growth of approximately 34%. We anticipate adjusted EBITDA will be in the range of $8 million to $8.8 million. We expect the non-GAAP net income of between $0.5 million and $1.7 million or between $0.01 and $0.04 per share based on 38.2 million 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 are enthusiastic about our second-quarter performance and believe that we have strong momentum going into the second half of the year. Now operator, we'd like to open the call for questions.

Questions & Answers:

Operator

[Operator instructions] And the first question comes from Will Power with Baird. Please go ahead.

Charlie Erlikh -- Baird -- Analyst

Hey, guys. Thanks for taking the question. This is Charlie Erlikh on for Will. Congrats on the great results and that great CEM number too.

And you mentioned that the channel program was key to success there and that's the number. I was hoping you can expand a bit on the channel program. Is the channel an area you plan to invest more in or you feel like you're pretty well penetrated in the channel at this point? Thanks.

David Meredith -- Chief Executive Officer

Charlie, this is David. Thank you so much for the question. And yes, when I first joined, we talked about our intention to increase our routes to market through partnerships channel, indirect. And we've been building up that capability over the last several quarters.

And we're seeing the flywheel starting to spin faster and faster now and it had a material impact on the total number of CEM deals that we were able to close this quarter. And I think it's great that, we're working on that because Q2 is usually not our best CEM quarter. Typically, our last record was on Q4. So the fact that we set an all-time record with 19 CEM deals in Q2 is really significant and something that we're very excited about.

And then furthermore, you're seeing that then translating into our number of large deals with a 167% increase in our $500,000 plus deals year over year and a record number of $200,000 plus deals as well for the quarter. So a lot of good traction around CEM overall.

Charlie Erlikh -- Baird -- Analyst

Great. Thanks very much.

David Meredith -- Chief Executive Officer

Thanks you.

Operator

The next question comes from Scott Berg with Needham. Please go ahead.

Unknown speaker

Hey, guys. This is John Perdinam for Scott. I appreciate you taking my question. Just first on the AP relationship, how should we think about that from a sales perspective? And will those add any extra opportunities that you weren't able to attack previously? And what kind of impact do you think it will have on win rates?

David Meredith -- Chief Executive Officer

John, thank you so much for the question. We just announced the AP relationship today and it's one we're very excited about. We continue to associate ourselves with some of the biggest and the best brands on the planet Earth. AP is a very unique capability with 250 locations around the world where they have people on the ground in 100 countries.

And they just have great access to information, which is differentiated. It's just one of the 25,000 data feeds that we have coming in to our CEM platform. So if you want to have situational awareness minutes matter, seconds matter, the ability to know exactly what's going on and have situational awareness around things you care about, your people, your assets, your supply chain, supply routes, your brand and reputation and things they threaten that, that can be the difference between a successful mitigation and response or not for a company or for a government or healthcare organization for that matter. So we think our strategy of aggregating high-quality data partners and then curating all of that data and turning it into actionable intelligence and actual information across a single pane of glass, which is our visual command center, is the right strategy and we're getting really good validation of that with partnerships like the AP.

It does allow for -- there's more options on things that customers can buy. So it does open up some opportunities. I think there's going to be potential for joint go-to-market and cross-sell, upsell. So it's just one of many, we felt it was worth announcing because AP is excited about it.

We're excited about it. And because of the power of the brand and the global appeal that they bring, but this is part of a larger product ecosystem strategy, which ties into what we talked about earlier with partnership and we're getting really good traction.

Unknown speaker

Great. Thank you. Congrats on the quarter.

David Meredith -- Chief Executive Officer

Thank you.

Operator

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

Matt Stotler -- William Blair & Company-- Analyst

Hey, thanks for taking my questions. I guess the first one, I'll go ahead and ask the billings question. Obviously, there's a lot of questions around billings when you see deceleration, but obviously, some really pretty significant outperformance, strong results on that from the quarter. Would love to just kind of dig into that in terms of any notable contributors or drivers.

