Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~April 29, 2022,~~May 1, 2023, the registrant had ~~481,302,459~~491,620,840 shares of common stock, $0.0001 par value per share, outstanding.

See accompanying notes to the unaudited condensed consolidated financial statements

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

Property and equipment outside North America geographic locations represented 32.9% and 35.5% of total property and equipment, net as of March 31, 2023 and December 31, 2022, respectively, and are located primarily in India. The composition of the Company’s property and equipment between North America and locations outside of North America is set forth below (in thousands):

4.4. Property and Equipment

Property and equipment are summarized as follows (in thousands):


	March 31,			December 31,			March 31,			December 31,
	2022			2021			2023			2022
Computer equipment, purchased software and software developed for internal-use	$	23,992		$	22,517		$	20,100		$	18,190
Leasehold improvements		22,744			22,747			21,954			21,906
Furniture and equipment		9,137			9,087			8,213			8,048
Rentable onsite solutions equipment		6,324			6,324			6,531			6,531
Other		250			511			349			1,231
Property and equipment, gross		62,447			61,186			57,147			55,906
Less accumulated depreciation		(47,720	)		(45,852	)		(42,570	)		(40,656	)
Property and equipment, net	$	14,727		$	15,334		$	14,577		$	15,250

Depreciation of property and equipment was $~~2.0~~1.8 million and $~~3.1~~2.0 million ~~during~~for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

5. Capitalized Software Development Costs

Capitalized software for the Company’s software platforms was developed either internally or was acquired through acquisitions. Capitalized software development costs and acquired software technology are summarized as follows (in thousands):


	March 31, 2022			December 31, 2021			March 31, 2023			December 31, 2022
Capitalized software development costs, gross	$	397,447		$	385,384		$	398,644		$	385,717
Less, accumulated depreciation		(292,527	)		(276,533	)
Less, accumulated amortization								(305,885	)		(288,758	)
Capitalized software development costs, net	$	104,920		$	108,851		$	92,759		$	96,959

Amortization of capitalized software development costs, recorded as cost of revenue, was $~~16.0~~17.0 million and $~~15.2~~16.0 million during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

6. Goodwill and Intangible Assets

The change in carrying amount of goodwill is summarized as follows (in thousands):

Goodwill as of January 1, 2022

$
1,617,880

Foreign currency translation adjustments

187

Goodwill as of March 31, 2022

$
1,618,067


Goodwill as of January 1, 2023	$	1,620,312
Foreign currency translation adjustments		67
Measurement period adjustments		(109	)
Goodwill as of March 31, 2023	$	1,620,270

Intangible assets are amortized based on a pattern in which the asset’s economic benefits are consumed, or if not reliably determined, amortized on a straight-line basis over their estimated useful lives between two and fifteen years.

Intangible assets consisted of the following as of March 31, ~~2022~~2023 (in thousands):


	Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net		Weighted-average remaining life (in years)	Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net		Weighted average remaining life as of March 31, 2023
Customer relationships	$	438,350	$	(267,123	)	$	171,227	4.1 years	$	433,832	$	(302,540	)	$	131,292	3.2 years
Trademarks		96,905		(58,818	)		38,087	3.8 years		82,235		(52,513	)		29,722	3.5 years
Non-compete agreements		588		(588	)		-
Intangible assets subject to amortization		535,843		(326,529	)		209,314			516,067		(355,053	)		161,014
Indefinite-lived assets		62		-			62			62		-			62
Intangible assets, net	$	535,905	$	(326,529	)	$	209,376		$	516,129	$	(355,053	)	$	161,076

Intangible assets consisted of the following as of December 31, ~~2021~~2022 (in thousands):


	Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net		Weighted-average remaining life (in years)	Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net		Weighted average remaining life as of December 31, 2022
Customer relationships	$	438,002	$	(256,885	)	$	181,117	4.6 years	$	433,825	$	(292,935	)	$	140,890	3.4 years
Trademarks		96,902		(56,710	)		40,192	4.2 years		82,234		(50,405	)		31,829	3.8 years
Non-compete agreements		588		(588	)	-
Intangible assets subject to amortization		535,492		(314,183	)		221,309			516,059		(343,340	)		172,719
Indefinite-lived assets		62	-				62			62		-			62
Intangible assets, net	$	535,554	$	(314,183	)	$	221,371		$	516,121	$	(343,340	)	$	172,781

The total amount of amortization expense related to intangible assets, recorded as intangible asset amortization, exclusive of amounts included in cost of revenue, was $~~12.2~~11.7 million and $~~13.0~~12.2 million during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The intangible asset balance remaining as of March 31, ~~2022~~2023 will be amortized into expense in future years as follows (in thousands):

2022 (remaining nine months)

$
36,467

2023

46,715

2024

45,150

2025

39,308

2026

35,584

2027 and thereafter

6,090

Total amortization expense related to acquired intangible assets

$
209,314


2023 (remaining nine months)	$	35,017
2024		45,164
2025		39,322
2026		35,540
2027		3,997
2028 and thereafter		1,974
Total amortization expense related to acquired intangible assets	$	161,014

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of accrued compensation, such as ~~bonus, commission,~~bonuses, commissions, and payroll taxes, sales and other tax ~~liabilities, etc.~~liabilities. The following table summarizes the Company’s accrued expenses and other current liabilities ~~for~~as of the ~~periods~~dates indicated (in thousands):


	March 31, 2022		December 31, 2021		March 31, 2023		December 31, 2022
Accrued compensation	$	38,511	$	49,015	$	39,482	$	49,219
Sales and other tax liabilities		8,920		10,774		13,960		11,877
Other		19,308		20,038		35,551		21,153
Accrued expenses and other current liabilities	$	66,739	$	79,827	$	88,993	$	82,249

8. Income Taxes

The effective tax rate for the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 was (~~4.29~~14.39%) and (~~9.96~~4.29%), respectively. The difference between the Company’s effective tax rates for the ~~2022~~2023 and ~~2021~~2022 periods and the U.S. statutory tax rate of 21% related primarily to U.S. taxes on foreign earnings, foreign tax rate differentials, and valuation allowance.

The Company evaluates its tax positions on a quarterly basis. There were 0no material changes to the Company’s uncertain tax positions, interest, or penalties during the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.

9.9. Stockholders’ Equity

The Company’s Certificate of Incorporation authorizes 1,500,000,000 shares of ~~Common Stock~~common stock and 1,000,000 of ~~Preferred Stock,~~preferred stock, each $0.0001 par value per share. As of March 31, 2023 and 2022, 491,358,090and ~~2021,~~ 481,266,396 ~~and~~ ~~416,400,891~~shares of ~~Common Stock~~common stock were outstanding, respectively, and no shares of ~~Preferred Stock~~preferred stock were outstanding. The holders of the ~~Common Stock~~common stock are entitled to dividends only when declared by the Board of Directors ratably on a per share basis. Each share of ~~Common Stock~~common stock has one vote under the Company’s Certificate of Incorporation.

Stock-based Compensation

The weighted-average assumptions used in the valuation of stock option awards granted under the Black-Scholes model are summarized as follows:


	Three Months Ended March 31,						Three Months Ended March 31,
	2022			2021			2023	2022
Dividend yield		0.0	%		0.0	%	N/A		0.0	%
Volatility		45.30	%		44.55	%	N/A		45.30	%
Expected term (years)	5.92			5.89			N/A	5.92
Risk-free interest rate		1.85	%		1.23	%	N/A		1.85	%

Stock Option Activity Rollforward


Stock options	Number of shares subject to option			Weighted average exercise price per share		Weighted average remaining contractual term (years)		Aggregate intrinsic value (in thousands)		Unrecognized compensation expense (in thousands)		Number of shares subject to option			Weighted average exercise price per share		Weighted average remaining contractual term (years)		Aggregate intrinsic value (in thousands)		Unrecognized compensation expense (in thousands)
Balance as of January 1, 2022		51,646,456		$	4.13		6.29	$	208,614	$	40,337
Balance as of December 31, 2022													50,013,426		$	4.45		5.61	$	58,326	$	19,997
Granted		4,129,380			8.05								-			-
Exercised		(140,970	)		3.80								(1,181,835	)		4.35
Forfeited		(280,330	)		5.07								(49,002	)		7.83
Expired		-			-								-			-
Balance as of March 31, 2022		55,354,536		$	4.42		6.32	$	153,377	$	47,586
Vested and exercisable as of January 1, 2022		43,842,127		$	3.71		5.47	$	195,710	$	-
Vested and exercisable as of March 31, 2022		47,844,651		$	3.82		5.53	$	161,118	$	-
Balance as of March 31, 2023													48,782,589		$	4.45		5.35	$	190,657	$	13,043
Vested and exercisable as of December 31, 2022													35,321,479		$	3.85		4.42	$	54,842
Vested and exercisable as of March 31, 2023													43,963,138		$	4.11		4.97	$	186,839

~~During the three months ended March 31, 2022, the Company granted~~ ~~4,129,380~~ ~~stock options.~~

The ~~weighted-average~~Company did not grant ~~date fair value of~~any options ~~granted~~ during the three months ended March 31, ~~2022 was $3.72~~ ~~per share.~~2023.

