ForgeRock Announces Second Quarter 2022 Financial Results

  • ARR grew 30% year-over-year to $201.6 million
  • Revenue grew 8% year-over-year to $47.7 million
  • SaaS as a percentage of ARR from new customers was 53% in Q2 

 

ForgeRock (NYSE: FORG), a global leader in digital identity, today announced financial results for its second quarter ended June 30, 2022.

“Identity remains a top priority for every modern organization in today’s shifting threat landscape and macroeconomic environment, and we continue to see strong customer demand for our enterprise-grade identity platform,” said Fran Rosch, CEO of ForgeRock. “At the same time, this uncertain macro environment has presented us with challenges such as longer deal cycles and FX headwinds. We are confident we have the right platform and market fit for our identity solutions and can drive robust and durable long-term growth as we capitalize on our $71 billion addressable market.”

“We were pleased to deliver revenue, non-GAAP operating loss and non-GAAP EPS results above our guided ranges in the second quarter, while our ARR results were impacted primarily by unexpected lengthening of sales cycles for our larger enterprise deals,” said John Fernandez, CFO of ForgeRock. “We continued to see strong adoption of our SaaS offering, which represented 53% of ARR from new customers in the quarter and tracks well towards our goal of finishing the year with 22% to 27% of ARR from SaaS. We remain focused on making measured investments to drive robust and durable long-term growth as we march toward achieving non-GAAP operating margin profitability sometime in the back half of 2023.”

Second Quarter 2022 Financial Highlights:

  • ARR: Annualized Recurring Revenue was $201.6 million, an increase of 30% year-over-year, marking the 6th consecutive quarter of ARR year-over-year growth of 30% or greater.
  • Revenue: Total revenue was $47.7 million, an increase of 8% year-over-year. Subscription SaaS, support & maintenance revenue grew 46% year-over-year in Q2, up sequentially from 43% year-over-year growth in Q1.
  • Operating Loss: GAAP operating loss was $22.3 million, or 47% of total revenue, compared to $4.6 million, or 11% of total revenue, in the second quarter of 2021. Non-GAAP operating loss was $14.3 million, or 30% of total revenue, compared to $2.9 million, or 7% of total revenue, in the second quarter of 2021.
  • Net Loss: GAAP net loss was $22.4 million, compared to $10.1 million in the second quarter of 2021. GAAP net loss per share was $0.26 compared to $0.40 in the second quarter of 2021. Non-GAAP net loss was $14.5 million, compared to $8.3 million in the second quarter of 2021. Non-GAAP net loss per share was $0.17, compared to $0.33 in the second quarter of 2021. Weighted average shares outstanding used to calculate non-GAAP net loss per share in Q2 2022 and Q2 2021 was 84.4 million and 25.2 million, respectively.
  • Cash Flow: Net cash used in operations was $20.3 million compared to $22.2 million in the second quarter of 2021. Free cash flow was $(20.7) million, or (44)% of total revenue, compared to $(22.4) million, or (51)% of total revenue, in the second quarter of 2021.
  • Cash, cash equivalents and short-term investments were $347.2 million as of June 30, 2022.

ForgeRock uses certain non-GAAP financial measures, which are described further below and reconciled to the most comparable GAAP financial measure after the presentation of our GAAP financial statements.

Financial Outlook:

For the third quarter of 2022, ForgeRock expects:

  • Total ARR of $208.0 million to $211.0 million, representing 28% year-over-year growth at the midpoint. Our Q3 and annual guidance is inclusive of estimated FX impact;
  • Total revenue of $49.0 million to $52.0 million, representing 14% year-over-year growth at the midpoint;
  • Non-GAAP operating loss of $12.0 million to $10.0 million, representing an operating margin range of negative 24% to negative 19%; and
  • Non-GAAP net loss per share of $0.17 to $0.13, assuming weighted-average shares outstanding of approximately 84.7 million.

For the full year 2022, ForgeRock now expects:

  • Total ARR of $225.0 million to $232.0 million, representing 25% year-over-year growth at the midpoint;
  • Total revenue of $206.0 million to $212.0 million, representing 18% year-over-year growth at the midpoint;
  • Non-GAAP operating loss of $35.0 million to $33.0 million, representing an operating margin range of negative 17% to negative 16%; and
  • Non-GAAP net loss per share of $0.49 to $0.44, assuming weighted-average shares outstanding of approximately 84.5 million.