Obviously, you've talked about this some kind of unrecognized backlog and I know there are some big deals in there. Anything flowing through there you can speak to? Is this within the countrywide side or otherwise or is this more of just the strength you saw in CEM kind of hitting deferred revenue in the quarter? Anything that you can share on that front would be helpful.

David Meredith -- Chief Executive Officer

Yeah, Matt, thanks. I'll do it first, Scott and then hand it to Patrick. But I think the No. 1 driver this quarter, the headline is record number of CEM deals led to a record number of 500K plus deals, record number of 200K plus deals and that you're seeing the effects of that kind of flow through a lot of our metrics.

So that's probably the No. 1 driver for the quarter to focus on. As far as the -- we talk about the -- what we call backlog, which are deals that are contracted, but don't show up in deferred, that's a pretty significant number. And Patrick, why don't you talk about it? I don't think that's what's driving it.

In fact, it's probably gotten bigger. But Patrick, why don't you jump in on that?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Yes. Well, that uninvoiced backlog is not in deferred and therefore, it's not anyone's calculations and billings. That uninvoiced backlog number is now in the mid- to high teens. It's grown sequentially quarter over quarter due to wins such as Estonia and some other deals.

So we're excited about that. And the ability to convert that into revenue over coming quarters. And one other thing to mention, I think as folks do their billings calculations, which, as Matt, you and others know, we don't point people to, but I know that sometimes it can be confusing to go ahead and call out that the -- you'll see in our 10-Q that xMatters contributed $34 million to our deferred revenue. That's combination of short term and long term, a significant portion of that is the long term because they're able to collect for multiple years upfront.

So that $34 million relates directly to xMatters.

Matt Stotler -- William Blair & Company-- Analyst

Got it. That's super helpful color. And then maybe just one on 911, right? I mean it's something that we've kind of talked about for going back to the Atos, the origination of the Atos partnership and being able to kind of partner with them, we brought into this larger next-gen E911 project that the State of California was doing. But just then obviously, you acquired RedSky earlier this year.

Obviously, there's this interesting partnership with RapidSOS that you guys have mentioned. I would love to just maybe, if you could touch on maybe the initiatives with broader next-gen 911, how critical those capabilities are to the platform and maybe what your vision is for your E911 capabilities going forward.

David Meredith -- Chief Executive Officer

Yeah, it's a great question. So you're right, you're connecting all the dots. Everything that's happening from our partnerships, what we're building out with the platform. It goes back to the network effects that we talk about, critical event management across both the private sector and the public sector.

The 911 system is one that's really ready to be -- it's ready for innovation. And it touches the lives of everyone in the United States and there's opportunities around the world as well. So when there is something that happens with the 911 call, there's a lot more data that you'd like to have than just what that person can share on the phone conversation verbally. RapidSOS is really a leader and has invested quite a bit of money over years building out really significant capabilities in this space.

And so you're putting two leaders together. And we're very excited about our potential to help companies that have to follow increasing regulatory guidelines or just best practices around duty of care for people that work for them as well as the public sector that benefits and the first responders that benefit from having better access to real-time information and data to support what's going on. And it really truly can save lives. So we announced the partnership with RapidSOS and then we're kind of unveiling the next-gen 911.

We're going to have more to say about that in future quarters, but we're very excited about where that can go. And we've gotten tremendous feedback from both companies and public sector prospects after our announcement. Thank you.

Matt Stotler -- William Blair & Company-- Analyst

Great. Thanks again.

Operator

The next question comes from Brian Peterson with Raymond James. Please go ahead.

Unknown speaker

Hi. This is John Mecina on for Brian. Just real quick on the corporate opportunity in Europe. It's been mentioned a few times about the flywheel effect that you're seeing in states like Florida, where that helps drive new business in the state.

Just curious how that's playing out internationally. And would we expect corporate demand to follow some of these potential wins we've seen? Just really interested how you're thinking about Europe playing out.

David Meredith -- Chief Executive Officer

Yeah. John, thank you for the question. I think it's a key moat around our business that over the long term, I think is going to position us exceedingly well. And we're definitely seeing it happen around the world, not just in Europe.

