upwk-8k_20180928.htm

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 7, 2018

 

UPWORK INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-38678

46-4337682

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

441 Logue Avenue

Mountain View, California

 

94043

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (650) 316-7500

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 

 


 

 

Item 2.02 Results of Operations and Financial Condition

 

On November 7, 2018, Upwork Inc. ("Upwork") issued a press release and will hold a conference call regarding its financial results for the quarter ended September 30, 2018. A copy of the press release is furnished as Exhibit 99.1 to this report.

 

The information furnished with this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

 

Upwork is making reference to non-GAAP financial information in both the press release and the conference call. A reconciliation of GAAP to non-GAAP results is provided in the attached Exhibit 99.1 press release.

 

Upwork uses its Investor Relations website (https://investors.upwork.com/), its Twitter handle (https://twitter.com/Upwork) and Stephane Kasriel’s Twitter handle (https://twitter.com/skasriel) and LinkedIn profile (http://www.linkedin.com/in/kasriel) as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

 

Exhibit

Number

 

Description

99.1

 

Press release dated November 7, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

Upwork Inc.

 

 

 

 

Date:  November 7, 2018

 

By:

/s/ Brian Kinion

 

 

 

Brian Kinion

 

 

 

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

2

upwk-ex991_6.htm

 

Exhibit 99.1

 

Upwork Reports Third Quarter 2018 Financial Results

 

 

Gross services volume (GSV) increased by 27% year-over-year to $449.5 million

 

Revenue increased by 23% year-over-year to $64.1 million

 

Core clients grew 22​%​ year-over-year to 101,000

 

Client spend retention increased to 108%, up from 95% a year ago

 

Mountain View, CA – November 7, 2018 – Upwork Inc. (Nasdaq: UPWK), the largest freelancing website, as measured by GSV, today announced its third quarter 2018 financial results.

 

“We are pleased that in our first earnings report as a public company we recorded strength across the business, driven by both new clients and expanded relationships with our core clients,” said Stephane Kasriel, CEO of Upwork.  “Through our innovation, Upwork is a leading force in creating a better future of work. Our continued success is fueling our mission to create economic opportunities so people have better lives.

 

Third Quarter 2018 Financial Results & Highlights

 

Revenue​:  Marketplace revenue for the third quarter increased 23% year-over-year to $56.8 million, while managed services revenue was up 21% year-over-year to $7.3 million

 

Take Rate:​ Take rate, which we define as revenue divided by GSV, in the third quarter was 14.3% net losses compared to 14.8% a year ago

 

Gross Margin: ​ Gross margin was 68%, remaining consistent year-over-year

 

Net Loss:​  Net loss was $7.3 million compared to a net loss of $0.3 million a year ago.  Non-GAAP net loss was $1.4 million compared to a non-GAAP net income of $1.9 million a year ago  

 

Adjusted EBITDA: Adjusted EBITDA was ($0.1) million in the third quarter compared to $2.8 million a year ago

 

A reconciliation of non-GAAP net income (loss) and adjusted EBITDA to GAAP net income (loss) are provided at the end of this press release.

 

Guidance

As of November 7, 2018, Upwork is initiating revenue and adjusted EBITDA guidance for its fourth quarter and full year 2018 as follows:

 

For the fourth quarter of 2018, Upwork expects to report:

 

Revenue in the range of $64.5 million to $66.0 million

 

Adjusted EBITDA in the range of ($0.75) million to $0.25 million

 

For the full year 2018, Upwork expects to report:

 

Revenue in the range of $250.5 million to $252.0 million

 

Adjusted EBITDA in the range of ($0.5) million to $0.5 million

 

We have not reconciled our guidance with respect to adjusted EBITDA to GAAP net income (loss) because certain items that impact adjusted EBITDA, such as stock-based compensation expense, are uncertain or out of our control, or cannot be reasonably predicted. In particular, stock-based compensation expense is impacted by our future hiring and retention needs, as well as the future fair market value of our common stock, all of which is difficult to predict and subject to constant change, and none of which is within our control. The actual amount of these expenses during 2018 will have a significant impact on our future GAAP financial results. Accordingly, a reconciliation of adjusted EBITDA to net income (loss) is not available without unreasonable effort.