These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

ForgeRock does not provide forward-looking guidance for certain financial data, such as depreciation, stock-based compensation, income (loss) from operations and net income (loss), and as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward-looking data without unreasonable effort. The impact of such adjustments could be significant.

Conference Call Information:

ForgeRock will host a conference call and webcast at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Thursday, August 11, 2022 to discuss its financial results and business highlights. To access this conference call, dial 1-800-437-2398 or 1-323-289-6576 and use the conference ID 9878662. The live webcast and a webcast replay of the conference call can be accessed from the investor relations page of ForgeRock's website at investors.forgerock.com.

Supplemental Financial and Other Information:

Supplemental financial and other information can be accessed through ForgeRock's investor relations website at investors.forgerock.com.

As of June 30, 2022, we had 11,968,482 options outstanding (vested and unvested) with a weighted-average exercise price of $5.65 and 3,898,053 RSUs outstanding. As of July 31, 2022, there were 37,845,089 shares of the registrant's Class A common stock outstanding and 47,184,236 shares of the registrant's Class B common stock outstanding. For more information, please refer to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

Non-GAAP Financial Measures and Key Metrics:

Besides financial results prepared in accordance with generally accepted accounting principles (“GAAP”), ForgeRock believes that evaluating its ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Accordingly, ForgeRock uses non-GAAP financial measures to evaluate its operations. We use non-GAAP financial measures to understand and evaluate our core operating performance and trends, to prepare our annual budget, to monitor and assess our liquidity, and to develop short-term and long-term operating plans. We believe that the non-GAAP financial measures we review are each a useful measure to us and to our investors because they provide consistency and comparability with our past performance and between periods, as these metrics generally eliminate the effects of the variability of certain charges and expenses that may not reflect our overall operating performance and liquidity. We believe that non-GAAP financial measures, when taken collectively with GAAP financial information, can be helpful to us and to investors because it provides consistency and comparability with past performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results.

ForgeRock presents non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development, non-GAAP sales and marketing, non-GAAP general and administrative, non-GAAP operating loss, non-GAAP operating margin and non-GAAP net loss per share, all of which exclude stock-based compensation expense and certain of which exclude the tax effect on the provision for (benefit from) income taxes. ForgeRock excludes stock-based compensation expense as it can vary significantly from period to period based on share price and the timing, size and nature of equity awards. As such, ForgeRock and many investors and analysts exclude stock-based compensation expense to better evaluate its operating performance and cash spending levels relative to its industry sector and competitors.

ForgeRock presents adjusted EBITDA, which is also a non-GAAP financial measure. We define adjusted EBITDA as GAAP operating loss, adjusted for depreciation and stock-based compensation expense. ForgeRock excludes certain items that it believes are not good indicators of ForgeRock’s current or future operating performance. These items are depreciation and stock-based compensation (as discussed above). ForgeRock excludes depreciation given its standard exclusion in EBITDA and adjusted EBITDA results. In addition, the frequency and amount of such charges can vary significantly based on the size and timing of the transactions.

ForgeRock also presents free cash flow, which is a non-GAAP financial measure. We define free cash flow as net cash used in operating activities less cash used for purchases of property and equipment. ForgeRock provides free cash flow as it is a commonly used non-GAAP financial measure to indicate the amount of cash needed to fund its operations and capital expenditures.

The non-GAAP financial information is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly-titled non-GAAP measures used by other companies. The principal limitation of these non-GAAP financial measures is that they exclude expenses that are required by GAAP to be recorded in our consolidated financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by our management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

ForgeRock also uses the key metric Annualized Recurring Revenue (“ARR”), to evaluate its operations. We believe that ARR is a key metric because it is driven by our ability to acquire new customers and to maintain and expand our relationship with existing customers. We define ARR as the annualized value of all contractual subscription agreements as of the end of the period. To the extent that we are negotiating a renewal with a customer after the expiration of the subscription, we continue to include that revenue in ARR if we are actively in discussion with such an organization for a new subscription or renewal, or until such organization notifies us that it is not renewing its subscription. We perform this calculation on an individual customer basis by dividing the total dollar amount of the customer’s contract by the total contract term stated in months and multiplying this amount by 12 to annualize. Calculated ARR for each individual customer is then aggregated to arrive at total ARR.