For example, in Singapore, you start with the front end with the government, you get the carriers, you get financial services, manufacturing. And you start to get other key vertical leaders. And you just -- you just see it light up on the map and we're seeing it now in the Middle East as well. So obviously, in Europe, we've got a really good footprint and we're getting -- we launched CEM in Europe and we're getting traction and adding more corporate customers there.

So one of the things we're doing is putting together playbooks on how do we take a process that happens organically anyway, but how do we accelerate that? And how do we use our marketing and thought leadership to make it happen faster. So that's something that we're trying different things with. And as we continue to get traction there, I think it just makes our results that much better. So really appreciate the question.

Thank you.

Unknown speaker

Thank you.

Operator

[Operator instructions] The next question comes from Mike Walkley with Canaccord Genuity. Please go ahead.

Mike Walkley -- Canaccord Genuity -- Analyst

Thanks for taking my question. David, just more of a high-level question for you. I would think needing to track all remote employees with a lot of companies being remote work and the various risks as flus are more spread out, plays well into demand for your solutions. But some companies are trying to get people back to work.

How can you help them, given the different health and safety protocols that can vary by state, even by county within state? And is it better for your business model if things stay more remote or people start to return to the office or are they both drivers?

David Meredith -- Chief Executive Officer

Yeah. Mike, thank you for the question. It's a really fundamental question. And the answer is, all of the above.

We're an enterprisewide platform and we support all the use cases. So we have hundreds of out-of-the-box integrations. So just for example, if you come into the office and you've got thermal cameras deployed to take people's temperatures coming in, we're integrated to these thermal cameras. So if you walk in and you've got a fever, you've got a mobile app in your pocket, say, hey, you've got a fever, go work from home and get a COVID test and potentially quarantine, isolate.

If we're also integrated with the physical access control system, the travel management system, the calendaring system, so we can say, all right, David's got a fever, he's been exposed to 10 other people in the office in the last week, let's send them a message. Tell them to work remotely, get a COVID test. This is all happening, can happen in seconds or minutes as opposed to having the state contact tracers spend the next days trying to call around and do contact tracing. So it's really a next-generation, digitally transformed way of doing contact tracing for the employer to help them mitigate the risk as the virus has hotspots, goes up and goes down.

We're able as we're a multinational and as many of our customers do, they've got offices all over the world, all over the United States. Everyone has different guidelines about what the rules are. The system is able to keep track of that in an automated way, help with enforcement. We're tied into the physical security information management system for the building.

So if you've got guidelines on how many people should be in a particular space around social distancing in a meeting room, the system can help report on that and enforce that. So there's just so many use cases around how do I get people back to the office safely. And it's -- the reality is it's going to be some form of hybrid. I mean we have some people in the office, some people remote.

And the ability to keep track and manage that across all of those populations with one single pane of glass, one platform, that's really a big part of the value proposition. And our customers really seem to appreciate it. In fact, we're using it for ourselves as we're managing our own business. So it's a great question.

Fundamental and I think this is what we've built the platform for and I think we're ahead of everybody else on that.

Mike Walkley -- Canaccord Genuity -- Analyst

Great. Thanks. And just a follow-up question for Patrick. Congratulations on all the large deals and the CEM deals in particular, very strong start to the year, but some things pulled in the funnel or do you still see strong trends for large deals in the back half of the year? And given the record deals and increasing ASPs, is dollar or base net retention trending higher and maybe we hit a new metric that it might be above going forward?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Thanks, Mike. We are -- we didn't necessarily pull things into Q2. Rather, we see -- we are just really thrilled with the performance in Q2 and we are really excited about what the second half looks like. We've been building the business for a long time here to increase our value proposition and therefore, our ASPs and that's a metric that isn't going to go up into the right every single quarter, but if you zoom out and you look at the trend, we're excited about it and we expect that it will continue to head that way over time.

And -- what was the last part of your question?

