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Cvent Announces Third Quarter 2022 Financial Results

Revenue Exceeds High End of Guidance

Fiscal Year 2022 Revenue Guidance Increased Due to Solid Third Quarter Revenue

Cvent Holding Corp. (“Cvent”) (Nasdaq: CVT), a market-leading meetings, events and hospitality technology provider, today announced financial results for the third quarter ended September 30, 2022.

“Momentum in the meetings and events industry continued in the third quarter of 2022, especially for in-person events. Organizations increasingly seek a comprehensive platform that can manage events of all formats and types, which helped drive our positive financial results in Q3,” said Reggie Aggarwal, CEO & Founder of Cvent. “We believe the versatility of our platform across in-person, virtual and hybrid events paired with our long track record as a market leader will help us successfully navigate the current unique macroeconomic environment.”

Third Quarter 2022 Financial Highlights

Revenue

  • Total revenue was $161.3 million for the third quarter of 2022, an increase of 20.3% from the comparable period in 2021, and $2.3 million, or 1.4%, higher than the high end of our guidance.
  • Event Cloud revenue was $112.9 million for the third quarter of 2022, an increase of 22.1% from the comparable period in 2021.
  • Hospitality Cloud revenue was $48.4 million for the third quarter of 2022, an increase of 16.5% from the comparable period in 2021.

Net Loss and Adjusted EBITDA

  • Net loss was $18.2 million for the third quarter of 2022 compared to $26.1 million in the comparable period in 2021.
  • Adjusted EBITDA (defined below) was $33.7 million for the third quarter of 2022, which was $5.1 million higher than the high end of our guidance, and Adjusted EBITDA margin (defined below) was 20.9% compared to the high end of our guidance of 18.0%. Adjusted EBITDA in the comparable period of 2021 was $23.4 million, with an Adjusted EBITDA margin of 17.5%.

Cash, Cash Equivalents and Short-Term Investments

  • Cash, cash equivalents and short-term investments as of September 30, 2022 totaled $110.6 million, compared to $127.1 million as of December 31, 2021.

Recent Business Highlights

  • For the Event Cloud, organizations that chose Cvent in the third quarter of 2022 for their event marketing and management needs include Forbes Australia, Datadog, United Soccer Coaches, Cloudera, New Jersey Education Association, and Rice University.
  • For the Hospitality Cloud, organizations that chose Cvent in the third quarter of 2022 for their group business and corporate travel needs include Visit Panama, HEI Hotels & Resorts, Visit California, The Penny Hotel Williamsburg, IHG Hotels & Resorts, and Boston Park Plaza.
  • Cvent hosted its annual Cvent CONNECT Europe customer conference in London and Frankfurt, October 4-6, 2022, as a hybrid event, driving a nearly 110% increase in in-person attendance year-over-year. The event, powered by Cvent technology, generated significant industry interest as attendees explored the latest Cvent innovations and experienced the power of hybrid events firsthand.
  • Cvent and American Express® introduced enhanced product features to provide a more seamless meetings & events payment experience for American Express Corporate Meeting Card and vPayment clients using the Cvent Event Marketing & Management platform.
  • Cvent recently received several awards and accolades including: CEO & Founder Reggie Aggarwal ranked third on the Top 50 SaaS CEOs of 2022 list published by The Software Report and Cvent was recognized as a 2022 APPEALIE SaaS Award winner in the marketing technology category.

Guidance

Based on information as of today, November 3, 2022, Cvent is providing the following guidance:

Fourth Quarter 2022

  • Revenue for the fourth quarter of 2022 is expected to be in the range of $169.3 million to $170.3 million, representing 17.4% year-over-year growth at the mid-point.
  • Adjusted EBITDA for the fourth quarter of 2022 is expected to be in the range of $38.5 million to $39.8 million, or 23.1% of revenue at the mid-point.

