Executive Summary

Q2 2023 delivered modest top-line growth and strong profitability expansion: revenue rose 7% year over year to $110.6M; adjusted EBITDA increased to $18.3M (16.6% margin), and non-GAAP diluted EPS was $0.31, reflecting disciplined cost execution and improved operating efficiency .
Management cut FY23 revenue guidance to $450–$452M from $456–$462M (lowered) due to headwinds in booking large and especially perpetual revenue contracts, but maintained adjusted EBITDA at $84–$86M and non-GAAP EPS at $1.48–$1.52, signaling profitability durability despite softer top-line expectations .
Annualized Recurring Revenue (ARR) increased sequentially to $395M (+9% YoY), and CEM customers rose to 373, underscoring continued traction in the core CEM platform and recurring model; RPO remained solid at $479M total ($290M NTM) .
Stock narrative catalysts: lowered revenue outlook against maintained margin/EBITDA targets; focus on core CEM and product delivery milestones; and an explicit “Rule of 40 by 2027” goal could frame mid-term rerating if execution persists .

What Went Well and What Went Wrong

What Went Well
- Profitability outperformance: non-GAAP operating income of $12.7M (from $1.0M) and adjusted EBITDA of $18.3M (from $4.8M) highlight sharp margin improvement YoY on tighter cost structure .
- Recurring model resilience: ARR reached $395M (+9% YoY) and subscription revenue grew 8% YoY; CEM customer count jumped to 373 (+67% YoY), indicating core platform momentum .
- Strategic focus and product delivery: management emphasized focus on core CEM platform with “key delivery milestones” and reiterated a path toward the Rule of 40 by 2027; expanded AI/crisis-detection partnership with Samdesk into VCC .
What Went Wrong
- Top-line pressure in large deals: continued headwinds booking large and especially perpetual revenue contracts drove a FY revenue guidance cut to $450–$452M (from $456–$462M) .
- Sequential revenue still below Q4 levels: while Q2 rose to $110.6M vs. $108.3M in Q1, it remains below Q4’s $117.1M, reflecting slower perpetual contributions and macro caution .
- Cash generation normalized: operating cash flow inflow was $5.4M in Q2 versus $20.6M in Q1, with adjusted free cash flow of $1.6M as realignment payments and working capital timing moderated quarterly cash benefits .

Financial Results

Metric	Q4 2022	Q1 2023	Q2 2023
Revenue ($M)	$117.1	$108.3	$110.6
GAAP Diluted EPS	$(0.15)	$(0.36)	$(0.37)
Non-GAAP Diluted EPS	$0.39	$0.25	$0.31
GAAP Gross Margin %	70.6%	70.5%	70.1%
Non-GAAP Gross Margin %	74.2%	74.5%	74.0%
Adjusted EBITDA ($M)	$19.6	$15.9	$18.3
Adjusted EBITDA Margin %	N/A	14.6%	16.6%
Cash from Operations ($M)	$4.4	$20.6	$5.4
Adjusted Free Cash Flow ($M)	$4.6	$20.0	$1.6

Notes:

Q2 revenue grew 7% YoY (vs. $103.0M in Q2 2022), per company disclosure .
Q2 GAAP diluted loss per share was $(0.37); non-GAAP diluted EPS was $0.31 .

KPIs and Operating Metrics

KPI	Q4 2022	Q1 2023	Q2 2023
ARR ($M)	N/A	$388	$395
CEM Customers (count)	307	335	373
RPO – Subscription & Other ($M)	$484 (as of 9/30/22)	$485 (total), $298 NTM	$479 (total), $290 NTM
Public Warning/Programs	Norway win highlighted	6 EU nations deployed	Trinidad & Tobago deployed

Guidance Changes

Metric	Period	Previous Guidance (5/9/23)	Current Guidance (8/8/23)	Change
Revenue ($M)	Q3 2023	N/A	$113.5–$114.0	New/Initial for Q3
GAAP Net Loss ($M)	Q3 2023	N/A	$(9.4)–$(8.9)	New/Initial for Q3
Non-GAAP Net Income ($M)	Q3 2023	N/A	$18.5–$19.0	New/Initial for Q3
Non-GAAP EPS ($)	Q3 2023	N/A	$0.42–$0.43	New/Initial for Q3
Adjusted EBITDA ($M)	Q3 2023	N/A	$23.0–$23.5	New/Initial for Q3
Revenue ($M)	FY 2023	$456–$462	$450–$452	Lowered
GAAP Net Loss ($M)	FY 2023	$(47.6)–$(45.6)	$(43.7)–$(41.7)	Improved (less negative)
Non-GAAP Net Income ($M)	FY 2023	$65.8–$67.8	$65.8–$67.8	Maintained
Non-GAAP EPS ($)	FY 2023	$1.48–$1.52	$1.48–$1.52	Maintained
Adjusted EBITDA ($M)	FY 2023	$84–$86	$84–$86	Maintained

Management rationale: revenue guide cut reflects headwinds in large/perpetual deals, while cost discipline underpins confidence in achieving $85M adjusted EBITDA target for 2023 (midpoint) .

