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ON24 Announces Second Quarter 2023 Financial Results

  • Second quarter total revenue of $42.1 million
  • Achieved Q2 2023 profitability target, and Q4 2023 profitability milestone ahead of schedule
  • Launched new Generative AI Optimization Suite with strong customer trial adoption
  • Continued to execute on capital return program; returned approximately $73.5 million to stockholders in Q2

ON24 (NYSE: ONTF), a leading sales and marketing platform for B2B digital engagement, today announced financial results for the second quarter ended June 30, 2023.

“In the second quarter, we continued to make significant progress on our path to profitability by achieving positive non-GAAP EPS. We also achieved breakeven non-GAAP EBITDA, which is two quarters ahead of our original goal,” said Sharat Sharan, co-founder and CEO of ON24. “We continued to operate in a period of uncertainty in which our customers’ budgets remained under pressure. In this environment, we remain laser-focused on what we can control by executing against our strategic priorities of delivering profitability, developing the next generation of our platform enabled by generative AI, and further enhancing our enterprise go-to-market strategy. Looking ahead, we are confident that we have positioned our company to drive long-term profitable growth.”

Second Quarter 2023 Financial Highlights

  • Revenue:
    • Revenue from our Core Platform, including services, was $40.5 million, a decrease of 9% year-over-year.
    • Total revenue was $42.1 million, a decrease of 13% year-over-year.
  • ARR:
    • Core Platform ARR of $140.6 million as of June 30, 2023, a decrease of 10% year-over-year.
    • Total ARR of $144.8 million as of June 30, 2023, a decrease of 14% year-over-year.
  • GAAP Operating Loss was $15.8 million, compared to GAAP operating loss of $16.0 million in the second quarter of 2022.
  • Non-GAAP Operating Loss was $0.9 million, compared to non-GAAP operating loss of $6.2 million in the second quarter of 2022.
  • GAAP Net Loss was $12.8 million, or $(0.28) per diluted share, compared to GAAP net loss of $16.2 million, or $(0.34) per diluted share in the second quarter of 2022.
  • Non-GAAP Net Income was $2.1 million, or $0.04 per diluted share, compared to a non-GAAP net loss of $6.4 million, or $(0.14) per diluted share in the second quarter of 2022.
  • Cash Flow: Net cash used in operating activities was $4.3 million, compared to $2.7 million used in operating activities in the second quarter of 2022. Free cash flow was negative $4.9 million for the quarter, compared to negative $3.4 million in the second quarter of 2022.
  • Cash, Cash Equivalents and Marketable Securities totaled $240.5 million as of June 30, 2023.

For more information regarding non-GAAP operating income (loss), non-GAAP net income (loss) and free cash flows, see the section titled “Non-GAAP Financial Measures” below. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure, see the tables at the end of this press release.

Recent Business Highlights:

  • Achieved accelerated profitability targets through greater operational efficiency.
  • Launched new Generative AI Optimization Suite built on strong foundation of first-party data to fuel the next generation of the ON24 platform; over 200 customers in free trial with positive outlook for expansion sales.
  • Strengthened relationships with enterprise customers as percentage of Core Platform ARR in multiyear agreements hit an all-time high.
  • Continued to advance enterprise go-to-market execution with focus on mission-critical digital transformation initiatives requiring a differentiated enterprise-grade solution that supports compliance.

Financial Outlook

For the third quarter of 2023, ON24 expects:

  • Core Platform Revenue, including services, to be in the range of $36.5 million to $37.5 million.
  • Total revenue of $37.5 million to $38.5 million.
  • Non-GAAP operating loss of $2.7 million to $1.7 million.
  • Non-GAAP net income per share of $0.00 per share, or break-even EPS, using approximately 49.2 million diluted shares outstanding.
    • Restructuring charge of $0.7 million to $1.4 million, excluded from the Non-GAAP amounts above.

