The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Central District of California on behalf of those who acquired Everbridge, Inc. (“Everbridge” or the “Company”) (NASDAQ: EVBG) common stock from November 4, 2019 through February 24, 2022 (the “Class Period”). Investors have until June 3, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Everbridge is a global software company that provides enterprise software applications to automate and accelerate organizations’ operational response to “critical events” in order to keep people safe and organizations running.
On December 9, 2021, the Company disclosed that Defendant David Meredith had unexpectedly resigned as Chief Executive Officer (“CEO”), without providing a reason for his decision. The Company also provided 2022 revenue growth guidance of between 20%-23%, well below the expected baseline of 30%. One analyst, Raymond James, stated in its December 16, 2021 report that “[w]hile we don’t have exact details on the xMatters and Anvil [the two most recent acquisitions] contributions to revenue growth next year, we believe the guidance implies organic revenue growth in the high teens range.” On this news, Everbridge’s common stock price declined by $52.37 per share, or approximately 45.39%, from $115.37 per share on December 9, 2021 to close at $63.00 per share on December 10, 2021.
On February 24, 2022, Everbridge announced its financial results for the fourth quarter and full year 2021, as well as its guidance for the first quarter and full year 2022. As to revenue, the Company guided only 20% growth in the first quarter of 2022 and a scant 15%-17% growth for the full year, even lower than the disappointing guidance previously issued in December 2021. Further, in an earnings call with analysts that same day, the new interim co-CEO, Vernon Irvin, disclosed for the first time, despite prior representations to the contrary, that “these products and businesses” obtained from Everbridge’s buying binge “have created incremental product line complexity that produce integration challenges and have complicated our go-to-market efforts.” He also stated that Everbridge will pause engaging in any new M&A activity to focus on product integration, as well as significantly “simplify” and reduce its product offerings. Further, Irvin disclosed that in its international public warning business, Everbridge was “seeing meaningful contraction in the size of countrywide deals as compared to the wins that we are seeing over the past couple of years.” On this news, Everbridge’s common stock price declined by $15.68 per share, or approximately 33.87%, from $46.29 per share on February 24, 2022 to close at $30.61 per share on February 25, 2022.
The lawsuit alleges throughout the Class Period, Defendants made false and misleading statements, as well as failed to disclose: (i) Everbridge’s inability to exceed its financial guidance; (ii) that Everbridge struggled to integrate the new businesses it acquired, which created increasing difficulty in the Company’s ability to pitch a single, coherent system and sell its products to new and existing customers; and (iii) that the COVID pandemic did in fact have, and continued to have throughout that part of the Class Period starting when the pandemic began, a material impact on the size of the deals that Everbridge was able to obtain, with a negative effect on revenue growth.