The 13th Warrior

Years ago I watched a movie called The 13th Warrior. The gist of the movie was that a mysterious
enemy was plaguing a smallish Viking village and needed help. So a band of 12 Vikings + Anterio
Banderos - as some sort of banished Arab I think - joined together to trek to the village to save the day. At one point in the movie the Vikings posted a lookout on a tower as sort of an early warning system should the bad guys attack. Only the sentry decided being in the tower was too exposed and so he rigged up a early day zip line and hung out in a tree. Anyway - when at last he saw the mysterious enemy coming - he used the rope zip line to slide over to the tower where he took a really
big hammer and smacked a huge metal gong to alert the village of the impending danger. The original
film trailer is here:

Since then, Critical Event Management (CEM) has come a long way: Enter EVERBRIDGE - EVBG.

EVBG is an SaaS company with software solutions that allows organizations to automatically identify,
control, and respond to crisis events. As far as I can tell, they don’t use watch towers, zip lines
or really big hammers to bang metal gongs. The company went public in September 2016 and the stock closed the first day of trading around $15.25. In 28 months it has managed to more than triple to its current price of -as of the close today, $57.85. A few salient data points:

Current Price: $57.85
52 Week Range: $29.56/63.00
Market Cap: $1.7B
P/S: 12.6
The stock is about 8% Below its 52 WK High

A few more salient - for some folks - data points from IBD Stock Checkup:

Composite Rating: 65 This score is sort of in the Oh-Poop range I think.
EPS Rating: 2 This is decidedly not all that good.
Relative Strength: 97 This is where Everbridge begins to shine
SMR Rating: D Not all that sure what an SMR score is or means but this can’t be good
ACC/DIS Rating: C I think this means someone is buying the stock

Note: there is a lot of other detail in the IBD stuff but the one thing that caught my eye
was the fact that the company has had 8 QTRS of increasing Fund Ownership. That has to
be good. Right?

Why Consider: They are SaaS and the revenue growth has been solid. The last four (4) earning
reports featured the following revenue growth evolution: 42.5%; 43.1%; 33.5% and 37.1%, respectively.
The most recent earnings announcement and Conf Call Transcript here:…

Note: The company has exceeded guidance on every QTRLY report since going public

Conf Call Highlights:

  • Customers grew by 29% Y/Y
  • Dollar Based Retention steady in the mid 90% range
  • Net Retention over 110%
  • New Products contributed 50% of growth
  • Average Sales Price grew to $55,000 representing 33% Y/Y
  • International Revenue Accelerated to 20%: Increased by 150% Y/Y
  • New contracts with: The City of Nashville; Ohio Emergency Mgmt; the Indiana National Guard

EVBG has contracts with the top 25 busiest U.S. airports, a large number of the busiest port
authorities including New York, New Jersey, Delaware, South Carolina, Georgia, and Ontario. They also
added the Massachusetts (sp?) Bay Transit Authority; and leading airports in Nashville, New Orleans,
and Anchorage - all in the QTR.

In the Qtr they landed contracts in Health Care in El Paso; the 6th largest bank in Spain; and numerous government agencies across the globe including the entire country of Norway, and contracts with organizations in The Netherlands and Sweden.

I could go on for a bit but it would just be regurgitating whats in the Conf Call Transcript that you can review for yourself by clicking on the conveniently provided link above. For one last example of their progress they have received their FEDRAMP authorization and signed several deals: they believe their TAM for the U.S. Government alone could be as high as $1B. They initiated contracts with the Department of Agriculture, The Postal Service, and the U.S Army.

You read all that and surmise that these guys must be stuffing the bank accounts; alas, not so fast.
Interestingly in life there are many many things you can fake - however, actual cash in the bank is not one of them. Its there - or its not. So these guys aren’t profitable - yet. Which leads me to a number of Oh-Poops. (I have a proprietary stock analysis system that revolves around quantified
Ying and Yang factors which I have developed myself over many years of trial and error: Atta Boys/Girls and Oh-Poops. Without going into the intricate detail of how I arrived at this rating system - suffice to understand that having a great many of Atta Boys/Girls is much better than
having a large number of Oh-Poops.)

To this point we see a lot, an entire wheelbarrow full, of Atta Boys/Girls that place Everbridge in a
very enticing and promising light. But now we come to the Oh Poops.

Oh Poops: This is a small company in a promising but small niche. There are a lot of competitors
and not sure I see much of a moat. I ask the question rhetorically: Is EVBG nothing more than
a somewhat more sophisticated hammer and gong alert system? Can it be easily copied/replicated
and/or replaced by the next evolution in CEM? Don’t know but much smarter folks than me will figure that out. Lastly, exactly how big is their TAM? And on that answer hinges the thesis for any investment.

Conclusion: I really like what they do and their huge percentage of growing contract wins is very very impressive. They also Raised their Guidance for the next Qtr. Haven’t decided to invest anything just yet but perhaps watching for the next few QTRS unless I decide not to.