For the full year 2023, ON24 now expects:

  • Core Platform Revenue, including services, to be in the range of $152.0 million to $155.0 million.
  • Total revenue of $157.0 million to $160.0 million.
  • Non-GAAP operating loss of $9.5 million to $7.5 million.
  • Non-GAAP net loss per share of $(0.02) to net income of $0.02 per share using approximately 44.8 million basic and diluted shares outstanding and 49.6 million diluted shares outstanding, respectively.

Conference Call Information

ON24 will host a conference call and live webcast for analysts and investors today at 2:00 p.m. Pacific Time. Parties in the United States can access the call by dialing (877) 497-9071 or +1 (201) 689-8727.

A webcast and management’s prepared remarks for today’s call will be accessible on ON24’s investor relations website at investors.on24.com. Approximately one hour after completion of the live call, an archived version of the webcast will be available on the Company’s investor relations website.

Definitions of Certain Key Business Metrics

Core Platform: The ON24 Core Platform products include:

ON24 Elite: live, interactive webinar experience that engages prospective customers in real-time and can be made available in an on-demand format.

ON24 Breakouts: live breakout room experience that facilitates networking, collaboration and interactivity between users.

ON24 Forums: live, interactive experience that facilitates video-to-video interaction between presenters and audiences.

ON24 Go Live: live, interactive video event experience that enables presenters and attendees to engage face-to-face in real-time and can also be made available in an on-demand format.

ON24 Engagement Hub: always-on, rich multimedia content experience that prospective customers can engage anytime, anywhere.

ON24 Target: personalize and curate, rich landing page experience that engages specific segments of prospective customers to drive desired action.

Annual Recurring Revenue (“ARR”): ARR is calculated as the sum of the annualized value of our subscription contracts as of the measurement date, including existing customers with expired contracts that we expect to be renewed. Our ARR amounts exclude professional services, overages from subscription customers and Legacy revenue.

Non-GAAP Financial Measures

In addition to our results determined in accordance with generally accepted accounting principles in the United States, or “GAAP”, we consider our non-GAAP operating income (loss), non-GAAP net income (loss) and free cash flow in evaluating our operating performance. We define non-GAAP operating income (loss) as net income (loss) excluding, interest expense, other (income) expense, net, income tax, stock-based compensation, amortization of acquired intangible assets, shareholder activism related costs, restructuring costs, charges for underutilized real estate, and certain other costs. We define non-GAAP net income (loss) as net income (loss) excluding stock-based compensation, amortization of acquired intangible assets, shareholder activism related costs, restructuring costs, charges for underutilized real estate, and certain other costs. We define free cash flow as net cash provided by (used in) operating activities, less purchases of property and equipment.

We use non-GAAP operating income (loss) and non-GAAP net income (loss) to evaluate our ongoing operations and for internal planning and forecasting purposes, and we use free cash flow to measure and evaluate cash generated through normal business operations. We believe non-GAAP operating income (loss) and non-GAAP net income (loss) may be helpful to investors because they provide consistency and comparability with past financial performance. We believe free cash flow may be helpful to investors because it reflects that some purchases of property and equipment are necessary to support ongoing operations, while providing a measure of cash available to acquire customers, expand within existing customers and otherwise pursue our business strategies.

However, these non-GAAP financial measures are each presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Non-GAAP financial measures have no standardized meanings prescribed by GAAP and are not prepared under a comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison.

We do not provide a quantitative reconciliation of the forward-looking non-GAAP financial measures included in this press release to the most directly comparable GAAP measures due to the high variability and difficulty to predict certain items excluded from these non-GAAP financial measures; in particular, the effects of stock-based compensation expense, and restructuring and transaction expenses. We expect the variability of these excluded items may have a significant, and potentially unpredictable, impact on our future GAAP financial results.

Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measure are included in the tables at the end of this press release.