Full Year 2022

  • Revenue for the full year 2022 is expected to be in the range of $628.9 million to $629.9 million, representing 21.3% year-over-year growth at the mid-point and a $2.8 million increase over the mid-point of our previously provided guidance.
  • Adjusted EBITDA for the full year 2022 is expected to be in the range of $108.4 million to $109.7 million, or 17.3% of revenue at the mid-point. This represents a $1.9 million increase over the mid-point of our previously provided Adjusted EBITDA guidance for the year and a 20-basis point increase over the mid-point of our previously provided Adjusted EBITDA margin guidance.

Reconciliation of Adjusted EBITDA and Adjusted EBITDA margin results to its GAAP basis results are shown in detail below. Cvent has not reconciled the Adjusted EBITDA forward-looking guidance included in this press release to the most directly comparable GAAP measure because certain items are out of Cvent's control or cannot reasonably be predicted, as the items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. Accordingly, a reconciliation of forward-looking Adjusted EBITDA and Adjusted EBITDA margin is not available without unreasonable effort.

Conference Call Information

Cvent management will host a conference call and webcast at 5:00 p.m. ET today, November 3, 2022, to discuss its third quarter 2022 financial results and business highlights and the Company's outlook. The conference call can be accessed by dialing (888) 440-5667 from the United States or +1 (646) 960-0476 internationally with conference ID 7981326. The live webcast of the conference call and other materials related to Cvent’s financial performance can be accessed from Cvent’s investor relations website at https://investors.cvent.com/.

Following the completion of the call until 11:59 p.m. ET on Thursday, November 10, 2022, a telephone replay will be available by dialing (800) 770-2030 from the United States, +1 (647) 362-9199 internationally with conference ID 7981326. A webcast replay will also be available at https://investors.cvent.com/.

About Cvent

Cvent Holding Corp. (Nasdaq: CVT) is a leading meetings, events, and hospitality technology provider with more than 4,800 employees and over 21,000 customers worldwide as of September 30, 2022. Founded in 1999, the company delivers a comprehensive event marketing and management platform and offers a global marketplace where event professionals collaborate with venues to create engaging, impactful experiences. Cvent is headquartered in Tysons, Virginia, just outside of Washington D.C., and has additional offices around the world to support its growing global customer base. The comprehensive Cvent event marketing and management platform offers software solutions to event organizers and marketers for online event registration, venue selection, event marketing and management, virtual and onsite solutions, and attendee engagement. Cvent’s suite of products automate and simplify the event management lifecycle and maximize the impact of in-person, virtual, and hybrid events. Hotels and venues use Cvent’s supplier and venue solutions to win more group and corporate travel business through Cvent’s sourcing platforms. Cvent solutions optimize the event management value chain and have enabled clients around the world to manage millions of meetings and events. For more information, please visit Cvent.com. From time to time, we plan to utilize our investor relations website, investors.cvent.com, as a channel of distribution for material company information.

Non-GAAP Financial Measures

This earnings press release and the related conference call use and discuss the following financial measures not presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”): Non-GAAP Gross Profit, Non-GAAP Sales and Marketing Expenses, Non-GAAP Research and Development Expenses, Non-GAAP General and Administrative Expenses, Adjusted EBITDA and Adjusted Free Cash Flow, and certain ratios and other metrics derived therefrom, including Adjusted EBITDA margin which represents Adjusted EBITDA divided by revenue and Non-GAAP gross margin which represents Non-GAAP Gross Profit divided by revenue. Reconciliation of these non-GAAP financial measures to their GAAP basis results can be found within the tables included in this release.

We believe that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Cvent’s financial condition and results of operations. We use these non-GAAP measures for financial, operational and budgetary decision-making purposes, and to compare our performance to that of prior periods for trend analyses. We believe that these non-GAAP financial measures provide useful information regarding past financial performance and future prospects, and permit us to more thoroughly analyze key financial metrics used to make operational decisions. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.

We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in Cvent’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release, and not to rely on any single financial measure to evaluate our business.

Cvent excludes or adjusts for one or more of the following items from these non-GAAP financial measures:

Interest expense. Cvent excludes this expense from its non-GAAP financial measures primarily because it is not considered a part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Adjusted EBITDA.