ARR does not have a standardized meaning and therefore may not be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue, deferred revenue and remaining performance obligations computed and/or disclosed in accordance with GAAP and is not intended to be combined with or to replace any of those items. Specifically, ARR, as calculated under the definition herein, has the effect of normalizing the impact of revenue recognition for term-based subscription license agreements. ARR is calculated based upon annualized contract value and not actual GAAP revenue. Under ASC 606, for term-based subscription license agreements, we recognize approximately half of the total contract value upfront as license revenue, with the remainder attributable to maintenance and support that is recognized ratably over the license term. Annualizing actual GAAP revenue for any particular period could result in a meaningful difference from our ARR calculation, particularly when we are experiencing increases or decreases in the mix of multi-year term licenses. ARR is not a forecast and the active contracts at the date used in calculating ARR may or may not be extended by our customers.

Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate to future events or ForgeRock’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates,” “going to,” "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "continue" or the negative of these words or other similar terms or expressions that concern ForgeRock’s expectations, strategy, priorities, plans or intentions. Forward-looking statements in this release include, but are not limited to the quotations of management, the section titled “Financial Outlook,” and statements regarding our strategy and the market for our products and services. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to our ability to attract new customers and retain and sell additional functionality and services to our existing customers, our ability to sustain and manage our growth, our ability to successfully add new features and functionality to our platform, our ability to compete effectively in an increasingly competitive market, and general market, political, economic, and business conditions, including the impact of COVID-19, and other risks detailed in our filings with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K filed with the SEC on March 9, 2022 and in our Quarterly Report on Form 10-Q that will be filed with the SEC on or about August 12, 2022.

Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent our views as of the date of this press release. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. We anticipate that subsequent events and developments could cause our views to change. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About ForgeRock

ForgeRock®, a global leader in digital identity, delivers modern identity and access management solutions for consumers, employees and things to simply and safely access the connected world. Using ForgeRock, more than 1,300 organizations around the world orchestrate, manage, and secure the complete lifecycle of identities from dynamic access controls, governance, APIs, and storing authoritative data – consumable in cloud or hybrid environments.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Revenue:

 

 

 

 

 

 

 

Subscription term licenses

$

15,527

 

 

$

22,504

 

 

$

35,185

 

 

$

43,585

 

Subscription SaaS, support & maintenance

 

29,562

 

 

 

20,239

 

 

 

55,748

 

 

 

38,603

 

Perpetual licenses

 

19

 

 

 

147

 

 

 

105

 

 

 

702

 

Total subscriptions and perpetual licenses

 

45,108

 

 

 

42,890

 

 

 

91,038

 

 

 

82,890

 

Professional services

 

2,569

 

 

 

1,063

 

 

 

4,731

 

 

 

1,913

 

Total revenue

 

47,677

 

 

 

43,953

 

 

 

95,769

 

 

 

84,803

 

Cost of revenue(1):

 

 

 

 

 

 

 

Subscriptions and perpetual licenses

 

6,415

 

 

 

4,149

 

 

 

12,268

 

 

 

7,796

 

Professional services

 

2,912

 

 

 

3,792

 

 

 

5,763

 

 

 

6,681

 

Total cost of revenue

 

9,327

 

 

 

7,941

 

 

 

18,031

 

 

 

14,477

 

Gross profit

 

38,350

 

 

 

36,012

 

 

 

77,738

 

 

 

70,326

 

Operating expenses(1):

 

 

 

 

 

 

 

Research and development

 

15,666

 

 

 

9,952

 

 

 

30,144

 

 

 

20,387

 

Sales and marketing

 

30,050

 

 

 

22,044

 

 

 

57,028

 

 

 

42,286

 

General and administrative

 

14,935

 

 

 

8,656

 

 

 

28,479

 

 

 

16,903

 

Total operating expenses

 

60,651

 

 

 

40,652

 

 

 

115,651

 

 

 

79,576

 

Operating loss

 

(22,301

)

 

 

(4,640

)

 

 

(37,913

)

 

 

(9,250

)

Foreign currency gain (loss)

 

1,026

 

 

 

33

 

 

 

1,461

 

 

 

(319

)

Fair value adjustment on warrants and preferred stock tranche option

 

 

 

 

(3,761

)

 

 

 

 

 

(7,339

)

Interest expense

 

(881

)

 

 

(1,197

)

 

 

(1,780

)

 

 

(2,377

)

Other, net

 

275

 

 

 

(207

)

 

 

343

 

 

 

(403

)

Interest and other expense, net

 

420

 

 

 

(5,132

)

 

 

24

 

 

 

(10,438

)

Loss before income taxes

 

(21,881

)

 

 

(9,772

)

 

 

(37,889

)

 

 

(19,688

)

Provision for income taxes

 

489

 

 

 

286

 

 

 