Forward-Looking Statements

This document contains “forward-looking statements” under applicable securities laws. Such statements can be identified by words such as: “outlook,” “expect,” “convert,” “believe,” “plan,” “future,” “may,” “should,” “will,” and similar references to future periods. Forward-looking statements include express or implied statements regarding our expected financial and operating results, the execution of our capital return program, the size of our market opportunity, the success of our new products and capabilities, the impact of the COVID-19 pandemic on the way people do business, and other statements regarding our ability to achieve our business strategies, growth, or other future events or conditions. Such statements are based on our current beliefs, expectations, and assumptions about future events or conditions, which are subject to inherent risks and uncertainties, including our ability to attract new customers and expand sales to existing customers, decline in our growth rate; fluctuation in our performance, our history of net losses and expected increases in our expenses; competition and technological development in our markets and any decline in demand for our solutions; our ability to expand our sales and marketing capabilities and otherwise manage our growth; the impact of the COVID-19 pandemic; disruptions or other issues with our technology or third-party services; compliance with data privacy, import and export controls, customs, sanctions and other laws and regulations; intellectual property matters; and matters relating to our common stock, along with the other risks and uncertainties discussed in the filings we make from time to time with the Securities and Exchange Commission. Actual results may differ materially from those indicated in forward-looking statements, and you should not place undue reliance on them. All statements herein are based only on information currently available to us and speak only as of the date hereof. Except as required by law, we undertake no obligation to update any such statement.

About ON24

ON24 is on a mission to re-imagine how companies engage, understand and build relationships with their audience in a digital world. Through our leading sales and marketing platform for digital engagement, businesses use our portfolio of webinar, virtual event and content experiences to drive engagement and generate first-party data, delivering revenue growth across the enterprise – from demand generation to customer success to partner enablement.

ON24 powers digital engagement for industry-leading customers worldwide, including 3 of the 5 largest global technology companies, 3 of the 6 largest US banks, 3 of the 5 largest global healthcare companies, and 3 of the 5 largest global industrial manufacturers, enabling organizations to reach millions of professionals a month for billions of engagement minutes per year with all the first-party data being captured, generated and integrated from one place. ON24 is headquartered in San Francisco with global offices in North America, EMEA, and APAC. For more information, visit www.ON24.com.

© 2023 ON24, Inc. All rights reserved. ON24 and the ON24 logo are trademarks owned by ON24, Inc., and are registered in the United States Patent and Trademark Office and in other countries.

ON24, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

 

 

June 30, 2023

 

December 31, 2022

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

25,158

 

 

$

26,996

 

Marketable securities

 

215,372

 

 

 

301,125

 

Accounts receivable, net

 

31,314

 

 

 

43,757

 

Deferred contract acquisition costs, current

 

12,452

 

 

 

13,136

 

Prepaid expenses and other current assets

 

7,293

 

 

 

6,281

 

Total current assets

 

291,589

 

 

 

391,295

 

Property and equipment, net

 

5,668

 

 

 

7,212

 

Operating right-of-use assets

 

3,717

 

 

 

5,606

 

Intangible asset, net

 

1,523

 

 

 

1,979

 

Deferred contract acquisition costs, non-current

 

16,876

 

 

 

17,773

 

Other long-term assets

 

1,370

 

 

 

1,608

 

Total assets

$

320,743

 

 

$

425,473

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

4,269

 

 

$

4,611

 

Accrued and other current liabilities

 

16,866

 

 

 

18,465

 

Deferred revenue

 

74,459

 

 

 

83,453

 

Finance lease liabilities, current

 

718

 

 

 

1,554

 

Operating lease liabilities, current

 

2,640

 

 

 

2,648

 

Total current liabilities

 

98,952

 

 

 

110,731

 

Operating lease liabilities, non-current

 

3,730

 

 

 

5,040

 

Other long-term liabilities

 

1,075

 

 

 

1,741

 

Total liabilities

 

103,757

 

 

 

117,512

 

Stockholders’ equity

 

 

 

Common stock

 

4

 

 

 

5

 

Additional paid-in capital

 

501,416

 

 

 

562,555

 

Accumulated deficit

 

(284,164

)

 

 

(253,727

)

Accumulated other comprehensive loss

 

(270

)

 

 

(872

)

Total stockholders’ equity

 

216,986

 

