KnowBe4 Announces First Quarter 2021 Financial Results

  • Complete GAAP income elevated 36.7% year-over-year to $53.6 million
  • Annual recurring income elevated 40.7% year-over-year to $222.three million
  • Complete variety of prospects reached almost 39,000
  • Money move from operations was $21.9 million and free money move was $ million

TAMPA BAY, Fla., Might 19, 2021 (GLOBE NEWSWIRE) — KnowBe4, Inc. (NASDAQ: KNBE), supplier of the main safety consciousness coaching and simulated phishing platform, at this time reported outcomes for the primary quarter ended March 31, 2021.

“We’re excited to announce that our first quarter outcomes as a newly public firm exceeded our expectations throughout the board with file annual recurring income (ARR) of $222.three million and powerful free money move era. ARR progress was pushed by one other quarter of latest buyer progress and cross-sell of our newer merchandise,” stated Stu Sjouwerman, founder and chief government officer of KnowBe4. “We now have established a market main place within the human-focused cybersecurity house validated by means of our sturdy first quarter outcomes. We stay up for persevering with to broaden on this place by means of new merchandise and options corresponding to Compliance Plus, AI-Pushed Phishing and PhishFlip, which we anticipate to deliver substantial worth to our present and potential prospects.”

Krish Venkataraman, KnowBe4’s co-president and chief monetary officer, added, “Our success with prospects translated into compelling monetary outcomes. First quarter income grew 36.7% year-over-year, reflecting sturdy progress throughout all of our merchandise and geographies. We’re more than happy to see our investments in platform growth and geographical enlargement repay. Our sturdy top-line progress and increasing profitability exhibit KnowBe4’s extremely resilient and money generative SaaS mannequin.”

First Quarter 2021 Monetary Highlights

 Q1-2021 Q1-2020 Change
 (in hundreds, besides share and per share quantities)
Income        $53,550  $39,178   + 36.7%
Annual recurring income1        $222,270  $157,919   + 40.7%
GAAP gross margin        86.three% 84.6 % + 1.7%
GAAP working margin        5.2% (three.9)% + 9.1%
Non-GAAP working margin1 (1.9)% + 12.9%
GAAP web revenue (loss) per share, primary and diluted        $zero.01  $(zero.03)  $zero.04 
Money move supplied by working actions        $21,852  $13,929   $7,923 
Free money move1        $20,961  $10,386   + 101.eight%

1 A reconciliation of GAAP to non-GAAP monetary measures and definitions for our key enterprise metrics, together with annualized recurring income and free money move, is supplied below the heading “Rationalization of Non-GAAP Monetary Measures”.

Latest Enterprise Highlights

  • Income and ARR elevated year-over-year by 36.7% and 40.7% respectively, pushed primarily by general enterprise progress ensuing from multi-product adoption tendencies, sturdy worldwide progress and continued enlargement of our buyer base.
  • All through 2021, we continued our innovation throughout quite a lot of new product options and enhancements together with the discharge of AI-Pushed Phishing, which automates the choice and supply of customized social engineering campaigns primarily based on customers’ coaching and response historical past. Moreover, we launched Season three of our award-winning Inside Man safety consciousness coaching sequence.
  • We hosted our fourth annual KB4-CON Digital Summit to additional interact with our prospects and companions. We skilled our highest ranges of participation so far with over 11,000 members registered for the occasion.
  • On March 1, 2021, we accomplished the acquisition of MediaPro Holdings, LLC for a complete buy worth of roughly $38 million, which was paid by means of a mixture of money and customary inventory. We anticipate this acquisition so as to add to our future technological capabilities and speed up our enlargement into the compliance market.
  • We entered right into a $100 million revolving line of credit score settlement with Financial institution of America, which we anticipate to permit us larger flexibility in executing on our progress methods.

