Everbridge (NASDAQ:EVBG) Q3: Beats On Revenue But Stock Drops

Jabin Bastian /
2021/11/09 4:39 pm EST

Critical event management software company Everbridge (NASDAQ:EVBG) beat analyst expectations in Q3 FY2021 quarter, with revenue up 35.7% year on year to $96.7 million. Guidance for next quarter's revenue was $102.1 million at the midpoint, which is 1.97% above the analyst consensus. Everbridge made a GAAP loss of $28.6 million, down on its loss of $24.2 million, in the same quarter last year.

Is now the time to buy Everbridge? Access our full analysis of the earnings results here, it's free.

Everbridge (EVBG) Q3 FY2021 Highlights:

  • Revenue: $96.7 million vs analyst estimates of $94.2 million (2.6% beat)
  • EPS (non-GAAP): $0.05 vs analyst estimates of -$0.14 ($0.19 beat)
  • Revenue guidance for Q4 2021 is $102.1 million at the midpoint, above analyst estimates of $100.1 million
  • Free cash flow was negative $7.52 million, compared to negative free cash flow of -$9.04 million in previous quarter
  • Customers: 6,010, up from 5,890 in previous quarter
  • Gross Margin (GAAP): 68.6%, down from 70.6% same quarter last year

“We exceeded our guidance ranges for revenue and profitability in the third quarter, with continued demand for our Critical Event Management Suite and Public Warning solutions,” said David Meredith, Chief Executive Officer of Everbridge.

Founded as a reaction to the catastrophic events of 9/11, Everbridge (NASDAQ:EVBG) supplies software that helps governments and businesses keep people and infrastructure safe in emergencies.

Climate change is expected to result in an increasing number of extreme weather events, globally, impacting both supply chains and personal security. This in turn increases the need for automated systems for critical events, meaning that there should be an increasing demand for software such as Everbridge.

Sales Growth

As you can see below, Everbridge's revenue growth has been very strong over the last year, growing from quarterly revenue of $71.2 million, to $96.7 million.

Everbridge Total Revenue

And unsurprisingly, this was another great quarter for Everbridge with revenue up an absolutely stunning 35.7% year on year. On top of that, revenue increased $10 million quarter on quarter, a very strong improvement on the $4.43 million increase in Q2 2021, and a sign of acceleration of growth.

Analysts covering the company are expecting the revenues to grow 27% over the next twelve months, although estimates are likely to change post earnings.

There are others doing even better than Everbridge. Founded by ex-Google engineers, a small company making software for banks has been growing revenue 90% year on year and is already up more than 400% since the IPO in December. You can find it on our platform for free.

Customer Growth

You can see below that Everbridge reported 6,010 customers at the end of the quarter, an increase of 120 on last quarter. That is a bit slower customer growth than what we are used to seeing lately, suggesting that the customer acquisition momentum is slowing a little bit.

Everbridge Customers

Key Takeaways from Everbridge's Q3 Results

With a market capitalization of $6.07 billion Everbridge is among smaller companies, but its more than $546.5 million in cash and positive free cash flow over the last twelve months put it in a very strong position to invest in growth.

We enjoyed seeing Everbridge’s impressive revenue growth this quarter. And we were also glad that the revenue guidance for the next quarter exceeded analysts' expectations. On the other hand, there was a slight slowdown in customer growth. Overall, this quarter's results seemed pretty positive and shareholders can feel optimistic. But investors might have been expecting more and the company is down 6.25% on the results and currently trades at $149.00 per share.

Should you invest in Everbridge right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.