Mike Walkley -- Canaccord Genuity -- Analyst

I was just curious, can you share your dollar, net retention of 110%. I was just curious if it was getting to a higher level maybe.

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Well, we have we have bounced around much higher than 110%. And as we continue to drive a stronger value proposition and focus on landing, sometimes we land with a lot. And then when we come back around and expand, it can be many quarters down the line. In other cases, it will happen faster.

So we've got a blend across businesses and geographies. I think as we continue to focus on a huge lever for us over the next many years, which is continuing to sell into the base, you'll see the potential for greater strength in that figure. And if we are continuously exceeding something like 125%, then we will call that out. But for now, given that it tends to oscillate up and down a little bit, we'll just stick with reminding folks that it's greater than 110%.

Mike Walkley -- Canaccord Genuity -- Analyst

Fair enough. Thanks, Patrick.

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Yup.

Operator

The next question comes from Parker Lane with Stifel. Please go ahead.

Parker Lane -- Stifel Financial Corp. -- Analyst

Yeah. Hi, guys. Thanks for taking my question. Congrats on the quarter and a really diverse solid set of CEM wins.

You think about the opportunities here for the remainder of the year and going forward, are there any particular verticals that you're seeing are most receptive to the CEM value proposition right now that you could potentially throw some extra sales resources behind?

David Meredith -- Chief Executive Officer

Hey, Parker. Thanks for the question. Yes, we saw a pretty broad-based strength on CEM. And I think it was a reflection of notwithstanding the Delta variant.

With the vaccines becoming more prevalent, companies are starting to open up and look at kind of broader term things that they need to do going forward. So we saw some really encouraging signs. Health care has been a really tough vertical for us during COVID because most of our customers really focused on dealing with the crisis. And we started to see some big deals come back there.

Other sectors, we've been really busy helping retailers kind of reopen. And we've had surprising traction with the retailers throughout COVID as we've been helping them. The tech sector has been great. We've been -- big customers, mid-market, it's been pretty broad-based, to be honest with you.

So everyone is thinking about this now. It's just a big topic. And now is the time for them. They know they've got to do something and now they've got a little bit more bandwidth to do something more strategic.

Parker Lane -- Stifel Financial Corp. -- Analyst

Yeah, make sense. Quick follow-up for you, Patrick. On the deferred revenue front, would it be fair to say that xMatters is the primary factor behind the nice sequential jump in noncurrent deferred revenue? And should we expect that trend to continue going forward?

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Well, yes and no. So the first question is yes. We historically have not made a habit of chasing long-term deferred revenue, but instead prefer to try to keep the model as clean as we can and go one year at a time in terms of invoicing and collections. So yes, that jump, that sequential jump has everything to do with xMatters.

But going forward, we don't -- like I said, I think over time, as that bleeds down, I think you'll see a return to normal, which is a greater focus on current deferred rather than long term.

Parker Lane -- Stifel Financial Corp. -- Analyst

Got it. Make sense. Perfect. Thanks again and congrats on the quarter.

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Thank you.

Operator

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

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

Hey, guys. Really great quarter. Thank you for taking my questions. A couple for me.

First one, on the Tech Data partnership, just curious here, they got 125,000 on their channel. So I guess what does it mean for the go-to-market strategy from your perspective? And I guess, how does it also open up maybe potential new market areas, either upmarket, downmarket or maybe even new verticals?

David Meredith -- Chief Executive Officer

Thanks, Koji. Yeah, great question. I think Tech Data and more broadly across our partnership, it's great when you can get thousands of people selling your solution in addition to the dedicated sales force you have. So there are definitely areas where it's really helpful to be at extra coverage.

So there's some parts of the world where we don't have as many sales people on the ground as we'd like. And so geography is a factor. As we've been selling bigger deals, kind of moving upmarket, trying to sell more to the C-suite, selling Fortune 1000, Global 2000, some of the smaller customers now, we can maybe more cost efficiently pursue through some of these channel partnerships. So that's very helpful so we can kind of free up our dedicated resources to do the bigger ASP deals.