Monetary Outlook
For the second quarter and full yr 2021, the Firm expects:

MetricSecond Quarter VaryProgress
Complete Income$55.5 – $56.5 million34 – 36%
MetricFull 12 months VaryProgress
Complete Income$229 – $231 million31 – 32%
Free Money Circulate Margin12 – 15%N/A

Convention Name Info
KnowBe4 will host a convention name for analysts and buyers to debate its earnings outcomes for the primary quarter of 2021 and outlook for the total yr 2021 at this time at 5:00 PM EDT. A recorded webcast of the occasion may also be out there shortly after the decision, and will likely be made out there for one yr on the KnowBe4 Investor Relations web site (

Ahead-Trying Statements
This press launch accommodates forward-looking statements throughout the that means of Part 27A of the Securities Act of 1933, as amended, and Part 21E of the Securities Alternate Act of 1934, as amended. Ahead-looking statements usually contain dangers and uncertainties, together with statements concerning our future monetary and working efficiency and our monetary outlook for the yr 2021. In some instances, you’ll be able to establish ahead trying statements as a result of they comprise phrases corresponding to “could,” “will,” “ought to,” “plans,” “anticipates,” “going to,” “might,” “intends,” “goal,” “tasks,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “proceed” or the unfavorable of those phrases or different related phrases or expressions that concern KnowBe4’s expectations, technique, priorities, plans or intentions. There are a major variety of components that might trigger precise outcomes to vary materially from statements made on this press launch, together with: the impression of the COVID-19 pandemic on our and our prospects’ enterprise; our restricted working historical past; our means to establish and successfully implement the required adjustments to deal with execution challenges; dangers related to managing our speedy progress; our restricted expertise with new product and subscription and help introductions and the dangers related to new merchandise and subscription and help choices, together with the chance of defects, errors, or vulnerabilities; our means to draw new and retain present prospects; the failure to well timed develop and obtain market acceptance of latest merchandise in addition to present merchandise; quickly evolving technological developments available in the market; size of gross sales cycles; and common market, political, financial, and enterprise circumstances.

Extra dangers and uncertainties that might have an effect on our monetary outcomes are included below the captions “Danger Components” and “Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations” set forth sometimes in our filings and reviews with the Securities and Alternate Fee (“SEC”), together with in our Quarterly Report on Kind 10-Q that will likely be filed with the SEC by June 7, 2021. Copies of which can be found freed from cost on the SEC’s web site at or upon request from our investor relations division. You shouldn’t depend on these forward-looking statements, as precise outcomes and outcomes could differ materially from these contemplated by these forward-looking statements because of such dangers and uncertainties. All forward-looking statements on this press launch are primarily based on data out there to us as of the date hereof, and we don’t assume any obligation to replace the forward-looking statements supplied to replicate occasions that happen or circumstances that exist after the date on which they had been made.

Use of Non-GAAP Monetary Info
We consider that the presentation of non-GAAP monetary data supplies vital supplemental data to administration and buyers concerning monetary and enterprise tendencies referring to our monetary situation and outcomes of operations. For additional data concerning these non-GAAP measures, together with the reconciliation of those non-GAAP monetary measures to their most straight comparable GAAP monetary measures, please consult with the monetary tables under, in addition to the “Rationalization of Non-GAAP Monetary Measures” part of this press launch.

About KnowBe4
KnowBe4 is the main supplier of “new-school” safety consciousness coaching and simulated phishing platform. Our mission is to allow your workers to make smarter safety selections, every single day. Via our subscription-based providers, your group can have entry to the main safety consciousness coaching platform.

Accessible Info
KnowBe4 broadcasts materials data to the general public about KnowBe4, its merchandise and different issues by means of quite a lot of means, together with filings with the Securities and Alternate Fee, press releases, public convention calls, webcasts, its Investor Relations web site, its Twitter accounts (@KnowBe4) and its blogs (together with with a purpose to obtain broad, non-exclusionary distribution of data to the general public and for complying with its disclosure obligations below Regulation FD.

Investor Relations Contact:
Ken Talanian

Press Contact:
Kathy Wattman

Rationalization of Non-GAAP Monetary Measures

To complement KnowBe4’s monetary data introduced in accordance with usually accepted accounting ideas in the USA (“GAAP”), we take into account sure monetary measure that aren’t ready in accordance with GAAP, together with Non-GAAP Working Revenue (Loss), Non-GAAP Working Margin and Free Money Circulate, as helpful in evaluating our working efficiency. We consider that non-GAAP monetary data, when taken collectively, could also be useful to buyers as a result of it assists buyers in seeing KnowBe4’s working outcomes by means of the eyes of administration, and since we consider that these measures present an extra instrument for buyers to make use of in evaluating our working outcomes over a number of intervals with different corporations in our trade. Nevertheless, non-GAAP monetary data is introduced for supplemental informational functions solely, has limitations as an analytical instrument, and shouldn’t be thought of in isolation or as an alternative to monetary data introduced in accordance with GAAP. Different corporations, together with corporations in our trade, could calculate similarly-titled non-GAAP measures in another way or could use different measures to judge their efficiency, all of which might scale back the usefulness of our non-GAAP monetary measures as instruments for comparability. A reconciliation is supplied under for every non-GAAP monetary measure to essentially the most straight comparable monetary measure acknowledged in accordance with GAAP. Traders are inspired to evaluate the associated GAAP monetary measures and the reconciliation of those non-GAAP monetary measures to their most straight comparable GAAP monetary measures and never depend on any single monetary measure to judge our enterprise.

