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Cvent Announces Fourth Quarter and Fiscal Year 2022 Financial Results

Revenue Exceeds High End of Guidance

Full Year Revenue Grows 21.5%

Cvent Holding Corp. (“Cvent”) (Nasdaq: CVT), an industry-leading meetings, events and hospitality technology provider, today announced financial results for the fourth quarter and full fiscal year ended December 31, 2022.

Fourth Quarter 2022 Financial Highlights

Revenue

  • Total revenue was $170.9 million for the fourth quarter of 2022, an increase of 18.2% from the comparable period in 2021, and $0.6 million higher than the high end of our guidance.
  • Event Cloud revenue was $120.6 million for the fourth quarter of 2022, an increase of 17.2% from the comparable period in 2021.
  • Hospitality Cloud revenue was $50.3 million for the fourth quarter of 2022, an increase of 20.5% from the comparable period in 2021.

Net Loss and Adjusted EBITDA

  • Net loss was $19.1 million for the fourth quarter of 2022 compared to $21.5 million in the comparable period in 2021.
  • Adjusted EBITDA (defined below) was $43.5 million for the fourth quarter of 2022, which was $3.7 million higher than the high end of our guidance.
  • Adjusted EBITDA margin (defined below) was 25.5% compared to the high end of our guidance of 23.4%. Adjusted EBITDA in the comparable period of 2021 was $32.8 million, with an Adjusted EBITDA margin of 22.7%.

Fiscal Year 2022 Financial Highlights

Revenue

  • Total revenue was $630.6 million for the fiscal year 2022, an increase of 21.5% from the comparable period in 2021, and $0.7 million higher than the high end of our guidance.
  • Event Cloud revenue was $441.1 million for the fiscal year 2022, an increase of 21.8% from the comparable period in 2021.
  • Hospitality Cloud revenue was $189.5 million for the fiscal year 2022, an increase of 20.9% from the comparable period in 2021.

Net Loss and Adjusted EBITDA

  • Net loss was $100.3 million for the fiscal year 2022 compared to $86.1 million in the comparable period in 2021.
  • Adjusted EBITDA (defined below) was $113.4 million for the fiscal year 2022, which was $3.7 million higher than the high end of our guidance, and Adjusted EBITDA margin (defined below) was 18.0% compared to the high end of our guidance of 17.4%. Adjusted EBITDA in the comparable period of 2021 was $103.7 million, with an Adjusted EBITDA margin of 20.0%.

Cash, Cash Equivalents and Short-Term Investments

  • Cash, cash equivalents and short-term investments as of December 31, 2022 totaled $140.0 million, compared to $127.1 million as of December 31, 2021.

Reconciliation of Adjusted EBITDA and Adjusted EBITDA margin results to their GAAP basis results are shown in detail below.

Guidance

Given Cvent’s entry into a definitive agreement on March 14, 2023 to be acquired by an affiliate of private equity funds managed by Blackstone (“Blackstone”), the Company will not provide guidance for first quarter and full year 2023.

Conference Call Information

Given Cvent’s entry into a definitive agreement on March 14, 2023 to be acquired by Blackstone, the Company will not host a conference call to discuss its fourth quarter and full year 2022 financial results and outlook.

About Cvent

Cvent Holding Corp. (Nasdaq: CVT) is a leading meetings, events, and hospitality technology provider with approximately 4,900 employees and approximately 22,000 customers worldwide as of December 31, 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 uses and discusses 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.

Forward-Looking Statements

Certain statements in this press release 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 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 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, Adjusted Free Cash Flow margin, gross profit, gross margin, expenses, deferred revenue, interest expense,the demand for events and meetings, the return to in-person events, demand for advertising and software solutions, and demand for an integrated platform; 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; the risk that the proposed merger with Blackstone may not be completed in a timely manner or at all, which may adversely affect Cvent’s business and the price of Cvent’s common stock; the effect of the announcement or pendency of the proposed transaction on Cvent’s business relationships, operating results and business generally; risks that the proposed transaction disrupts Cvent’s current plans and operations; 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)

 

 

 

As of December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

99,108

 

 

$

126,526

 

Restricted cash

 

 

815

 

 

 

103

 

Short-term investments

 

 

40,925

 

 

 

538

 

Accounts receivable, net of allowance of $2.6 million and $4.5 million, respectively

 

 

120,362

 

 

 

112,251

 

Capitalized commission, net

 

 

26,685

 

 

 

25,393

 

Prepaid expenses and other current assets

 

 

17,819

 

 

 

20,376

 

Total current assets

 

 

305,714

 

 

 

285,187

 

Property and equipment, net

 

 

15,250

 