The total intrinsic value of options that were exercised during the three months ended March 31, ~~2022~~2023 was $~~0.5~~3.9 million. During the three months ended March 31, ~~2022,~~2023, ~~140,970~~1,181,835 options were exercised.

As of March 31, ~~2022,~~2023, the $~~47.6~~13.0 million in unrecognized compensation cost related to stock options will be recognized over a weighted-average period of ~~1.64~~1.83 years.

~~Restricted Stock Units~~

~~During~~The following table summarizes RSU activity for the three months ended March 31, ~~2022,~~2023.


Restricted Stock Units	Number of shares			Weighted Average Grant Date Fair Value
Balance at December 31, 2022		13,685,748		$	7.56
Granted		-
Vested		(1,879,277	)		7.28
Forfeited		(169,765	)		7.74
Balance at March 31, 2023		11,636,706		$	7.61

The Company did not grant any RSUs during the ~~Company granted~~ three months ended March 31, 2023.

~~12,043,248~~ ~~service-based restricted stock units (“RSUs”),~~ ~~3,731~~ ~~of which had vested as~~As of March 31, ~~2022. The outstanding~~2023, $73.2 million in unrecognized compensation cost related to RSUs ~~vest on dates ranging from March 2022 to March 2026 as measured from the grant date.~~will be recognized over a weighted-average period of 1.88

years.

Stock-based Compensation Expense

Stock-based compensation expense for equity and liability classified awards is recognized using the straight-line attribution method. In addition, the Company ensures that it has fully recognized expense for at least the option and RSU tranches that have fully vested in the period in which they vest.

Stock-based compensation expense is summarized as follows (in thousands):


	Three Months Ended March 31,				��	Three Months Ended March 31,
	2022		2021			2023		2022
Cost of revenue	$	590	$	59		$	1,231	$	590
Sales and marketing		2,980		335			4,938		2,980
Research and development		2,588		141			3,829		2,588
General and administrative		3,610		73			4,557		3,610
Total stock-based compensation	$	9,768	$	608		$	14,555	$	9,768

2021 Employee Stock Purchase Plan

~~At the Special Meeting of the shareholders of Dragoneer on December 7, 2021, the shareholders of Dragoneer considered and approved the~~The Cvent Holding Corp. 2021 Employee Stock Purchase Plan (the “ESPP”)~~, which was adopted by the Board and became effective for the Company immediately upon the closing of the Reverse Recapitalization Transaction.~~ ~~The ESPP~~ permits employees to purchase common stock through payroll deductions during biannual offering periods, or during such other offering periods as the Board of Directors may determine. Participants may authorize payroll deductions of a specific percentage of compensation not to exceed 15%, with such deductions being accumulated for biannual purchase periods beginning on the first business day of each offering period and ending on the last business day of each offering period.

The ESPP provides that 11,500,000 shares of common stock may be made available for sale under the ESPP (the “ESPP Reserve”). The ESPP Reserve automatically increases on each January 1 of each year, by an amount equal to 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, or a lesser number as may be determined by the Board of Directors. The Board of Directors waived the automatic increase that would have taken effect on January 1, 2022 under the ESPP. Under the terms of the ESPP, the purchase price per share will equal 85% of the fair market value of a share of common stock on the first day of an offering period or the last date of an offering period, whichever is lower, although the Board of Directors has discretion to change the purchase price with respect to future offering periods. An employee may not purchase more than $25,000 of stock during any calendar year. Payroll deductions from employees related to the ESPP are classified as restricted cash on the condensed consolidated balance sheets.

At March 31, ~~2022,~~2023, there were ~~11,500,000~~15,060,931 shares available for issuance under the ESPP. ~~NaN~~ ~~contributions were made by employees during the three months ended~~As of March 31, ~~2022. The first ESPP offering period will begin on June 1, 2022.~~

~~2017 Long-Term Incentive Plan~~

~~The Company recorded~~ 0 ~~expense for the 2017 Long-Term Incentive Plan (the “2017 LTI Plan”) during the three months ended March 31, 2022 and 2021 because the incentive remains unvested and~~2023, the Company is only liable to make the 2017 LTI Plan cash bonus payments upon a sale of the Company, or other Qualified Event, as defined in the 2017 LTI Plan, which is not currently determined to be probable. On February 28, 2022, the Compensation and Nominating Committee of the Board approved a plan that allows employees to convert their awards (the “Legacy Cvent LTIP Awards”) granted under the 2017 LTI Plan to an aggregate of approximately had $~~3.7~~0.2 million ~~RSUs in exchange~~of unrecognized compensation cost related to the offering period beginning on December 1, 2022. The last date for cancellation of such employees’ outstanding Legacy Cvent LTIP Awards. The RSUs are subject to varying vesting periods ranging from April 2022 to October 2024. The RSUs were granted effective as of April 15, 2022 to employees who elected to participate in such exchange. Substantially all of the ~~Company's employees have participated in the exchange.~~current offering period is May 31, 2023.

10. Debt

The outstanding principal amount and related unamortized debt issuance costs, net, are summarized as follows (in thousands):

March 31, 2022

December 31, 2021

First Lien Principal amount

$
265,696

$
265,696

Revolving Credit Facility Principal amount

0

0

Less: original issue discount

(401
)

(438
)
Less: unamortized deferred financing costs

(2,702
)

(2,956
)
Total principal amount and related unamortized debt issuance costs, net

$
262,593

$
262,302


	March 31, 2023			December 31, 2022
Senior Secured Revolving Credit Facility	$	138,000		$	208,000
Less: unamortized deferred financing costs		(2,609	)		(2,766	)
Total principal amount and related unamortized debt issuance costs, net	$	135,391		$	205,234

~~a) First Lien~~

Senior Secured Revolving Credit Facility

~~As of January 1,~~On May 27, 2022, ~~the Company had~~Cvent, as borrower, entered into a five-year$~~265.7~~500.0 million ~~balance on~~senior secured revolving credit facility (the “Revolving Credit Facility”) pursuant to the ~~Company's variable rate first lien~~Credit Agreement, dated as of May 27, 2022, by and among Cvent, Holdings (as defined below) and the other loan ~~or Term Loan Facility, with a consortium of~~parties party thereto, the lenders ~~(including Vista Credit Partners)~~party thereto, and ~~Goldman Sachs acting~~PNC Bank, National Association, as ~~the~~ administrative agent ~~with a~~(the “Credit Agreement”).

13A portion of the Revolving Credit Facility, not to exceed $

35.0

million, will be available for the issuance of letters of credit, and Cvent has the option to increase borrowing capacity under the Revolving Credit Facility or to incur incremental term loans, subject to certain provisions outlined in the Credit Agreement. The Revolving Credit Facility has a maturity date of May 27, 2027.

~~November 30, 2024~~. As of the end of the 2021 calendar year, the Financial Conduct Authority in the United Kingdom (“U.K.”) has phased out the one-week and two-month LIBOR tenors, and no new loans beginning in 2022 will be priced using those LIBOR tenors. The Company’s existing loan agreements may still utilize the remaining one, three, or six-month LIBOR tenors until the complete discontinuation of LIBOR, which is currently expected in June 2023. The Company does not anticipate a significant impact to our financial position or results of operations as we expect our agreements to be modified utilizing a similar rate before phase-out occurs. As a result of the Company's voluntary prepayment in connection with the Reverse Recapitalization Transaction, the Company has no minimum payments due until Term Loan Facility's due date in 2024. The interest rate on outstanding borrowings under the ~~first lien~~Revolving Credit Facility was ~~3.96~~6.47% as of March 31, ~~2022.~~2023. The carrying value of variable rate debt approximates fair value due to the short-term nature of the Company's interest ~~rates.~~rate elections.