And some of the, what I call, kind of product-led ecosystem partnerships, like we talked about, WizNucleus, where we're getting very deep vertical industry expertise around critical infrastructure that we can put together with what we're doing and create a really unique and differentiated proposition for the end customer. So those are some of the categories. And we -- first, we had to sign up the partners and then we've made efforts in terms of getting better at how we enable our partners. So we sign them up and then we go into the enablement phase, start to build funnel and then you start to see the deals come through.

So that's really gratifying and we're starting to see more and more of that.

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

Got it. Thank you. And just one follow-up, if I may. On the xMatters acquisition, is it possible to get the xMatters contribution to the revenue for the quarter? And really given the positive commentary throughout the call, I mean, I guess, are you expecting much more than the $9 million to $11 million in total revenue that you guided for xMatters earlier this year.

David Meredith -- Chief Executive Officer

Yeah. Koji, it's a great question. So let me just give an update on what's going on with xMatters. One is, we are probably ahead of schedule on getting them integrated with the organization and we acquired a really tremendous team.

They understand our space and the strategic fit of digital plus physical is resonating well with customers. And so based on our internal expectations, what we thought we'd do on sales, like we're doing better. And so we certainly are going to try to continue that. We are integrating.

We did have an ITA business previously. So we're integrating those teams. They've already been integrated. So it is interesting in terms of which deals were already in the funnel, would we have won them anyway, not won them.

So we're really not -- and it's probably impossible to kind of break out going forward because we're putting the teams together. But our overall guidance reflects our view of the consolidated view going forward. And overall, we're very bullish on the acquisition and the results exceeded what we thought prior to having gone through Sarbanes-Oxley and closing the deal and all that. Thank you.

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

Got it. Thank you. Thank you very much. Super clear.

Thank you guys.

Operator

The next question comes from Terry Tillman with Truist. Please go ahead.

Terry Tillman -- Truist Securities -- Analyst

Yeah. Good afternoon everyone and congratulations from me, particularly on the CEM side. I guess I had a question in terms of the Public Warning opportunity in the U.K. So I'd like to learn a little bit more about -- so is this like long-term contracts with the three mobile operators? And what about on the front end? And then I had a follow-up.

David Meredith -- Chief Executive Officer

Yeah. Hi, Terry. Thanks for the question. So yes, the U.K., we won the three largest carriers and we've implemented them in really record time, which is great.

And so we're able to announce that. The front end is still a legacy front end. So there is a possibility at some point in the future that there could be an upsell on the front-end side as well.

Terry Tillman -- Truist Securities -- Analyst

OK. Well, good luck on that. 

David Meredith -- Chief Executive Officer

Thank you.

Terry Tillman -- Truist Securities -- Analyst

And I guess, my second part of the question, David, just relates to -- earlier, you talked about an important region, a higher population region, probably a lot of economic activity in Switzerland that I think you all want. What I'm curious about and get a lot of ongoing questions about the EU opportunity more broadly speaking. Going forward, do you see it maybe playing out where you get more countrywide deals initially or maybe in some instances, actually, you're going to picked, you're going to end up kind of knocking off some of the regions? What are you seeing in terms of the consumption pattern for the rest of the year next year?

David Meredith -- Chief Executive Officer

Well, Terry, it's a very great question because what we're actually seeing now, for example, in Norway, we're starting to win deals at the more, I would call, state and local type level where we're getting cities signed up, where historically, we would just do the countrywide, but we're finding that once we're in with the carriers, there are use cases where the smaller -- the municipalities, not just the entire country, have their own use cases they want the solution for. So it's an interesting opportunity for us to sell additional deals within a country. And I would say where we're getting some early traction on that is Norway. And so we're looking at how we can try to do more of that, which should be kind of in addition to the countrywide deal opportunity.

Terry Tillman -- Truist Securities -- Analyst

All right. Thanks.

David Meredith -- Chief Executive Officer

Thank you.