 

 

15,334

 

Capitalized software development costs, net

 

 

96,959

 

 

 

108,851

 

Intangible assets, net

 

 

172,781

 

 

 

221,371

 

Goodwill

 

 

1,620,312

 

 

 

1,617,880

 

Operating lease right-of-use assets

 

 

20,398

 

 

 

28,370

 

Capitalized commission, non-current, net

 

 

23,477

 

 

 

22,999

 

Deferred tax assets, non-current

 

 

2,425

 

 

 

2,403

 

Other assets, non-current, net

 

 

8,617

 

 

 

3,684

 

Total assets

 

$

2,265,933

 

 

$

2,306,079

 

Liabilities and Stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of long-term debt

 

$

 

 

$

 

Accounts payable

 

 

2,147

 

 

 

2,675

 

Accrued expenses and other current liabilities

 

 

82,249

 

 

 

79,827

 

Fees payable to customers

 

 

38,379

 

 

 

24,982

 

Operating lease liabilities, current

 

 

11,070

 

 

 

11,290

 

Deferred revenue

 

 

267,882

 

 

 

239,843

 

Total current liabilities

 

 

401,727

 

 

 

358,617

 

Deferred tax liabilities, non-current

 

 

18,103

 

 

 

16,695

 

Long-term debt, net

 

 

208,000

 

 

 

262,302

 

Operating lease liabilities, non-current

 

 

19,712

 

 

 

30,809

 

Other liabilities, non-current

 

 

7,526

 

 

 

8,200

 

Total liabilities

 

 

655,068

 

 

 

676,623

 

Commitments and contingencies (Note 15)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.0001 par value, 1,500,000,000 shares authorized at December 31, 2022 and 2021, respectively; 488,296,792 and 481,121,695 shares issued and outstanding as of December 31, 2022 and 2021, respectively

 

 

49

 

 

 

48

 

Additional paid-in capital

 

 

2,571,424

 

 

 

2,483,761

 

Accumulated other comprehensive loss

 

 

(8,731

)

 

 

(2,746

)

Accumulated deficit

 

 

(951,877

)

 

 

(851,607

)

Total stockholders’ equity

 

 

1,610,865

 

 

 

1,629,456

 

Total liabilities and stockholders’ equity

 

$

2,265,933

 

 

$

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

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

$

170,918

 

 

$

144,652

 

 

$

630,558

 

 

$

518,811

 

Cost of revenue

 

 

63,082

 

 

 

50,969

 

 

 

247,854

 

 

 

191,448

 

Gross profit

 

 

107,836

 

 

 

93,683

 

 

 

382,704

 

 

 

327,363

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

45,172

 

 

 

36,547

 

 

 

176,959

 

 

 

135,616

 

Research and development

 

 

31,854

 

 

 

24,611

 

 

 

130,620

 

 

 

96,627

 

General and administrative

 

 

26,911

 

 

 

24,494

 

 

 

102,544

 

 

 

88,206

 

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

 

 

12,153

 

 

 

12,757

 

 

 

48,637

 

 

 

51,478

 

Total operating expenses

 

 

116,090

 

 

 

98,409

 

 

 

458,760

 

 

 

371,927

 

Loss from operations

 

 

(8,254

)

 

 

(4,726

)

 

 

(76,056

)

 

 

(44,564

)

Interest expense

 

 

(2,811

)

 

 

(6,356

)

 

 

(9,865

)

 

 

(29,073

)

Amortization of deferred financing costs and debt discount

 

 

(157

)

 

 

(783

)

 

 

(891

)

 

 

(3,606

)

Loss on extinguishment of debt

 

 

-

 

 

 

(7,159

)

 

 

(3,219

)

 

 

(7,159

)

Other income/(expense), net

 

 

(843

)

 

 

(771

)

 

 

1,135

 

 

 

5,367

 

Loss before income taxes

 

 

(12,065

)

 

 

(19,795

)

 

 

(88,896

)

 

 

(79,035

)

Provision for/(benefit from) income taxes

 

 

7,082

 

 

 

1,750

 

 

 

11,374

 

 

 

7,044

 

Net loss

 

 

(19,147

)

 

 

(21,545

)

 

 

(100,270

)

 

 

(86,079

)

Other comprehensive income/(loss):

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation (loss)/gain

 

 

5,632

 

 

 

(446

)

 

 

(5,985

)

 

 

(2,793

)

Comprehensive loss

 

$

(13,515

)

 

$

(21,991

)

 

$

(106,255

)

 

$

(88,872

)

Basic and Diluted net loss per common share

 

$

(0.04

)

 

$

(0.05

)

 

$

(0.21

)