As of March 31, 2023, the Company had $

138.0

~~Future minimum principal payments~~million outstanding borrowings under the ~~debt agreement~~Revolving Credit Facility. The Company had $362.0 million available for borrowing under the Revolving Credit Facility based on the outstanding balance as of March 31, ~~2022 are~~2023. The Company is in compliance with all covenants outlined in the Credit Agreement as ~~follows (in thousands):~~

2022 (remaining nine months)

$
-

2023

-

2024

265,696

Total minimum principal payments on debt

$
265,696

b)of March 31, 2023 and currently has no required prepayments with respect to borrowings made under the Revolving Credit Facility

~~The Company has an agreement for a variable rate revolving credit facility in~~ prior to the ~~amount of $40.0~~ ~~million, which has a~~ maturity date of August 30, 2024. Due to the spread of COVID-19 in the beginning of 2020, the global economic activity slowed down and in anticipation of constraints on cash and working capital, the Company fully drew on the revolving credit facility on March 20, 2020, which currently bears interest at a rate of one-month LIBOR plus a ~~3.75~~May 27, 2027% margin payable monthly in arrears. The Company paid off portions of the revolving credit facility in May, September, December 2020, and March 2021 and fully repaid the remaining balance as of April 2021. If the revolving credit facility is drawn more than 35~~% of the $40.0~~ ~~million commitment it requires the Company to maintain compliance with the financial covenant maintaining a First Lien Leverage Ratio of less than~~ ~~7.20~~ to ~~1.00~~ ~~as of the last day of any Test Period. During the three months ended March 31, 2022 and 2021, the Company was and is within compliance of the First Lien Leverage Ratio and all financial covenants.~~.

11. Leases

The Company enters into lease arrangements for office facilities under non-cancellable operating leases with various expiration dates.

As of March 31, ~~2022,~~2023, the Company’s right-of-use (“ROU”) assets and total operating lease liabilities were $~~26.2~~28.5 million and $~~39.2~~37.9 million, respectively. As of December 31, ~~2021,~~2022, the Company’s ROU assets and total operating lease liabilities were $~~28.4~~20.4 million and $~~42.1~~30.8 million, respectively. During the three months ended March 31, ~~2022,~~ 0 ~~ROU assets were obtained in exchange for new operating lease liabilities. During the three months ended March 31, 2021, less than~~2023, $~~0.1~~10.1 million of ROU assets were obtained in exchange for new operating lease liabilities related to a new office lease in Australia as well as the renewal and expansion of certain office leases in India. During the three months ended March 31, 2022, no ROU assets were obtained in exchange for new operating lease liabilities.

12. Commitments and Contingencies

a) Legal Proceedings, Regulatory Matters and Other Contingencies

~~From~~The Company is, and from time to time ~~the Company~~ may become, involved in legal proceedings, regulatory matters or other contingencies in the ordinary course of its business. In its opinion, the Company is not presently involved in any legal proceeding, regulatory matter or other contingency that, if determined adversely to it, would individually or in the aggregate have a material adverse effect on its business, operating results, financial condition or cash flows.

b) Purchase Commitments

In the ordinary course of business, the Company enters into various purchase commitments primarily related to third-party cloud hosting, technology operations and data services. Total non-cancellable purchase commitments as of March 31, ~~2022~~2023 were approximately $~~14.9~~31.1 million expiring at various dates through ~~2025.~~2026.

13. Related-Party Transactions

The Company did not incur any consulting fees from Vista ~~Credit~~Equity Partners ~~has a balance of $2.3~~ ~~million in~~Management, LLC (“Vista”) during the ~~Term Loan Facility as of~~three months ended March 31, ~~2022. There were~~ 0 ~~other related parties that have a position in the Term Loan Facility.~~

~~The Company~~2023 and incurred less than $0.1 million for consulting fees from Vista ~~Equity Partners Management, LLC (“Vista”) for both~~ the three months ended March 31, 2022, ~~and 2021,~~ which ~~are~~is recorded in general and administrative expenses. As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, less than $0.1 million was included in accrued expenses in the condensed consolidated balance sheet.

The Company also entered into transactions during the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 to sell services to other Vista controlled entities. The Company recognized $~~0.2~~0.4 million and $~~0.1~~0.2 million in revenue related to these transactions for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. Cvent also purchased software subscription and other services from Vista affiliates. The Company recognized $~~0.6~~0.7 million and $~~0.4~~0.6 million in expenses related to these transactions for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains “forward-looking statements” ~~for~~as defined in the ~~purposes~~Private Securities Litigation Reform Act of ~~federal securities laws. Such forward-looking~~1995. All statements ~~include, but are not limited to,~~other than statements of historical facts contained in this Quarterly Report, including, statements that reflect our current views with respect to future events and financial performance, business strategies, and expectations for our ~~business and~~ business; statements regarding our or our management’s expectations, hopes, beliefs, intentions, plans or strategies regarding the ~~future. In addition, any~~future and statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “ongoing,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” “will,” “approximately,” “likely,” “shall” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

In this Quarterly Report, the terms ~~“Cvent,”~~ the “Company,” “Cvent,” “we,” “us,” and “our” refer to Cvent Holding Corp. and its subsidiaries, unless the context indicates otherwise.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to:

•

our proposed acquisition by an affiliate of Blackstone Capital Partners VIII L.P. (“Blackstone”), including the occurrence of any event, change or other circumstance that could give rise to our right or the right of Blackstone or both of us to terminate the Merger Agreement, including circumstances requiring us to pay Blackstone a termination fee pursuant to the Merger Agreement;

•

the risk that the acquisition may not close in the anticipated timeframe or at all due to one or more of the closing conditions to the acquisition not being satisfied or, to the extent permitted by applicable law, waived, including due to the failure to obtain applicable regulatory approvals or the approval of our stockholders in a timely manner or otherwise;

•

the risk that the proposed acquisition disrupts our current plans and operations;

•

the risk that there may be unexpected costs, charges or expenses resulting from the proposed acquisition;

•

risks related to disruption of management's time and attention from ongoing business operations due to the proposed acquisition;

•

the risk that any announcements related to the proposed acquisition could have adverse effects on our ability to retain and hire key personnel and to maintain relationships with business partners, suppliers and customers and on our operating results and business generally;

•

the risk that certain restrictions during the pendency of the proposed acquisition may impact ~~on Cvent’s operations and financial condition from~~our ability to pursue certain business opportunities or strategic transactions;

•

the risk of litigation and/or regulatory actions related to the proposed acquisition, including the effects of ~~the current COVID-19 pandemic;~~any outcomes related thereto;

•

~~Cvent’s~~the impact of the global COVID-19 pandemic and other geopolitical, macroeconomic and market conditions on our industry, business and customers, and our susceptibility to declines or disruptions in the demand for meetings and events;

•

our ability to sell additional solutions to our customers;

•

our ability to retain our existing customer base and to attract and retain new customers;

•

~~Cvent’s~~our ability to maintain and expand relationships with hotels and venues;

•

the impact of a data breach or other security incident involving ~~Cvent~~our or ~~its~~our customers’ confidential or personal information stored in our or our third-party service providers’ systems;

•

risks associated with indemnity provisions in some of ~~Cvent’s~~our agreements;

•

the competitiveness of the market in which ~~Cvent operates;~~we operate;

•

the impact of a disruption of ~~Cvent’s~~our operations, infrastructure or systems, or disruption of the operations, infrastructure or systems of the third parties on which ~~Cvent relies;~~we rely;

•

~~Cvent’s ability to sell additional solutions to its customers;~~

•

~~Cvent’s~~
our ability to maintain access to third-party ~~licenses;~~

•

~~Cvent’s ability to~~licenses and comply with ~~its~~our obligations under license or technology agreements with third parties;

•

~~Cvent’s ability to manage its growth effectively;~~

•

~~Cvent’s~~our ability to expand ~~its~~our sales force;

•

risks and uncertainties associated with potential and completed acquisitions and divestitures;

•

~~Cvent’s~~our ability to operate offices located outside of the United States, including India;

•

the impact of declines or disruptions in the demand for events and meetings;

•

~~risks associated with Cvent’s reliance~~the impact of any significant reduction in spending by advertisers on ~~third-party mobile application platforms such as the Apple App Store and the Google Play Store to distribute its mobile applications;~~our platforms;

•

~~Cvent’s~~our history of losses and ability to achieve profitability in the future;

•

~~Cvent’s~~our ability to develop, introduce and market new and enhanced versions of ~~its~~our solutions to meet customer needs and expectations;