Other income, net. Cvent excludes this item, which is comprised primarily of foreign exchange gains/(losses) and state tax settlements, from its non-GAAP financial measures primarily because it is not considered a part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Adjusted EBITDA.

Provision for income taxes. Cvent excludes this item from its non-GAAP financial measures primarily because it is not considered a part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Adjusted EBITDA.

Amortization of deferred financing costs and debt discount. Cvent excludes this expense primarily because it is not considered a part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Adjusted EBITDA.

Intangible asset amortization. Cvent excludes this expense primarily because it is not considered a part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Non-GAAP Gross Profit and Adjusted EBITDA.

Amortization of software development costs. Cvent excludes this expense primarily because it is not considered a part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Non-GAAP Gross Profit and Adjusted EBITDA.

Stock-based compensation expense. Cvent excludes this expense primarily because it is not considered a part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Non-GAAP Gross Profit, Non-GAAP Sales and Marketing Expenses, Non-GAAP Research and Development Expenses, Non-GAAP General and Administrative Expenses and Adjusted EBITDA.

Cost related to acquisitions. Cost related to acquisitions is comprised of the value of contingent payments included in compensation expense which relate to the potential cash payment to certain employees of acquired companies whose right to receive such payment is forfeited if they terminate their employment prior to the required service period. As the contingent payments are subject to continued employment, GAAP requires that these payments be accounted for as compensation expense and such expense is subject to revaluation. Additionally, cost related to acquisitions includes expenses related to performing due diligence, valuation, earnouts or other acquisition-related activities. Cvent excludes these expenses primarily because they are not considered a part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Non-GAAP Gross Profit, Non-GAAP Sales and Marketing Expenses, Non-GAAP Research and Development Expenses, Non-GAAP General and Administrative Expenses and Adjusted EBITDA.

Restructuring expenses. Cvent excludes this expense, which is comprised of expenses associated with severance to terminated employees of acquired entities, retention bonuses to employees retained from acquired entities, costs to discontinue use of a back-office system and closing of certain office spaces, primarily because it is not considered a part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Non-GAAP Gross Profit, Non-GAAP Sales and Marketing Expenses, Non-GAAP Research and Development Expenses, Non-GAAP General and Administrative Expenses and Adjusted EBITDA.

Other items. Cvent excludes this item, which is comprised of certain expenses associated with prosecuting a trade secret misappropriation claim and credit facility fees, net of the gain from government subsidies related to the global COVID-19 pandemic, primarily because it is not considered a part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Non-GAAP Gross Profit, Non-GAAP Sales and Marketing Expenses, Non-GAAP Research and Development Expenses, Non-GAAP General and Administrative Expenses and Adjusted EBITDA.

Loss on extinguishment of debt. Cvent excludes this expense from its non-GAAP financial measures primarily because it is not considered a part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Adjusted EBITDA.

Purchases of Property and Equipment. This item is customarily included as a reduction to net cash provided by operating activities in the calculation of free cash flow. This item is reflected in Adjusted Free Cash Flow.

Capitalized Software Development Costs. This item is customarily included as a reduction to net cash provided by operating activities in the calculation of free cash flow. This item is reflected in Adjusted Free Cash Flow.

Change in Fees Payable to Customers. Cvent excludes the change in this balance sheet item primarily because it is not considered a part of ongoing net cash provided by operating activities when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Adjusted Free Cash Flow.

Interest Paid. Cvent excludes these cash payments primarily because it is not considered a part of ongoing net cash provided by operating activities when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry. This adjustment is reflected in Adjusted Free Cash Flow.