 

 

307,961

 

Total liabilities and stockholders’ equity

$

320,743

 

 

$

425,473

 

 

 

 

 

ON24, INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

Subscription and other platform

$

38,336

 

 

$

43,064

 

 

$

77,700

 

 

$

86,541

 

Professional services

 

3,750

 

 

 

5,174

 

 

 

7,449

 

 

 

10,189

 

Total revenue

 

42,086

 

 

 

48,238

 

 

 

85,149

 

 

 

96,730

 

Cost of revenue:

 

 

 

 

 

 

 

Subscription and other platform(1)(4)

 

9,066

 

 

 

9,958

 

 

 

18,955

 

 

 

19,560

 

Professional services(1)(4)

 

3,134

 

 

 

3,343

 

 

 

6,451

 

 

 

6,685

 

Total cost of revenue

 

12,200

 

 

 

13,301

 

 

 

25,406

 

 

 

26,245

 

Gross profit

 

29,886

 

 

 

34,937

 

 

 

59,743

 

 

 

70,485

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing(1)(4)

 

22,628

 

 

 

28,850

 

 

 

47,045

 

 

 

58,043

 

Research and development(1)(2)(4)

 

10,930

 

 

 

10,948

 

 

 

22,029

 

 

 

21,592

 

General and administrative(1)(3)(4)

 

12,105

 

 

 

11,158

 

 

 

26,383

 

 

 

22,035

 

Total operating expenses

 

45,663

 

 

 

50,956

 

 

 

95,457

 

 

 

101,670

 

Loss from operations

 

(15,777

)

 

 

(16,019

)

 

 

(35,714

)

 

 

(31,185

)

Interest expense

 

33

 

 

 

49

 

 

 

62

 

 

 

103

 

Other (income) expense, net

 

(3,193

)

 

 

103

 

 

 

(5,765

)

 

 

280

 

Loss before provision for income taxes

 

(12,617

)

 

 

(16,171

)

 

 

(30,011

)

 

 

(31,568

)

Provision for income taxes

 

230

 

 

 

41

 

 

 

426

 

 

 

123

 

Net loss

 

(12,847

)

 

 

(16,212

)

 

 

(30,437

)

 

 

(31,691

)

Net loss per share:

 

 

 

 

 

 

 

Basic and diluted

$

(0.28

)

 

$

(0.34

)

 

$

(0.65

)

 

$

(0.67

)

Weighted-average shares used in computing net loss per share:

 

 

 

 

 

 

 

Basic and diluted

 

45,866,022

 

 

 

47,187,586

 

 

 

46,581,527

 

 

 

47,408,479

 

(1)

Includes stock-based compensation as follows:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

Cost of revenue

 

 

 

 

 

 

 

Subscription and other platform

$

709

 

$

823

 

$

1,494

 

$

1,691

Professional services

 

144

 

 

166

 

 

296

 

 

340

Total cost of revenue

 

853

 

 

989

 

 

1,790

 

 

2,031

Sales and marketing

 

3,555

 

 

3,697

 

 

6,612

 

 

7,389

Research and development

 

2,363

 

 

1,925

 

 

4,384

 

 

3,906

General and administrative

 

4,834

 

 

3,087

 

 

8,940

 

 

5,879

Total stock-based compensation expense

$

11,605

 

$

9,698

 

$

21,726

 

$

19,205

(2)

Research and development expense includes amortization of acquired intangible asset of $135 thousand and $277 thousand for the three and six months ended June 30, 2023, respectively, and $137 thousand for the three and six months ended June 30, 2022, in connection with the Vibbio acquisition in April 2022.

(3)

General and administrative expense for the three and six months ended June 30, 2023 includes fees related to shareholder activism of $210 thousand and $2,656 thousand, respectively.