951

 

 

 

456

 

Net loss

$

(22,370

)

 

$

(10,058

)

 

$

(38,840

)

 

$

(20,144

)

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders:

Basic and diluted

$

(0.26

)

 

$

(0.40

)

 

$

(0.46

)

 

$

(0.81

)

 

 

 

 

 

 

 

 

Weighted-average shares used in computing net loss per share attributable to common stockholders:

Basic and diluted

 

84,445

 

 

 

25,161

 

 

 

84,107

 

 

 

24,792

 

 

 

 

 

 

 

 

 

¹ Includes stock-based compensation as follows (in thousands):

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Cost of revenue

$

615

 

 

$

94

 

 

$

1,132

 

 

$

167

 

Research and development

 

1,653

 

 

 

224

 

 

 

3,053

 

 

 

493

 

Sales and marketing

 

2,803

 

 

 

547

 

 

 

5,061

 

 

 

968

 

General and administrative

 

2,900

 

 

 

898

 

 

 

5,185

 

 

 

1,659

 

Total stock-based compensation expense

$

7,971

 

 

$

1,763

 

 

$

14,431

 

 

$

3,287

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

 

June 30,

2022

 

December 31,

2021

Assets

 

 

 

Cash and cash equivalents

$

99,083

 

 

$

128,381

 

Short-term investments

 

248,128

 

 

 

241,411

 

Accounts receivable, net of allowance for credit losses of $192 and $34, respectively

 

45,899

 

 

 

55,999

 

Contract assets

 

15,673

 

 

 

19,670

 

Deferred commissions

 

8,343

 

 

 

8,457

 

Prepaid expenses and other assets

 

10,362

 

 

 

9,787

 

Total current assets

 

427,488

 

 

 

463,705

 

Deferred commissions

 

16,441

 

 

 

15,601

 

Property and equipment, net

 

2,751

 

 

 

2,463

 

Operating lease right-of-use assets

 

10,785

 

 

 

12,626

 

Contract and other assets

 

3,091

 

 

 

2,783

 

Total assets

$

460,556

 

 

$

497,178

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

Accounts payable

$

1,930

 

 

$

2,039

 

Accrued compensation

 

16,017

 

 

 

22,359

 

Accrued expenses

 

5,924

 

 

 

5,016

 

Current portion of operating lease liability

 

1,263

 

 

 

1,820

 

Deferred revenue

 

64,261

 

 

 

67,222

 

Other liabilities

 

1,858

 

 

 

2,258

 

Total current liabilities

 

91,253

 

 

 

100,714

 

Long-term debt

 

39,547

 

 

 

39,483

 

Long-term operating lease liability

 

10,008

 

 

 

11,037

 

Deferred revenue

 

2,136

 

 

 

8,172

 

Other liabilities

 

1,811

 

 

 

1,646

 

Total liabilities

 

144,755

 

 

 

161,052

 

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock

 

85

 

 

 

83

 

Additional paid-in capital

 

615,321

 

 

 

593,196

 

Accumulated other comprehensive income

 

3,060

 

 

 

6,672

 

Accumulated deficit

 

(302,665

)

 

 

(263,825

)

Total stockholders’ equity

 

315,801

 

 

 

336,126

 

Total liabilities and stockholders’ equity

$

460,556

 

 

$

497,178

 

 

 

 

 

As of July 31, 2022, there were 37,845,089 shares of the registrant's Class A common stock outstanding and 47,184,236 shares of the registrant's Class B common stock outstanding.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Six Months Ended June 30,

 

2022

 

2021

Operating activities:

 

 

 

Net loss

$

(38,840

)

 

$

(20,144

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation

 

549

 

 

 

536

 

Noncash operating lease expense

 

1,147

 

 

 

937

 

Stock-based compensation expense

 

14,431

 

 

 

3,287

 

Amortization of deferred commissions

 

7,202

 

 

 

7,233

 

Foreign currency remeasurement gain

 

(1,539

)

 

 

(668

)

Change in fair value of redeemable convertible preferred stock warrant liability

 

 

 

 

4,157

 

Change in fair value of preferred stock tranche option liability

 

 

 

 

3,182

 

Amortization of premium / discount on short-term investments

 

1,247

 

 

 

371

 

Other non-cash

 

50

 

 

 

142

 

Changes in operating assets and liabilities:

 

 

 

Deferred commissions

 

(7,928

)

 

 

(9,577

)

Accounts receivable

 

7,709

 

 

 

(3,213

)