•

the impact of ~~Cvent’s~~delays in product and service development, including delays beyond our control;

•

our ability to fund our research and development efforts;

•

the impact of our lengthy and unpredictable sales cycle;

•

~~Cvent’s~~our ability to retain, hire and integrate skilled personnel, including ~~its~~our senior management team;

•

~~Cvent’s ability~~the fluctuations due to ~~fund its research~~seasonality of our sales, billings, cash flow, operating expenses and ~~development efforts;~~operating results;

•

~~the seasonality of Cvent’s sales and customer growth;~~

•

~~Cvent’s~~our ability to offer high-quality customer support;

•

the impact of contractual disputes with ~~Cvent’s~~our customers;

•

~~the impact of any significant reduction in spending by advertisers on Cvent’s platforms;~~

•

~~Cvent’s~~our ability to maintain, enhance and protect ~~its~~our brand;

•

~~the impact of delays in product and service development, including delays beyond Cvent’s control;~~

•

~~Cvent’s~~our ability to maintain and develop the compatibility of ~~its~~our solutions with third-party applications;

•

risks related to incorrect or improper use of ~~Cvent’s~~our solutions or ~~its~~our failure to properly train customers on how to utilize ~~its~~our solutions;

•

the impact of ~~Cvent’s~~our reliance on data provided by third parties;

•

risks associated with privacy concerns and end users’ acceptance of Internet behavior tracking;

•

~~Cvent’s~~our ability to maintain ~~its~~our corporate culture as ~~it grows;~~we grow;

•

~~Cvent’s~~our ability to comply with legal requirements, contractual obligations and industry standards relating to security, data protection and privacy;

•

~~Cvent’s~~our ability to comply with the rules and regulations adopted by the payment card networks;

•

~~Cvent’s~~our ability to obtain, maintain, protect and enforce ~~its~~our intellectual property and proprietary rights;

•

risks associated with lawsuits by third parties for alleged infringement, misappropriation or other violation of their intellectual property and proprietary rights;

•

risks associated with ~~Cvent’s~~our use of open source software in certain of ~~its~~our solutions;

•

risks associated with changes in tax laws;

•

the impact of third-party or government claims, including ~~by governmental bodies,~~regulatory claims or claims regarding the content and advertising distributed by ~~Cvent’s~~our customers through ~~its~~our service;

•

risks associated with changes in financial accounting standards;

•

risks associated with fluctuations in currency exchange rates;

•

~~Cvent’s~~our ability to raise additional capital or generate cash flows necessary to expand ~~its~~our operations, consummate acquisitions and invest in new technologies in the future;

•

~~Cvent’s~~our ability to ~~develop and~~ maintain proper and effective internal control over financial reporting;

•

changes in applicable laws or regulations;

•15

~~the ability of Cvent to expand or maintain its existing customer base;~~

•

~~the effect of global economic conditions or political transitions on Cvent’s customers and their ability to continue to purchase Cvent products;~~

•

~~the effect of COVID-19 on the foregoing, including the impact on our virtual, hybrid and in-person offerings, each of which has been and may continue to be impacted differently by COVID-19;~~

•

other factors discussed in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 and included elsewhere in this Quarterly Report; and

•

other factors beyond our control.

We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these ~~risk~~risks and uncertainties, the matters referred to in the forward-looking statements contained in this Quarterly Report may not, in fact, occur. Moreover, we operate in a rapidly changing and competitive environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors. Accordingly, you should not place undue reliance on those statements. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. You should read this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

1716

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

~~Cvent~~The Company was founded in 1999 in the Washington, D.C. metro area as a provider of event registration software to meeting and event organizers. Since that time, we have continually innovated to develop a comprehensive platform of event marketing and management solutions and hospitality solutions. We believe that since inception, we have demonstrated an entrepreneurial spirit, culture of teamwork and sense of resilience, particularly in moments of crisis. This is best evidenced by the Company’s continued progress and innovation in the midst of challenges like the recessions of 2001 and 2008 and the global COVID-19 pandemic.

~~Cvent~~The Company is a leading cloud-based platform of enterprise event marketing and management and hospitality solutions. We power the marketing and management of meetings and events through our Event Cloud and Hospitality Cloud solutions. Our Event Cloud consists of tools to enable event organizers to manage the entire event lifecycle and deliver engaging experiences across every type of event and all event ~~delivery models:~~formats: in-person, virtual and hybrid. Event Cloud serves as the system of record for event and engagement data collected across an organization’s total event program, which comprises every internal and external event an organization hosts or attends ~~(“Total~~(its “Total Event Program”). Our Hospitality Cloud offers a marketplace that connects event organizers looking for the appropriate event space for their in-person and hybrid events with hoteliers and venue operators through a vertical search engine built on our proprietary database of detailed event space information. In addition, our Hospitality Cloud provides marketing and software solutions that hotels and venues leverage to digitally showcase their event space to attract valuable leads and grow their businesses. This combination of ~~the Cvent~~our Event Cloud and Hospitality Cloud offerings results in an integrated solution.

Proposed Merger

On March 14, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Capstone Borrower, Inc. (“Capstone Parent”), and Capstone Merger Sub, Inc., a ~~cohesive platform that we believe generates powerful network effects~~wholly owned subsidiary of Capstone Parent (“Merger Sub”). Capstone Parent and ~~attracts more event organizers~~Merger Sub are affiliates of investment funds affiliated with or managed by affiliates of Blackstone Inc. Pursuant to the Merger Agreement and ~~hotels~~subject to the satisfaction of customary closing conditions, Merger Sub will be merged with and ~~venues.~~into the Company, with the Company surviving as a wholly owned subsidiary of Capstone Parent (the “Merger”). If the Merger is consummated, the Company’s common stock (the “Company Common Stock”) will be delisted from the Nasdaq Global Market and deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The closing of the proposed Merger is subject to certain conditions, including the adoption of the Merger Agreement by stockholders representing a majority of the outstanding shares of Company Common Stock and the receipt of applicable regulatory approvals. The proposed Merger is expected to close mid-year 2023.

Trends and Economic Conditions

~~Impact~~Global events, such as recent geopolitical instability, inflation and the COVID-19 pandemic, have created or contributed to uncertainty in macroeconomic conditions, including changes in interest rates, supply chain disruptions, labor shortages and increased labor costs, which, in turn, could decrease overall economic activity, hinder economic growth or cause a recession in the United States or in the global economy. Negative macroeconomic conditions may affect our clients’ businesses, which could result in reduced demand for our services or cancellations, increased demands for pricing accommodations or higher rates of delays in collection of, or losses on, our accounts receivable, which could adversely affect our results of operations. If we are unable to offset any decrease in revenue by increasing sales to new or existing customers, or otherwise offset higher costs through price increases, our revenues may decline or grow at lower rates. The extent of the impact of ongoing macroeconomic conditions on our operational and financial performance is uncertain and will depend on political, social, economic and regulatory factors that are outside of our control, including but not limited to the incidence and severity of additional COVID-19 virus variants and actions that may be taken by regulators and businesses (including customers) in response to macroeconomic uncertainty. We considered the impact of the current economic environment and COVID-19 on ~~Operating Results~~

~~The global COVID-19 pandemic significantly impacted~~ our ~~ability to sign new clients,~~estimates and ~~to upsell to~~assumptions and ~~renew contracts with our existing clients, starting in March 2020. Our customer count declined 9.5%~~determined that there were no material adverse impacts on the consolidated financial statements as of March 31, ~~2022 as compared~~2023. As events continue to ~~March 31, 2021. The extent to which the global COVID-19 pandemic will affect~~evolve and additional information becomes available, our ~~business will depend on~~estimates and assumptions may change materially in future developments in the United States and around the world, which are highly uncertain and cannot be predicted, including the duration and spread of the pandemic and different COVID-19 variants, new information which may emerge concerning the severity of COVID-19 and the actions required to contain and treat it, among others. Although the ultimate impact of the global COVID-19 pandemic on our business and financial results remains uncertain, a continued and prolonged public health crisis such as the global COVID-19 pandemic could have a material negative impact on our business, operating results and financial condition. See Part I. Item 1A. “~~Risk Factors — The effects of the global~~ COVID-19 pandemic have materially affected how we and our customers are operating our businesses, and the duration and extent to which this will impact our future results of operations and overall financial performance remains uncertain~~” in our Annual Report on Form 10-K for the year ended December 31, 2021 for more information.~~periods.