 

$

(0.20

)

Basic and Diluted weighted-average common shares outstanding

485,772,963

433,345,289

483,047,301

420,692,510

 

CVENT HOLDING CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(19,147

)

 

$

(21,545

)

 

$

(100,270

)

 

$

(86,079

)

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

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

30,930

 

 

 

31,205

 

 

 

122,141

 

 

 

124,347

 

Amortization of the right-of-use assets

 

 

2,032

 

 

 

1,546

 

 

 

7,972

 

 

 

8,363

 

Allowance for expected credit losses, net

 

 

938

 

 

 

2,767

 

 

 

1,316

 

 

 

8,316

 

Amortization of deferred financing costs and debt discount

 

 

157

 

 

 

783

 

 

 

891

 

 

 

3,606

 

Amortization of capitalized commission

 

 

8,278

 

 

 

7,712

 

 

 

32,029

 

 

 

29,280

 

Unrealized foreign currency transaction loss

 

 

(149

)

 

 

134

 

 

 

491

 

 

 

153

 

Loss on extinguishment of debt

 

 

 

 

 

7,159

 

 

 

3,219

 

 

 

7,159

 

Stock-based compensation

 

 

19,070

 

 

 

8,245

 

 

 

65,078

 

 

 

25,056

 

Change in deferred taxes

 

 

1,223

 

 

 

(1,909

)

 

 

1,215

 

 

 

(596

)

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

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(44,424

)

 

 

(32,645

)

 

 

(10,214

)

 

 

19,966

 

Prepaid expenses and other assets

 

 

3,283

 

 

 

(733

)

 

 

2,360

 

 

 

(6,797

)

Capitalized commission, net

 

 

(7,847

)

 

 

(6,929

)

 

 

(35,571

)

 

 

(33,635

)

Accounts payable, accrued expenses and other liabilities

 

 

(29,155

)

 

 

(7,036

)

 

 

16,456

 

 

 

1,961

 

Operating lease liability

 

 

(2,888

)

 

 

(2,267

)

 

 

(11,317

)

 

 

(11,933

)

Deferred revenue

 

 

20,680

 

 

 

14,151

 

 

 

28,339

 

 

 

33,029

 

Net cash provided by operating activities

 

 

(17,019

)

 

 

638

 

 

 

124,135

 

 

 

122,196

 

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(1,185

)

 

 

(1,907

)

 

 

(6,890

)

 

 

(4,675

)

Capitalized software development costs

 

 

(12,659

)

 

 

(10,706

)

 

 

(51,072

)

 

 

(40,978

)

Purchase of investments

 

 

(48,067

)

 

 

(4,292

)

 

 

(93,231

)

 

 

(35,727

)

Maturities of investments

 

 

5,532

 

 

 

6,450

 

 

 

48,380

 

 

 

35,189

 

Acquisitions, net of cash acquired

 

 

(26

)

 

 

 

 

 

(3,578

)

 

 

(14,769

)

Proceeds from divestiture

 

 

 

 

 

 

 

 

135

 

 

 

122

 

Net cash used in investing activities

 

 

(56,405

)

 

 

(10,455

)

 

 

(106,256

)

 

 

(60,838

)

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from Reverse Recapitalization Transaction

 

 

 

 

 

552,693

 

 

 

 

 

 

552,693

 

Payment of offering costs

 

 

 

 

 

(30,760

)

 

 

 

 

 

(30,760

)

Principal repayments on first lien term loan

 

 

 

 

 

(500,000

)

 

 

(265,696

)

 

 

(505,951

)

Principal repayments of revolving credit facility

 

 

(37,000

)

 

 

 

 

 

(157,000

)

 

 

(13,400

)

Proceeds from revolving credit facility

 

 

80,000

 

 

 

 

 

 

365,000

 

 

 

 

Payment of debt issuance costs

 

 

 

 

 

 

 

 

(3,141

)

 

 

 

Proceeds from exercise of stock options

 

 

9,237

 

 

 

 

 

 

17,059

 

 

 

522

 

Proceeds from Employee Stock Purchase Plan

 

 

3,957

 

 

 

 

 

 

3,957

 

 

 

 

Repurchase of Common stock

 

 

 

 

 

(173

)

 

 

 

 

 

(230

)

Payments of tax withholdings on vesting of restricted stock units

 

 

 

 

 

 

 

 

(31

)

 

 

 

Net cash provided by financing activities

 

 

56,194

 

 

 

21,760

 

 

 

(39,852

)

 

 

2,874

 

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

 

 

6,658

 

 

 

(823

)

 

 

(4,733

)

 

 

(3,073

)