(4)

The results of operations for the three and six months ended June 30, 2023 includes restructuring costs, which primarily represent severance and related expense due to restructuring activities, and impairment charges on our headquarters lease, as follows:

 

Three Months Ended June 30, 2023

 

Six months ended June 30, 2023

 

Severance

and related

Charges(1)

 

Lease

Impairment

Charge(2)

 

Total

 

Severance

and related

Charges(1)

 

Lease

Impairment

Charge(2)

 

Total

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Subscription and other platform

$

720

 

$

89

 

$

809

 

$

1,505

 

$

89

 

$

1,594

Professional services

 

50

 

 

101

 

 

151

 

 

104

 

 

101

 

 

205

Total cost of revenue

 

770

 

 

190

 

 

960

 

 

1,609

 

 

190

 

 

1,799

Sales and marketing

 

597

 

 

208

 

 

805

 

 

1,808

 

 

208

 

 

2,016

Research and development

 

340

 

 

472

 

 

812

 

 

1,113

 

 

472

 

 

1,585

General and administrative

 

52

 

 

339

 

 

391

 

 

282

 

 

339

 

 

621

Total restructuring costs

$

1,759

 

$

1,209

 

$

2,968

 

$

4,812

 

$

1,209

 

$

6,021

 

ON24, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

$

(12,847

)

 

$

(16,212

)

 

$

(30,437

)

 

$

(31,691

)

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

 

 

 

 

 

 

 

Depreciation and amortization

 

1,375

 

 

 

1,339

 

 

 

2,792

 

 

 

2,546

 

Stock-based compensation expense

 

11,605

 

 

 

9,698

 

 

 

21,726

 

 

 

19,205

 

Amortization of deferred contract acquisition cost

 

3,951

 

 

 

3,950

 

 

 

7,844

 

 

 

8,017

 

Provision for allowance for doubtful accounts and billing reserve

 

798

 

 

 

487

 

 

 

1,699

 

 

 

747

 

Non-cash lease expense

 

444

 

 

 

482

 

 

 

941

 

 

 

1,001

 

Amortization (accretion) of marketable securities

 

(1,885

)

 

 

77

 

 

 

(3,711

)

 

 

330

 

Lease impairment charge

 

1,209

 

 

 

 

 

 

1,209

 

 

 

 

Other

 

28

 

 

 

(1

)

 

 

156

 

 

 

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

1,339

 

 

 

1,866

 

 

 

10,744

 

 

 

5,645

 

Deferred contract acquisition cost

 

(2,717

)

 

 

(3,741

)

 

 

(6,263

)

 

 

(7,368

)

Prepaid expenses and other assets

 

1,221

 

 

 

1,978

 

 

 

(848

)

 

 

(1,577

)

Accounts payable

 

882

 

 

 

(1,428

)

 

 

(471

)

 

 

314

 

Accrued liabilities

 

(1,658

)

 

 

1,007

 

 

 

(2,747

)

 

 

255

 

Deferred revenue

 

(6,707

)

 

 

(1,388

)

 

 

(8,994

)

 

 

(5,486

)

Other non-current liabilities

 

(1,354

)

 

 

(782

)

 

 

(2,123

)

 

 

(1,376

)

Net cash used in operating activities

 

(4,316

)

 

 

(2,668

)

 

 

(8,483

)

 

 

(9,438

)

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of property and equipment

 

(554

)

 

 

(690

)

 

 

(732

)

 

 

(1,674

)

Acquisition, net of cash acquired

 

 

 

 

(2,495

)

 

 

 

 

 

(2,495

)

Purchase of marketable securities

 

(76,234

)

 

 

(51,349

)

 

 

(195,825

)

 

 

(111,620

)

Proceeds from maturities of marketable securities

 

77,260

 

 

 

47,390

 

 

 

276,470

 

 

 

62,098

 

Proceeds from sale of marketable securities

 

 

 

 

 

 

 

9,321

 

 

 

 

Net cash provided by (used in) investing activities

 

472

 

 

 

(7,144

)

 

 

89,234

 

 

 

(53,691

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

629

 

 

 

581

 

 

 

884

 

 

 

1,738

 

Proceeds from issuance of common stock under ESPP

 

546

 

 

 

833

 

 

 

