Business Wire | Nov 9, 2021 04:06PM EST

ON24 Announces Third Quarter 2021 Financial Results

Nov. 09, 2021

SAN FRANCISCO--(BUSINESS WIRE)--Nov. 09, 2021--ON24 (NYSE: ONTF), a leading cloud-based digital experience platform provider, today announced financial results for its third quarter ended September 30, 2021.

"We delivered a solid third quarter and strengthened our core enterprise customer base. We made steady progress and remain confident in the underlying strength of our business and the large market opportunity that lies ahead for us, although, as expected, we continued to face some headwinds with respect to first time renewals," said Sharat Sharan, co-founder and CEO of ON24. "I'm proud of the exciting platform innovations that our team is bringing to market for customers which we believe will drive our next phase of durable growth."

Third Quarter 2021 Financial Highlights

* ARR: Ending Annualized Recurring Revenue of $167.2 million as of September 30, 2021, an increase of 20% year-over-year. * Revenue: Total revenue was $49.4 million, an increase of 16% year-over-year. Subscription and Other Platform Revenue, was $43.6 million, an increase of 27% year-over-year. * GAAP Operating Loss was $9.3 million, compared to GAAP operating income of $6.8 million in the third quarter of 2020. * Non-GAAP Operating Loss was $1.4 million, compared to non-GAAP operating income of $7.5 million in the third quarter of 2020. * GAAP Net Loss attributable to common stockholders was $9.4 million, or $(0.20) per diluted share, compared to net income attributable to common stockholders of $5.1 million, or $0.12 per diluted share in the third quarter of 2020. * Non-GAAP Net Loss was $1.6 million, or $(0.03) per diluted share, compared to a non-GAAP net income of $7.2 million, or $0.42 per diluted share in the third quarter of 2020. * Cash Flow: Net cash used in operating activities was $0.9 million, compared to $11.5 million provided by operating activities in the third quarter of 2020. * Free Cash Flow was negative $1.6 million for the quarter, compared to $11.1 million in the third quarter of 2020. * Cash, Cash Equivalents and Marketable securities totaled $399.7 million as of September 30, 2021.

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

Product Innovation

* Hosted a customer event to introduce the latest ON24 technologies, platform innovations, and product roadmap for companies to advance digital engagement. * Announced ON24 Go Live as the latest addition to the ON24 platform, a new self-service virtual event product to stand up live-streaming video events such as roadshows, customer conferences, virtual pop-ups, town halls, and company meetings faster and easier. ON24 Go Live is planned to become available in November 2021 for early adopters. * New capabilities are available for audiences to watch ON24 Webcast Elite live webinars directly in ON24 Engagement Hub, a central content destination to generate demand with prospects, engage customers, and drive partner enablement. * Introduced Hybrid Mode in ON24 Webcast Elite to make seamless hybrid experiences possible and enable companies to customize their events for in-person and virtual attendees.

Industry Recognition

* ON24 Elite was rated the top webinar software by enterprise users for the second consecutive quarter by G2, one of the largest software marketplace and user review platforms. * The ON24 Digital Experience Platform was named the "Best Overall Event Management Platform" by MarTech Breakthrough as part of their annual awards recognizing the best companies, technologies, products, and services for sales, marketing, and advertising. * Forrester, a leading global research and advisory firm, recently included ON24 as a growth stage company in the content engagement solutions market for ON24 Engagement Hub, a central destination for audiences to get engaging, dynamic live and on-demand content when they need it.

Financial Outlook

For the fourth quarter of 2021, ON24 expects

* Total revenue of $51.0 to $52.0 million. * Non-GAAP operating loss of $4.7 to $3.7 million. * Non-GAAP net loss per share of $(0.10) to $(0.08) using approximately 48.2 million basic and diluted shares outstanding.

For the full year 2021, ON24 expects

* Total revenue of $202.6 to $203.6 million. * Non-GAAP operating loss of $0.9 million to non-GAAP operating income of $0.1 million. * Non-GAAP net loss per share of $(0.04) to $(0.02) using approximately 43.6 million basic and diluted shares outstanding.