Change in cash, cash equivalents, and restricted cash

 

 

(10,572

)

 

 

11,120

 

 

 

(26,706

)

 

 

61,159

 

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

 

 

110,495

 

 

 

115,509

 

 

 

126,629

 

 

 

65,470

 

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

 

$

99,923

 

 

$

126,629

 

 

$

99,923

 

 

$

126,629

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

 

 

 

Interest paid

 

$

2,391

 

 

$

6,335

 

 

$

9,346

 

 

$

29,056

 

Income taxes paid

 

$

3,491

 

 

$

755

 

 

$

8,668

 

 

$

5,410

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding payments for purchase of property and equipment at period end

 

$

1,157

 

 

$

223

 

 

$

1,484

 

 

$

554

 

Outstanding payments for capitalized software development costs at period end

 

$

23

 

 

$

235

 

 

$

1,006

 

 

$

748

 

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(in thousands, except share amounts and share counts)

(unaudited)

 

 

 

Three months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

Non-GAAP Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

$

107,836

 

 

$

93,683

 

 

$

382,704

 

 

$

327,363

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

343

 

 

 

592

 

 

 

1,820

 

 

 

3,363

 

Amortization of software development costs

 

 

16,843

 

 

 

15,607

 

 

 

66,024

 

 

 

61,344

 

Intangible asset amortization

 

 

-

 

 

 

-

 

 

 

-

 

 

 

180

 

Stock-based compensation expense

 

 

2,267

 

 

 

460

 

 

 

7,025

 

 

 

1,410

 

Restructuring expense

 

 

-

 

 

 

8

 

 

 

10

 

 

 

19

 

Cost related to acquisitions

 

 

-

 

 

 

1

 

 

 

-

 

 

 

12

 

Other items

 

 

(2

)

 

 

(452

)

 

 

(388

)

 

 

(1,446

)

Non-GAAP Gross Profit

 

$

127,287

 

 

$

109,899

 

 

$

457,195

 

 

$

392,245

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin:

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

170,918

 

 

$

144,652

 

 

$

630,558

 

 

$

518,811

 

Gross Margin

 

 

63.1

%

 

 

64.8

%

 

 

60.7

%

 

 

63.1

%

Non-GAAP Gross Margin

 

 

74.5

%

 

 

76.0

%

 

 

72.5

%

 

 

75.6

%

 

 

Three months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

Non-GAAP Sales & Marketing Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales & marketing

 

$

45,172

 

 

$

36,547

 

 

$

176,959

 

 

$

135,616

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

(170

)

 

 

(188

)

 

 

(680

)

 

 

(1,320

)

Stock-based compensation expense

 

 

(6,345

)

 

 

(2,472

)

 

 

(21,904

)

 

 

(7,843

)

Restructuring expense

 

 

(4

)

 

 

(35

)

 

 

(56

)

 

 

(107

)

Cost related to acquisitions

 

 

-

 

 

 

(533

)

 

 

(10

)

 

 

(650

)

Other items

 

 

4

 

 

 

138

 

 

 

136

 

 

 

518

 

Non-GAAP Sales & Marketing Expenses

 

$

38,657

 

 

$

33,457

 

 

$

154,445

 

 

$

126,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales & Marketing Expenses as a Percent of Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

170,918

 

 

$

144,652

 

 

$

630,558

 

 

$

518,811

 

Sales & marketing expenses

 

 

26.4

%

 

 

25.3

%

 

 

28.1

%

 

 

26.1

%

Non-GAAP sales & marketing expenses

 

 

22.6

%

 

 

23.1

%

 

 

24.5

%

 

 

24.3

%

 

 

Three months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

Non-GAAP Research & Development Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research & development

 

$

31,854

 

 

$

24,611

 

 

$

130,620

 

 

$

96,627

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

(220

)

 

 

(296

)

 

 

(900

)

 

 

(1,727

)

Stock-based compensation expense

 

 

(5,071

)

 

 

(2,126

)

 

 

(16,860

)

 

 

(6,447

)

Restructuring expense

 

 

(15

)

 

 

(48

)

 

 

(24

)

 

 

(115

)

Cost related to acquisitions

 

 

-

 

 

 

(45

)

 

 

-

 

 

 

(54

)

Other items

 

 

-

 

 

 

1,660

 

 

 

1,505

 

 

 

5,026

 

Non-GAAP Research & Development Expenses

 

$

26,548

 

 

$

23,756

 

 

$

114,341

 

 

$

93,310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research & Development Expenses as a Percent of Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

170,918

 

 

$

144,652

 

 

$

630,558

 

 

$

518,811

 

Research & development expenses

 

 

18.6

%

 

 