546

 

 

 

833

 

Payment of tax withholding obligations related to net share settlements on equity awards

 

 

 

 

 

 

 

 

 

 

(1,756

)

Payment for repurchase of common stock

 

(22,586

)

 

 

(8,734

)

 

 

(33,306

)

 

 

(21,808

)

Payment of cash dividend

 

(49,872

)

 

 

 

 

 

(49,872

)

 

 

 

Repayment of equipment loans

 

(60

)

 

 

(67

)

 

 

(131

)

 

 

(133

)

Repayment of finance lease obligations

 

(531

)

 

 

(555

)

 

 

(942

)

 

 

(972

)

Net cash used in financing activities

 

(71,874

)

 

 

(7,942

)

 

 

(82,821

)

 

 

(22,098

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

99

 

 

 

249

 

 

 

229

 

 

 

276

 

Net decrease in cash, cash equivalents and restricted cash

 

(75,619

)

 

 

(17,505

)

 

 

(1,841

)

 

 

(84,951

)

Cash, cash equivalents and restricted cash, beginning of period

 

100,947

 

 

 

97,597

 

 

 

27,169

 

 

 

165,043

 

Cash, cash equivalents and restricted cash, end of period

$

25,328

 

 

$

80,092

 

 

$

25,328

 

 

$

80,092

 

 

 

 

 

 

 

 

 

ON24, INC.

Reconciliation of GAAP to Non-GAAP Results

(in thousands, except share and per share data)

(Unaudited)

 

Reconciliation of gross profit and gross margin

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

GAAP gross profit

$

29,886

 

 

$

34,937

 

 

$

59,743

 

 

$

70,485

 

Add:

 

 

 

 

 

 

 

Stock-based compensation

 

853

 

 

 

989

 

 

 

1,790

 

 

 

2,031

 

Restructuring costs

 

770

 

 

 

 

 

 

1,609

 

 

 

 

Impairment charge

 

190

 

 

 

 

 

 

190

 

 

 

 

Non-GAAP gross profit

$

31,699

 

 

$

35,926

 

 

$

63,332

 

 

$

72,516

 

GAAP gross margin

 

71

%

 

 

72

%

 

 

70

%

 

 

73

%

Non-GAAP gross margin

 

75

%

 

 

74

%

 

 

74

%

 

 

75

%

Reconciliation of operating expenses

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

GAAP sales and marketing

$

22,628

 

 

$

28,850

 

 

$

47,045

 

 

$

58,043

 

Less:

 

 

 

 

 

 

 

Stock-based compensation

 

(3,555

)

 

 

(3,697

)

 

 

(6,612

)

 

 

(7,389

)

Restructuring costs

 

(597

)

 

 

 

 

 

(1,808

)

 

 

 

Impairment charge

 

(208

)

 

 

 

 

 

(208

)

 

 

 

Non-GAAP sales and marketing

$

18,268

 

 

$

25,153

 

 

$

38,417

 

$

50,654

 

 

 

 

 

 

 

 

 

GAAP research and development

$

10,930

 

 

$

10,948

 

 

$

22,029

 

 

$

21,592

 

Less:

 

 

 

 

 

 

 

Stock-based compensation

 

(2,363

)

 

 

(1,925

)

 

 

(4,384

)

 

 

(3,906

)

Restructuring costs

 

(340

)

 

 

 

 

 

(1,113

)

 

 

 

Impairment charge

 

(472

)

 

 

 

 

 

(472

)

 

 

 

Amortization of acquired intangible asset

 

(135

)

 

 

(137

)

 

 

(277

)

 

 

(137

)

Non-GAAP research and development

$

7,620

 

 

$

8,886

 

 

$

15,783

 

 

$

17,549

 

 

 

 

 

 

 

 

 

GAAP general and administrative

$

12,105

 

 

$

11,158

 

 

$

26,383

 

 

$

22,035

 

Less:

 

 

 

 

 

 

 

Stock-based compensation

 

(4,834

)

 

 

(3,087

)

 

 

(8,940

)

 

 

(5,879

)

Restructuring costs

 

(52

)

 

 

 

 

 

(282

)

 

 

 

Impairment charge

 

(339

)

 

 

 

 

 

(339

)

 

 

 

Fees related to shareholder activism

 

(210

)

 

 

 

 

 

(2,656

)

 

 

 

Non-GAAP general and administrative

$

6,670

 

 

$

8,071

 

 

$

14,166

 

 

$

16,156

 

 

ON24, INC.

