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EI

EVERBRIDGE, INC. (EVBG)·Q4 2023 Earnings Summary

Executive Summary

  • Q4 revenue was $115.8M (-1% YoY) with GAAP diluted EPS of $(0.47), while non-GAAP diluted EPS was $0.47; mix favored subscriptions (+4% YoY) as one‑time services/licenses fell 35% YoY .
  • Profitability and cash generation improved: adjusted EBITDA rose to $27.0M (23.3% margin) and operating cash flow was $29.6M; adjusted FCF was $26.7M .
  • Against prior guidance for Q4 issued in November, revenue modestly exceeded the high end, adjusted EBITDA landed near the top, and non‑GAAP EPS missed the low end by $0.01 (actual $0.47 vs $0.48–$0.52 guided) .
  • Strategic catalyst: Everbridge agreed to be acquired by Thoma Bravo ($28.60/sh on Feb 5, amended to $35.00/sh on Mar 1), and canceled its Q4 earnings call; near‑term stock dynamics center on deal spread and closing risk [docs.publicnow.com/AE1831EEF386DF12680390F922140FF245B14763].

What Went Well and What Went Wrong

What Went Well

  • Subscriptions remained resilient: Q4 subscription revenue grew 4% YoY to $105.6M, supporting total non‑GAAP operating income of $20.7M and adjusted EBITDA of $27.0M .
  • Cash conversion improved: operating cash flow was $29.6M in Q4 and adjusted free cash flow was $26.7M, reflecting disciplined spend and mix shift to recurring revenue .
  • Management’s prior focus areas showed traction: “improve our go-to-market execution and overall operating efficiency… increase adjusted EBITDA by $8.5 million… strongest recurring bookings quarter of the year,” CEO David Wagner on Q3 (context for sequential Q4 profitability) .

What Went Wrong

  • One‑time revenue headwinds persisted: professional services/software licenses/other declined 35% YoY to $10.2M in Q4, dampening total growth despite subscription strength .
  • GAAP results were pressured by non‑recurring items including an Anvil legal dispute accrual ($15.9M in Q4) and restructuring, contributing to a $(19.3)M GAAP net loss in Q4 .
  • Non‑GAAP diluted EPS missed the low end of prior guidance by $0.01 (actual $0.47 vs $0.48–$0.52 guided), underscoring the impact of lower one‑time revenue mix .

Financial Results

MetricQ2 2023Q3 2023Q4 2023
Revenue ($USD Millions)$110.569 $114.191 $115.760
GAAP Diluted EPS ($)$(0.37) $(0.23) $(0.47)
Non‑GAAP Diluted EPS ($)$0.31 $0.46 $0.47
Gross Margin (%)70.07% 71.04% 71.19%
Adjusted EBITDA ($USD Millions)$18.311 $23.691 $27.003
Adjusted EBITDA Margin (%)16.6% 20.7% 23.3%

Revenue breakdown ($USD Millions)

Revenue SourceQ2 2023Q3 2023Q4 2023
Subscription services—$104.3 $105.6
Professional services, software licenses & other—$9.8 $10.2

Key KPIs and cash flow

KPI / Cash FlowQ2 2023Q3 2023Q4 2023
Annualized Recurring Revenue (ARR) ($USD Millions)$395 $399 $408
CEM customers added (quarter)38 32 55
Deals >$100K / >$500K / >$1M (count)——48 / 3 / 1
Cash from Operations ($USD Millions)$5.370 $17.009 $29.621
Adjusted Free Cash Flow ($USD Millions)$1.570 $15.498 $26.681

Guidance Changes

MetricPeriodPrevious Guidance (as of Nov 9, 2023)Current/ActualChange
Revenue ($M)Q4 2023$114.0–$115.5 $115.8 Beat high end
Non‑GAAP diluted EPS ($)Q4 2023$0.48–$0.52 $0.47 Missed low end
Adjusted EBITDA ($M)Q4 2023$25.6–$27.1 $27.0 Near top of range
2024 outlookFY 2024Not provided (Q4 call canceled amid announced sale) [docs.publicnow.com/AE1831EEF386DF12680390F922140FF245B14763]——