 

Third Quarter 2018 Financial Results Conference Call and Webcast

Upwork will host a conference call today at 2 p.m. Pacific Time/5 p.m. Eastern Time to discuss the company’s third quarter 2018 financial results. An audio webcast archive will be available following the live event for approximately one year at https://investors.upwork.com. The prepared remarks corresponding to the information reviewed on today’s conference call will also be available on our Investor Relations website, once the call has concluded.

 

Upwork uses its Investor Relations website (https://investors.upwork.com), its Twitter handle (https://twitter.com/Upwork), and Stephane Kasriel’s Twitter handle (https://twitter.com/skasriel) and LinkedIn profile (http://www.linkedin.com/in/kasriel) as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

 

 


 

Safe Harbor Statement  

This press release includes forward-looking statements, which are statements other than statements of historical facts, and statements in the future tense. These statements include, but are not limited to, statements regarding the future performance of Upwork, including expected financial results for the fourth quarter and the full year 2018. Forward-looking statements are based upon various estimates and assumptions, as well as information known to Upwork as of the date of this press release, and are subject to risks and uncertainties.  Accordingly, actual results could differ materially or such uncertainties could cause adverse effects on our results, including: our ability to attract and retain a community of freelancers and clients; our limited operating history under our current platform and pricing model; if the market for freelancers and the services they offer develops more slowly than we expect; our ability to develop and release new products and services, and develop and release successful enhancements, features, and modifications to our existing products and services; our ability to generate revenue from our marketplace offerings; the impact of new and existing laws and regulations; competition; our ability to develop, maintain, and enhance our brand and reputation cost-effectively; challenges to contractor classification or employment status of freelancers on our platform; the market for information technology; future changes to our pricing model; payment and fraud risks; our ability to sell to large enterprise clients; litigation and related costs; privacy; security breaches; and other general market, political, economic and business conditions. Actual results could differ materially from those predicted or implied, and reported results should not be considered as an indication of future performance.  

 

Additional risks and uncertainties that could affect our financial results are included under the caption “Risk Factors” in our final prospectus filed pursuant to Rule 424(b) with the SEC on October 3, 2018 and our other SEC filings, which are available on the Investor Relations page of our website at https://investors.upwork.com​ and on the SEC website at www.sec.gov​. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the three months ended September 30, 2018. All forward-looking statements contained herein are based on information available to us as of the date hereof and we do not assume any obligation to update these statements as a result of new information or future events.

 

Undue reliance should not be placed on the forward-looking statements in this press release. These statements are based on information available to Upwork on the date hereof, and Upwork assumes no obligation to update such statements.

 

Non-GAAP Financial Measures

 

To supplement our condensed consolidated financial statements, which are prepared in accordance with GAAP, we present non-GAAP net income (loss) and adjusted EBITDA in this press release. Our use of non-GAAP financial measures has limitations as an analytical tool, and these measures should not be considered in isolation or as a substitute for analysis of financial results as reported under GAAP.  

 

We use these non-GAAP financial measures in conjunction with financial measures prepared in accordance with GAAP for planning purposes and as a measure of financial performance. These measures provide consistency and comparability with past financial performance, facilitates period-to-period comparisons of core operating results, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.  We exclude the following items from one or more of our non-GAAP financial measures:

 

 

Stock-based compensation expense:   We exclude stock-based compensation expense, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. In particular, companies calculate stock-based compensation expense using a variety of valuation methodologies and subjective assumptions.

 

Depreciation and amortization: We exclude depreciation and amortization, which are non-cash expenses.

 

Change in fair value of redeemable preferred stock warrant liability:  We exclude the change in fair value of redeemable preferred stock warrant liability which is a non-cash charge that will not recur in the periods following the fourth quarter of 2018.

 

Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, we exclude stock-based compensation expense and depreciation and amortization are recurring and will be reflected in our financial results for the foreseeable future. The non-GAAP measures we use may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures.  A reconciliation of these non-GAAP measures has been provided in the financial statement tables included in this press release and investors are encouraged to review the reconciliation.

