Second quarter total revenue grows 43%
year-over-year to $52.1 million
Subscription and other platform revenue,
excluding legacy, grows 68% year-over-year to $44.4 million
ON24 (NYSE: ONTF), a leading cloud-based digital experience
platform provider, today announced financial results for its second
quarter ended June 30, 2021.
“Total revenue in the second quarter of 2021 grew 43%
year-over-year, and our subscription and other platform revenue,
excluding legacy, grew 68% year-over-year,” said Sharat Sharan,
co-founder and CEO of ON24. “The second quarter of 2021 was a
transition quarter where we went from a ‘peak of Covid’ in Q2 2020
to a ’peak of vaccinations’ in Q2 2021 and we exited this quarter
with a significantly improved quality of our customer base. The
last year has accelerated the global enterprise awareness of our
offerings and we are now serving a larger market than ever before.
As our category leadership grows, our future is more exciting than
ever before.”
Second Quarter 2021 Financial
Highlights
- Revenue: Total revenue was $52.1 million, an increase of
43% year-over-year, or 47% year-over-year, excluding legacy.
- Subscription and Other Platform Revenue: Subscription
and Other Platform Revenue, excluding legacy, was $44.4 million, an
increase of 68% year-over-year.
- ARR: ARR increased 44% year-over-year to $164.1 million
as of June 30, 2021.
- Net Loss Attributable to Common Stockholders: Net loss
attributable to common stockholders was $2.5 million, or $(0.05)
per diluted share, compared to net income attributable to common
stockholders of $5.3 million, or $0.14 per diluted share in the
second quarter of 2020.
- Non-GAAP Operating Income: Non-GAAP operating income was
$2.5 million, compared to non-GAAP operating income of $7.3 million
in the second quarter of 2020.
- Non-GAAP Net Income: Non-GAAP net income was $2.5
million, or $0.04 per diluted share, compared to a non-GAAP net
income of $7.1 million, or $0.69 per diluted share in the second
quarter of 2020.
- Cash Flow: Net cash provided by operating activities was
$6.9 million, compared to $14.0 million provided in operating
activities in the second quarter of 2020. Free cash flow was $5.7
million for the quarter, compared to $13.8 million in the second
quarter of 2020.
For more information regarding non-GAAP operating income (loss),
non-GAAP net income (loss) and free cash flows, see the section
titled “Non-GAAP Financial Measures” below. For reconciliations of
these non-GAAP financial measures to the most directly comparable
GAAP financial measure, see the tables at the end of this press
release.
Second Quarter 2021 Industry
Recognition and Innovation Highlights
Industry Recognition
- In June 2021, ON24 Elite was recognized as the top webinar
software for Enterprises and Mid-Market companies by G2, one of the
largest software marketplace and user review platforms.
- In addition, in July 2021, TrustRadius, another review site for
business technology, named ON24 the best webinar software for
Enterprises.
Customer Experience Innovation
- ON24 introduced its Hybrid Engagement solution, enabling
customers to deliver unified experiences, where both physical and
digital audiences can interact and engage with the same experience,
at the same time. Virtual and physical attendees can view the same
presentations, interact with the same digital content, participate
in the same Q&A, polls, and network with breakouts. This
enhances prospect engagement data, now spanning across both
physical and digital attendees.
- With the addition of ON24 Breakouts, ON24 now offers five
experiences products, including ON24 Elite, ON24 Virtual
Conference, ON24 Engagement Hub, and ON24 Target. Breakouts enable
attendees and presenters to network with each other virtually
face-to-face, allowing sales teams to connect immediately with
prospects and subject matters experts to engage directly with
customers.
AI-Driven Personalization
- ON24 enhanced its ON24 Intelligence product and AI-Based
personalization engine by expanding the first-party data displayed
for each individual. Our customers are now able to view over 50+
data points over their prospect’s lifetime of engagement across
live, always-on and personalized experiences and also integrate
that data into key CRM and Marketing Automation platforms.