Non-GAAP Working Revenue (Loss) and Non-GAAP Working Margin
We outline non-GAAP working revenue (loss) as GAAP working revenue (loss) excluding stock-based compensation expense, amortization of acquired intangible belongings and acquisition and integration associated prices. Prices related to acquisitions and integration embody authorized, accounting and different skilled charges, adjustments within the honest worth of contingent consideration obligations and different prices associated to the transition of the acquired enterprise. We consider non-GAAP working revenue (loss) supplies our administration and buyers consistency and comparability with our previous monetary efficiency and facilitates period-to-period comparisons of operations, as this metric usually eliminates the consequences of sure variables unrelated to our general working efficiency.

Free Money Circulate
We outline free money move as web money supplied by working actions, essentially the most straight comparable monetary measure calculated in accordance with GAAP, much less purchases of property, gear, quantities capitalized for internal-use software program and principal funds on finance leases. We consider that free money move is a significant indicator of liquidity to administration and buyers about the amount of money generated from our operations that, after the investments in property, gear and capitalized internal-use software program, can be utilized for strategic initiatives.

Rationalization of Key Enterprise Metrics

Along with GAAP measures of efficiency, we often monitor sure monetary and working metrics, together with Variety of Prospects and Annual Recurring Income (ARR), with a purpose to measure our present efficiency and estimate our future efficiency. We often evaluate and will regulate our processes for calculating our inner metrics to enhance their accuracy.

Variety of Prospects
We outline a buyer as a separate and distinct shopping for entity, corresponding to an organization, an academic or authorities establishment or a definite enterprise unit of a big firm that has an lively contract with us to entry our platform. We don’t take into account our channel companions as separate prospects as our contracts are executed with the top person, and we deal with MSPs, who could buy our merchandise on behalf of a number of corporations, as a single buyer. We consider that our means to extend and retain the variety of prospects on our platform is an indicator of our market penetration, the expansion of our enterprise and potential future enterprise alternatives.

Annual Recurring Income (ARR)
We outline ARR because the annualized worth of all contractual subscription agreements as of the top of the interval. We carry out this calculation on a person contract foundation by dividing the full greenback quantity of a contract by the full contract time period acknowledged in months and multiplying this quantity by twelve to annualize. Calculated ARR for every particular person contract is then aggregated to reach at whole ARR. We consider that ARR is a key metric to measure our enterprise efficiency as a result of it’s pushed by our means to amass new prospects and to keep up and broaden our relationship with present prospects.

KnowBe4, Inc.
Consolidated Stability Sheets
(in hundreds)

 March 31, 2021 December 31, 2020
Present belongings:   
Money and money equivalents$94,647   $85,582  
Accounts receivable, web37,261   38,664  
Deferred commissions13,947   13,177  
Pay as you go bills and different present belongings9,383   6,124  
Complete present belongings155,238   143,547  
Deferred commissions, non-current24,963   24,022  
Capitalized software program and content material, web14,592   15,523  
Property and gear, web10,076   10,284  
Working lease proper of use belongings, web11,571   12,067  
Intangible belongings, web9,065   2,985  
Goodwill41,819   eight,605  
Different belongings1,268   1,177  
Complete belongings$268,592   $218,210  
Liabilities and stockholders’ (deficit) fairness   
Present liabilities:   
Accounts payable and accrued bills$25,476   $19,265  
Present portion of deferred income127,047   112,469  
Present portion of working lease liabilities2,812   2,651  
Complete present liabilities155,335   134,385  
Non-current liabilities:   
Deferred income77,zero10   73,227  
Working lease liabilities, web of present portion9,284   9,766  
Different non-current liabilities2,279   three,991  
Complete liabilities243,908   221,369  
Stockholders’ fairness (deficit)   
Most popular inventory, Collection A, A-1, B, C, C-1     
Widespread inventory     
Extra paid-in capital184,325   158,483  
Collected deficit(159,103)  (161,303) 
Collected different complete loss(538)  (339) 
Complete stockholders’ fairness (deficit)24,684   (three,159) 
Complete liabilities and stockholders’ fairness (deficit)$268,592   $218,210  

