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Cvent Announces First Quarter 2023 Financial Results

Revenue Increases 21.0% Year-over-Year

Cvent Holding Corp. (“Cvent”) (Nasdaq: CVT), an industry-leading meetings, events and hospitality technology provider, today announced financial results for the first quarter ended March 31, 2023.

First Quarter 2023 Financial Highlights

Revenue

  • Total revenue was $166.2 million for the first quarter of 2023, an increase of 21.0% from the comparable period in 2022.
  • Event Cloud revenue was $114.7 million for the first quarter of 2023, an increase of 20.7% from the comparable period in 2022.
  • Hospitality Cloud revenue was $51.5 million for the first quarter of 2023, an increase of 21.6% from the comparable period in 2022.

Net Loss and Adjusted EBITDA

  • Net loss was $32.6 million for the first quarter of 2023 compared to $31.4 million in the comparable period in 2022.
  • Adjusted EBITDA (defined below) was $32.4 million for the first quarter of 2023 compared to $12.8 million in the comparable period in 2022.
  • Adjusted EBITDA margin (defined below) was 19.5% for the first quarter of 2023 compared to 9.3% in the comparable period in 2022.

Cash, Cash Equivalents and Short-Term Investments

  • Cash, cash equivalents and short-term investments as of March 31, 2023 totaled $156.1 million, compared to $140.0 million as of December 31, 2022.

Adjusted EBITDA and Adjusted EBITDA margin are a non-GAAP financial measure. Definitions of Adjusted EBITDA and Adjusted EBITDA margin and a reconciliation of those measures to their most directly comparable measures in accordance with GAAP are set forth below.

Pending Merger

On March 14, 2023, Cvent entered into a definitive agreement pursuant to which it agreed to be acquired by an affiliate of private equity funds managed by Blackstone (“Blackstone”). Upon completion of the transaction, Cvent’s common stock will no longer be publicly listed, and Cvent will become a privately held company. The transaction was unanimously approved by the board of directors of Cvent (following the recommendation of a special committee composed entirely of independent and disinterested directors) and is subject to the satisfaction of customary closing conditions, including receipt of approval by Cvent’s stockholders and required regulatory approvals.

Conference Call Information

Given Cvent’s pending acquisition by Blackstone, the Company is not providing guidance for full year 2023 (or any interim period in 2023) and will not host a conference call to discuss its first quarter 2023 financial results. For further detail and discussion of the Company’s financial performance, please refer to the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023.

About Cvent

Cvent Holding Corp. (Nasdaq: CVT) is a leading meetings, events, and hospitality technology provider with more than 4,800 employees and more than 21,000 customers worldwide as of March 31, 2023. 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, including costs associated with the proposed merger with Blackstone. 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.

Additional Information and Where to Find It

This communication is being made in respect of the proposed transaction involving Cvent and Blackstone. Cvent has filed a definitive proxy statement and a form of proxy card with the SEC in connection with the solicitation of proxies for the special meeting of stockholders of Cvent relating to the proposed transaction (the “Definitive Proxy Statement”). This press release is not a substitute for the Definitive Proxy Statement or any other document that may be filed by Cvent with the SEC.

BEFORE MAKING ANY DECISION, CVENT STOCKHOLDERS ARE URGED TO CAREFULLY READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE INTO THE DEFINITIVE PROXY STATEMENT BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Any vote in respect of resolutions to be proposed at Cvent’s special meeting of stockholders to approve the proposed transaction or other responses in relation to the proposed transaction should be made only on the basis of the information contained in the Definitive Proxy Statement. You may obtain a free copy of the Definitive Proxy Statement and other related documents filed by Cvent with the SEC at the website maintained by the SEC at www.sec.gov or by accessing the Investor Relations section of Cvent’s website at https://www.cvent.com.

No Offer or Solicitation

This communication is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Participants in the Solicitation

Cvent and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from Cvent’s stockholders in connection with the proposed transaction. Information regarding Cvent’s directors and executive officers, including a description of their respective direct or indirect interests, by security holdings or otherwise, is included in the Definitive Proxy Statement and will be included in Cvent’s other filings with the SEC made subsequent to the date of the Definitive Proxy Statement. To the extent holdings of Cvent’s securities by such directors or officers have changed or will change since the amounts printed as of a date disclosed in the Definitive Proxy Statement, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3, Statements of Changes in Beneficial Ownership on Form 4 or other ownership reports filed with the SEC. Additional information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, is set forth in the Definitive Proxy Statement and will be set forth in other materials to be filed with the SEC in connection with the special meeting of Cvent’s stockholders. These documents can be obtained free of charge from the SEC’s website at www.sec.gov or by accessing the Investor Relations section of Cvent’s website at https://www.cvent.com.