Operator

The next question comes from Brian Collar with Stephens. Please go ahead.

Unknown speaker

Hey, guys. Thanks for taking my question and congratulations on the quarter. Just a quick one here. I'm curious if you see any noticeable change in customer behavior, buying patterns over the past several months.

I'm just kind of curious if the resurgence in COVID has impacted your outlook or customer demand in any way?

David Meredith -- Chief Executive Officer

Brian, thanks for the question. Look, I think it's a really fundamental question. It's a good question. If you remember, before COVID, we were putting some really great numbers.

And when COVID hit, I think we still had very solid numbers to COVID. We pivoted on specific use cases around vaccine distribution and contact tracing. But you saw -- if you go back a year or so ago, you saw our ASPs were much lower. And I think you're seeing now the ASPs are coming strong.

We're getting more big deals. So I think there's a lot of kind of reopening use cases that are very compelling for our customers that uses CEM platform for. And so I think we're seeing that in the big deals. We're seeing that in ASP.

So that does feel like a change to me.m And I said two quarters ago, when I said last quarter, I said I'm seeing more big deals in the funnel. And I think we've been able to execute on those as you're seeing with some records this quarter. So I do think it's a change. What will happen now with the Delta variant kind of surging in different parts of the world, we'll have to see, that's really happening in real time.

But we do have use cases that are -- we have so many use cases. Some of them are good for reopening. And obviously, some of them are helpful when you're dealing with the critical event like a pandemic. So we have the ability to help our customers in either scenario.

But yes, we are seeing some positive signs, particularly around the big deals.

Unknown speaker

Got it. And I'm curious, specifically, I mean which CEM use cases are you seeing the strongest demand for right now? And also, have you seen any -- I know it's still early days on xMatters, but I'm curious if you see any tangible increase in the CEM pipeline that you would attribute directly to xMatters?

David Meredith -- Chief Executive Officer

Yeah. I think there's a lot of interest around what I'll call future work or hybrid work scenarios and the ability to sort of -- there's more focus on just overall duty of care for companies with their employees. It's a focus like there's never been ever, right? And so it's really top of mind. So that is definitely a catalyst for us.

And again, as I mentioned in my remarks, we build Safety Connection as the core component of the CEM platform years ago, specifically around remote workers and managing a hybrid environment. So we think that, that's a big driver. And what was the second question, Brian?

Unknown speaker

If you've seen the pipeline increase as a direct result of xMatters and the capabilities that brings you and also just the fact that you're selling closer to revenue and executives, I guess.

David Meredith -- Chief Executive Officer

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

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Pipeline as it relates to xMatters, well, we've been integrating the businesses practically since before the acquisition began. We were excited to do that. So I'd say that the -- and part of the thesis for the acquisition for the merger was going back many quarters, customers -- existing customers coming to us and saying, you're really knocking out of the park with life safety and physical, but we also need to combine this with digital. So the pipeline was growing pre-acquisition.

And I think now as we've formed the merger and we're going to market with digital and physical at the same time with the fusion concept, we are seeing greater demand.

Unknown speaker

Got it. Well, that's helpful. Thank you for the time guys.

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Thank you.

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

Well, thank you for joining our call today. As a growing number of organizations recognize the numerous benefits of our proven, scalable and reliable digital and physical resiliency solutions, we're well positioned to continue penetrating a multibillion-dollar opportunity as we look ahead. We hope to see many of you at the Canaccord growth conference later this week. Thank you again.

Goodbye.

Operator

[Operator signoff]

Duration: 64 minutes

Call participants:

Joshua Young -- Vice President, Investor Relations

David Meredith -- Chief Executive Officer

Patrick Brickley -- Senior Vice President and Chief Financial Officer

Charlie Erlikh -- Baird -- Analyst

Unknown speaker

Matt Stotler -- William Blair & Company-- Analyst

Mike Walkley -- Canaccord Genuity -- Analyst

Parker Lane -- Stifel Financial Corp. -- Analyst

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

Terry Tillman -- Truist Securities -- Analyst

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