Financial Outlook
For the third quarter of 2021, the Company currently
expects:
- Total revenue of $47.5 to $48.5 million.
- Non-GAAP operating loss of $(4.0) to $(3.0) million.
- Non-GAAP net loss per share of $(0.09) to $(0.07) using
approximately 47.5 million basic and diluted shares
outstanding.
For the full year 2021, the Company expects:
- Total revenue of $201.2 to $204.2 million.
- Non-GAAP operating loss of $(4.3) to $(1.3) million.
- Non-GAAP loss per share of $(0.13) to $(0.06), using
approximately 44 million basic and diluted shares outstanding.
Conference Call
Information:
ON24 will host a conference call and live webcast for analysts
and investors today at 2:00 p.m. Pacific Time. Parties in the
United States can access the call by dialing (866) 248-8441, and
international parties can access the call by dialing (323)
289-6581, using the conference ID 5561958.
A webcast will be accessible on ON24’s investor relations
website at investors.on24.com. Approximately one hour after
completion of the live call, an archived version of the webcast
will be available on the Company’s investor relations website.
Non-GAAP Financial Measures
In addition to our results determined in accordance with
generally accepted accounting principles in the United States, or
GAAP, we consider our non-GAAP operating income, non-GAAP net
income (loss) and free cash flow in evaluating our operating
performance. We define non-GAAP operating income as net (loss)
income excluding, interest expense, other (income) expense, income
tax and stock-based compensation. We define non-GAAP net income
(loss) as net income (loss) excluding cumulative preferred
dividends allocated to preferred shareholders and stock-based
compensation. We define free cash flow as net cash provided by
(used in) operating activities, less purchases of property and
equipment.
We use non-GAAP operating income (loss) and non-GAAP net income
(loss) to evaluate our ongoing operations and for internal planning
and forecasting purposes, and we use free cash flow to measure and
evaluate cash generated through normal business operations. We
believe non-GAAP operating income (loss) and non-GAAP net income
(loss) may be helpful to investors because they provide consistency
and comparability with past financial performance. We believe free
cash flow may be helpful to investors because it reflects that some
purchases of property and equipment are necessary to support
ongoing operations, while providing a measure of cash available to
acquire customers, expand within existing customers and otherwise
pursue our business strategies.
However, these non-GAAP financial measures are each presented
for supplemental informational purposes only, have limitations as
analytical tools and should not be considered in isolation or as a
substitute for financial information presented in accordance with
GAAP. Non-GAAP financial measures have no standardized meanings
prescribed by GAAP and are not prepared under a comprehensive set
of accounting rules or principles. In addition, other companies,
including companies in our industry, may calculate similarly-titled
non-GAAP financial measures differently or may use other measures
to evaluate their performance, all of which could reduce the
usefulness of our non-GAAP financial measure as a tool for
comparison.
Reconciliations of these non-GAAP financial measures to their
most directly comparable GAAP financial measure are included in the
tables at the end of this press release.
Forward-Looking Statements
This document contains “forward-looking statements” under
applicable securities laws. Such statements can be identified by
words such as: “outlook,” “expect,” “convert,” “believe,” “plan,”
“future,” “may,” “should,” “will,” and similar references to future
periods. Forward-looking statements include express or implied
statements regarding our expected financial and operating results,
the size of our market opportunity, impact of COVID-19 and vaccines
on the way people do business, and other statements regarding our
ability to achieve our business strategies, growth, or other future
events or conditions. Such statements are based on our current
beliefs, expectations, and assumptions about future events or
conditions, which are subject to inherent risks and uncertainties,
including our ability to sustain our recent revenue growth rate,
attract new customers and expand sales to existing customers;
fluctuation in our performance, our history of net losses and
expected increases in our expenses; competition in our markets and
any decline in demand for our solutions; our ability to expand our
sales and marketing capabilities and otherwise manage our growth;
the impact of the COVID-19 pandemic; disruptions or other issues
with our technology or third-party services; compliance with data
privacy, import and export controls, customs, sanctions and other
laws and regulations; intellectual property matters; and matters
relating to our common stock, along with the other risks and
uncertainties discussed in the filings we make from time to time
with the Securities and Exchange Commission. Actual results may
differ materially from those indicated in forward-looking
statements, and you should not place undue reliance on them. All
statements herein are based only on information currently available
to us and speak only as of the date hereof. Except as required by
law, we undertake no obligation to update any such statement.