CVENT HOLDING CORP.

 

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

 

 

 

 

 

 

 

March 31, 2023

 

December 31, 2022

 

 

(unaudited)

 

 

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$

102,220

 

 

$

99,108

 

Restricted cash

 

2,535

 

 

 

815

 

Short-term investments

 

53,872

 

 

 

40,925

 

Accounts receivable, net of allowance of $1.8 million and $2.6 million, respectively

 

97,018

 

 

 

120,362

 

Capitalized commission, net

 

27,473

 

 

 

26,685

 

Prepaid expenses and other current assets

 

24,759

 

 

 

17,819

 

Total current assets

 

307,877

 

 

 

305,714

 

Property and equipment, net

 

14,577

 

 

 

15,250

 

Capitalized software development costs, net

 

92,759

 

 

 

96,959

 

Intangible assets, net

 

161,076

 

 

 

172,781

 

Goodwill

 

1,620,270

 

 

 

1,620,312

 

Operating lease-right-of-use assets

 

28,453

 

 

 

20,398

 

Capitalized commission, non-current, net

 

23,828

 

 

 

23,477

 

Deferred tax assets, non-current

 

2,440

 

 

 

2,425

 

Other assets, non-current, net

 

5,493

 

 

 

8,617

 

Total assets

$

2,256,773

 

 

$

2,265,933

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

-

 

 

$

-

 

Accounts payable

 

2,804

 

 

 

2,147

 

Accrued expenses and other current liabilities

 

88,993

 

 

 

82,249

 

Fees payable to customers

 

63,589

 

 

 

38,379

 

Operating lease liabilities, current

 

11,121

 

 

 

11,070

 

Deferred revenue

 

302,216

 

 

 

267,882

 

Total current liabilities

 

468,723

 

 

 

401,727

 

Deferred tax liabilities, non-current

 

18,126

 

 

 

18,103

 

Long-term debt, net

 

138,000

 

 

 

208,000

 

Operating lease liabilities, non-current

 

26,790

 

 

 

19,712

 

Other liabilities, non-current

 

6,413

 

 

 

7,526

 

Total liabilities

 

658,052

 

 

 

655,068

 

Commitments and contingencies (Note 12)

 

 

 

Stockholders’ equity:

 

 

 

Common stock, $0.0001 par value, 1,500,000,000 shares authorized at March 31, 2023 and December 31, 2022, respectively; 491,358,090 and 488,296,792 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

 

49

 

 

 

49

 

Additional paid-in capital

 

2,591,042

 

 

 

2,571,424

 

Accumulated other comprehensive loss

 

(7,850

)

 

 

(8,731

)

Accumulated deficit

 

(984,520

)

 

 

(951,877

)

Total stockholders’ equity

 

1,598,721

 

 

 

1,610,865

 

Total liabilities and stockholders’ equity

$

2,256,773

 

 

$

2,265,933

 

CVENT HOLDING CORP.

 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

(unaudited)

 

 

 

 

 

Three Months Ended March 31,

 

 

2023

 

2022

Revenue

$

166,205

 

$

137,356

 

Cost of revenue

 

60,691

 

 

56,200

 

Gross profit

 

105,514

 

 

81,156

 

Operating expenses:

 

 

Sales and marketing

 

44,960

 

 

40,091

 

Research and development

 

35,973

 

 

31,406

 

General and administrative

 

39,768

 

 

24,951

 

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

 

11,713

 

 

12,154

 

Total operating expenses

 

132,414

 

 

108,602

 

Loss from operations

 

(26,900

)

 

(27,446

)

Interest expense

 

(2,647

)

 

(2,592

)

Amortization of deferred financing costs and debt discount

 

(158

)

 

(320

)

Other income, net

 

1,169

 

 

260

 

Loss before income taxes

 

(28,536

)

 

(30,098

)

Provision for income taxes

 

4,107

 

 

1,291

 

Net loss

$

(32,643

)