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2023)Trend
AI/Technology initiativesLaunched Everbridge 360; awarded AI patent; expanded AI-powered crisis detection partnership (Samdesk) No call; press release focused on figures Positive progress previously; limited Q4 disclosures
Product performance / MixSubscription growth offset decline in one-time services; CFO flagged Q4 non-subscription revenue down ~$6M vs Q4’22; some on-prem deals pushed to 2024 Services/licenses/other down 35% YoY; subscriptions +4% YoY Continued mix shift to recurring
Public warning / Regional winsGermany nationwide warning day success; Trinidad & Tobago deployment; Glendale, AZ win No call commentary; metrics highlight customer adds Steady execution inferred
Bookings / ARR“Strongest recurring bookings quarter of the year” in Q3; pipeline and deal size improving ARR reached $408M; 55 CEM customers added Sequential momentum sustained
Regulatory / Strategic—Thoma Bravo acquisition announced then improved to $35.00/sh; Q4 call canceled [docs.publicnow.com/AE1831EEF386DF12680390F922140FF245B14763]Major strategic shift

Management Commentary

  • “We delivered solid third quarter results as we continue to improve our go-to-market execution and overall operating efficiency… allowing us to increase adjusted EBITDA by $8.5 million in the third quarter compared to last year.” — David Wagner, President & CEO (Q3 release) .
  • “Our improving profitability is supported by continued strength in our subscription revenue growth despite challenges associated with one-time services and perpetual software license revenue… In the fourth quarter, our one-time revenues are now expected to decrease by about $6 million compared to the fourth quarter of 2022.” — Patrick Brickley, CFO (Q3 release) .

Q&A Highlights

  • Q4: The company canceled its Q4 earnings conference call; therefore, no Q&A was held [docs.publicnow.com/AE1831EEF386DF12680390F922140FF245B14763].
  • Q3 context (pipeline and mix): “Our pipeline has been improving… Q4 is sequentially our strongest quarter… we are expecting a good quarter.” — CEO David Wagner; CFO noted certain on‑prem sales expected to deliver in 2024 rather than Q4’23, affecting non‑subscription revenue timing .

Estimates Context

  • S&P Global consensus: Unavailable via our SPGI feed for EVBG at this time; we attempted to retrieve but could not due to a mapping issue (no CIQ mapping found).
  • Third‑party aggregator reference: Public Investing shows Q4 2023 non‑GAAP EPS of $0.49 vs $0.47 estimate (beat by $0.02); note methodology may differ and is not S&P Global .

Key Takeaways for Investors

  • Mix matters: Recurring subscription growth (+4% YoY) is offsetting a deliberate pullback/deferral in one‑time services/licenses (‑35% YoY), improving margins and cash flow despite modest top‑line pressure .
  • Profitability inflection: Adjusted EBITDA margin expanded to 23.3% in Q4, with sustained operating cash flow and adjusted FCF momentum, underscoring expense discipline and recurring economics .
  • Execution on ARR and CEM adoption: ARR rose to $408M with 55 CEM customers added in Q4, signaling healthy demand for critical event management solutions .
  • Watch non‑GAAP EPS dynamics: Actual non‑GAAP diluted EPS ($0.47) fell slightly below prior guidance due to lower one‑time revenues; this mix could continue to cap near‑term EPS upside even as margins improve .
  • Major catalyst dominates: The amended Thoma Bravo deal at $35.00/sh re-anchors valuation; near‑term trading likely reflects deal spread, regulatory timing, and closing certainty rather than fundamentals .
  • Governance/leadership changes: New CFO appointed Feb 4, 2024; continuity plans in place via consulting for outgoing CFO—monitor for post‑deal transition execution .
  • One‑offs receding: The Anvil legal dispute accrual impacted GAAP loss in Q4; settlement was executed Jan 31, 2024, reducing overhang into 2024 operations .

Sources

  • Q4 2023 8‑K and press release with full financials and reconciliations .
  • Q3 2023 8‑K and press release with guidance and KPIs .
  • Q2 2023 8‑K and press release with financials and KPIs .
  • Merger announcements and amendment: Feb 5, 2024 definitive agreement and Mar 1, 2024 amended agreement .
  • Q4 2023 call cancellation notice [docs.publicnow.com/AE1831EEF386DF12680390F922140FF245B14763].
  • Q3 2023 earnings call Q&A excerpts (contextual) .
  • Third‑party EPS comparison (non‑S&P) .