Everbridge's (NASDAQ:EVBG) Q1 Sales Top Estimates, Next Quarter Growth Looks Optimistic

Kayode Omotosho /
2023/05/09 7:13 am EDT

Critical event management software company Everbridge (NASDAQ:EVBG) reported Q1 FY2023 results beating Wall St's expectations, with revenue up 7.86% year on year to $108.3 million. The company expects that next quarter's revenue would be around $110.3 million, which is the midpoint of the guidance range. That was roughly in line with analyst expectations. Everbridge made a GAAP loss of $14.6 million, improving on its loss of $19.1 million, in the same quarter last year.

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Everbridge (EVBG) Q1 FY2023 Highlights:

  • Revenue: $108.3 million vs analyst estimates of $106.5 million (1.7% beat)
  • EPS (non-GAAP): $0.25 vs analyst estimates of $0.13 ($0.12 beat)
  • Revenue guidance for Q2 2023 is $110.3 million at the midpoint, above analyst estimates of $109.3 million
  • The company reconfirmed revenue guidance for the full year, at $459 million at the midpoint
  • Free cash flow of $15.9 million, up from $387 thousand in previous quarter
  • Customers: 6,500, down from 6,513 in previous quarter
  • Gross Margin (GAAP): 70.5%, up from 68.3% same quarter last year

“The first quarter marked a solid start to the year,” said David Wagner, Everbridge’s President and CEO.

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.

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Sales Growth

As you can see below, Everbridge's revenue growth has been strong over the last two years, growing from quarterly revenue of $82.2 million in Q1 FY2021, to $108.3 million.

Everbridge Total Revenue

Everbridge's quarterly revenue was only up 7.86% year on year, which might disappoint some shareholders. And the revenue actually decreased by $8.86 million in Q1, compared to $5.73 million increase in Q4 2022. However, the sales also similarly dropped a year ago and management is guiding for revenue to rebound in the coming quarter, which might hint at an emerging seasonal pattern.

Guidance for the next quarter indicates Everbridge is expecting revenue to grow 7.05% year on year to $110.3 million, slowing down from the 18.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 6.2% over the next twelve months.

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Customer Growth

You can see below that Everbridge reported 6,500 customers at the end of the quarter, a decrease of 13 on last quarter. That is slower customer growth than what we are used to seeing lately, suggesting that the customer acquisition momentum is slowing down.

Everbridge Customers

Key Takeaways from Everbridge's Q1 Results

With a market capitalization of $985.8 million Everbridge is among smaller companies, but its more than $220.9 million in cash and positive free cash flow over the last twelve months put it in a very strong position to invest in growth.

Everbridge topped analysts’ revenue expectations this quarter, even if just narrowly. And we were also glad that the revenue guidance for the next quarter exceeded analysts' expectations. On the other hand, it was unfortunate to see the slowdown in customer growth and revenue decreased in absolute numbers. Overall, this quarter's results were not the best we've seen from Everbridge. The company is up 3.53% on the results and currently trades at $25.22 per share.

Everbridge may have had a tough quarter, but does that actually create an opportunity to invest 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.