 

 


 

About Upwork

Upwork is the largest freelancing website, as measured by GSV, for businesses to find and work with highly-skilled freelancers—a sought after, critical, and expanding component of the global workforce. As an increasingly connected and independent workforce goes online, knowledge work—like software, shopping, and content before it—is shifting online as well. This shift is making it easier for clients to connect and work with talent in near real-time and is freeing professionals everywhere to work where and how they want to. Upwork’s mission is to create economic opportunities so people have better lives. Upwork is headquartered in Mountain View, California, with offices in San Francisco and Chicago. For more information, visit Upwork’s website at www.upwork.com, or its Investor Relations website at https://investors.upwork.com, or join Upwork on Twitter, Facebook, and LinkedIn.

 

Upwork is a registered trademark of Upwork Inc. All other product and brand names may be trademarks or registered trademarks of their respective owners.

 

 

 


 

UPWORK INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketplace

 

$

56,766

 

 

$

46,186

 

 

$

164,180

 

 

$

130,124

 

Managed services

 

 

7,347

 

 

 

6,076

 

 

 

21,832

 

 

 

17,669

 

Total revenue

 

 

64,113

 

 

 

52,262

 

 

 

186,012

 

 

 

147,793

 

Cost of revenue

 

 

20,504

 

 

 

16,894

 

 

 

60,578

 

 

 

47,847

 

Gross profit

 

 

43,609

 

 

 

35,368

 

 

 

125,434

 

 

 

99,946

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

14,377

 

 

 

11,514

 

 

 

40,680

 

 

 

32,519

 

Sales and marketing

 

 

18,967

 

 

 

13,626

 

 

 

55,054

 

 

 

37,327

 

General and administrative

 

 

11,707

 

 

 

8,952

 

 

 

34,102

 

 

 

25,415

 

Provision for transaction losses

 

 

1,892

 

 

 

1,073

 

 

 

4,612

 

 

 

2,857

 

Total operating expenses

 

 

46,943

 

 

 

35,165

 

 

 

134,448

 

 

 

98,118

 

Income (loss) from operations

 

 

(3,334

)

 

 

203

 

 

 

(9,014

)

 

 

1,828

 

Interest expense

 

 

589

 

 

 

199

 

 

 

1,674

 

 

 

629

 

Other expense, net

 

 

3,423

 

 

 

260

 

 

 

3,845

 

 

 

75

 

Income (loss) before income taxes

 

 

(7,346

)

 

 

(256

)

 

 

(14,533

)

 

 

1,124

 

Income tax provision

 

 

 

 

 

(45

)

 

 

(9

)

 

 

(56

)

Net income (loss)

 

$

(7,346

)

 

$

(301

)

 

$

(14,542

)

 

$

1,068

 

Undistributed earnings allocable to preferred stockholders

 

 

 

 

 

 

 

 

 

 

 

(1,068

)

Net loss attributable to common stockholders

 

$

(7,346

)

 

$

(301

)

 

$

(14,542

)

 

$

 

Net loss per share attributable to common stockholders, basic and diluted

 

$

(0.20

)

 

$

(0.01

)

 

$

(0.41

)

 

$

 

Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted

 

 

36,070

 

 

 

33,299

 

 

 

35,129

 

 

 

32,760

 

 

 

 

 

 

 

 


 

UPWORK INC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

September 30, 2018

 

 

December 31, 2017

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

27,055

 

 

$

21,595

 

Funds held in escrow, including funds in transit

 

 

107,479

 

 

 

87,195

 

Trade and client receivables

 

 

41,592

 

 

 

30,762

 

Prepaid expenses and other current assets

 

 

5,326

 

 

 

4,574

 

Total current assets

 

 

181,452

 

 

 

144,126

 

Property and equipment, net

 

 

6,260

 

 

 

3,514

 

Goodwill

 

 

118,219

 

 

 

118,219

 

Intangible assets, net

 

 

6,671

 

 

 

8,672

 

Other assets, noncurrent

 

 

6,240

 

 

 

658

 