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 (800) 367-2403, and international parties can access the call by dialing (334) 777-6978, using the conference ID 2232532.

A webcast 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.

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 and stock-based compensation. We define non-GAAP net income (loss) as net income (loss) excluding cumulative preferred dividends allocated to preferred shareholders and stock-based compensation. 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.

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 size of our market opportunity, the success of our new products and capabilities, the impact of COVID-19 and vaccines 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 sustain our recent revenue growth rate, attract new customers and expand sales to existing customers; fluctuation in our performance, our history of net losses and expected increases in our expenses; competition 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 provides a leading cloud-based hybrid engagement platform that makes it easy to create, scale, and personalize engaging experiences to drive measurable business growth. Today, we are helping over 2,000 companies worldwide, including 3 of the 5 largest global technology companies, 4 of the 5 largest US banks, 3 of the 5 largest global healthcare companies, and 3 of the 5 largest global industrial manufacturing companies, convert millions of prospects to buyers. Through interactive webinars, virtual events, and always-on multimedia experiences, ON24 provides a system of engagement, powered by AI, which enables businesses to scale engagement, conversions, and pipeline to drive revenue growth. The ON24 platform supports millions of professionals a month who are totaling billions of engagement minutes per year. ON24 is headquartered in San Francisco with global offices in North America, EMEA, and APAC. For more information, visit www.ON24.com.

(c) 2021 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)

September 30, December 31, 2021 2020

Assets

Current assets

Cash and cash equivalents $ 197,788 $ 58,243

Marketable securities 201,896 3,000

Accounts receivable, net 36,798 48,617

Deferred contract acquisition costs, current 11,718 10,528

Prepaid expenses and other current assets 9,661 7,079

Total current assets 457,861 127,467

Property and equipment, net 8,849 9,051

Deferred contract acquisition costs, non-current 20,205 18,753

Other long-term assets 995 1,447

Total assets $ 487,910 $ 156,718

Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit)

Current liabilities

Accounts payable $ 2,026 $ 4,730

Accrued liabilities 22,989 17,439

Deferred revenue 91,185 92,240

Long-term debt, current portion 2,128 2,359

Total current liabilities 118,328 116,768

Long-term debt 2,543 25,727

Other long-term liabilities 3,374 4,022

Total liabilities 124,245 146,517

Convertible Class A-1 and Class A-2 preferred stock - 83,857

Redeemable convertible Class B and Class B-1 - 70,000 preferred stock

Stockholders' equity (deficit)

Common stock 5 1

Additional paid-in capital 549,455 27,512

Accumulated deficit (186,010 ) (171,263 )

Accumulated other comprehensive income 215 94

Total Stockholders' equity (deficit) 363,665 (143,656 )

Total liabilities, convertible preferred stock and $ 487,910 $ 156,718 stockholders' equity (deficit)



ON24, INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Revenue:

Subscription and other platform

$

43,601

$

34,356

$

130,888

$

81,379

Professional services

5,761

8,233

20,691

22,276

Total revenue

49,362

42,589

151,579

103,655

Cost of revenue:

Subscription and other platform(1)

8,718

5,425

24,382

14,405

Professional services(1)

3,349

3,195

10,252

8,883

Total cost of revenue

12,067

8,620

34,634

23,288

Gross profit

37,295

33,969

116,945

80,367

Operating expenses:

Sales and marketing(1)

26,591

15,756

75,981

40,495

Research and development(1)

9,114

4,660

25,222

13,272

General and administrative(1)

10,851

6,712

29,719

14,370

Total operating expenses

46,556

27,128

130,922

68,137

Income (loss) from operations

(9,261

)

6,841

(13,977

)

12,230

Interest expense

65

228

402

633

Other (income) expense, net

106

(23

)

433

226

Income (loss) before provision for (benefit from) income taxes

(9,432

)

6,636

(14,812

)

11,371

Provision for (benefit from) income taxes

(32

)

31

(65

)

123

Net income (loss)