Reconciliation of GAAP to Non-GAAP Results

(in thousands, except share and per share data)

(Unaudited)

 

Reconciliation of net loss to non-GAAP operating loss

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

$

(12,847

)

 

$

(16,212

)

 

$

(30,437

)

 

$

(31,691

)

Add:

 

 

 

 

 

 

 

Interest expense

 

33

 

 

 

49

 

 

 

62

 

 

 

103

 

Other (income) expense, net

 

(3,193

)

 

 

103

 

 

 

(5,765

)

 

 

280

 

Provision for income taxes

 

230

 

 

 

41

 

 

 

426

 

 

 

123

 

Stock-based compensation

 

11,605

 

 

 

9,698

 

 

 

21,726

 

 

 

19,205

 

Amortization of acquired intangible asset

 

135

 

 

 

137

 

 

 

277

 

 

 

137

 

Restructuring costs

 

1,759

 

 

 

 

 

 

4,812

 

 

 

 

Impairment charge

 

1,209

 

 

 

 

 

 

1,209

 

 

 

 

Fees related to shareholder activism

 

210

 

 

 

 

 

 

2,656

 

 

 

 

Non-GAAP operating loss

$

(859

)

 

$

(6,184

)

 

$

(5,034

)

 

$

(11,843

)

Reconciliation of net loss to Adjusted EBITDA

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

$

(12,847

)

 

$

(16,212

)

 

$

(30,437

)

 

$

(31,691

)

Add:

 

 

 

 

 

 

 

Interest expense

 

33

 

 

 

49

 

 

 

62

 

 

 

103

 

Other (income) expense, net

 

(3,193

)

 

 

103

 

 

 

(5,765

)

 

 

280

 

Provision for income taxes

 

230

 

 

 

41

 

 

 

426

 

 

 

123

 

Depreciation and amortization

 

1,240

 

 

 

1,202

 

 

 

2,515

 

 

 

2,409

 

Amortization of acquired intangible asset

 

135

 

 

 

137

 

 

 

277

 

 

 

137

 

Amortization of cloud implementation costs

 

37

 

 

 

37

 

 

 

74

 

 

 

63

 

Stock-based compensation

 

11,605

 

 

 

9,698

 

 

 

21,726

 

 

 

19,205

 

Restructuring costs

 

1,759

 

 

 

 

 

 

4,812

 

 

 

 

Impairment charge

 

1,209

 

 

 

 

 

 

1,209

 

 

 

 

Fees related to shareholder activism

 

210

 

 

 

 

 

 

2,656

 

 

 

 

Adjusted EBITDA

$

418

 

 

$

(4,945

)

 

$

(2,445

)

 

$

(9,371

)

Reconciliation of net loss to non-GAAP net income (loss)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

$

(12,847

)

 

$

(16,212

)

 

$

(30,437

)

 

$

(31,691

)

Add:

 

 

 

 

 

 

 

Stock-based compensation

 

11,605

 

 

 

9,698

 

 

 

21,726

 

 

 

19,205

 

Amortization of acquired intangible asset

 

135

 

 

 

137

 

 

 

277

 

 

 

137

 

Restructuring costs

 

1,759

 

 

 

 

 

 

4,812

 

 

 

 

Impairment charge

 

1,209

 

 

 

 

 

 

1,209

 

 

 

 

Fees related to shareholder activism

 

210

 

 

 

 

 

 

2,656

 

 

 

 

Non-GAAP net income (loss)

$

2,071

 

 

$

(6,377

)

 

$

243

 

 

$

(12,349

)

 

ON24, INC.