Total assets

 

$

318,842

 

 

$

275,189

 

 

 

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

5,471

 

 

$

462

 

Escrow funds payable

 

 

107,479

 

 

 

87,195

 

Debt, current

 

 

29,594

 

 

 

10,342

 

Accrued expenses and other current liabilities

 

 

16,911

 

 

 

16,030

 

Deferred revenue

 

 

717

 

 

 

614

 

Total current liabilities

 

 

160,172

 

 

 

114,643

 

Debt, noncurrent

 

 

19,304

 

 

 

23,491

 

Other liabilities, noncurrent

 

 

6,110

 

 

 

1,936

 

Total liabilities

 

 

185,586

 

 

 

140,070

 

 

 

 

 

 

 

 

 

 

Redeemable convertible preferred stock

 

 

166,486

 

 

 

166,486

 

Stockholders’ deficit:

 

 

 

 

 

 

 

 

Common stock

 

 

4

 

 

 

3

 

Additional paid-in capital

 

 

104,900

 

 

 

92,222

 

Accumulated deficit

 

 

(138,134

)

 

 

(123,592

)

Total stockholders’ deficit

 

 

(33,230

)

 

 

(31,367

)

Total liabilities, redeemable convertible preferred stock, and stockholders' deficit

 

$

318,842

 

 

$

275,189

 

 

 


 

UPWORK INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(7,346

)

 

$

(301

)

 

$

(14,542

)

 

$

1,068

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for transaction losses

 

 

1,892

 

 

 

1,073

 

 

 

4,612

 

 

 

2,857

 

Depreciation and amortization

 

 

1,287

 

 

 

1,033

 

 

 

3,542

 

 

 

3,135

 

Amortization of debt issuance costs

 

 

13

 

 

 

26

 

 

 

64

 

 

 

40

 

Change in fair value of redeemable preferred stock warrant liability

 

 

3,251

 

 

 

(10

)

 

 

3,610

 

 

 

41

 

Stock-based compensation expense

 

 

1,986

 

 

 

1,526

 

 

 

5,667

 

 

 

4,817

 

Loss (gain) on disposal of fixed assets

 

 

 

 

 

(7

)

 

 

33

 

 

 

(3

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and client receivables

 

 

(6,517

)

 

 

(3,525

)

 

 

(15,137

)

 

 

(7,239

)

Prepaid expenses and other assets

 

 

(86

)

 

 

140

 

 

 

(658

)

 

 

183

 

Accounts payable

 

 

4,745

 

 

 

(7

)

 

 

5,006

 

 

 

662

 

Accrued expenses and other liabilities

 

 

(17,823

)

 

 

4,572

 

 

 

(490

)

 

 

7,833

 

Deferred revenue

 

 

5

 

 

 

(147

)

 

 

103

 

 

 

56

 

Net cash provided by (used in) operating activities

 

 

(18,593

)

 

 

4,373

 

 

 

(8,190

)

 

 

13,450

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Decrease (increase) in restricted cash

 

 

6

 

 

 

 

 

 

(94

)

 

 

(1

)

Purchases of property and equipment

 

 

(301

)

 

 

(941

)

 

 

(1,598

)

 

 

(1,509

)

Internal-use software and platform development costs

 

 

(725

)

 

 

(151

)

 

 

(2,670

)

 

 

(392

)

Net cash used in investing activities

 

 

(1,020

)

 

 

(1,092

)

 

 

(4,362

)

 

 

(1,902

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in funds held in escrow, including funds in transit

 

 

(25,977

)

 

 

(4,564

)

 

 

(20,283

)

 

 

(12,016

)

Changes in escrow funds payable

 

 

25,977

 

 

 

4,564

 

 

 

20,283

 

 

 

12,016

 

Proceeds from exercises of stock options

 

 

2,740

 

 

 

93

 

 

 

7,011

 

 

 

1,494

 

Proceeds from exercise of redeemable convertible preferred stock warrant

 

 

 

 

 

 

 

 

 

 

 

260

 

Proceeds from borrowings on debt

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

 

 

15,000

 

Payment of debt issuance costs

 