Earnings Call Themes & Trends

Note: The Q2 2023 earnings call transcript could not be retrieved from the document repository due to a database inconsistency. We searched for Q2 2023 transcripts (two entries dated 8/8/23) but the Read tool returned errors; thus, themes below are drawn from company Q2 press release and prior-quarter primary documents (retrieval errors), -.

Topic	Previous Mentions (Q4 2022, Q1 2023)	Current Period (Q2 2023)	Trend
Core CEM focus/product delivery	Strategic realignment; go-to-market alignment; record CEM adds (to 307) -	Focused R&D on core CEM with “key delivery milestones” improving customer value/satisfaction	Improving execution on core
Recurring model/ARR	ARR strengthened in Q4; subscription resilience	ARR $395M (+9% YoY); subscription revenue up 8% YoY	Healthy, steady growth
Perpetual/large deals	Exceptional perpetual deliveries buoyed Q4	Headwinds in large/perpetual bookings; revenue guide lowered	Negative for top-line mix
Profitability discipline	Transition year; profitability/cash flow to improve -	Adjusted EBITDA margin expanded to 16.6%; FY23 EBITDA maintained	Positive margin trajectory
Public Warning/regulatory	Norway selection; global deployments	Trinidad & Tobago deployment; ITU sector member; joined UNDRR ARISE	Expanding public-sector footprint
AI/technology initiatives	DigitalOps Insights (AI) introduced	Expanded partnership: Samdesk AI crisis detection integrated with VCC	Continued AI integration

Management Commentary

“We delivered solid second quarter results as we continue to improve our overall operating efficiency… we sequentially increased ARR and further expanded our adjusted EBITDA margins… we remain on track to execute toward our goal of reaching the ‘Rule of 40’ by 2027.” — David Wagner, President & CEO
“ARR and subscription revenue grew year-over-year by 9% and 8%… however, we continue to experience headwinds booking large and especially perpetual revenue contracts… reflected in our updated revenue guidance… we further tightened our cost structure, giving us confidence in our adjusted EBITDA target of $85 million for 2023.” — Patrick Brickley, EVP & CFO

Q&A Highlights

We attempted to read the full Q2 2023 earnings call transcript (two transcripts dated 8/8/23), but the Read tool returned database inconsistency errors; therefore, detailed Q&A themes and clarifications are not accessible from the repository at this time .

Estimates Context

S&P Global consensus for Q2 2023 could not be retrieved due to a Capital IQ mapping issue for EVBG (“Missing CIQ mapping” error). As a result, we cannot provide a definitive “beat/miss” vs. Wall Street consensus for revenue or EPS at this time [SpgiEstimatesError in tool].
If/when mapping is resolved, update to include: Q2 2023 actual revenue $110.6M and non-GAAP diluted EPS $0.31 versus S&P Global consensus for apples-to-apples comparison .

Key Takeaways for Investors

Profitability is the offsetting pillar to softer top-line: despite lowered FY revenue, maintained FY adjusted EBITDA ($84–$86M) and non-GAAP EPS ($1.48–$1.52) point to continued operating leverage .
Mix shift matters: ongoing headwinds in large/perpetual deals reduce revenue visibility and cap sequential growth; watch mix back to subscription to sustain ARR trajectory .
Core CEM momentum intact: ARR grew to $395M and CEM customer count rose sharply, supporting the thesis around Everbridge’s core platform resilience .
Public-sector/global warning opportunity advancing: new deployments (Trinidad & Tobago) and engagement with ITU/UNDRR provide medium-term pipeline catalysts .
Execution on Rule of 40 by 2027 underpins mid-term framework; near-term stock drivers are likely the pace of recurring growth and evidence that perpetual headwinds abate while margin gains persist .
Cash generation normalized in Q2; watch working capital dynamics and restructuring cash-outs versus second-half seasonality for FCF cadence .
Monitor next quarter’s bookings narrative: clarity on large-deal conversion and perpetual revenue run-rate is critical to de-risk FY revenue and re-accelerate growth .

Appendix: Additional Detail

YoY and Sequential Context

Q2 2023 revenue increased 7% YoY to $110.6M (vs. $103.0M in Q2 2022), reflecting solid subscription growth and higher ARR .
Sequentially, revenue improved from Q1 2023’s $108.3M, but remains below Q4 2022’s $117.1M given reduced perpetual contributions and macro caution .

Non-GAAP Adjustments

Non-GAAP results exclude amortization of acquired intangibles, stock-based compensation, 2022 Strategic Realignment costs, change in fair value of contingent consideration, accretion of interest on convertible notes, and related tax impacts; adjusted EBITDA further excludes these items as defined by the company .

EVERBRIDGE, INC. (EVBG)·Q2 2023 Earnings Summary