Cautionary Language Regarding Forward-Looking Statements

Certain statements in this press release and on the related conference call may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts, and you can often identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “target,” “projects,” “forecasts,” “shall,” “contemplates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this release and on the related conference call are based upon Cvent’s historical performance and on its current plans, operating budgets, estimates and expectations in light of information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks, uncertainties, assumptions and factors that could cause actual results to differ materially from those anticipated, including, but not limited to: the risk that trends stated or implied by this release or in the earnings conference call cannot or will not be sustained at the current pace or may fluctuate from current expectations, including trends and expectations related to revenue, revenue growth, net loss, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow, gross profit, gross margin, expenses, net dollar retention rate, deferred revenue, interest expense under our credit facility, the demand for events and meetings, the return to in-person events, demand for advertising and software solutions, and demand for an integrated platforms; the risk that the Company does not experience stable, sustainable growth; the risk that revenues for the fourth quarter and full year 2022 will not be as stated in this release; the risk that Adjusted EBITDA and Adjusted EBITDA margin for the fourth quarter and full year will not be as stated in this release; the impact of current global events and macroeconomic conditions on customer’s demand for our products and services, Cvent’s operations, financial results and on Cvent’s virtual, hybrid and in-person offerings; Cvent’s ability to retain, engage, and upsell current customers and attract and retain new customers; Cvent’s ability to maintain and expand relationships with hotels and venues; the competitiveness of the market in which Cvent operates and Cvent’s ability to maintain and increase its market position; Cvent’s ability to attract and retain key employees, including its senior management team; the impact of a disruption of Cvent’s operations, infrastructure or systems, or disruption of the operations, infrastructure or systems of the third parties on which Cvent relies; Cvent’s ability to manage its costs and growth effectively; Cvent’s ability to develop, introduce and market new and enhanced versions of its solutions to meet customer needs and expectations; the risk that the industry does not get back to a normalized state when and as expected; and other factors beyond our control.

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based on many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications, including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, including in the “Risk Factors” section of those filings. Actual results may differ materially. Investors should evaluate all forward-looking statements in the context of these risks and uncertainties.

The forward-looking statements included herein are made only as of the date hereof, based on current estimates, expectations, observations and trends. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

 

CVENT HOLDING CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

 

 

 

September 30, 2022

 

December 31, 2021

 

 

(unaudited)

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

107,708

 

 

$

126,526

 

Restricted cash

 

 

2,787

 

 

 

103

 

Short-term investments

 

 

2,854

 

 

 

538

 

Accounts receivable, net of allowance of $1.9 million and $4.5 million, respectively

 

 

76,000

 

 

 

112,251

 

Capitalized commission, net

 

 

22,649

 

 

 

25,393

 

Prepaid expenses and other current assets

 

 

21,038

 

 

 

20,376

 

Total current assets

 

 

233,036

 

 

 

285,187

 

Property and equipment, net

 

 

14,617

 

 

 

15,334

 

Capitalized software development costs, net

 

 

100,293

 

 

 

108,851

 

Intangible assets, net

 

 

184,841

 

 

 

221,371

 

Goodwill

 

 

1,620,597

 

 

 

1,617,880

 

Operating lease-right-of-use assets

 

 

22,124

 

 

 

28,370

 

Capitalized commission, non-current, net

 

 

21,489

 

 

 

22,999

 

Deferred tax assets, non-current

 

 

2,279

 

 

 

2,403

 

Other assets, non-current, net

 

 

5,941

 

 

 

3,684

 

Total assets

 

$

2,205,217

 

 

$

2,306,079

 

Liabilities and stockholders’ equity

 

 

 

 

Current liabilities:

 

 

 

 

Current portion of long-term debt

 

$

-

 

 

$

-

 

Accounts payable

 

 

4,146

 

 

 

2,675

 

Accrued expenses and other current liabilities

 

 

75,370

 

 

 

79,827

 

Fees payable to customers

 

 

64,501

 

 

 

24,982

 

Operating lease liabilities, current

 

 

11,170

 

 

 

11,290

 

Deferred revenue

 

 

246,239

 

 

 

239,843

 

Total current liabilities

 

 

401,426

 

 

 

358,617

 

Deferred tax liabilities, non-current

 

 

16,717

 

 

 

16,695

 

Long-term debt, net

 

 

165,000

 

 

 

262,302

 

Operating lease liabilities, non-current

 

 

22,191

 

 

 

30,809

 

Other liabilities, non-current

 

 

8,097

 

 

 

8,200

 

Total liabilities

 

 

613,431

 

 

 

676,623

 

Commitments and contingencies (Note 13)