Key Business Metric

In addition to our GAAP financial information, ~~determined in accordance with generally accepted accounting principles (“GAAP”),~~ we review the following key business metric to measure our performance, identify trends, formulate business plans and make strategic decisions.

Net Dollar Retention Rate

To evaluate the efficacy of our land and expand model, we examine the rate at which our customers increase their spend with us for our solutions. Our net dollar retention rate measures our ability to retain and increase spend across our existing customer base through expanded use of our platform, offset by customers who choose to stop using our solutions or spend less with us.

We calculate our net dollar retention rate as a quotient of the following:

•

Denominator: Revenue from customers whose revenue existed in the twelve months ending on the day twelve months prior to the date as of which the retention rate is being reported.

•

Numerator: Revenue in the last twelve months from the customers whose revenue is reflected in the denominator.

In the Event Cloud, we define a customer as a party who has entered into an active subscription contract with us. The majority of our customers are parties who are separate organizations. In certain instances, separate business units of an organization that have each entered into separate subscription agreements with us are considered separate customers. In the Hospitality Cloud, we define a customer as an entity with an active account with the Company, where the customer pays for the account or the account has been paid

for by the customer’s parent company. For example, a corporate brand’s individual hotel properties whose accounts are paid for by that property’s corporate brand would be considered separate customers.

The calculation excludes transactional revenue associated with our Cvent CONNECT client conference and revenue associated with acquisitions ~~where by-client~~whereby client revenue is not ~~available, revenue is recognized on a transactional basis and revenue associated with our client conference.~~available. This revenue comprised ~~3.6%~~1.7% and ~~3.2%~~3.6% of revenue for three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

We believe our ability to not only retain, but upsell and cross-sell additional features and products to, our existing customers will continue to support our net dollar retention rate. As of March 31, ~~2022~~2023 and ~~2021,~~2022, our net dollar retention rate was ~~108.7%~~115.1% and ~~83.9%~~108.7%, respectively. The ~~return of~~year-over-year increase in our net dollar retention rate ~~to pre-COVID levels was~~is primarily due to the lessening impact of the global COVID-19 pandemic in ~~2021~~2022 and ~~2022~~2023 on both the Event Cloud and Hospitality ~~Clouds and~~Cloud, resulting in increased spend on products supporting in-person events, in addition to the adoption of Attendee Hub, our ~~new~~solution for ongoing engagement and virtual ~~solution, Attendee Hub. We~~events. With in-person meetings and events continuing to quickly return, our net dollar retention rate currently exceeds pre-pandemic levels. In the near-term, we believe our net dollar retention rate will return to pre-pandemic levels as the rate of growth of in-person meetings and events continues to normalize. Longer-term, we believe our net dollar retention rate may exceed ~~historical~~pre-pandemic levels as a result of the market opportunity created by virtual and hybrid events and the accelerated digitization of the meetings and events industry.

Our net dollar retention rate may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of products and features, our ability to retain our customers and our ability to upsell and cross-sell to our customers. Our calculation of net dollar retention rate may differ from similarly titled metrics presented by other companies.

Components of Operating Results

Revenue

We generate revenue from two primary sources: Event Cloud subscription-based solutions and Hospitality Cloud marketing-based and subscription-based solutions. Subscription-based solution revenue consists primarily of fees to provide our customers with access to our cloud-based software platform. Marketing-based solution revenue consists primarily of fees for digital advertising on the Cvent Supplier Network (“CSN”) or one of our other online advertising platforms.

Event Cloud

We generate the majority of our Event Cloud revenue from subscriptions for our event marketing and management software solution. Subscription revenue is driven primarily by the number of registrations purchased and the number and complexity of mobile applications, onsite events and virtual events purchased in addition to additional modules that enhance the functionality of the software solution. In some cases, the subscription price is based on the number of subscriptions being purchased by the customer.

The terms of our Event Cloud contracts are typically non-cancellable, have annual or multi-year terms, and are billed in advance ~~generally annually, but also~~ on aan annual or quarterly ~~basis.~~basis, as applicable. In the case of multi-year agreements, the agreement sometimes includes annual price increases over the contract term. Our agreements are sum-certain and not pay-as-you-go. Generally, if a customer exceeds their purchased number of registrations, the customer will incur an overage fee. We recognize revenue associated with Event Cloud

subscription agreements ratably over the term of the contract. Certain revenue associated with Onsite Solutions and Attendee Hub products is recognized at a point in time as the services are performed and the performance obligations are satisfied. Amounts that have been contractually invoiced are initially recorded as deferred revenue and are recognized as revenue ratably over the subscription period. We refer to contractual amounts that have not been invoiced as unbilled contract value, and together with deferred revenue, remaining performance obligations. Unbilled contract value is not reflected in our consolidated financial statements.

Hospitality Cloud

We generate our Hospitality Cloud revenue from marketing and subscription-based software solutions. Marketing solutions revenue is primarily driven by the number of advertisements purchased on CSN. The advertisement price is primarily determined by the term, targeted geography, market tier, number and prominence of the advertising placement. Subscription revenue is driven primarily by the number of licenses purchased for our lead scoring solution to prioritize group RFPs, three-dimensional hotel tours, event diagramming to collaborate with event organizers on designing optimal event layouts and viewing three-dimensional renderings, room block management to enable event attendees to reserve hotel rooms, business transient solutions and business intelligence solutions to benchmark against internal and targeted competitive metrics. In some cases, the subscription price is based on the number of subscriptions being purchased by the customer.

The terms of our subscription and marketing contracts are typically non-cancellable, annual or multi-year terms, and are typically billed in advance ~~generally annually, but also~~ on aan annual or quarterly ~~basis.~~basis, as applicable. In the case of multi-year agreements, the agreement sometimes includes annual price increases over the contract term. Our agreements are typically sum-certain and not based on usage.

We recognize revenue associated with these agreements ratably over the term of the subscription or advertising period. ~~Amounts~~For both Event Cloud and Hospitality Cloud, amounts that have been contractually invoiced are initially recorded as deferred revenue and are recognized as revenue ratably over the subscription or advertising period. ~~We refer to contractual amounts that have not been invoiced as unbilled contract value, and together with deferred revenue, remaining performance obligations.~~

We refer to contractual amounts that have not been invoiced as unbilled contract value, and together with deferred revenue, remaining performance obligations. Unbilled contract value is not reflected in our consolidated financial statements. See “Key Factors Affecting Our Performance —Seasonality” included in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 for the effects of seasonality on our Hospitality Cloud ~~Revenue.~~revenue.

For multi-year agreements for either Event Cloud or Hospitality Cloud solutions, we typically invoice the amount for the first year of the contract at signing, followed by subsequent annual invoices at the anniversary of each year. Since we bill most of our customers in advance, there can be amounts that we have not yet been contractually able to invoice. Until such time as these amounts are invoiced or recognized in revenue, they are considered by us to be unbilled contract value, and together with deferred revenue, remaining performance obligations. As of March 31, ~~2022~~2023 and December 31, ~~2021~~2022 our total current deferred revenue was ~~$287.5~~$302.2 million and ~~$239.8~~$267.9 million, which amounts do not include unbilled contract value for contracts not yet billed of ~~$518.8~~$532.1 million and ~~$573.4~~$539.7 million, respectively. We expect that the amount of unbilled contract value relative to the total value of our contracts will change from year to year for several reasons, including the amount of cash collected early in the contract term, the specific timing and duration of customer agreements, varying invoicing cycles of agreements, the specific timing of customer ~~renewal,~~renewals, changes in customer financial circumstances and foreign currency fluctuations. We expect to recognize approximately ~~69.2%~~71.5% of our remaining performance obligations as revenue over the subsequent 24 months, and the remainder thereafter.

Cost of ~~revenue~~Revenue

Cost of revenue primarily consists of employee-related expenses, such as salaries, benefits, bonuses and stock-based compensation, related to providing support and hosting our solutions, costs of cloud-based data center capacity, software license fees, costs to support our onsite, ~~solutions~~virtual and ~~virtual products,~~hybrid solutions, interchange fees related to merchant services and amortization expense associated with capitalized software. In addition, we allocate a portion of overhead, such as rent and depreciation and amortization to cost of revenue based on headcount.

Although ~~Cvent breaks~~we break out revenue by ~~cloud,~~solution, we do not track or manage the business by cost of revenue by ~~cloud.~~solution. Rather, we manage cost of revenue by type of direct cost, and a significant portion of these direct costs are shared costs to support both Event Cloud and Hospitality Cloud solutions. This is consistent with ~~Cvent’s~~our approach to management of the business as one comprehensive solution for the entire event management lifecycle.