KnowBe4, Inc.
Consolidated Statements of Operations
(in hundreds, besides per share quantities)

 Three Months Ended March 31,
 2021 2020
Revenues, web        $53,550   $39,178  
Price of revenues        7,343   6,zero43  
Gross revenue        46,207   33,135  
Working bills:   
Gross sales and advertising and marketing        23,071   19,627  
Know-how and growth        5,742   four,906  
Normal and administrative        14,629   10,120  
Complete working bills        43,442   34,653  
Working revenue (loss)        2,765   (1,518) 
Different revenue (expense):   
Curiosity revenue        18   125  
Curiosity expense        (196)  (13) 
Different (expense) revenue        (143)  33  
Revenue (loss) earlier than revenue tax (expense) profit        2,444   (1,373) 
Revenue tax (expense) profit        (244)  12  
Internet revenue (loss)        $2,200   $(1,361) 
Internet revenue (loss) per share, primary and diluted        $zero.01   $(zero.03) 
Weighted-average shares utilized in calculating primary web revenue (loss) per share        42,298,941   42,060,787  
Weighted-average shares utilized in calculating diluted web revenue (loss) per share        168,252,806   42,060,787  

KnowBe4, Inc.
Consolidated Statements of Money Flows
(in hundreds)

 Three Months Ended March 31,
 2021 2020
Money flows from working actions:   
Internet revenue (loss)$2,200   $(1,361) 
Changes to reconcile web revenue (loss) to web money from working actions:   
Additions to capitalized content material(1,218)  (1,zero27) 
Depreciation and amortization expensethree,247   2,696  
Deferred commissions amortizationfour,zero84   three,375  
Fairness-based compensation expense1,671   710  
Different, web(124)  93  
Modifications in working belongings and liabilities, web of enterprise mixtures:   
Accounts receivable2,774   1,914  
Deferred commissions(5,847)  (5,167) 
Pay as you go and different belongings(2,128)  1,128  
Accounts payable and different liabilities2,523   (1,371) 
Deferred income14,670   12,939  
Internet money supplied by working actions21,852   13,929  
Money flows from investing actions:   
Enterprise mixtures, web of money acquired(11,305)    
Purchases of property and gear(519)  (2,670) 
Capitalized internal-use software program prices(362)  (867) 
Internet money utilized in investing actions(12,186)  (three,537) 
Money flows from financing actions:   
Proceeds from the train of inventory choices347   60  
Repurchase of widespread inventory and choices(1,171)  (269) 
Proceeds from finance lease obligations   214  
Funds for finance lease obligations(10)  (6) 
Internet money utilized in financing actions(834)  (1) 
Impact of change charge adjustments on money and money equivalents233   (329) 
Internet change in money and money equivalents9,065   10,062  
Money and money equivalents, starting of interval85,582   48,864  
Money and money equivalents, finish of interval$94,647   $58,926  

Non-GAAP Working Revenue (Loss) and Non-GAAP Working Margin

 Three Months Ended March 31,
 2021 2020
        (in hundreds)
Working revenue (loss)        $2,765   $(1,518) 
Add: Inventory-based compensation expense        1,659   703  
Add: Amortization of acquired intangible belongings        175   83  
Add: Acquisition and integration associated prices        1,311     
Non-GAAP working revenue (loss)        $5,910   $(732) 
GAAP working margin        5.2%  (three.9)%
Non-GAAP working margin  (1.9)%

Free Money Circulate

 Three Months Ended March 31,
 2021 2020
        (in hundreds)
Internet money supplied by working actions         $21,852   $13,929  
Much less: Purchases of property and gear        (519)  (2,670) 
Much less: Capitalized internal-use software program        (362)  (867) 
Much less: Principal funds on finance leases        (10)  (6) 
Free Money Circulate        $20,961   $10,386  

Key Enterprise Metrics

 March 31,
 2021 2020
 ( in hundreds)
Variety of prospects        38,975   31,823  
Annual recurring income        $222,270   $157,919  


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