 

 

 

 

(84

)

 

 

 

 

 

(84

)

Repayment of debt

 

 

 

 

 

(14,000

)

 

 

 

 

 

(17,000

)

Payments of deferred offering costs

 

 

(2,403

)

 

 

(14

)

 

 

(3,999

)

 

 

(14

)

Net cash provided by (used in) financing activities

 

 

15,337

 

 

 

995

 

 

 

18,012

 

 

 

(344

)

NET INCREASE (DECREASE) IN CASH

 

 

(4,276

)

 

 

4,276

 

 

 

5,460

 

 

 

11,204

 

Cash, beginning of period

 

 

31,331

 

 

 

34,254

 

 

 

21,595

 

 

 

27,326

 

Cash, end of period

 

$

27,055

 

 

$

38,530

 

 

$

27,055

 

 

$

38,530

 

 


 


 

UPWORK INC

PRO FORMA BALANCE SHEET IMPACT OF IPO

(In thousands)

(Unaudited)

 

 

The table below shows, on a pro forma basis, the effect of our initial public offering (“IPO”) (in thousands; unaudited) as if we had completed the IPO as of September 30, 2018. As of September 30, 2018, we had 36.9 million common shares outstanding. We completed our IPO in October 2018, in which we issued and sold 7,840,908 shares of common stock at a public offering price of $15.00 per share. We received net proceeds of $109.4 million after deducting underwriting discounts and commissions of $8.2 million. We also repaid $10.0 million of indebtedness under our loan agreement and reclassified our redeemable convertible preferred stock warrant liability of $4.7 million to stockholders’ equity. Lastly, we reclassified deferred offering costs included in other assets to stockholders’ equity. Upon the closing of the IPO, all outstanding shares of our redeemable convertible preferred stock automatically converted into 61,279,079 shares of common stock on a one-for-one basis. On a pro-forma basis, we had approximately 106 million common shares outstanding.

 

 

 

As of September 30, 2018

 

Consolidated Balance Sheet Data:

 

Actual

 

 

Pro Forma Adjustments

 

 

Pro Forma

 

Cash

 

$

27,055

 

 

$

99,381

 

 

$

126,436

 

Total current assets

 

 

181,452

 

 

 

99,381

 

 

 

280,833

 

Other assets

 

 

6,240

 

 

 

(5,648

)

 

 

592

 

Total assets

 

 

318,842

 

 

 

93,733

 

 

 

412,575

 

Debt, current

 

 

29,594

 

 

 

(10,000

)

 

 

19,594

 

Total current liabilities

 

 

160,172

 

 

 

(10,000

)

 

 

150,172

 

Other liabilities, noncurrent

 

 

6,110

 

 

 

(4,714

)

 

 

1,396

 

Total liabilities

 

 

185,586

 

 

 

(14,714

)

 

 

170,872

 

Redeemable convertible preferred stock

 

 

166,486

 

 

 

(166,486

)

 

 

 

Common stock

 

 

4

 

 

 

7

 

 

 

11

 

Additional paid-in capital

 

 

104,900

 

 

 

274,926

 

 

 

379,826

 

Total stockholders' equity (deficit)

 

 

(33,230

)

 

 

274,933

 

 

 

241,703

 

Total liabilities, redeemable convertible preferred stock, and stockholders' equity

 

 

318,842

 

 

 

93,733

 

 

 

412,575

 

 

 

 


 

UPWORK INC

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except for per share data)

(Unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

GAAP Net Income (Loss)

 

$

(7,346

)

 

$

(301

)

 

$

(14,542

)

 

$

1,068

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

1,986

 

 

 

1,526

 

 

 

5,667

 

 

 

4,817

 

Depreciation and amortization

 

 

1,287

 

 

 

1,033

 

 

 

3,542

 

 

 

3,135

 

Interest expense

 

 

589

 

 

 

199

 

 

 

1,674

 

 

 

629

 

Other expense, net

 

 

3,423

 

 

 

260

 

 

 

3,845

 

 

 

75

 

Provision for income tax

 

 

 

 

 

45

 

 

 

9

 

 

 