(9,400

)

6,605

(14,747

)

11,248

Cumulative preferred dividends allocated to preferred stockholders

-

(1,467

)

(558

)

(4,219

)

Net income (loss) attributable to common stockholders

$

(9,400

)

$

5,138

$

(15,305

)

$

7,029

Net income (loss) per share attributable to common stockholders:

Basic

$

(0.20

)

$

0.14

$

(0.36

)

$

0.19

Diluted

$

(0.20

)

$

0.12

$

(0.36

)

$

0.17

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

Basic

47,101,200

10,420,584

42,149,108

9,755,373

Diluted

47,101,200

17,068,097

42,149,108

13,417,405

ON24, INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)



Three Months Ended September Nine Months Ended September 30, 30,

2021 2020 2021 2020

Revenue:

Subscription and $ 43,601 $ 34,356 $ 130,888 $ 81,379 other platform

Professional 5,761 8,233 20,691 22,276 services

Total revenue 49,362 42,589 151,579 103,655

Cost of revenue:

Subscription andother platform^ 8,718 5,425 24,382 14,405 (1)

Professional 3,349 3,195 10,252 8,883 services^(1)

Total cost of 12,067 8,620 34,634 23,288 revenue

Gross profit 37,295 33,969 116,945 80,367

Operating expenses:

Sales and 26,591 15,756 75,981 40,495 marketing^(1)

Research and 9,114 4,660 25,222 13,272 development^(1)

General andadministrative^ 10,851 6,712 29,719 14,370 (1)

Total operating 46,556 27,128 130,922 68,137 expenses

Income (loss) (9,261 ) 6,841 (13,977 ) 12,230 from operations

Interest expense 65 228 402 633

Other (income) 106 (23 ) 433 226 expense, net

Income (loss)before provisionfor (benefit (9,432 ) 6,636 (14,812 ) 11,371 from) incometaxes

Provision for(benefit from) (32 ) 31 (65 ) 123 income taxes

Net income (9,400 ) 6,605 (14,747 ) 11,248 (loss)

Cumulativepreferreddividends - (1,467 ) (558 ) (4,219 ) allocated topreferredstockholders

Net income(loss)attributable to $ (9,400 ) $ 5,138 $ (15,305 ) $ 7,029 commonstockholders

Net income(loss) per shareattributable to commonstockholders:

Basic $ (0.20 ) $ 0.14 $ (0.36 ) $ 0.19

Diluted $ (0.20 ) $ 0.12 $ (0.36 ) $ 0.17

Weighted-averageshares used incomputing netincome (loss) per shareattributable tocommonstockholders:

Basic 47,101,200 10,420,584 42,149,108 9,755,373

Diluted 47,101,200 17,068,097 42,149,108 13,417,405

(1) Includes stock-based compensation as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Cost of revenue

Subscription and other platform

$

607

$

31

$

1,190

$

78

Professional services

109

7

248

16

Total cost of revenue

716

38

1,438

94

Sales and marketing

2,364

162

5,627

450

Research and development

1,235

70

2,879

189

General and administrative

3,516

350

7,851

720

Total stock-based compensation expense

$

7,831

$

620

$

17,795

$

1,453

(1) Includes stock-basedcompensation as follows:

Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Cost of revenue

Subscription and other platform $ 607 $ 31 $ 1,190 $ 78

Professional services 109 7 248 16

Total cost of revenue 716 38 1,438 94

Sales and marketing 2,364 162 5,627 450

Research and development 1,235 70 2,879 189

General and administrative 3,516 350 7,851 720

Total stock-based compensation $ 7,831 $ 620 $ 17,795 $ 1,453 expense

ON24, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Cash flows from operating activities:

Net income (loss)

$

(9,400

)

$

6,605

$

(14,747

)

$

11,248

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

Depreciation and amortization

1,129

741

3,423

1,930

Stock-based compensation expense

7,831

620

17,795

1,453

Amortization of deferred contract acquisition cost

3,803

3,115

11,305

7,460

Provision for allowance for doubtful accounts and billing reserve

67

652

1,276

1,449

Other

166

-

191

-

Changes in operating assets and liabilities:

Accounts receivable

2,026

(2,864

)

10,543

(21,424

)

Deferred contract acquisition cost

(4,355

)

(8,182

)

(13,947

)

(19,280

)

Prepaid expenses and other assets

1,720

(1,756

)

(5,358

)

(2,539

)

Accounts payable

(778

)

878

(2,219

)

1,116

Accrued liabilities

96

555

3,122

2,709

Deferred revenue

(2,714

)

10,731

(1,055

)

42,754

Other long-term liabilities

(485

)

384

(648

)

(37

)

Net cash (used in) provided by operating activities

(894

)

11,479

9,681

26,839

Cash flows from investing activities:

Purchase of property and equipment

(706

)

(386

)

(2,440

)

(674

)

Purchase of marketable securities

(162,558

)

-

(207,039

)

(5,000

)

Proceeds from maturities and paydowns of marketable securities

8,237

-

11,401

5,000

Net cash used in investing activities

(155,027

)

(386

)

(198,078

)

(674

)

Cash flows from financing activities:

Proceeds from initial public offering, net of underwriting discounts

-

-

353,397

-

Proceeds from issuance of common stock resulting from exercise of options

2,487

1,098

4,282

3,337

Payment of tax withholding obligations related to net share settlements of stock options exercise

-

-

(2,001

)

-

Proceeds from long-term debt

-

5,986

-

18,165

Repayments of long-term debt

(54

)

(6,045

)

(22,532

)

(18,129

)

Repayment of capital lease obligations

(501

)

(263

)

(1,885

)

(826

)

Payments of offering costs

-

-

(3,481

)

-

Net cash provided by financing activities

1,932

776

327,780

2,547

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

46

134

154

188

Net (decrease) increase in cash, cash equivalents and restricted cash

(153,943

)

12,003

139,537

28,900

Cash, cash equivalents and restricted cash, beginning of period

351,825

35,830

58,345

18,933

Cash, cash equivalents and restricted cash, end of period

$

197,882

$

47,833

$

197,882

$

47,833

Supplemental disclosures of cash flow information:

Cash paid for taxes, net of refunds

$

217

$

122

$

359

$

172

Cash paid for interest

$

86

$

228

$

489

$

724

Supplemental disclosures of noncash investing and financing activities:

Equipment acquired under capital leases

$

-

$

660

$

1,586

$

3,180

Equipment purchased funded by liabilities

$

-

$

-

$

391

$

179

Property and equipment purchased not yet paid

$

29

$

692

$

29

$

692

Marketable securities purchased not yet settled

$

3,482

$

-

$

3,482

$

-

Conversion of convertible preferred stock and redeemable convertible preferred stock to common stock

$

-

$

-

$

153,857

$

-

ON24, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Three Months Ended September Nine Months Ended September 30, 30,

2021 2020 2021 2020

Cash flows fromoperating activities:

Net income (loss) $ (9,400 ) $ 6,605 $ (14,747 ) $ 11,248

Adjustments toreconcile netincome (loss) to net cash providedby operatingactivities:

Depreciation and 1,129 741 3,423 1,930 amortization

Stock-basedcompensation 7,831 620 17,795 1,453 expense

Amortization ofdeferred contract 3,803 3,115 11,305 7,460 acquisition cost

Provision forallowance for 67 652 1,276 1,449 doubtful accountsand billing reserve

Other 166 - 191 -

Changes inoperating assets and liabilities:

Accounts receivable 2,026 (2,864 ) 10,543 (21,424 )

Deferred contract (4,355 ) (8,182 ) (13,947 ) (19,280 ) acquisition cost

Prepaid expenses 1,720 (1,756 ) (5,358 ) (2,539 ) and other assets

Accounts payable (778 ) 878 (2,219 ) 1,116

Accrued liabilities 96 555 3,122 2,709

Deferred revenue (2,714 ) 10,731 (1,055 ) 42,754

Other long-term (485 ) 384 (648 ) (37 ) liabilities

Net cash (used in)provided by (894 ) 11,479 9,681 26,839 operatingactivities

Cash flows frominvesting activities:

Purchase ofproperty and (706 ) (386 ) (2,440 ) (674 ) equipment

Purchase ofmarketable (162,558 ) - (207,039 ) (5,000 ) securities

Proceeds frommaturities andpaydowns of 8,237 - 11,401 5,000 marketablesecurities

Net cash used ininvesting (155,027 ) (386 ) (198,078 ) (674 ) activities

Cash flows fromfinancing activities:

Proceeds frominitial publicoffering, net of - - 353,397 - underwritingdiscounts

Proceeds fromissuance of commonstock resulting 2,487 1,098 4,282 3,337 from exercise ofoptions

Payment of taxwithholdingobligations relatedto net share - - (2,001 ) - settlements ofstock optionsexercise

Proceeds from - 5,986 - 18,165 long-term debt

Repayments of (54 ) (6,045 ) (22,532 ) (18,129 ) long-term debt

Repayment ofcapital lease (501 ) (263 ) (1,885 ) (826 ) obligations

Payments of - - (3,481 ) - offering costs

Net cash providedby financing 1,932 776 327,780 2,547 activities

Effect of exchangerate changes oncash, cash 46 134 154 188 equivalents andrestricted cash

Net (decrease)increase in cash, (153,943 ) 12,003 139,537 28,900 cash equivalentsand restricted cash

Cash, cashequivalents and 351,825 35,830 58,345 18,933 restricted cash,beginning of period

Cash, cashequivalents and $ 197,882 $ 47,833 $ 197,882 $ 47,833 restricted cash,end of period

Supplementaldisclosures of cash flow information:

Cash paid fortaxes, net of $ 217 $ 122 $ 359 $ 172 refunds

Cash paid for $ 86 $ 228 $ 489 $ 724 interest

Supplementaldisclosures ofnoncash investing and financingactivities:

Equipment acquiredunder capital $ - $ 660 $ 1,586 $ 3,180 leases

Equipment purchasedfunded by $ - $ - $ 391 $ 179 liabilities

Property andequipment purchased $ 29 $ 692 $ 29 $ 692 not yet paid

Marketablesecurities $ 3,482 $ - $ 3,482 $ - purchased not yetsettled

Conversion ofconvertiblepreferred stock and redeemable $ - $ - $ 153,857 $ - convertible preferred stock tocommon stock

ON24, INC.

Reconciliation from GAAP to Non-GAAP Results

(in thousands, except share and per share data)

(Unaudited)

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

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Net income (loss)

$

(9,400

)

$

6,605

$

(14,747

)

$

11,248

Add:

Interest expense

65

228

402

633

Other (income) expense, net

106

(23

)

433

226

Provision for (benefit from) income taxes

(32

)

31

(65

)

123

Stock-based compensation

7,831

620

17,795

1,453

Non-GAAP operating income (loss)

$

(1,430

)

$

7,461

$

3,818

$

13,683

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

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Net income (loss)

$

(9,400

)

$

6,605

$

(14,747

)

$

11,248

Add: Stock-based compensation expense

7,831

620

17,795

1,453

Non-GAAP net income (loss)

$

(1,569

)

$

7,225

$

3,048

$

12,701

Reconciliation of net income (loss) available to common stockholders

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Net income (loss) attributable to common shareholders

$

(9,400

)

$

5,138

$

(15,305

)

$

7,029

Add: Cumulative preferred dividends allocated to preferred shareholders

-

1,467

558

4,219

Add: Stock-based compensation expense

7,831

620

17,795

1,453

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

$

(1,569

)

$

7,225

$

3,048

$

12,701

GAAP net income (loss) per share, basic

$

(0.20

)

$

0.14

$

(0.36

)

$

0.19

GAAP net income (loss) per share, diluted

$

(0.20

)

$

0.12

$

(0.36

)

$

0.17

Non-GAAP earnings (loss) per share, basic

$

(0.03

)