 

 

 

 

Stockholders’ equity:

 

 

 

 

Common stock, $0.0001 par value, 1,500,000,000 shares authorized at September 30, 2022 and December 31, 2021; 484,488,616 and 481,121,695 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

 

48

 

 

 

48

 

Additional paid-in capital

 

 

2,538,829

 

 

 

2,483,761

 

Accumulated other comprehensive loss

 

 

(14,362

)

 

 

(2,746

)

Accumulated deficit

 

 

(932,729

)

 

 

(851,607

)

Total stockholders’ equity

 

 

1,591,786

 

 

 

1,629,456

 

Total liabilities and stockholders’ equity

 

$

2,205,217

 

 

$

2,306,079

 

CVENT HOLDING CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

(unaudited)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue

 

$

161,321

 

 

$

134,058

 

 

$

459,639

 

 

$

374,159

 

Cost of revenue

 

 

63,011

 

 

 

50,635

 

 

 

184,772

 

 

 

140,479

 

Gross profit

 

 

98,310

 

 

 

83,423

 

 

 

274,867

 

 

 

233,680

 

Operating expenses:

 

 

 

 

 

 

 

 

Sales and marketing

 

 

42,869

 

 

 

37,161

 

 

 

131,787

 

 

 

99,069

 

Research and development

 

 

34,232

 

 

 

25,685

 

 

 

98,766

 

 

 

72,016

 

General and administrative

 

 

24,685

 

 

 

25,358

 

 

 

75,633

 

 

 

63,711

 

Intangible asset amortization, exclusive of amounts included in cost of revenue

 

 

12,170

 

 

 

12,757

 

 

 

36,484

 

 

 

38,721

 

Total operating expenses

 

 

113,956

 

 

 

100,961

 

 

 

342,670

 

 

 

273,517

 

Loss from operations

 

 

(15,646

)

 

 

(17,538

)

 

 

(67,803

)

 

 

(39,837

)

Interest expense

 

 

(1,857

)

 

 

(7,546

)

 

 

(7,054

)

 

 

(22,717

)

Amortization of deferred financing costs and debt discount

 

 

(157

)

 

 

(938

)

 

 

(734

)

 

 

(2,823

)

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

(3,219

)

 

 

-

 

Other income, net

 

 

1,094

 

 

 

1,864

 

 

 

1,979

 

 

 

6,135

 

Loss before income taxes

 

 

(16,566

)

 

 

(24,158

)

 

 

(76,831

)

 

 

(59,242

)

Provision for income taxes

 

 

1,667

 

 

 

1,968

 

 

 

4,292

 

 

 

5,294

 

Net loss

 

$

(18,233

)

 

$

(26,126

)

 

$

(81,123

)

 

$

(64,536

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

Foreign currency translation loss

 

 

(6,513

)

 

 

(2,001

)

 

 

(11,617

)

 

 

(2,347

)

Comprehensive loss

 

$

(24,746

)

 

$

(28,127

)

 

$

(92,740

)

 

$

(66,883

)

Basic and diluted net loss per common share

 

$

(0.04

)

 

$

(0.06

)

 

$

(0.17

)

 

$

(0.15

)

Basic and diluted weighted-average common shares outstanding

 

 

483,591,690

 

 

 

416,483,028

 

 

 

482,128,762

 

 

 

416,428,569

 

CVENT HOLDING CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(18,233

)

 

$

(26,126

)

 

$

(81,123

)

 

$

(64,536

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

30,210

 

 

 

30,801

 

 

 

91,211

 

 

 

93,142

 

Amortization of the right-of-use assets

 

 

1,984

 

 

 

1,968

 

 

 

5,940

 

 

 

6,817

 

Allowance for expected credit losses, net

 

 

325

 

 

 

4,431

 

 

 

378

 

 

 

5,549

 

Amortization of deferred financing costs and debt discount

 

 

157

 

 

 

939

 

 

 

734

 

 

 

2,823

 

Amortization of capitalized commission

 

 

7,926

 

 

 

7,362

 

 

 

23,751

 

 

 