Reconciliation of GAAP to Non-GAAP Results

(in thousands, except share and per share data)

(Unaudited)

 

Reconciliation of GAAP to Non-GAAP basic and diluted net income (loss) per share

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

GAAP basic and diluted net loss per share:

 

 

 

 

 

 

 

Net loss

$

(12,847

)

 

$

(16,212

)

 

$

(30,437

)

 

$

(31,691

)

Weighted average common stock outstanding, basic and diluted

 

45,866,022

 

 

 

47,187,586

 

 

 

46,581,527

 

 

 

47,408,479

 

Net loss per share, basic and diluted

$

(0.28

)

 

$

(0.34

)

 

$

(0.65

)

 

$

(0.67

)

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Non-GAAP basic and diluted net income (loss) per share:

 

 

 

 

 

 

 

Net loss

$

(12,847

)

 

$

(16,212

)

 

$

(30,437

)

 

$

(31,691

)

Add:

 

 

 

 

 

 

 

Stock-based compensation

 

11,605

 

 

 

9,698

 

 

 

21,726

 

 

 

19,205

 

Amortization of acquired intangible asset

 

135

 

 

 

137

 

 

 

277

 

 

 

137

 

Restructuring costs

 

1,759

 

 

 

 

 

 

4,812

 

 

 

 

Impairment charge

 

1,209

 

 

 

 

 

 

1,209

 

 

 

 

Fees related to shareholder activism

 

210

 

 

 

 

 

 

2,656

 

 

 

 

Non-GAAP net income (loss)

$

2,071

 

 

$

(6,377

)

 

$

243

 

 

$

(12,349

)

Non-GAAP weighted-average common stock outstanding

 

 

 

 

 

 

 

Basic

 

45,866,022

 

 

 

47,187,586

 

 

 

46,581,527

 

 

 

47,408,479

 

Diluted

 

50,716,390

 

 

 

47,187,586

 

 

 

51,120,544

 

 

 

47,408,479

 

Non-GAAP net income (loss) per share of common stock:

 

 

 

 

 

 

 

Basic

$

0.05

 

 

$

(0.14

)

 

$

0.01

 

 

$

(0.26

)

Diluted

$

0.04

 

 

$

(0.14

)

 

$

 

 

$

(0.26

)

 

 

 

 

 

 

 

 

ON24, INC.

Reconciliation of GAAP to Non-GAAP Results

(in thousands)

(Unaudited)

 

Reconciliation of GAAP Cash Flow from Operating Activities to Free Cash Flow

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net cash used in operating activities:

$

(4,316

)

 

$

(2,668

)

 

$

(8,483

)

 

$

(9,438

)

Less: Purchases of property and equipment

 

(554

)

 

 

(690

)

 

 

(732

)

 

 

(1,674

)

Free cash flow

$

(4,870

)

 

$

(3,358

)

 

$

(9,215

)

 

$

(11,112

)

 

ON24, INC.

Revenue

(in thousands)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

Core Platform

 

 

 

 

 

 

 

Subscription and other platform

$

37,000

 

$

40,027

 

$

74,811

 

$

80,097

Professional services

 

3,460

 

 

4,604

 

 

6,855

 

 

9,041

Total core platform revenue

$

40,460

 

$

44,631

 

$

81,666

 

$

89,138

 

 

 

 

 

 

 

 

Virtual Conference

 

 

 

 

 

 

 

Subscription and other platform

$

1,336

 

$

3,037

 

$

2,889

 

$

6,444

Professional services

 

290

 

 

570

 

 

594

 

 

1,148

Total virtual conference revenue

$

1,626

 

$

3,607

 

$

3,483

 

$

7,592

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

Subscription and other platform

$

38,336

 

$

43,064

 

$

77,700

 

$

86,541

Professional services

 

3,750

 

 

5,174

 

 

7,449

 

 

10,189

Total revenue

$

42,086

 

$

48,238

 

$

85,149

 

$

96,730

 

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