About ON24
ON24 provides a leading cloud-based hybrid engagement platform
that makes it easy to create, scale, and personalize engaging
experiences to drive measurable business growth. Today, we are
helping over 2,000 companies worldwide, including 3 of the 5
largest global technology companies, 4 of the 5 largest US banks, 3
of the 5 largest global healthcare companies, and 3 of the 5
largest global industrial manufacturing companies, convert millions
of prospects to buyers. Through interactive webinars, virtual
events, and always-on multimedia experiences, ON24 provides a
system of engagement, powered by AI, which enables businesses to
scale engagement, conversions, and pipeline to drive revenue
growth. The ON24 platform supports millions of professionals a
month who are totaling billions of engagement minutes per year.
ON24 is headquartered in San Francisco with global offices in North
America, EMEA, and APAC. For more information, visit
www.ON24.com.
© 2021 ON24, Inc. All rights reserved. ON24 and the ON24 logo
are trademarks owned by ON24, Inc., and are registered in the
United States Patent and Trademark Office and in other countries.
The other referenced trademarks and service marks are also owned by
ON24, Inc. and may be registered in some countries.
ON24, INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(Unaudited)
June 30, 2021
December 31, 2020
Assets Current assets Cash and cash equivalents
$
351,727
$
58,243
Marketable securities
44,631
3,000
Accounts receivable, net
38,891
48,617
Deferred contract acquisition costs, current
11,304
10,528
Prepaid expenses and other current assets
11,264
7,079
Total current assets
457,817
127,467
Property and equipment, net
9,775
9,051
Deferred contract acquisition costs, non-current
20,067
18,753
Other long-term assets
902
1,447
Total assets
$
488,561
$
156,718
Liabilities, Convertible Preferred Stock and
Stockholders’ Equity (Deficit) Current liabilities Accounts
payable
$
2,907
$
4,730
Accrued liabilities
19,555
17,439
Deferred revenue
93,899
92,240
Long-term debt, current portion
2,362
2,359
Total current liabilities
118,723
116,768
Long-term debt
3,263
25,727
Other long-term liabilities
3,859
4,022
Total liabilities
125,845
146,517
Convertible Class A-1 and Class A-2 preferred stock
—
83,857
Redeemable convertible Class B and Class B-1 preferred stock
—
70,000
Stockholders’ equity (deficit) Common stock
5
1
Additional paid-in capital
539,137
27,512
Accumulated deficit
(176,610
)
(171,263
)
Accumulated other comprehensive income
184
94
Total Stockholders’ equity (deficit)
362,716
(143,656
)
Total liabilities, convertible preferred stock and stockholders’
equity (deficit)
$
488,561
$
156,718
ON24, INC.