$

0.69

$

0.07

$

1.30

Non-GAAP earnings (loss) per share, diluted

$

(0.03

)

$

0.42

$

0.06

$

0.95

Shares Used in GAAP Per Share Calculations:

GAAP weighted-average shares used to compute GAAP net income (loss) per share, basic

47,101,200

10,420,584

42,149,108

9,755,373

GAAP weighted-average shared used to compute GAAP net income (loss) per share, diluted

47,101,200

17,068,097

42,149,108

13,417,405

Shares Used in Non-GAAP Per Share Calculations:

Non-GAAP weighted-average shares used to compute non-GAAP earnings (loss) per share, basic

47,101,200

10,420,584

42,149,108

9,755,373

Non-GAAP weighted-average shared used to compute non-GAAP earnings (loss) per share, diluted

47,101,200

17,068,097

50,630,225

13,417,405

ON24, INC.

Reconciliation from GAAP to Non-GAAP Results

(in thousands, except share and per share data)

(Unaudited)

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

Three Months Ended September Nine Months Ended September 30, 30,

2021 2020 2021 2020

Net income $ (9,400 ) $ 6,605 $ (14,747 ) $ 11,248 (loss)

Add:

Interest expense 65 228 402 633

Other (income) 106 (23 ) 433 226 expense, net

Provision for(benefit from) (32 ) 31 (65 ) 123 income taxes

Stock-based 7,831 620 17,795 1,453 compensation

Non-GAAPoperating income $ (1,430 ) $ 7,461 $ 3,818 $ 13,683 (loss)



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

Three Months Ended September Nine Months Ended September 30, 30,

2021 2020 2021 2020

Net income $ (9,400 ) $ 6,605 $ (14,747 ) $ 11,248 (loss)

Add: Stock-basedcompensation 7,831 620 17,795 1,453 expense

Non-GAAP net $ (1,569 ) $ 7,225 $ 3,048 $ 12,701 income (loss)



Reconciliation of net income (loss) available to common stockholders

Three Months Ended September Nine Months Ended September 30, 30,

2021 2020 2021 2020

Net income(loss)attributable to $ (9,400 ) $ 5,138 $ (15,305 ) $ 7,029 commonshareholders

Add: Cumulativepreferreddividends - 1,467 558 4,219 allocated topreferredshareholders

Add: Stock-basedcompensation 7,831 620 17,795 1,453 expense

Non-GAAP netincome (loss)attributable to $ (1,569 ) $ 7,225 $ 3,048 $ 12,701 commonstockholders

GAAP net income(loss) per $ (0.20 ) $ 0.14 $ (0.36 ) $ 0.19 share, basic

GAAP net income(loss) per $ (0.20 ) $ 0.12 $ (0.36 ) $ 0.17 share, diluted

Non-GAAPearnings (loss) $ (0.03 ) $ 0.69 $ 0.07 $ 1.30 per share, basic

Non-GAAPearnings (loss) $ (0.03 ) $ 0.42 $ 0.06 $ 0.95 per share,diluted

Shares Used inGAAP Per Share Calculations:

GAAPweighted-averageshares used to 47,101,200 10,420,584 42,149,108 9,755,373 compute GAAP netincome (loss)per share, basic

GAAPweighted-averageshared used tocompute GAAP net 47,101,200 17,068,097 42,149,108 13,417,405 income (loss)per share,diluted

Shares Used inNon-GAAP Per ShareCalculations:

Non-GAAPweighted-averageshares used to 47,101,200 10,420,584 42,149,108 9,755,373 compute non-GAAPearnings (loss)per share, basic

Non-GAAPweighted-averageshared used to compute non-GAAP 47,101,200 17,068,097 50,630,225 13,417,405earnings (loss) per share,diluted

ON24, INC.