Additional Input Appreciated


I might be spoiled by the companies I already own, but I briefly looked at this company and decided to pass.

Revenue Growth appears to be slowing
Net Expansion rate is <100% which means customers spend less on average each year (bad sign)

Question from your post. How is retention over 100%. As I understand it, retention rate is basically customer turnover. It could be 100% (didn’t lose any customers), but how can it be 110%?


Well, I want to thank you for reminding me about that movie.
Also, how does their software measure a system failing?

From what I can tell - Rev Growth is accelerating - I listed the most recent numbers first and that was probably confusing.

I’ll have to take a better look at the retention numbers - for example they added 109+/- new customers during the last QTR which they state at 29% Y/Y growth; however, both numbers I quoted were directly from the Transcript - and I could be confused on which is which: I am easily confused and my wife says I have a gift for it.

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Revenue Growth appears to be slowing

It’s actually growing as they begin to expand their services across their market dominant position in emergency mass notifications.

Since their IPO their revenue growth has moved from 20s to 30s to 43% most recently.

Their ASP is also increasing.

Previous thread:…

Last quarter discussion:…


JAF I was mistaken. I assumed Champ posted oldest to newest but it was the opposite.


Pretty interesting company. I like that accelerating growth. Worth a closer look for sure.

Customer count was reported as 4,267 global enterprise customers up from 3,303 in the year ago quarter. That’s the 29% increase.

Customers agree to a non-cancelable contract of two or more years billed annually up front. That gets them a subscription to one or more of their hosted applications.

Need to figure their competitive position and TAM.




I just like what they do and I want to be careful that I don’t get overwhelmed by premeditated
personal bias. But here are a few things that just sing:

  1. Lots and lots of new contracts and customer adds.
  2. Huge increase in average value of average contract income
  3. Increasing estimates for revenue growth

Even though they raised their guidance going forward its my belief that they are sandbagging
and will beat the new targets.

The more I think about it the more I tend to believe that this is a SaaS company in its infancy. It may not turn out to be a world beater but it doesn’t have to be to become a nice investment.

Your thoughts and moneyslobs are probably right on target: what is the TAM and competitive position and how do they account for failed systems.

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Your analysis is much better than mine. Three questions:

  1. Have you maintained your position in the company?
  2. Any additional thoughts on the company
  3. Would you initiate or add here?

I initiated a starter position that is small in my portfolio ~2%.

The company is small, but growing. Their CEO is transitioning out, and I’m curious who they will name. I believe the company has a very strong culture (their work literally helps save lives).

That said, last year was a lot of M&A activity and investing to expand their offerings. Initial results look promising, however, I want to see another quarterly report.

I will also be tuning into their webinar from the Needham Growth conference (along with others) to glean any updates.

I recently raised cash exiting ISRG and EVBG is on the short list to build on. There are lots of high growth stocks right now though, this one included.


Thanks JAF

I opened a smallish test flight position.

This morning the city my wife and I live in announced that they have selected the company
for their mass notification system.

All the Best

Champico -

Thanks for the rec. As I’m taking a look at EVBG I have a quick question on customer growth. There seems to be a discrepancy in their reported customer numbers. In their Q318 release they announce their Q317 customer count as 3,303. Likewise, their Q218 release lists their Q217 count as 3,201. Yet as I’m going through past releases from those Q’s themselves, they announced Q317 at the time as 3,441 and Q217 at the time as 3,560. Using the numbers they released at the time would put quite a dent in the growth rates they are touting for 2018. For instance, it would drop their customer growth from their most recent Q from 29.2% to 19.9%.

I haven’t had a chance to dig through any transcripts yet to see management comments. Do you know if they reclassified the way they count customers at some point? Otherwise, I’m having a hard time figuring out why the numbers don’t seem to match.



Hi Joe:

I’m sorry but I don’t know.

Start with the Conf Calls for verification as they are the best source of
information. If I get some time this weekend I will go back through them
and thanks for bringing this up.

All the Best

I sent this to the EVBG IR department. Believe it or not I got a response within a couple hours on a Sunday. It does appear they changed the way they count customers starting in Q218. Seems reasonable enough and explains the discrepancies in the earnings releases.

"Thanks for your interest in Everbridge. You are correct: beginning with our 2Q18 release (and coinciding with the acquisition of UMS), we increased the threshold of enterprise customers from $100 per month to $200 per month.

Best, Garo"

Sent: Sunday, January 13, 2019 11:39 AM
Subject: Everbridge Inc Mail Fulfillment Request

Comment: In your 2 most recent earnings releases you list Q2 2017 customers at 3201 and Q3 2017 at 3303. But in the 2017 releases themselves you list customers as 3441 (Q2) and 3560 (Q3). Has Everbridge changed the way they count customers at some point?