Contract and other non-current assets

 

2,458

 

 

 

(9,176

)

Prepaid expenses and other current assets

 

(893

)

 

 

(6,776

)

Operating lease liabilities

 

(884

)

 

 

(1,200

)

Accounts payable

 

(45

)

 

 

(411

)

Accrued expenses and other liabilities

 

(4,265

)

 

 

1,907

 

Deferred revenue

 

(5,130

)

 

 

93

 

Net cash used in operating activities

 

(24,731

)

 

 

(29,320

)

Investing activities:

 

 

 

Purchases of property and equipment

 

(974

)

 

 

(341

)

Purchases of short-term investments

 

(64,971

)

 

 

(63,283

)

Maturities of short-term investments

 

43,048

 

 

 

 

Sales of short-term investments

 

11,792

 

 

 

4,260

 

Net cash used in investing activities

 

(11,105

)

 

 

(59,364

)

Financing activities:

 

 

 

Payment of offering costs

 

(141

)

 

 

 

Proceeds from exercises of employee stock options

 

3,329

 

 

 

2,470

 

Proceeds from issuance of common stock under employee stock purchase plan

 

4,374

 

 

 

 

Proceeds from issuance of redeemable convertible preferred stock

 

 

 

 

19,951

 

Principal repayments on debt

 

 

 

 

(46

)

Net cash provided by financing activities

 

7,562

 

 

 

22,375

 

Effect of exchange rates on cash and cash equivalents and restricted cash

 

(1,036

)

 

 

(249

)

Net decrease in cash, cash equivalents and restricted cash

 

(29,310

)

 

 

(66,558

)

Cash, cash equivalents and restricted cash, beginning of year

 

128,437

 

 

 

100,042

 

Cash, cash equivalents and restricted cash, end of period

$

99,127

 

 

$

33,484

 

 

 

 

 

Reconciliation of cash and cash equivalents and restricted cash:

 

 

 

Cash and cash equivalents

$

99,083

 

 

$

33,431

 

Restricted cash included in prepaids and other current assets

 

44

 

 

 

53

 

Total cash and cash equivalents and restricted cash

$

99,127

 

 

$

33,484

 

 

 

 

 

Short-term investments, end of period

$

248,128

 

 

$

47,311

 

FORGEROCK, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS TO GAAP RESULTS

 

Non-GAAP Gross Profit and Non-GAAP Gross Margin

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit is defined as GAAP revenue less cost of revenue and gross margin is GAAP gross profit as a percentage of total revenue. We define non-GAAP gross profit and non-GAAP gross margin as GAAP gross profit and GAAP gross margin adjusted to exclude stock-based compensation expense, as presented below (in thousands, except percentages):

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Gross profit

$

38,350

 

 

$

36,012

 

 

$

77,738

 

 

$

70,326

 

Add: stock-based compensation included in cost of revenue

 

615

 

 

 

94

 

 

 

1,132

 

 

 

167

 

Non-GAAP gross profit

$

38,965

 

 

$

36,106

 

 

$

78,870

 

 

$

70,493

 

 

 

 

 

 

 

 

 

Gross margin

 

80

%

 

 

82

%

 

 

81

%

 

 

83

%

Non-GAAP gross margin

 

82

%

 

 

82

%

 

 

82

%

 

 

83

%

 

 

 

 

 

 

 

 

Non-GAAP Research and Development

 

 

 

 

 

 

 

 

 

 

 

 

We define non-GAAP research and development as GAAP research and development adjusted to exclude stock-based compensation expense, as presented below (in thousands):

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Research and development

$

15,666

 

 

$

9,952

 

 

$

30,144

 

 

$

20,387

 

Less: stock-based compensation

 

1,653

 

 

 

224

 

 

 

3,053

 

 

 

493

 

Non-GAAP research and development

$

14,013

 

 

$

9,728

 

 

$

27,091

 

 

$

19,894

 

 

 

 

 

 

 

 

 

Non-GAAP Sales and Marketing

 

 

 

 

 

 

 

 

 

 

 

 

We define non-GAAP sales and marketing as GAAP sales and marketing adjusted to exclude stock-based compensation expense, as presented below (in thousands):

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Sales and marketing

$

30,050

 

 

$

22,044

 

 

$

57,028

 

 

$

42,286

 

Less: stock-based compensation

 

2,803

 

 

 

547

 

 

 

5,061

 

 

 

968

 

Non-GAAP sales and marketing

$

27,247

 

 

$

21,497

 

 

$

51,967

 

 