Earnings (Loss) Per Share

(in thousands, except share and per share data)

GAAP Basic Earnings (Loss) Per Share

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

GAAP basic net income (loss) per share:

Net income (loss)

$

(9,400

)

$

6,605

$

(14,747

)

$

11,248

Less: Cumulative preferred dividends allocated to preferred stockholders

-

(1,467

)

(558

)

(4,219

)

Net income (loss) attributable to common stockholders, basic

(9,400

)

5,138

(15,305

)

7,029

Income available to participating securities

-

(3,716

)

-

(5,175

)

Net income (loss) available to common stockholders

$

(9,400

)

$

1,422

$

(15,305

)

$

1,854

Weighted average common stock outstanding, basic

47,101,200

10,420,584

42,149,108

9,755,373

Basic earnings (loss) per share of common stock

$

(0.20

)

$

0.14

$

(0.36

)

$

0.19

GAAP Diluted Earnings (Loss) Per Share

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

GAAP diluted earnings (loss) per share:

Net income (loss)

$

(9,400

)

$

6,605

$

(14,747

)

$

11,248

Less: Cumulative preferred dividends allocated to preferred stockholders

-

(1,467

)

(558

)

(4,219

)

Net income (loss) attributable to common stockholders, diluted

(9,400

)

5,138

(15,305

)

7,029

Reallocation of earnings to participating securities considering potentially dilutive securities

-

(3,158

)

-

(4,709

)

Net income (loss) available to common stockholders

$

(9,400

)

$

1,980

$

(15,305

)

$

2,320

Weighted average common stock outstanding

47,101,200

10,420,584

42,149,108

9,755,373

Weighted average dilutive effect of stock options, restricted stock and ESPP

-

6,647,513

-

3,662,032

Diluted weighted average common shares

47,101,200

17,068,097

42,149,108

13,417,405

Diluted earnings (loss) per share of common stock

$

(0.20

)

$

0.12

$

(0.36

)

$

0.17

ON24, INC.

Earnings (Loss) Per Share

(in thousands, except share and per share data)

GAAP Basic Earnings (Loss) Per Share

Three Months Ended September Nine Months Ended September 30, 30,

2021 2020 2021 2020

GAAP basicnet income (loss) pershare:

Net income $ (9,400 ) $ 6,605 $ (14,747 ) $ 11,248 (loss)

Less:Cumulativepreferreddividends - (1,467 ) (558 ) (4,219 ) allocated topreferredstockholders

Net income(loss)attributable (9,400 ) 5,138 (15,305 ) 7,029 to commonstockholders,basic

Incomeavailable to - (3,716 ) - (5,175 ) participatingsecurities

Net income(loss)available to $ (9,400 ) $ 1,422 $ (15,305 ) $ 1,854 commonstockholders

Weightedaveragecommon stock 47,101,200 10,420,584 42,149,108 9,755,373 outstanding,basic

Basicearnings(loss) per $ (0.20 ) $ 0.14 $ (0.36 ) $ 0.19 share ofcommon stock



GAAP DilutedEarnings (Loss) PerShare

Three Months Ended September Nine Months Ended September 30, 30,

2021 2020 2021 2020

GAAP dilutedearnings (loss) pershare:

Net income $ (9,400 ) $ 6,605 $ (14,747 ) $ 11,248 (loss)

Less:Cumulativepreferreddividends - (1,467 ) (558 ) (4,219 ) allocated topreferredstockholders

Net income(loss)attributable (9,400 ) 5,138 (15,305 ) 7,029 to commonstockholders,diluted

Reallocationof earningstoparticipatingsecurities - (3,158 ) - (4,709 ) consideringpotentiallydilutivesecurities

Net income(loss)available to $ (9,400 ) $ 1,980 $ (15,305 ) $ 2,320 commonstockholders

Weightedaverage 47,101,200 10,420,584 42,149,108 9,755,373 common stockoutstanding

Weightedaveragedilutiveeffect ofstock - 6,647,513 - 3,662,032 options,restrictedstock andESPP

Dilutedweighted 47,101,200 17,068,097 42,149,108 13,417,405 averagecommon shares

Dilutedearnings(loss) per $ (0.20 ) $ 0.12 $ (0.36 ) $ 0.17 share ofcommon stock



Non-GAAP Earning (Loss) Per Share

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Non-GAAP basic earnings (loss) per share:

Net income (loss) available to common stockholders

$

(9,400

)

$

1,980

$

(15,305

)

$

2,320

Add: Cumulative preferred dividends allocated to preferred stockholders

-

1,467

558

4,219

Add: Stock based compensation

7,831

620

17,795

1,453

Add: Income available to participating securities

-

3,158

-

4,709

Non-GAAP earnings (loss) attributable to common stockholders, basic and diluted

(1,569

)

7,225

3,048

12,701

Non-GAAP weighted-average shares used to compute non-GAAP earnings (loss) per share, basic

47,101,200

10,420,584

42,149,108

9,755,373

Non-GAAP weighted-average shares used to compute non-GAAP earnings (loss) per share, diluted

47,101,200

17,068,097

50,630,225

13,417,405

Non-GAAP earnings per share of common stock:

Non-GAAP earnings (loss) per share, basic

$

(0.03

)

$

0.69

$

0.07

$

1.30

Non-GAAP earnings (loss) per share, diluted

$

(0.03

)

$

0.42

$

0.06

$

0.95

Non-GAAP Earning(Loss) Per Share

Three Months Ended September Nine Months Ended September 30, 30,

2021 2020 2021 2020

Non-GAAP basicearnings (loss) per share:

Net income (loss)available to $ (9,400 ) $ 1,980 $ (15,305 ) $ 2,320 commonstockholders

Add: Cumulativepreferreddividends - 1,467 558 4,219 allocated topreferredstockholders

Add: Stock based 7,831 620 17,795 1,453 compensation

Add: Incomeavailable to - 3,158 - 4,709 participatingsecurities

Non-GAAP earnings(loss)attributable to (1,569 ) 7,225 3,048 12,701 commonstockholders,basic and diluted



Non-GAAPweighted-averageshares used to 47,101,200 10,420,584 42,149,108 9,755,373 compute non-GAAPearnings (loss)per share, basic

Non-GAAPweighted-averageshares used tocompute non-GAAP 47,101,200 17,068,097 50,630,225 13,417,405 earnings (loss)per share,diluted

Non-GAAP earningsper share of common stock:

Non-GAAP earnings(loss) per share, $ (0.03 ) $ 0.69 $ 0.07 $ 1.30 basic

Non-GAAP earnings(loss) per share, $ (0.03 ) $ 0.42 $ 0.06 $ 0.95 diluted



ON24, INC.

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

(in thousands)

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Net cash (used in) provided by operating activities:

(894

)

11,479

9,681

26,839

Less: Purchases of property and equipment

(706

)

(386

)

(2,440

)

(674

)

Free cash flow

$

(1,600

)

$

11,093

$

7,241

$

26,165

ON24, INC.

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

(in thousands)

(Unaudited)



Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Net cash (used in)provided by operating (894 ) 11,479 9,681 26,839 activities:

Less: Purchases of (706 ) (386 ) (2,440 ) (674 ) property and equipment

Free cash flow $ (1,600 ) $ 11,093 $ 7,241 $ 26,165



ON24, INC.

Revenue

(in thousands)

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Digital Experience Platform

Subscription and other platform

$

43,564

$

34,297

$

130,789

$

80,010

Professional services

5,761

8,183

20,666

21,705

Total digital experience platform

$

49,325

$

42,480

$

151,455

$

101,715

Legacy

Subscription and other platform

$

37

$

59

$

99

$

1,369

Professional services

-

50

25

$

571

Total legacy revenue

$

37

$

109

$

124

$

1,940

Revenue

Subscription and other platform

$

43,601

$

34,356

$

130,888

$

81,379

Professional services

5,761

8,233

20,691

22,276

Total revenue

$

49,362

$

42,589

$

151,579

$

103,655

View source version on businesswire.com: https://www.businesswire.com/news/home/20211109006393/en/

CONTACT: Media Contact: Roger Villareal press@on24.com

CONTACT: Investor Contact: Nate Pollack investorrelations@on24.com