Everbridge (EVBG), the leader in critical event management and enterprise safety software applications, reported first-quarter 2020 results after the market close on Tuesday.
Shares closed up a whopping 23.8% on Wednesday. We can attribute the stock's gain to the adjusted loss per share coming in much less than the Wall Street consensus estimate, along with the company significantly raising its bottom-line guidance for 2020.
If you've never heard of Everbridge, that might be because it's only been publicly traded for less than four years. It held its initial public offering (IPO) in September 2016. Everbridge has been flying under the radar of many investors, but in late April, I included it as one of eight coronavirus stocks to consider buying.
Here's how the quarter worked out for Everbridge and its investors.
Image source: Getty Images.
Everbridge's key numbers
|
Metric |
Q1 2020 |
Q1 2019 |
Change |
|---|---|---|---|
|
Revenue |
$58.9 million | $42.8 million | 38% |
|
Operating income |
($21.7 million) | ($13.3 million) | Loss widened 63% |
|
Adjusted operating income |
($7.2 million) | ($3.9 million) | Loss widened 85% |
|
Net income |
($25.4 million) | ($14.1 million) | Loss widened 80% |
|
Adjusted net income |
($5.5 million) | ($3.5 million) | Loss widened 57% |
|
Earnings per share (EPS) |
($0.74) | ($0.44) | Loss widened 68% |
|
Adjusted EPS |
($0.16) | ($0.11) | Loss widened 45% |
Data source: Everbridge.
Robust revenue growth was driven by a significant number of new customers and strong renewal and expansion activity at existing customers, CEO David Meredith said on the earnings call. He added that the coronavirus pandemic has increased awareness of critical event management (CEM) solutions.
The company's losses widened from the year-ago period because it's investing to fuel long-term growth.
Wall Street was looking for an adjusted loss per share of $0.36 on revenue of $57.7 million, so Everbridge crushed the bottom-line expectation and beat on the top line.
Cash generated from operations was $0.8 million, down from $8.7 million in the first quarter of 2019. Free cash flow was negative $1.7 million compared to $3.9 million in the year-ago period. The company ended the quarter with $506.5 million in cash and cash equivalents.
What happened with Everbridge in the quarter?
- It ended the quarter with 5,218 global enterprise customers, up 15% from the year-ago period.
- Multiproduct deal count surged 40% year over year to 129, and deals of at least $100,000 soared 82% to 40, Meredith said on the earnings call.
- It acquired One2Many Group, the leading global provider of cell broadcast solutions for safety applications, in order to provide a "full-lifecycle solution for meeting and exceeding European Union (EU) regulatory and other global initiatives for countrywide population alerting," according to the earnings release. With this technology, the company says it now provides the "only public warning system combining cell-broadcast and address-, group-, and location-based, multi-channel technologies."
- Everbridge launched the COVID-19 Shield package for keeping employees and customers safe, maintaining operations, safeguarding supply chains, and reducing pandemic-related costs during the crisis.
- The company announced that it was selected by Massachusetts as its new mass notification provider.
- It also announced that its public warning solution now reaches subscribers across all three mobile networks in Norway using location-based mobile messaging. The company says the solution "has been instrumental to countrywide communications during COVID-19."
What management had to say
Here's what Meredith had to say in the earnings release:
Amid the COVID-19 pandemic, we have remained singularly focused on our purpose-driven mission to keep people safe and businesses running during critical events. With more than 5,200 customers, our technology has demonstrated the crucial difference it can make for our customers spanning the corporate, government, and healthcare markets around the world on a daily basis over the past few months. I am proud of our team's ability to quickly respond and serve the needs of new and existing customers during this dynamic environment.
With that backdrop, our financial performance in the first quarter exceeded our guidance ranges. Our momentum, combined with the impact of acquisitions in the first quarter, leaves us well positioned to deliver a strong performance in 2020 and beyond.
Q2 and full-year 2020 guidance
Everbridge issued second-quarter guidance and raised its 2020 outlook for both the top and bottom lines.
| Metric |
Current Guidance (Loss) |
Initial Guidance (Loss) |
Current Projected Change YOY |
|---|---|---|---|
| Q2 revenue | $62.9 million to $63.3 million | N/A | 30% to 31% |
| Q2 adjusted EPS | ($0.22) to ($0.20) | N/A |
Loss to widen 214% to 186% from $0.07 in the year-ago period |
| 2020 revenue | $261.5 million to $263.3 million | $260.3 million to $262.3 million | 30% to 31% |
| 2020 adjusted EPS | ($0.19) to ($0.16) | ($0.77) to ($0.75) | Loss to narrow 10% to 24% from $0.21 |
Data source: Everbridge. YOY = year over year.
Going into the release, Wall Street had been modeling for a Q2 adjusted loss per share of $0.21 on revenue of $62.8 million, so Everbridge's bottom-line outlook was in line with expectations, while its revenue outlook came in a bit higher than expected.
For full-year 2020, the Street had been projecting a loss per share of $0.76 on revenue of $259.9 million. So, the company's updated revenue guidance came in a little higher here, too, but the big positive was on the bottom line. Everbridge guided for a much lower loss than analysts had been expecting.
We can deduce from the numbers that the company anticipates turning an adjusted profit during the second half of the year.