We are invested in our customers’ success and as such, we will continue to invest in providing support, expanding our capacity to support our growth and developing new features to support virtual, hybrid and ~~hybrid~~in-person events and enhance our existing products, which in the near-term ~~will~~is expected to result in higher cost of revenue in absolute ~~dollars and as a percentage of revenue.~~dollars.

Gross ~~profit~~Profit and ~~gross margin~~Gross Margin

Gross profit is total revenue less total cost of revenue. Gross margin is gross profit expressed as a percentage of total revenue. We expect that our gross margin may fluctuate from period to period as a result of seasonality related to our onsite, virtual and hybrid solutions ~~virtual~~ and merchant services products in the near-term, and additional costs associated with potential future acquisitions.

Operating ~~expenses~~Expenses

Our operating expenses include selling and marketing expenses, research and development expenses, general and administrative expenses and intangible asset amortization, exclusive of amounts included in cost of revenue.

Sales and ~~marketing~~Marketing

Sales and marketing expenses primarily consist of personnel and related expenses for our sales and marketing staff, including salaries, benefits, bonuses, commissions and stock-based compensation. We capitalize commissions when they are earned by staff, which is when the customer contract is signed. We amortize capitalized commissions over the average historic customer contract life. In addition to staff costs, our cost of marketing includes product marketing and other brand-building and lead generation tactics such as webinars, trade shows, product seminars, content marketing, digital marketing, third-party content distribution and our annual client

conference, Cvent CONNECT. In addition, we also allocate a portion of overhead, such as rent and depreciation to sales and marketing based on headcount.

We intend to continue to invest in sales and marketing and expect ~~spending in these areas~~expenses to increase in absolute dollars in the near-term as we continue to expand our business both domestically and internationally and take advantage of the growing need for virtual and hybrid events. WeAlthough we expect sales and marketing expenses to continue to be among the most significant components of our operating ~~expenses.~~expenses, we expect sales and marketing expenses as a percentage of revenue to decrease in the near-term.

Research and ~~development~~Development

Research and development expenses consist primarily of personnel and related expenses for our research and development staff, including salaries, benefits, bonuses and stock-based compensation and the cost of third-party contractors. Research and development expenses, other than software development costs that qualify for capitalization, are expensed as incurred. In addition, we allocate a portion of overhead, such as rent and depreciation to research and development based on headcount.

With the exception of software developed by companies we have acquired, we maintain a unified software code base for our entire platform, which we believe improves the efficiency of our research and development activities. We expect research and development expenses to ~~remain consistent~~increase in absolute dollars in the near-term as we continue to expand our product offerings, including our virtual and hybrid event functionality, and integrate and support potential future acquired businesses and technologies. However, we expect research and development expenses as a percentage of revenue to decrease in the near-term.

General and ~~administrative~~Administrative

General and administrative expenses consist primarily of personnel and related expenses for administrative, internal information technology operations, finance, legal, corporate development, strategy and human resource staff, including salaries, benefits, bonuses and stock-based compensation, as well as professional fees, insurance premiums and other corporate ~~expenses.~~expenses, including expenses associated with the Merger. In addition, we allocate a portion of overhead, such as rent and depreciation to general and administrative based on headcount.

We expect our general and administrative expenses to increase in absolute dollars in the near-term, ~~as we continue~~primarily due to ~~expand our operations and hire additional personnel to support our growth. Additionally, we expect to incur~~ incremental ~~general and administrative~~ expenses ~~to comply~~in connection with the ~~additional requirements of being a public company.~~Merger.

Intangible ~~asset amortization, exclusive~~Asset Amortization, Exclusive of ~~amounts included~~Amounts Included in ~~cost~~Cost of ~~revenue~~Revenue

Intangible asset amortization, exclusive of amounts included in cost of revenue, consists entirely of amortization expenses related to acquired customer relationship and trademark intangible assets. This line item excludes intangible asset amortization related to cost of revenue, which is defined as acquired developed technology and capitalized software intangible asset amortization.

We expect to continue to pursue strategic acquisition opportunities, subject to any restrictions under the Merger Agreement, and if successful, we expect that our intangible asset amortization expenses towill increase in absolute ~~dollars in the near-term as we expect to strategically acquire companies to aid in our near-term growth.~~dollars.

Other

Our other income/expense items include interest expense, amortization of deferred financing costs and debt discount ~~gain/loss on divestitures, net~~ and other ~~income/expense,~~income, net.

Interest ~~expense~~Expense

Interest expense relates primarily to interest payments on our outstanding borrowings under ~~the~~our credit ~~facility with a syndicate of lenders (such term loan facility as increased by the incremental~~ facilities ~~the “Term Loan Facility,”~~ as further described in Note 10. “Debt” to the ~~unaudited condensed~~ consolidated financial statements included in Part I, Item 1 of this Quarterly ~~Report) and a $40.0~~Report. As of March 31, 2023, we had outstanding borrowings of $138.0 million under our five-year, $500.0 million senior secured revolving ~~loan~~credit facility (the “Revolving Credit ~~Facility,” and together with the Term Loan Facility, the “Credit Facilities”~~Facility”) we entered into pursuant to the Credit Agreement dated November 30, 2017 (the “Credit Agreement”) by and between Cvent, Inc. as borrower, Papay Holdco, LLC, as Holdings, Goldman Sachs Bank USA, as administrative agent, the guarantors from time to time party thereto, and the lenders and other parties from time to time party thereto, as amended, restated, amended and restated, supplemented or otherwise modified from time to time. As of March 31, 2022, the Company had an outstanding balance of $265.7 million on the term loan facility and no outstanding borrowings on the revolving loan facility..

Amortization of ~~deferred financing costs~~Deferred Financing Costs and ~~debt discount~~Debt Discount

Amortization of deferred financing costs and debt discount consists of the amortization of up-front fees paid at the inception of our ~~Credit Facilities.~~credit facilities.

Other Income, Net

Other income, net

~~Other income/(expense), net~~ consists primarily of interest income and foreign currency gains or ~~losses, and import tax credits.~~losses.

Provision for ~~income taxes~~Income Taxes

Provision for income taxes consists primarily of income taxes related to U.S. federal and state income taxes and income taxes in foreign jurisdictions in which we conduct business.

2221

Results of Operations

Comparison of the Three Months Ended March 31, ~~2022~~2023 and ~~2021~~2022

The following table sets forth our consolidated statement of operations for the ~~period~~periods indicated:


	Three Months Ended March 31,						Three Months Ended March 31,
	2022			2021			2023			2022
	(in thousands)						(in thousands)
Consolidated Statement of Operations Data:
Revenue:
Event cloud	$	94,988		$	81,133
Hospitality cloud		42,368			36,154
Event Cloud							$	114,686		$	94,988
Hospitality Cloud								51,519			42,368
Total revenue		137,356			117,287			166,205			137,356
Cost of revenue		56,200			43,845			60,691			56,200
Gross profit		81,156			73,442			105,514			81,156
Operating expenses:
Sales and marketing		40,091			28,837			44,960			40,091
Research and development		31,406			21,674			35,973			31,406
General and administrative		24,951			16,754			39,768			24,951
Intangible asset amortization, exclusive of amounts included in cost of revenue		12,154			13,035			11,713			12,154
Total operating expenses		108,602			80,300			132,414			108,602
Loss from operations		(27,446	)		(6,858	)		(26,900	)		(27,446	)
Interest expense		(2,592	)		(7,533	)		(2,647	)		(2,592	)
Amortization of deferred financial costs and debt discount		(320	)		(943	)		(158	)		(320	)
Other income, net		260			273			1,169			260
Loss before income taxes		(30,098	)		(15,061	)		(28,536	)		(30,098	)
Provision for income taxes		1,291			1,500			4,107			1,291
Net loss	$	(31,389	)	$	(16,561	)	$	(32,643	)	$	(31,389	)

The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenue for the ~~period~~periods indicated:


	Three Months Ended March 31,							Three Months Ended March 31,
	2022			2021				2023			2022
Consolidated Statement of Operations Data:
Revenue:
Event Cloud		69.2	%		69.2	%			69.0	%		69.2	%
Hospitality Cloud		30.8	%		30.8	%			31.0	%		30.8	%
Total revenue		100.0	%		100.0	%			100.0	%		100.0	%
Cost of revenue		40.9	%		37.4	%			36.5	%		40.9	%
Gross profit		59.1	%		62.6	%			63.5	%		59.1	%
Operating expenses:
Sales and marketing		29.2	%		24.6	%			27.1	%		29.2	%
Research and development		22.9	%		18.5	%			21.6	%		22.9	%
General and administrative		18.2	%		14.3	%			23.9	%		18.2	%
Intangible asset amortization, exclusive of amounts included in cost of revenue		8.8	%		11.1	%			7.0	%		8.8	%
Total operating expenses		79.1	%		68.5	%			79.7	%		79.1	%
Loss from operations		(20.0	%)		(5.8	%)	��		(16.2	%)		(20.0	%)
Interest expense		(1.9	%)		(6.4	%)			(1.6	%)		(1.9	%)
Amortization of deferred financial costs and debt discount		(0.2	%)		(0.8	%)			(0.1	%)		(0.2	%)
Other income, net		0.2	%		0.2	%			0.7	%		0.2	%
Loss before income taxes		(21.9	%)		(12.8	%)			(17.2	%)		(21.9	%)
Provision for income taxes		0.9	%		1.3	%			2.5	%		0.9	%
Net loss		(22.9	%)		(14.1	%)			(19.6	%)		(22.9	%)

2322

Revenue


	Three Months Ended March 31,									Three Months Ended March 31,
	2022		2021		$ Change		% Change			2023		2022		$ Change		% Change
	(in thousands)									(in thousands)
Revenue:
Event Cloud	$	94,988	$	81,133	$	13,855		17.1	%	$	114,686	$	94,988	$	19,698		20.7	%
Hospitality Cloud		42,368		36,154		6,214		17.2	%		51,519		42,368		9,151		21.6	%
Total revenue	$	137,356	$	117,287	$	20,069		17.1	%	$	166,205	$	137,356	$	28,849		21.0	%

Total revenue for the three months ended March 31, ~~2022~~2023 was ~~$137.4~~$166.2 million, an increase of ~~$20.1~~$28.8 million, or ~~17.1%~~21.0% compared to the three months ended March 31, ~~2021.~~2022. Event Cloud revenue accounted for ~~$95.0~~$114.7 million, or ~~69.2%~~69.0% of total revenue, and Hospitality Cloud revenue accounted for ~~$42.4~~$51.5 million, or ~~30.8%~~31.0% of total revenue, for three months ended March 31, ~~2022.~~2023.

Event Cloud revenue for the three months ended March 31, ~~2022~~2023 was ~~$95.0~~$114.7 million, an increase of ~~$13.9~~$19.7 million, or ~~17.1%~~20.7%, compared to the three months ended March 31, ~~2021.~~ ~~This~~2022. The increase was ~~primarily~~ due to the strong performance of products that support in-person meetings ~~starting to return~~ and events because of the lessening impact of the global COVID-19 pandemic between the first quarter of 2022 and ~~continued momentum in virtual events, which drove increases in products across~~ the ~~platform.~~first quarter of 2023.

Hospitality Cloud revenue for the three months ended March 31, ~~2022~~2023 was ~~$42.4~~$51.5 million, an increase of ~~$6.2~~$9.2 million, or ~~17.2%~~21.6%, compared to the three months ended March 31, ~~2021.~~2022. The increase was primarily due to increased demand ~~for~~of our advertising and software solutions driven by the sustained return of in-person ~~meetings and events beginning to return.~~meetings.

We generate the majority of our revenue from North America. Revenue from outside North America accounted for ~~12.0%~~13.7% and ~~13.6%~~12.0% of total revenue for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. In the near-term, in absolute dollars, we expect that total revenue from outside North America will increase at the same rate as the rest of our business, and as such, we expect total revenue from outside of North America as proportion of total revenue will not substantially change.

Cost of Revenue

Three Months Ended
March 31,

2022

2021

$ Change

% Change

(in thousands)

Cost of revenue

$
56,200

$
43,845

$
12,355

28.2
%


	Three Months Ended March 31,
	2023		2022		$ Change		% Change
	(in thousands)
Cost of revenue	$	60,691	$	56,200	$	4,491		8.0	%

Cost of revenue for the three months ended March 31, ~~2022~~2023 was ~~$56.2~~$60.7 million, an increase of ~~$12.4~~$4.5 million, or ~~28.2%~~8.0%, compared to the three months ended March 31, ~~2021.~~2022. This increase was primarily driven by a ~~$3.9~~$2.0 million increase in employee expense due to ~~a 33.3%~~an 8.2% increase in average headcount, a ~~$0.5~~$1.0 million increase in amortization of capitalized software development costs and a $0.6 million increase in stock-based ~~compensation, a $2.8 million increase in hosting expense and a $0.8 million decrease in wage subsidies received in 2021 pursuant to the Canada Emergency Wage Subsidy program in 2022 compared to 2021.~~compensation. Additionally, third-party costs related to supporting virtual, in-person, and hybrid events increased ~~$2.1~~$1.6 million and credit card interchange fees related to our merchant services business increased ~~$1.7~~$1.5 million, ~~both of which were~~ primarily driven by the sustained return of in-person meetings and ~~events beginning~~events. These cost increases were partially offset by a $1.7 million decrease in hosting expense related to ~~return.~~cost optimization and higher credits received in the first quarter of 2023 compared to the first quarter of 2022.

Operating Expenses


	Three Months Ended March 31,										Three Months Ended March 31,
	2022		2021		$ Change			% Change			2023		2022		$ Change			% Change
	(in thousands)										(in thousands)
Sales and marketing	$	40,091	$	28,837	$	11,254			39.0	%	$	44,960	$	40,091	$	4,869			12.1	%
Research and development		31,406		21,674		9,732			44.9	%		35,973		31,406		4,567			14.5	%
General and administrative		24,951		16,754		8,197			48.9	%		39,768		24,951		14,817			59.4	%
Intangible asset amortization, exclusive of amounts included in cost of revenue		12,154		13,035		(881	)		(6.8	%)		11,713		12,154		(441	)		(3.6	%)
Total operating expenses	$	108,602	$	80,300	$	28,302			35.2	%	$	132,414	$	108,602	$	23,812			21.9	%

2423

Sales and Marketing. Sales and marketing expenses for the three months ended March 31, ~~2022~~2023 were ~~$40.1~~$45.0 million, an increase of ~~$11.3~~$4.9 million, or ~~39.0%~~12.1%, compared to the three months ended March 31, ~~2021.~~2022. This increase was primarily driven by a ~~$5.6~~$3.6 million increase in employee expense due to a ~~15.0%~~10.4% increase in average headcount, and a ~~$2.6~~$2.0 million increase in stock-based ~~compensation, a $2.5~~compensation. These increases were partially offset by $0.9 million ~~increase~~ in lower marketing program ~~spend, and a $0.6 million increase in travel related expense.~~spend.

Research and Development. Research and development expenses for the three months ended March 31, ~~2022~~2023 were ~~$31.4~~$36.0 million, an increase of ~~$9.7~~$4.6 million, or ~~44.9%~~14.5%, compared to the three months ended March 31, ~~2021.~~2022. This increase was primarily driven by ~~$5.2~~a $3.1 million increase in employee expense due to a ~~13.5%~~11.2% increase in average headcount, and a ~~$2.4~~$1.2 million increase in stock-based ~~compensation and a $2.4 million decrease in wage subsidies received pursuant to the Canada Emergency Wage Subsidy program in 2022 compared to 2021.~~compensation.

General and Administrative. General and administrative expenses for the three months ended March 31, ~~2022~~2023 were ~~$25.0~~$39.8 million, an increase of ~~$8.2~~$14.8 million, or ~~48.9%~~59.4%, compared to the three months ended March 31, ~~2021.~~2022. This increase was ~~primarily~~ driven by $13.5 million in transaction costs related to the Merger, a ~~$3.5~~$0.9 million increase in stock-based compensation, and a ~~$2.0~~$0.7 million increase in ~~employee expense due to a 24.9% increase~~travel related expense. These increases were partially offset by $0.7 million decrease in average headcount, a $1.0 million increase in corporate insurance related to public company directors' and officers' insurance, and a $0.8 million increase in contracted services. A portion of these cost increases are related to additional costs incurred as a publicly traded company.bad debt expense.