56

 

Non-GAAP Adjusted EBITDA

 

$

(61

)

 

$

2,762

 

 

$

195

 

 

$

9,780

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of revenue

 

$

20,504

 

 

$

16,894

 

 

$

60,578

 

 

$

47,847

 

Stock-based compensation

 

 

(59

)

 

 

(48

)

 

 

(164

)

 

 

(241

)

Non-GAAP cost of revenue

 

$

20,445

 

 

$

16,846

 

 

$

60,414

 

 

$

47,606

 

     % of revenue, non-GAAP

 

 

32

%

 

 

32

%

 

 

32

%

 

 

32

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit and gross margin reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

43,609

 

 

$

35,368

 

 

$

125,434

 

 

$

99,946

 

Stock-based compensation

 

 

59

 

 

 

48

 

 

 

164

 

 

 

241

 

Non-GAAP gross margin

 

$

43,668

 

 

$

35,416

 

 

$

125,598

 

 

$

100,187

 

     % of revenue, non-GAAP

 

 

68

%

 

 

68

%

 

 

68

%

 

 

68

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP research and development

 

$

14,377

 

 

$

11,514

 

 

$

40,680

 

 

$

32,519

 

Stock-based compensation

 

 

(623

)

 

 

(432

)

 

 

(1,711

)

 

 

(1,271

)

Non-GAAP research and development

 

$

13,754

 

 

$

11,082

 

 

$

38,969

 

 

$

31,248

 

     % of revenue, non-GAAP

 

 

21

%

 

 

21

%

 

 

21

%

 

 

21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP sales and marketing

 

$

18,967

 

 

$

13,626

 

 

$

55,054

 

 

$

37,327

 

Stock-based compensation

 

 

(355

)

 

 

(312

)

 

 

(1,026

)

 

 

(967

)

Non-GAAP sales and marketing

 

$

18,612

 

 

$

13,314

 

 

$

54,028

 

 

$

36,360

 

     % of revenue, non-GAAP

 

 

29

%

 

 

25

%

 

 

29

%

 

 

25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP general and administrative

 

$

11,707

 

 

$

8,952

 

 

$

34,102

 

 

$

25,415

 

Stock-based compensation

 

 

(949

)

 

 

(734

)

 

 

(2,766

)

 

 

(2,338

)

Amortization of intangible assets

 

 

(667

)

 

 

(667

)

 

 

(2,001

)

 

 

(2,060

)

Non-GAAP general and administrative

 

$

10,091

 

 

$

7,551

 

 

$

29,335

 

 

$

21,017

 

     % of revenue, non-GAAP

 

 

16

%

 

 

14

%

 

 

16

%

 

 

14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP income (loss) from operations

 

$

(3,334

)

 

$

203

 

 

$

(9,014

)

 

$

1,828

 

Stock-based compensation

 

 

1,927

 

 

 

1,478

 

 

 

5,503

 

 

 

4,576

 

Amortization of intangible assets

 

 

667

 

 

 

667

 

 

 

2,001

 

 

 

2,060

 

Non-GAAP income (loss) from operations

 

$

(740

)

 

$

2,348

 

 

$

(1,510

)

 

$

8,464

 

     % of revenue, non-GAAP

 

 

-1

%

 

 

4

%

 

 

-1

%

 

 

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss) attributable to common stockholders

 

$

(7,346

)

 

$

(301

)

 

$

(14,542

)

 

$

 

Change in fair value of redeemable convertible preferred stock warrant liability

 

 

3,251

 

 

 

(10

)

 

 

3,610

 

 

 

41

 

Stock-based compensation

 

 

1,986

 

 

 

1,526

 

 

 

5,667

 

 

 

4,817

 

Amortization of intangible assets

 

 

667

 

 

 

667

 

 

 

2,001

 

 

 

2,060

 

Non-GAAP net income (loss) attributable to common stockholders

 

$

(1,442

)

 

$

1,882

 

 

$

(3,264

)

 

$

6,918

 

     % of revenue, non-GAAP

 

 

-2

%

 

 

4

%

 

 

-2

%

 

 

5

%