Condensed Consolidated
Statements of Operations
(in thousands, except share and
per share data)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenue: Subscription and other platform
$
44,377
$
27,096
$
87,287
$
47,023
Professional services
7,741
9,224
14,930
14,043
Total revenue
52,118
36,320
102,217
61,066
Cost of revenue: Subscription and other platform(1)
8,179
4,824
15,664
8,980
Professional services(1)
3,694
3,138
6,903
5,688
Total cost of revenue
11,873
7,962
22,567
14,668
Gross profit
40,245
28,358
79,650
46,398
Operating expenses: Sales and marketing(1)
25,465
12,729
49,390
24,739
Research and development(1)
8,162
4,513
16,108
8,612
General and administrative(1)
9,100
4,206
18,868
7,658
Total operating expenses
42,727
21,448
84,366
41,009
Income (loss) from operations
(2,482
)
6,910
(4,716
)
5,389
Interest expense
106
193
337
405
Other (income) expense
211
(22
)
327
249
Income (loss) before provision for (benefit from) income taxes
(2,799
)
6,739
(5,380
)
4,735
Provision for (benefit from) income taxes
(282
)
37
(33
)
92
Net income (loss)
(2,517
)
6,702
(5,347
)
4,643
Cumulative preferred dividends allocated to preferred stockholders
—
(1,427
)
(558
)
(2,752
)
Net income (loss) attributable to common stockholders
$
(2,517
)
$
5,275
$
(5,905
)
$
1,891
Net income (loss) per share attributable to common stockholders:
Basic
$
(0.05
)
$
0.14
$
(0.15
)
$
0.05
Diluted
$
(0.05
)
$
0.14
$
(0.15
)
$
0.05
Weighted-average shares used in computing net income (loss) per
share attributable to common stockholders: Basic
46,570,195
9,707,995
39,664,436
9,419,113
Diluted
46,570,195
10,315,294
39,664,436
10,013,791
(1) Includes stock-based compensation as follows:
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Cost of revenue Subscription and other platform
$
346
$
24
$
583
$
47
Professional services
77
5
139
9
Total cost of revenue
423
29
722
56
Sales and marketing
1,571
147
3,263
288
Research and development
862
62
1,644
119
General and administrative
2,114
192
4,335
370
Total
$
4,970
$
430
$
9,964
$
833
ON24, INC.
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Cash flows from operating activities: Net income (loss)
$
(2,517
)
$
6,702
$
(5,347
)
$
4,643
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and amortization
1,134
642
2,294
1,189
Stock-based compensation expense
4,970
430
9,964
833
Amortization of deferred contract acquisition cost
3,828
2,465
7,502
4,345
Provision for allowance for doubtful accounts and billing reserve
692
543
1,209
797
Other
25
25
—
Changes in operating assets and liabilities:
-
Accounts receivable
5,995
(13,003
)
8,517
(18,560
)
Deferred contract acquisition cost
(4,142
)
(6,980
)
(9,592
)
(11,098
)
Prepaid expenses and other assets
(2,025
)
82
(7,078
)
(783
)
Accounts payable
(2,042
)
574
(1,441
)
238
Accrued liabilities
2,653
1,981
3,026
2,154
Deferred revenue
(1,663
)
20,879
1,659
32,023
Other long-term liabilities
(37
)
(284
)
(163
)
(421
)
Net cash provided by operating activities
6,871
14,031
10,575
15,360
Cash flows from investing activities: Purchase of property
and equipment
(1,214
)
(191
)
(1,734
)
(288
)
Purchase of marketable securities
(44,481
)
(5,000
)
(44,481
)
(5,000
)
Proceeds from maturity of marketable securities
3,164
5,000
3,164
5,000
Net cash used in investing activities
(42,531
)
(191
)
(43,051
)
(288
)
Cash flows from financing activities: Proceeds from initial
public offering, net of underwriting discounts
-
—
353,397
—
Proceeds from issuance of common stock resulting from exercise of
options
384
1,754
1,795
2,239
Payment of tax withholding obligations related to net share
settlements of stock options exercise
—
—
(2,001
)
—
Proceeds from long-term debt
—
6,179
—
12,179
Repayments of long-term debt
(71
)
(6,043
)
(22,478
)
(12,084
)
Repayment of capital lease obligations
(807
)
(357
)
(1,384
)
(563
)
Payments of offering costs
(1,176
)
—
(3,481
)
—
Net cash provided by financing activities
(1,670
)
1,533
325,848
1,771
Effect of exchange rate changes on cash, cash equivalents and
restricted cash
114
(2
)
108
54
Net increase in cash, cash equivalents and restricted cash
(37,216
)
15,371
293,480
16,897
Cash, cash equivalents and restricted cash, beginning of period
389,041
20,459
58,345
18,933
Cash, cash equivalents and restricted cash, end of period
$
351,825
$
35,830
$
351,825
$
35,830
Supplemental disclosures of cash flow information: Cash paid
for taxes, net of refunds
$
131
$
46
$
142
$
50
Cash paid for interest
$
147
$
235
$
403
$
496
Supplemental disclosures of noncash investing and financing
activities: Equipment acquired under capital leases
$
571
$
1,922
$
1,586
$
2,520
Equipment purchased funded by liabilities
$
391
$
179
$
391
$
179
Property and equipment purchased not yet paid
$
132
$
465
$
132
$
465
Conversion of convertible preferred stock and redeemable
convertible preferred stock to common stock
$
—
$
—
$
153,857
$
—
ON24, INC.