21,568

 

Unrealized foreign currency transaction loss

 

 

106

 

 

 

(5

)

 

 

640

 

 

 

19

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

3,219

 

 

 

 

Stock-based compensation

 

 

19,288

 

 

 

8,388

 

 

 

46,008

 

 

 

16,811

 

Change in deferred taxes

 

 

(25

)

 

 

468

 

 

 

(8

)

 

 

1,313

 

Change in operating assets and liabilities, net of business combinations:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

1,620

 

 

 

18,481

 

 

 

34,210

 

 

 

52,611

 

Prepaid expenses and other assets

 

 

(609

)

 

 

(290

)

 

 

(923

)

 

 

(6,064

)

Capitalized commission, net

 

 

(7,145

)

 

 

(7,592

)

 

 

(27,724

)

 

 

(26,706

)

Accounts payable, accrued expenses and other liabilities

 

 

21,684

 

 

 

4,786

 

 

 

45,611

 

 

 

8,999

 

Operating lease liability

 

 

(2,858

)

 

 

(3,182

)

 

 

(8,429

)

 

 

(9,666

)

Deferred revenue

 

 

(20,924

)

 

 

(14,469

)

 

 

7,659

 

 

 

18,878

 

Net cash provided by operating activities

 

 

33,506

 

 

 

25,960

 

 

 

141,154

 

 

 

121,558

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(3,009

)

 

 

(786

)

 

 

(5,705

)

 

 

(2,768

)

Capitalized software development costs

 

 

(13,411

)

 

 

(10,823

)

 

 

(38,413

)

 

 

(30,272

)

Purchase of short-term investments

 

 

(2,794

)

 

 

(36

)

 

 

(45,164

)

 

 

(31,435

)

Maturities of short-term investments

 

 

15,409

 

 

 

9,414

 

 

 

42,848

 

 

 

28,739

 

Proceeds from divestiture

 

 

918

 

 

 

122

 

 

 

135

 

 

 

122

 

Acquisitions, net of cash acquired

 

 

135

 

 

 

 

 

 

(3,552

)

 

 

(14,769

)

Net cash used in investing activities

 

 

(2,752

)

 

 

(2,109

)

 

 

(49,851

)

 

 

(50,383

)

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Principal repayments on first lien term loan

 

 

 

 

 

(1,984

)

 

 

(265,696

)

 

 

(5,951

)

Principal repayments of revolving credit facility

 

 

(50,000

)

 

 

 

 

 

(120,000

)

 

 

(13,400

)

Proceeds from revolving credit facility

 

 

20,000

 

 

 

 

 

 

285,000

 

 

 

 

Payment of debt issuance costs

 

 

 

 

 

 

 

 

(3,141

)

 

 

 

Proceeds from exercise of stock options

 

 

6,648

 

 

 

 

 

 

7,822

 

 

 

522

 

Repurchase of common stock

 

 

 

 

 

 

 

 

 

 

 

(57

)

Payments of tax withholdings on vesting of restricted stock units

 

 

 

 

 

 

 

 

(31

)

 

 

 

Net cash provided by (used in) financing activities

 

 

(23,352

)

 

 

(1,984

)

 

 

(96,046

)

 

 

(18,886

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(5,582

)

 

 

(1,506

)

 

 

(11,391

)

 

 

(2,250

)

Change in cash, cash equivalents, and restricted cash

 

 

1,820

 

 

 

20,361

 

 

 

(16,134

)

 

 

50,039

 

Cash, cash equivalents, and restricted cash, beginning of period

 

 

108,675

 

 

 

95,148

 

 

 

126,629

 

 

 

65,470

 

Cash, cash equivalents, and restricted cash, end of period

 

$

110,495

 

 

$

115,509

 

 

$

110,495

 

 

$

115,509

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

 

 

 

Interest paid

 

$

1,778

 

 

$

7,540

 

 

$

6,955

 

 

$

22,721

 

Income taxes paid

 

$

1,442

 

 

$

1,176

 

 

$

5,177

 

 

$

4,655

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding payments for purchase of property and equipment at period end

