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Everbridge (EVBG) By Tyler Laundon, Chief Analyst of Cabot Small-Cap Confidential

Everbridge was founded in 2002, shortly after the 9/11 attacks, to provide fast, automated communications services during life-threatening situations and mission-critical business events. The software platform powers apps that help organizations and government entities keep people safe and businesses running. Customers buy the software to lower the risks to human life and the cost of business downtime due to terrorist attacks, active shooter situations, severe weather events, IT outages and cyber attacks.

The company’s SaaS-based technology quickly collects, aggregates and analyzes data that can help customers asses the level of the threat, locate people at risk, deploy resources to help and execute pre-defined communications processes. The platform can deliver contextual messages via voice, text and email, to millions of recipients in over 15 languages on over 100 types of devices in over 200 countries, all at the same time. And it can receive return information on a person’s status so that organizations can respond properly. The system prompts receivers to use short, simple responses to questions like “Are you safe?” or “Do you need medical help?” The Burlington, Massachusetts-based company went public on September 16, 2016.

As is common among best-of-breed cloud-based software stocks, Everbridge has built a single, scalable platform that powers its suite of apps.Each app is

designed to address a specific market need by quickly aggregating data and delivering a contextually relevant message to the right people on the right device at the right time. It is relatively easy for the company to build new apps on this platform.

Everbridge started with one product, a mass notification solution that it tweaked and expanded for the first 10 years of the company’s existence. That solution

helped it grow a customer base to 867 by the end of 2011. Since then, it’s developed six additional solutions and has grown its customer base to over 3,000

enterprise customers, spanning the corporate, healthcare, transportation, higher education, energy, governmental and financial sectors.

Today’s clients include eight of the 10 largest U.S. cities, eight of the 10 largest U.S.-based investment banks, 24 of the 25 busiest North American airports, six of the 10 largest global consulting firms, six of the 10 largest global auto makers, all four ofthe largest global accounting firms, four of the 10 largest U.S.-based health care providers and four of the 10 largest U.S.-based health insurers. The average number of products per customer is around 2 and growing.

This client roster is a powerful endorsement of Everbridge’s solution, and it continues to grow. In Q3, Everbridge added 150 new customers, bringing its total enterprise customer base up to 3,076. New customers include Santa Clara County CA, Dubai University, UCLA, University of Texas at Austin, Walter Reed Medical, Penn State Hershey Medical, Lowe’s, Rackspace, Citrix and Shutterfly.

Expanding the Platform

As the need for critical communications solutions has grown, Everbridge has expanded its suite of apps to fill the emergency response IT needs of enterprises and government entities. Here is a brief overview of each solution.

Mass Notification: Everbridge’s first and most established application, Mass Notification lets organizations and government agencies send contextually aware messages to people during natural disasters, public safety threats and other emergencies. The app provides map-based targeting, distributed contact data, flexible group management, language localization, robust analytics, a globally optimized methodology to voice and text routing, and numerous options for contact data management. It also supports community collaboration to help foster public safety by providing a direct link between emergency response departments and residents. The app was launched in 2002.

Incident Management: The company’ssecond app was launched in 2012 and enables organizations to automate work flows to determine (1) who should be contacted, (2) how theyshould be contacted and (3) what informationis necessary. Because people using the app are prompted to follow pre-determined processes, Incident Management helps capture required compliance information while also reducing human error and downtime during power outages and cyber

attacks. The app also supports cross- account collaboration, so organizations and communities can share intelligence during crises.

IT Alerting: The 2014 launch of IT Alerting has given IT professionals the ability to alert and collaborate with key members of their teams during IT incidents or outages, such as a cyber security breach. The app integrates with IT service management platforms (including ServiceNow).

Secure Messaging: The first of three apps launched in 2015, Secure Messaging gives customers a platform for communicating sensitive information via text, voice and video, mainly in health care and finance markets. A custom version, HipaaBridge, is a telemedicine app that allows doctors to communicate with patients and share medical imaging, lab results and other critical information.

Community Engagement (Nixle): The second app launched in 2015 is a unified emergency management and community outreach solution that employs social media and mobile apps to link residents to their public safety department, public information resources and neighbors. Residents can anonymously opt-in and provide tips, while also getting real-time information. You can opt-in to Nixle in your area by texting your zip code to 888-777.

Internet of Things: Launched in late 2015, the Internet of Things app allows connected devices to communicate directly with relevant personnel based on pre- determined rules. The app allows medical devices, re alarms, workplace security controls and public infrastructure devices to link directly to Everbridge’s platform and activate the device, confirm activation or alert people that a response is necessary.

Safety Connection: Everbridge’s most recentnew app was launched this year and uses dynamic, location-aware data to alert organizations about the last known location of an individual and expected location for safety and incident response. By aggregating data from connected devices (building access control systems,

network access points, mobile app check-ins, etc.), the solution aims to help organizations protect their people both in and out of the office.

The Growth Strategy – Working to Spread the Word Faster and Further

A major component of Everbridge’s growth strategy is the introduction (and acceptance) of new products. For instance, the company estimates that its Mass Notification product addresses a $1.7 billion market, and that its Community Engagement product addresses a $120 million market. New products that address large markets are good! And two new product look to do just that.

These are the Internet of Things solution (estimated market is $3.3 billion) and the Safety Connection solution (estimated market is $9.6 billion). If the company could achieve the same market share it’s established in Mass Notification (roughly 3% to 5%) with the products it has already by 2026, it could generate annual revenue of almost $1 billion.

Safety Connection (the newest product) is onethat could help it get there. Management says the product is gaining traction faster than any other new product launch. One example given on the Q3 conference call was that the Director of Physical Safety and Security at one of the largest cloud infrastructure providers signed up because the company couldn’t locate people after fire drills. The company realized that in an active-shooter situation, for instance, they wouldn’t know who and what areas of their properties would be affected. They put a hold on spending on physical access controls and went with Everbridge.

Another way in which Everbridge should be able to achieve 25% to 30% annual growth is through strategic partnerships that help expand its reach, especially internationally. On this front, the company recently teamed up with International SOS to deliver critical information to employees and mobile workforces when crisis events occur. International SOS is the world’s leading medical and travel security risk services company, so this partnership gives Everbridge a global audience for its solutions.

The Business Model

Everbridge is a cloud-based software provider that generates 97% of its revenue from subscriptions to its enterprise-critical communications apps. The remaining 3% of revenue comes from a mix of set-up fees and professional services required to help get customers up and running on the platform. Subscription contracts are

typically one to three years.

Pricing is based on the number of applications subscribed to and, per application, the numberof people, locations and devices connected. The volume of

communications also affects pricing. Premium services are available, and include data feeds to such things as weather, threat intelligence and social media. The sales team is segmented by end-market, not product, meaning every sales rep can sell all Everbridge products.

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