Reconciliation from GAAP to
Non-GAAP Results
(in thousands, except share and
per share data)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation of net income (loss) to
non-GAAP operating income Net income (loss)
$
(2,517
)
$
6,702
$
(5,347
)
$
4,643
Add: Interest expense
106
193
337
405
Other (income) expense, net
211
(22
)
327
249
Provision for (benefit from) income taxes
(282
)
37
(33
)
92
Stock-based compensation
4,970
430
9,964
833
Non-GAAP operating income
$
2,488
$
7,340
$
5,248
$
6,222
Reconciliation of net loss to
non-GAAP net income Net loss
$
(2,517
)
$
6,702
$
(5,347
)
$
4,643
Add: Stock-based compensation expense
4,970
430
9,964
833
Non-GAAP net income
$
2,453
$
7,132
$
4,617
$
5,476
Reconciliation of net income (loss)
available to common stockholders Net income (loss)
attributable to common shareholders:
$
(2,517
)
$
5,275
$
(5,905
)
$
1,891
Add: Cumulative preferred dividends allocated to preferred
shareholders
-
1,427
558
2,752
Add: Stock-based compensation expense
4,970
430
9,964
833
Non-GAAP net income attributable to common stockholders
$
2,453
$
7,132
$
4,617
$
5,476
GAAP net income (loss) per share, basic
$
(0.05
)
$
0.14
$
(0.15
)
$
0.05
GAAP net income (loss) per share, diluted
$
(0.05
)
$
0.14
$
(0.15
)
$
0.05
Non-GAAP earnings (loss) per share, basic
$
0.05
$
0.73
$
0.12
$
0.58
Non-GAAP earnings (loss) per share, diluted
$
0.04
$
0.69
$
0.09
$
0.55
Shares Used in GAAP Per Share Calculations: GAAP
weighted-average shares used to compute GAAP net income (loss) per
share, basic
46,570,195
9,707,995
39,664,436
9,419,113
GAAP weighted-average shared used to compute GAAP net income (loss)
per share, diluted
46,570,195
10,315,294
39,664,436
10,013,791
Shares Used in Non-GAAP Per Share Calculations:
Non-GAAP weighted-average shares used to compute non-GAAP earnings
(loss) per share, basic
46,570,195
9,707,995
39,664,436
9,419,113
Non-GAAP weighted-average shared used to compute non-GAAP earnings
per share, diluted
54,993,297
10,315,294
48,646,614
10,013,791
ON24, INC.