17.0

%

 

 

20.7

%

 

 

18.6

%

Non-GAAP research & development expenses

 

 

15.5

%

 

 

16.4

%

 

 

18.1

%

 

 

18.0

%

 

 

Three months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

Non-GAAP General & Administrative Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General & administrative

 

$

26,911

 

 

$

24,494

 

 

$

102,544

 

 

$

88,206

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

(907

)

 

 

(837

)

 

 

(3,981

)

 

 

(3,980

)

Stock-based compensation expense

 

 

(5,386

)

 

 

(3,187

)

 

 

(19,288

)

 

 

(9,357

)

Restructuring expense

 

 

(261

)

 

 

(377

)

 

 

(950

)

 

 

(2,003

)

Cost related to acquisitions

 

 

(1,103

)

 

 

233

 

 

 

(1,770

)

 

 

(875

)

Other items

 

 

(713

)

 

 

(462

)

 

 

(1,551

)

 

 

(2,947

)

Non-GAAP General & Administrative Expenses

 

$

18,541

 

 

$

19,864

 

 

$

75,004

 

 

$

69,044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General & Administrative Expenses as a Percent of Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

170,918

 

 

$

144,652

 

 

$

630,558

 

 

$

518,811

 

General & administrative expenses

 

 

15.7

%

 

 

16.9

%

 

 

16.3

%

 

 

17.0

%

Non-GAAP general & administrative expenses

 

 

10.8

%

 

 

13.7

%

 

 

11.9

%

 

 

13.3

%

 

 

Three months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(19,147

)

 

$

(21,545

)

 

$

(100,270

)

 

$

(86,079

)

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

2,811

 

 

 

6,356

 

 

 

9,865

 

 

 

29,073

 

Amortization of deferred financing costs and debt discount

 

 

157

 

 

 

783

 

 

 

891

 

 

 

3,606

 

Loss on extinguishment of debt

 

 

-

 

 

 

7,159

 

 

 

3,219

 

 

 

7,159

 

Other income, net

 

 

843

 

 

 

771

 

 

 

(1,135

)

 

 

(5,367

)

Provision for/(benefit from) income taxes

 

 

7,082

 

 

 

1,750

 

 

 

11,374

 

 

 

7,044

 

Depreciation

 

 

1,640

 

 

 

1,911

 

 

 

7,380

 

 

 

10,389

 

Amortization of software development costs

 

 

16,843

 

 

 

15,607

 

 

 

66,024

 

 

 

61,524

 

Intangible asset amortization

 

 

12,153

 

 

 

12,757

 

 

 

48,637

 

 

 

51,478

 

Stock-based compensation expense

 

 

19,070

 

 

 

8,245

 

 

 

65,078

 

 

 

25,056

 

Restructuring expense

 

 

281

 

 

 

468

 

 

 

1,040

 

 

 

2,245

 

Cost related to acquisitions

 

 

1,103

 

 

 

346

 

 

 

1,779

 

 

 

1,591

 

Other items

 

 

707

 

 

 

(1,788

)

 

 

(477

)

 

 

(4,043

)

Adjusted EBITDA

 

$

43,543

 

 

$

32,820

 

 

$

113,405

 

 

$

103,676

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

170,918

 

 

$

144,652

 

 

$

630,558

 

 

$

518,811

 

Net loss margin

 

 

(11.2

)%

 

 

(14.9

)%

 

 

(15.9

)%

 

 

(16.6

)%

Adjusted EBITDA margin

 

 

25.5

%

 

 

22.7

%

 

 

18.0

%

 

 

20.0

%

 

 

Three months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

 

(in thousands)

 

Adjusted Free Cash Flow:

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities:

 

$

(17,019

)

 

$

638

 

 

$

124,135

 

 

$

122,196

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(1,185

)

 

 

(1,907

)

 

 

(6,890

)

 

 

(4,675

)

Capitalized software development costs

 

 

(12,659

)

 

 

(10,706

)

 

 

(51,072

)

 

 

(40,978

)

Change in fees payable to customers

 

 

26,122

 

 

 

5,768

 

 

 

(13,397

)

 

 

(8,110

)

Interest paid

 

 

2,391

 

 

 

6,335

 

 

 

9,346

 

 

 

29,056

 

Adjusted Free Cash Flow

 

$

(2,350

)

 

$

128

 

 

$

62,122

 

 

$

97,489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Free Cash Flow margin

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

170,918

 

 

$

144,652

 

 

$

630,558

 

 

$

518,811

 

Adjusted Free Cash Flow margin

 

 

(1.4

)%

 

 

0.1

%

 

 

9.9

%

 

 

18.8

%

 

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