 

$

327

 

 

$

331

 

 

$

327

 

 

$

331

 

Outstanding payments for capitalized software development costs at period end

 

$

983

 

 

$

513

 

 

$

983

 

 

$

513

 

 

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(in thousands, except share amounts and share counts)

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

 

(in thousands)

 

Non-GAAP Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

$

98,310

 

 

$

83,423

 

 

$

274,867

 

 

$

233,680

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

459

 

 

 

759

 

 

 

1,477

 

 

 

2,772

 

Amortization of software development costs

 

 

16,459

 

 

 

15,508

 

 

 

49,181

 

 

 

45,737

 

Intangible asset amortization

 

 

-

 

 

 

-

 

 

 

-

 

 

 

180

 

Stock-based compensation expense

 

 

2,234

 

 

 

456

 

 

 

4,758

 

 

 

950

 

Restructuring expense

 

 

-

 

 

 

9

 

 

 

10

 

 

 

11

 

Cost related to acquisitions

 

 

-

 

 

 

11

 

 

 

-

 

 

 

11

 

Other items

 

 

(110

)

 

 

-

 

 

 

(385

)

 

 

(994

)

Non-GAAP Gross Profit

 

$

117,352

 

 

$

100,166

 

 

$

329,908

 

 

$

282,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin:

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

161,321

 

 

$

134,058

 

 

$

459,639

 

 

$

374,159

 

Gross Margin

 

 

60.9

%

 

 

62.2

%

 

 

59.8

%

 

 

62.5

%

Non-GAAP Gross Margin

 

 

72.7

%

 

 

74.7

%

 

 

71.8

%

 

 

75.5

%

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

 

(in thousands)

 

Non-GAAP Sales and Marketing Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

$

42,869

 

 

$

37,161

 

 

$

131,787

 

 

$

99,069

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

(167

)

 

 

(284

)

 

 

(510

)

 

 

(1,132

)

Stock-based compensation expense

 

 

(6,398

)

 

 

(2,578

)

 

 

(15,559

)

 

 

(5,371

)

Restructuring expense

 

 

11

 

 

 

(42

)

 

 

(51

)

 

 

(72

)

Cost related to acquisitions

 

 

-

 

 

 

(53

)

 

 

(10

)

 

 

(118

)

Other items

 

 

42

 

 

 

1

 

 

 

131

 

 

 

380

 

Non-GAAP Sales and Marketing Expenses

 

$

36,357

 

 

$

34,205

 

 

$

115,788

 

 

$

92,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and Marketing Expenses as a Percent of Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

161,321

 

 

$

134,058

 

 

$

459,639

 

 

$

374,159

 

Sales and marketing expenses

 

 

26.6

%

 

 

27.7

%

 

 

28.7

%

 

 

26.5

%

Non-GAAP sales and marketing expenses

 

 

22.5

%

 

 

25.5

%

 

 

25.2

%

 

 

24.8

%

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

 

(in thousands)

 

Non-GAAP Research and Development Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

34,232

 

 

$

25,685

 

 

$

98,766

 

 

$

72,016

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

(227

)

 

 

(409

)

 

 

(680

)

 

 

(1,431

)

Stock-based compensation expense

 

 

(5,280

)

 

 

(2,183

)

 

 

(11,789

)

 

 

(4,321

)

Restructuring expense

 

 

(16

)

 

 

(52

)

 

 

(9

)

 

 

(67

)

Cost related to acquisitions

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9

)

Other items

 

 

490

 

 

 

-

 

 

 

1,505

 

 

 

3,366

 

Non-GAAP Research and Development Expenses

 

$

29,199

 

 

$

23,041

 

 

$

87,793

 

 

$

69,554

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and Development Expenses as a Percent of Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

161,321

 

 

$

134,058

 

 

$

459,639

 

 

$

374,159

 

Research and development expenses

 

 

21.2

%

 

 

19.2

%

 

 

21.5

%

 

 

19.2

%

Non-GAAP research and development expenses

 

 

18.1

%

 

 

17.2

%

 

 

19.1

%

 

 