Earnings (Loss) Per
Share
(in thousands, except share
and per share data)
GAAP Basic and Diluted Earnings (Loss) Per Share
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
GAAP basic and diluted net income (loss) per share: Net
income (loss)
$
(2,517
)
$
6,702
$
(5,347
)
$
4,643
Less: Cumulative preferred dividends allocated to preferred
stockholders
-
(1,427
)
(558
)
(2,752
)
Net income (loss) attributable to common stockholders, basic
(2,517
)
5,275
(5,905
)
1,891
Income (loss) available to participating securities
—
(3,889
)
-
(1,406
)
Net income (loss) available to common stockholders
$
(2,517
)
$
1,386
$
(5,905
)
$
485
Weighted average common stock outstanding, basic
46,570,195
9,707,995
39,664,436
9,419,113
Basic earnings (loss) per share of common stock
$
(0.05
)
$
0.14
$
(0.15
)
$
0.05
GAAP Diluted Earnings (Loss) Per Share
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
GAAP diluted earnings (loss) per share: Net income (loss)
$
(2,517
)
$
6,702
$
(5,347
)
$
4,643
Less: Cumulative preferred dividends allocated to preferred
stockholders
-
(1,427
)
(558
)
(2,752
)
Net income (loss) attributable to common stockholders, diluted
(2,517
)
5,275
(5,905
)
1,891
Reallocation of earnings to participating securities
considering potentially dilutive securities
—
(3,826
)
—
(1,383
)
Net income (loss) available to common stockholders
$
(2,517
)
$
1,449
$
(5,905
)
$
508
Weighted average common stock outstanding
46,570,195
9,707,995
39,664,436
9,419,113
Weighted average dilutive effect of stock options, restricted stock
and ESPP
—
607,299
—
594,678
Diluted weighted average common shares
46,570,195
10,315,294
39,664,436
10,013,791
Diluted earnings (loss) per share of common stock
$
(0.05
)
$
0.14
$
(0.15
)
$
0.05
Non-GAAP Earning (Loss) Per Share
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Non-GAAP basic earnings (loss) per share: Net income (loss)
available to common stockholders
$
(2,517
)
$
1,449
$
(5,905
)
$
508
Less: Cumulative preferred dividends allocated to preferred
stockholders
-
1,427
558
2,752
Add: Stock based compensation
4,970
430
9,964
833
Add: Income available to participating securities
—
3,826
—
1,383
Non-GAAP earnings (loss) attributable to common stockholders, basic
and diluted
2,453
7,132
4,617
5,476
-
-
-
-
Non-GAAP weighted-average shares used to compute non-GAAP
earnings (loss) per share, basic
46,570,195
9,707,995
39,664,436
9,419,113
Non-GAAP weighted-average shares used to compute non-GAAP earnings
(loss) per share, diluted
54,993,297
10,315,294
48,646,614
10,013,791
Non-GAAP earnings per share of common stock: Non-GAAP earnings
(loss) per share, basic
$
0.05
$
0.73
$
0.12
$
0.58
Non-GAAP earnings (loss) per share, diluted
$
0.04
$
0.69
$
0.09
$
0.55
ON24, INC.
Reconciliation of GAAP Cash
Flow from Operating Activities to Free Cash Flow
(in thousands)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Net cash provided by operating activities:
$
6,871
$
14,031
$
10,575
$
15,360
Less: Purchases of property and equipment
(1,214
)
(191
)
(1,734
)
(288
)
Free cash flow
$
5,657
$
13,840
$
8,841
$
15,072
ON24, INC.
Revenue
(in thousands)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Digital Experience Platform Subscription and other platform
$
44,367
$
26,397
$
87,225
$
45,713
Professional services
7,741
9,120
14,905
$
13,522
Total digital experience platform
$
52,108
$
35,517
$
102,130
$
59,235
Legacy Subscription and other platform
$
10
$
699
$
62
$
1,310
Professional services
-
104
25
$
521
Total legacy revenue
$
10
$
803
$
87
$
1,831
Revenue Subscription and other platform
$
44,377
$
27,096
$
87,287
$
47,023
Professional services
7,741
9,224
14,930
14,043
Total revenue
$
52,118
$
36,320
$
102,217
$
61,066
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210810005895/en/
Media Contact: Roger Villareal press@on24.com Investor
Contact: Lauren Sloane investorrelations@on24.com
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