$

(31,389

)

Other comprehensive income:

 

 

Other comprehensive income

 

881

 

 

131

 

Comprehensive loss

$

(31,762

)

$

(31,258

)

Basic and diluted net loss per common share

$

(0.07

)

$

(0.07

)

Basic and diluted weighted-average common shares outstanding

 

488,983,183

 

 

481,144,118

 

CVENT HOLDING CORP.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

 

 

Three Months Ended March 31,

 

 

2023

 

2022

Operating activities:

 

 

Net loss

$

(32,643

)

$

(31,389

)

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

 

 

Depreciation and amortization

 

30,582

 

 

30,187

 

Amortization of the right-of-use assets

 

2,231

 

 

2,077

 

Allowance for expected credit losses, net

 

(462

)

 

279

 

Amortization of deferred financing costs and debt discount

 

158

 

 

320

 

Amortization of capitalized commission

 

8,924

 

 

7,948

 

Unrealized foreign currency transaction (gain)/loss

 

(1,020

)

 

287

 

Stock-based compensation

 

14,556

 

 

9,768

 

Change in deferred taxes

 

7

 

 

2

 

Change in operating assets and liabilities

 

 

Accounts receivable

 

23,932

 

 

18,968

 

Prepaid expenses and other assets

 

(17,840

)

 

(7,021

)

Capitalized commission, net

 

(13,700

)

 

(13,581

)

Accounts payable, accrued expenses and other liabilities

 

47,168

 

 

16,783

 

Operating lease liability

 

(3,158

)

 

(2,864

)

Deferred revenue

 

33,790

 

 

48,160

 

Net cash provided by operating activities

 

92,525

 

 

79,924

 

Investing activities:

 

 

Purchase of property and equipment

 

(2,356

)

 

(1,375

)

Capitalized software development costs

 

(12,725

)

 

(11,891

)

Purchase of investments

 

(56,051

)

 

(21,238

)

Maturities of investments

 

46,127

 

 

16,824

 

Net cash used in investing activities

 

(25,005

)

 

(17,680

)

Financing activities:

 

 

Principal repayments of revolving credit facility

 

(115,000

)

 

 

Proceeds from revolving credit facility

 

45,000

 

 

 

Proceeds from exercise of stock options

 

5,127

 

 

510

 

Net cash (used in) provided by financing activities

 

(64,873

)

 

510

 

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

 

2,185

 

 

(1,209

)

Change in cash, cash equivalents, and restricted cash

 

4,832

 

 

61,545

 

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

 

99,923

 

 

126,629

 

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

$

104,755

 

$

188,174

 

Supplemental cash flow information:

 

 

Interest paid

$

2,448

 

$

2,584

 

Income taxes paid

$

455

 

$

1,743

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

Outstanding payments for purchase of property and equipment at period end

$

153

 

$

382

 

Outstanding payments for capitalized software development costs at period end

$

883

 

$

887

 

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(in thousands, except share amounts and share counts)

(unaudited)

 

 

 

 

 

Three Months Ended March 31,

 

 

2023

 

2022

 

 

(in thousands)

Non-GAAP Gross Profit:

 

 

Gross Profit

$

105,514

 

$

81,156

 

Adjustments

 

 

Depreciation

 

316

 

 

542

 

Amortization of software development costs

 

17,008

 

 

15,961

 

Stock-based compensation expense

 

1,231

 

 

590

 

Restructuring expense

 

-

 

 

8

 

Other items

 

-

 

 

(98

)

Non-GAAP Gross Profit

$

124,069

 

$

98,159

 

 

 

 

Gross Margin:

 

 

Revenue

$

166,205

 

$

137,356

 

Gross Margin

 

63.5

%

 

59.1

%

Non-GAAP Gross Margin

 

74.6

%

 

71.5

%

 

Three Months Ended March 31,

 

2023

 

2022

 

(in thousands)

Non-GAAP Sales and Marketing Expenses:

 

 

Sales and marketing

$

44,960

 

 

$

40,091

 

Adjustments

 

 

 

Depreciation

 

(176

)

 

 

(173

)

Stock-based compensation expense

 

(4,938

)

 

 

(2,980

)

Restructuring expense

 

(7

)

 

 

(67

)

Cost related to acquisitions

 

-

 

 

 

(10

)

Other items

 

-

 

 

 

52

 