18.6

%

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

 

(in thousands)

 

Non-GAAP General and Administrative Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$

24,685

 

 

$

25,358

 

 

$

75,633

 

 

$

63,711

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

(964

)

 

 

(1,041

)

 

 

(3,073

)

 

 

(3,143

)

Stock-based compensation expense

 

 

(5,376

)

 

 

(3,170

)

 

 

(13,902

)

 

 

(6,169

)

Restructuring expense

 

 

(219

)

 

 

(1,109

)

 

 

(690

)

 

 

(1,627

)

Cost related to acquisitions

 

 

141

 

 

 

4

 

 

 

(666

)

 

 

(1,107

)

Other items

 

 

(215

)

 

 

(548

)

 

 

(839

)

 

 

(2,485

)

Non-GAAP General and Administrative Expenses

 

$

18,052

 

 

$

19,494

 

 

$

56,463

 

 

$

49,180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and Administrative Expenses as a Percent of Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

161,321

 

 

$

134,058

 

 

$

459,639

 

 

$

374,159

 

General and administrative expenses

 

 

15.3

%

 

 

18.9

%

 

 

16.5

%

 

 

17.0

%

Non-GAAP general and administrative expenses

 

 

11.2

%

 

 

14.5

%

 

 

12.3

%

 

 

13.1

%

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

 

(in thousands)

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(18,233

)

 

$

(26,126

)

 

$

(81,123

)

 

$

(64,536

)

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

1,857

 

 

 

7,546

 

 

 

7,054

 

 

 

22,717

 

Amortization of deferred financing costs and debt discount

 

 

157

 

 

 

938

 

 

 

734

 

 

 

2,823

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

3,219

 

 

 

-

 

Other income, net

 

 

(1,094

)

 

 

(1,864

)

 

 

(1,979

)

 

 

(6,135

)

Provision for income taxes

 

 

1,667

 

 

 

1,968

 

 

 

4,292

 

 

 

5,294

 

Depreciation

 

 

1,817

 

 

 

2,493

 

 

 

5,740

 

 

 

8,478

 

Amortization of software development costs

 

 

16,459

 

 

 

15,508

 

 

 

49,181

 

 

 

45,917

 

Intangible asset amortization

 

 

12,170

 

 

 

12,757

 

 

 

36,484

 

 

 

38,721

 

Stock-based compensation expense

 

 

19,288

 

 

 

8,387

 

 

 

46,008

 

 

 

16,811

 

Restructuring expense

 

 

224

 

 

 

1,212

 

 

 

760

 

 

 

1,777

 

Cost related to acquisitions

 

 

(141

)

 

 

60

 

 

 

676

 

 

 

1,245

 

Other items

 

 

(427

)

 

 

547

 

 

 

(1,182

)

 

 

(2,255

)

Adjusted EBITDA

 

$

33,744

 

 

$

23,426

 

 

$

69,864

 

 

$

70,857

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

161,321

 

 

$

134,058

 

 

$

459,639

 

 

$

374,159

 

Net loss margin

 

 

(11.3

)%

 

 

(19.5

)%

 

 

(17.6

)%

 

 

(17.2

)%

Adjusted EBITDA margin

 

 

20.9

%

 

 

17.5

%

 

 

15.2

%

 

 

18.9

%

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

 

(in thousands)

 

Adjusted Free Cash Flow:

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities:

 

$

33,506

 

 

$

25,960

 

 

$

141,154

 

 

$

121,558

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(3,009

)

 

 

(786

)

 

 

(5,705

)

 

 

(2,768

)

Capitalized software development costs

 

 

(13,411

)

 

 

(10,823

)

 

 

(38,413

)

 

 

(30,272

)

Change in fees payable to customers

 

 

(16,781

)

 

 

(4,011

)

 

 

(39,519

)

 

 

(13,878

)

Interest paid

 

 

1,778

 

 

 

7,540

 

 

 

6,955

 

 

 

22,721

 

Adjusted Free Cash Flow

 

$

2,083

 

 

$

17,880

 

 

$

64,472

 

 

$

97,361

 

 

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