$

41,318

 

Non-GAAP General and Administrative

 

 

 

 

 

 

 

 

 

 

 

 

We define non-GAAP general and administrative as GAAP general and administrative adjusted to exclude stock-based compensation expense, as presented below (in thousands):

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

General and administrative

$

14,935

 

 

$

8,656

 

 

$

28,479

 

 

$

16,903

 

Less: stock-based compensation

 

2,900

 

 

 

898

 

 

 

5,185

 

 

 

1,659

 

Non-GAAP general and administrative

$

12,035

 

 

$

7,758

 

 

$

23,294

 

 

$

15,244

 

 

 

 

 

 

 

 

 

Non-GAAP Operating Loss and Non-GAAP Operating Margin

 

 

 

 

 

 

 

 

 

 

 

 

We define non-GAAP operating loss and non-GAAP operating margin as GAAP operating loss and GAAP operating margin adjusted to exclude stock-based compensation expense, as presented below (in thousands, except percentages):

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Operating loss

$

(22,301

)

 

$

(4,640

)

 

$

(37,913

)

 

$

(9,250

)

Add: stock-based compensation

 

7,971

 

 

 

1,763

 

 

 

14,431

 

 

 

3,287

 

Non-GAAP operating loss

$

(14,330

)

 

$

(2,877

)

 

$

(23,482

)

 

$

(5,963

)

 

 

 

 

 

 

 

 

Operating margin

 

(47

) %

 

 

(11

) %

 

 

(40

) %

 

 

(11

) %

Non-GAAP operating margin

 

(30

) %

 

 

(7

) %

 

 

(25

) %

 

 

(7

) %

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

We define adjusted EBITDA as operating loss adjusted to exclude depreciation and stock-based compensation expense, as presented below (in thousands):

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Operating loss

$

(22,301

)

 

$

(4,640

)

 

$

(37,913

)

 

$

(9,250

)

Depreciation

 

269

 

 

 

267

 

 

 

549

 

 

 

536

 

Add: stock-based compensation

 

7,971

 

 

 

1,763

 

 

 

14,431

 

 

 

3,287

 

Adjusted EBITDA

$

(14,061

)

 

$

(2,610

)

 

$

(22,933

)

 

$

(5,427

)

 

 

 

 

 

 

 

 

Non-GAAP Net Loss and Non-GAAP Net Loss per Share, Basic and Diluted

 

 

 

 

 

 

 

 

We define non-GAAP net loss as GAAP net loss adjusted to exclude stock-based compensation expense, including the tax effect of stock-based compensation expense on the provision for (benefit from) income taxes as presented below (in thousands, except per share amounts):

 

 

 

 

 

 

 

 

We define non-GAAP net loss per share, basic, as non-GAAP net loss divided by GAAP weighted-average shares used to compute net loss per share, basic.

 

 

 

 

 

 

 

 

We define non-GAAP net loss per share, diluted, as non-GAAP net loss divided by GAAP weighted average shares used to compute net loss per share, basic, adjusted for (i) the dilutive effect of employee equity awards, excluding the impact of unrecognized stock-based compensation expense and (ii) warrants; unless these adjustments are anti-dilutive.

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Net loss

$

(22,370

)

 

$

(10,058

)

 

$

(38,840

)

 

$

(20,144

)

Add: stock-based compensation

 

7,971

 

 

 

1,763

 

 

 

14,431

 

 

 

3,287

 

Tax effect on the provision for (benefit from) income taxes

 

(71

)

 

 

(12

)

 

 

(133

)

 

 

(23

)

Non-GAAP net loss

$

(14,470

)

 

$

(8,307

)

 

$

(24,542

)

 

$

(16,880

)

 

 

 

 

 

 

 

 

Non-GAAP net loss per share, basic and diluted

$

(0.17

)

 

$

(0.33

)

 

$

(0.29

)

 

$

(0.68

)

 

 

 

 

 

 

 

 

Free Cash Flow

 

 

 

 

 

 

 

 

 

 

 

 

We define free cash flow as net cash provided by (used in) operating activities less cash used for purchases of property and equipment as presented below (in thousands):

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Net cash used in operating activities

$

(20,261

)

 

$

(22,223

)

 

$

(24,731

)

 

$

(29,320

)

Less: purchases of property and equipment

 

(486

)

 

 

(187

)

 

 

(974

)

 

 

(341

)

Free cash flow

$

(20,747

)

 

$

(22,410

)

 

$

(25,705

)

 

$

(29,661

)

 

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