Non-GAAP Sales and Marketing Expenses

$

39,839

 

 

$

36,913

 

 

 

 

 

Sales and Marketing Expenses as a Percent of Revenue:

 

 

 

Revenue

$

166,205

 

 

$

137,356

 

Sales and marketing expenses

 

27.1

%

 

 

29.2

%

Non-GAAP sales and marketing expenses

 

24.0

%

 

 

26.9

%

 

Three Months Ended March 31,

 

2023

 

2022

 

(in thousands)

Non-GAAP Research and Development Expenses:

 

 

Research and development

$

35,973

 

 

$

31,406

 

Adjustments

 

 

 

Depreciation

 

(207

)

 

 

(226

)

Stock-based compensation expense

 

(3,829

)

 

 

(2,588

)

Restructuring expense

 

(15

)

 

 

27

 

Other items

 

-

 

 

 

360

 

Non-GAAP Research and Development Expenses

$

31,922

 

 

$

28,979

 

 

 

 

 

Research and Development Expenses as a Percent of Revenue:

 

 

 

Revenue

$

166,205

 

 

$

137,356

 

Research and development expenses

 

21.6

%

 

 

22.9

%

Non-GAAP research and development expenses

 

19.2

%

 

 

21.1

%

 

Three Months Ended March 31,

 

2023

 

2022

 

(in thousands)

Non-GAAP General and Administrative Expenses:

 

 

General and administrative

$

39,768

 

 

$

24,951

 

Adjustments

 

 

 

Depreciation

 

(1,117

)

 

 

(1,097

)

Stock-based compensation expense

 

(4,557

)

 

 

(3,610

)

Restructuring expense

 

27

 

 

 

(229

)

Cost related to acquisitions

 

(13,585

)

 

 

(177

)

Other items

 

(662

)

 

 

(330

)

Non-GAAP Research and Development Expenses

$

19,874

 

 

$

19,508

 

 

 

 

 

General and Administrative Expenses as a Percent of Revenue:

 

 

 

Revenue

$

166,205

 

 

$

137,356

 

General and administrative expenses

 

23.9

%

 

 

18.2

%

Non-GAAP general and administrative expenses

 

12.0

%

 

 

14.2

%

 

Three Months Ended March 31,

 

2023

 

2022

 

(in thousands)

Adjusted EBITDA

 

 

Net loss

$

(32,643

)

 

$

(31,389

)

Adjustments

 

 

 

Interest expense

 

2,647

 

 

 

2,592

 

Amortization of deferred financing costs and debt discount

 

158

 

 

 

320

 

Other income, net

 

(1,169

)

 

 

(260

)

Provision for income taxes

 

4,107

 

 

 

1,291

 

Depreciation

 

1,816

 

 

 

2,038

 

Amortization of software development costs

 

17,008

 

 

 

15,961

 

Intangible asset amortization

 

11,713

 

 

 

12,154

 

Stock-based compensation expense

 

14,556

 

 

 

9,768

 

Restructuring (income) expense

 

(4

)

 

 

277

 

Cost related to acquisitions

 

13,585

 

 

 

187

 

Other items

 

660

 

 

 

(180

)

Adjusted EBITDA

$

32,434

 

 

$

12,759

 

 

 

 

 

Adjusted EBITDA margin

 

 

 

Revenue

$

166,205

 

 

$

137,356

 

Net loss margin

 

(19.6

)%

 

 

(22.9

)%

Adjusted EBITDA margin

 

19.5

%

 

 

9.3

%

 

Three Months Ended March 31,

 

2023

 

2022

 

(in thousands)

Adjusted Free Cash Flow:

 

 

 

Net cash provided by operating activities:

$

92,525

 

 

$

79,924

 

Adjustments

 

 

 

Purchase of property and equipment

 

(2,356

)

 

 

(1,375

)

Capitalized software development costs

 

(12,725

)

 

 

(11,891

)

Change in fees payable to customers

 

(25,210

)

 

 

(24,493

)

Interest paid

 

2,448

 

 

 

2,584

 

Adjusted Free Cash Flow

$

54,682

 

 

$

44,749

 

 

 

 

 

Adjusted Free Cash Flow margin:

 

 

 

Revenue

$

166,205

 

 

$

137,356

 

Adjusted Free Cash Flow margin

 

32.9

%

 

 

32.6

%

 

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