David Meredith, CEO, Everbridge
Scott Mlyn | CNBC
With tech stocks plunging alongside the broader market, software-maker Everbridge has emerged a rare profitable bet for investors.
Everbridge, whose technology helps companies manage public safety emergencies like the coronavirus, rose 1% on Wednesday and reached an intraday record of $116.21 as the S&P 500 sank 4.9%. Over the past three weeks, with the broader market mired in its worst slump since the 2008 financial crisis, Everbridge was up 22% as of Wednesday’s close.
For the year, it was up 42%, while all of the most valuable tech names and subscription software companies are down. Everbridge was trading at 18.1 times revenue Wednesday, well above its average of 11.2 since debuting on the public market in 2016, according to FactSet. The stock price was down 4.7% in Thursday’s premarket.
Everbridge was built for crises. Following the 9/11 terrorist attacks, the company was formed to develop a notification system so “messages are received without fail when life safety is at risk,” according to its website. Nearly two decades later and with a market cap approaching $4 billion, Everbridge’s mission is to protect institutions during public safety emergencies like active shooter situations, terrorist incidents, natural disasters and cyberattacks.
The company’s software pulls together all of the various threats to a business or city at a given time using a variety of data sources. Energy producers can use the technology to get people out of dangerous areas, hospitals count on it to respond to patient emergencies and prepare staff for a flood of patient activity and airports use it to get alerts out quickly.
In October, the company, which is located outside of Boston, signed its biggest contract ever — a $25 million, five-year deal with the state of California to upgrade the 911 system for emergencies and natural disasters. Given the regularity of catastrophic wildfires in California and hurricanes in Florida, where Everbridge also has a statewide contract, demand for its technology is soaring. The company also won recent deals with countries including Australia, Singapore and Peru.
Whatever concerns investors have about the coronavirus leading to economic challenges and a decline in corporate spending, they’re not extending those fears to Everbridge.
‘Our system is lighting up’
These deals all happened before the recent coronavirus outbreak, which began in China and has now killed at least 38 people in the U.S., with over 1,300 cases confirmed. Analysts at Raymond James wrote in a brief to clients last week that, based on “C-level interest in protecting employees/assets,” Everbridge will see “potential bookings tailwinds in 2020.”
“Our system is lighting up with a tremendous amount of activity like we’ve never seen before, and on a persistent basis,” Everbridge CEO David Meredith said in a phone interview. “With critical events, they happen and then they’re over pretty quickly. In this case, it’s persistent and ramping up across our customer base. And it’s everywhere; it’s global.”
For the COVID-19 outbreak, Everbridge is bringing in all its historical data and pattern recognition and combining it with a real-time communications system that lets cities and states get information to the right people. In the weeks since the coronavirus hit the U.S., the cities of New York, San Francisco, New Orleans, Houston and Tampa, Florida, have all deployed Everbridge’s messaging system, allowing residents to text a phone number for updates, while also reaching people through digital signage and location-based targeting.
Cities are using Everbridge’s data to determine when to cancel public events, and companies are relying on it to tell employees if they should work from home. The company says it has sent more than 15 million messages on behalf of customers related to the coronavirus in recent weeks.
Meredith said it’s too soon to predict how the coronavirus will impact the company’s financials. Revenue last year climbed 37% from 2018 to $200.9 million, and the stock rose 38%, beating the S&P 500’s 29% gain.
But Meredith said one noticeable difference now is that his sales team is meeting with the very top executives at companies, not just the heads of security.
“My salespeople would say the chief security officer loves what we’re doing, but it’s hard to get the attention of the CEO and board,” Meredith said. “Now the CEO is thinking about it, and the board.”
Everbridge is also gearing up for action in health care. The company works with 1,500 companies in the sector, including hospitals, drugmakers and medical device manufacturers. With the coronavirus rapidly spreading, hospitals could soon be stretched thin on beds, staffing and equipment like ventilators and respirators.
Pulling in data from the Centers for Disease Control and Prevention, the World Health Organization and local and state entities, Everbridge can help medical facilities coordinate staffing, making sure that there are plenty of nurses and relevant specialists on call.
“This will start to put a lot of strain on the health-care infrastructure,” Meredith said.
As far as handling its own 1,000-person workforce, which is spread across 14 offices worldwide, Meredith said he’s closely monitoring the recommendations of the CDC and WHO as well as the guidelines from all the local governments. The company canceled all nonessential travel last week, eliminated meetings over a certain size and has loosened its work-from-home policies.
Still, the company has to meet customer demand, and there’s a lot of it.
“Our No. 1 priority is keeping people safe,” Meredith said. “At the same time, we view ourselves as an extension of our first responders. This is the time we’re needed.”
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