Intangible Asset Amortization, Exclusive of Amounts Included in Cost of Revenue. Intangible asset amortization, exclusive of amounts included in cost of revenue for the three months ended March 31, ~~2022~~2023 was ~~$12.2~~$11.7 million, a decrease of ~~$0.9~~$0.4 million, or ~~6.8%~~3.6%, compared to the three months ended March 31, ~~2021.~~2022. This decrease was driven primarily by the scheduled decline in the amortization of intangible assets acquired in past years and no ~~significant~~ business acquisitions occurring in ~~2022.~~the first quarter of 2023.

Interest Expense

Three Months Ended
March 31,

2022

2021

$ Change

% Change

(in thousands)

Interest expense

$
(2,592
)

$
(7,533
)

$
4,941

(65.6
%)


	Three Months Ended March 31,
	2023			2022			$ Change			% Change
	(in thousands)
Interest expense	$	(2,647	)	$	(2,592	)	$	(55	)		2.1	%

Interest expense for the three months ended March 31, ~~2022~~2023 was $2.6 million, ~~a decrease~~an increase of ~~$4.9~~$0.1 million, or ~~65.6%~~2.1%, compared to the three months ended March 31, ~~2021.~~2022. This ~~decrease~~increase was driven ~~primarily~~ by ~~a significantly~~higher interest rates in the three months ended March 31, 2023 as compared to the same period in 2022, partially offset by lower ~~principal amount on our outstanding~~ long-term ~~debt. In addition, there were outstanding revolving borrowings~~debt balances during the three months ended March 31, ~~2021 incurring interest whereas there were zero outstanding borrowings during the three months ended March 31, 2022. The Revolving Credit Facility was fully repaid in April 2021.~~2023 as compared to prior year.

Amortization of Deferred Financing Costs and Debt Discount

Three Months Ended
March 31,

2022

2021

$ Change

% Change

(in thousands)

Amortization of deferred financing costs and debt discount

$
(320
)

$
(943
)

$
623

(66.1
%)


	Three Months Ended March 31,
	2023			2022			$ Change		% Change
	(in thousands)
Amortization of deferred financing costs and debt discount	$	(158	)	$	(320	)	$	162		(50.6	%)

Amortization of deferred financing costs and debt discount for the three months ended March 31, ~~2022~~2023 was ~~$0.3~~$0.2 million, a decrease of ~~$0.6~~$0.2 million, or ~~66.1%~~50.6%, compared to the three months ended March 31, ~~2021~~2022 due to the acceleration of amortization of deferred financing costs and debt discount associated with the prepayment of ~~$500.0 million of~~the outstanding principal ~~indebtedness~~balance under ~~our Term Loan Facility~~the Company's variable rate first lien loan in ~~December 2021.~~May 2022.

Other Income, Net

Three Months Ended
March 31,

2022

2021

$ Change

% Change

(in thousands)

Other income, net

$
260

$
273

$
(13
)

(4.8
%)


	Three Months Ended March 31,
	2023		2022		$ Change		% Change
	(in thousands)
Other income, net	$	1,169	$	260	$	909		349.6	%

Other income, net for the three months ended March 31, ~~2022~~2023 was ~~$0.3~~$1.2 million, ~~which did not change significantly as~~an increase of $0.9 million, or 349.6%, compared to the three months ended March 31, ~~2021.~~2022. Other income for the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 consisted primarily of ~~foreign currency gains.~~interest income of $0.8 million in each period from short-term investments.

Provision for Income Taxes

Three Months Ended
March 31,

2022

2021

$ Change

% Change

(in thousands)

Provision for income taxes

$
1,291

$
1,500

$
(209
)

(13.9
%)


	Three Months Ended March 31,
	2023		2022		$ Change		% Change
	(in thousands)
Provision for income taxes	$	4,107	$	1,291	$	2,816		218.1	%

Provision for income taxes for the three months ended March 31, ~~2022~~2023 was ~~$1.3~~$4.1 million, ~~a decrease~~an increase of ~~$0.2~~$2.8 million, or ~~13.9%~~218.1%, compared to the three months ended March 31, ~~2021.~~2022. The ~~decrease~~increase primarily resulted from the recording of ~~lower~~higher pre-tax book income in high tax foreign ~~jurisdictions.~~jurisdictions and an increase in state tax expense due to the prior year utilization of net operating losses in certain states.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we believe the non-GAAP measures of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow and Adjusted ~~EBITDA~~Free Cash Flow margin are useful in evaluating our operating performance. We believe that non-GAAP financial information, when ~~taken~~considered collectively with the corresponding GAAP measures, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA margin are supplemental measures of operating performance monitored by management that are not defined under GAAP and that do not represent, and should not be considered as, an alternative to net loss or net loss margin, as determined by GAAP. We define Adjusted EBITDA as net loss adjusted for interest expense, amortization of deferred financing costs and debt discount, gain/(loss) on extinguishment of debt, gain/(loss) on divestitures, net, other income/(expense), net, provision for/(benefit from) income taxes, depreciation, amortization of software development costs, intangible asset amortization, stock-based compensation expense, restructuring expense, cost related to acquisitions, and other items. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue. We use Adjusted EBITDA and Adjusted EBITDA margin to understand and evaluate our core operating performance and trends. We believe Adjusted EBITDA and Adjusted EBITDA margin are helpful to investors, analysts, and other interested parties because itthey can assist in providing a more consistent and comparable overview of our operations across our historical financial periods.

Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and you should not consider either in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, including net loss, net loss margin and our other GAAP results. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by the types of items excluded from the calculation of Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA and Adjusted EBITDA margin are not a presentation made in accordance with GAAP and the use of the ~~term varies~~terms may vary from others in our industry.

2625

A reconciliation of Adjusted EBITDA to net loss and of Adjusted EBITDA margin to net loss margin (defined as net loss divided by revenue), the most directly comparable GAAP measure, respectively, is as follows:


	Three Months Ended March 31,						Three Months Ended March 31,
	2022			2021			2023			2022
	(in thousands)						(in thousands)
Adjusted EBITDA:
Net loss	$	(31,389	)	$	(16,561	)	$	(32,643	)	$	(31,389	)
Adjustments
Interest expense		2,592			7,533			2,647			2,592
Amortization of deferred financing costs and debt discount		320			943			158			320
Other income, net		(260	)		(273	)		(1,169	)		(260	)
Provision for income taxes		1,291			1,500			4,107			1,291
Depreciation		2,038			3,084			1,816			2,038
Amortization of software development costs		15,961			15,195			17,008			15,961
Intangible asset amortization		12,154			13,035			11,713			12,154
Stock-based compensation expense		9,768			608			14,556			9,768
Restructuring expense (1)		277			254
Restructuring (income) expense (1)								(4	)		277
Cost related to acquisitions (2)		187			422			13,585			187
Other items (3)		(180	)		(3,091	)		660			(180	)
Adjusted EBITDA	$	12,759		$	22,649		$	32,434		$	12,759
Adjusted EBITDA Margin:
Revenue	$	137,356		$	117,287		$	166,205		$	137,356
Net loss margin (4)		(22.9	%)		(14.1	%)		(19.6	%)		(22.9	%)
Adjusted EBITDA margin (4)		9.3	%		19.3	%		19.5	%		9.3	%

(1)

Restructuring expense includes retention bonuses to employees of acquired entities and costs to discontinue use of a back-office system and closing of office space.

(2)

Represents costs incurred in association with acquisition activity, including due diligence and post-acquisition earn out ~~payments.~~payments, and costs incurred in relation to the Merger.

(3)

Includes other costs associated with ~~litigation,~~prosecuting a trade secret misappropriation claim, private equity management fees, and credit facility fees, net of the gain from government subsidies related to the global COVID-19 pandemic.

(4)

Net loss margin represents net loss divided by revenue and Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue.

Liquidity and Capital Resources

Our principal sources of liquidity are cash and cash equivalents, on-going collection of our accounts receivable and borrowings under our Revolving Credit ~~Facilities.~~Facility (see Note 10. Debt to the consolidated financial statements included in Part I1, Item 1 of this Quarterly Report). Outstanding borrowings under the Revolving Credit Facility may fluctuate on a quarterly basis due to the seasonality of the Company’s operating cash flows, and the Company’s desire to minimize interest expense. Cash and cash equivalents may include holdings in bank demand deposits, money market instruments and certificates of deposit. We also periodically invest a portion of our excess cash in short-term investments with stated maturity dates between three months and one year from the purchase date.

Our U.S. entities held $33.3 million and $40.2 million in cash and cash equivalents and short-term investments as of March 31, 2023 and December 31, 2022, respectively. Our non-U.S. entities held $122.8 million and $99.9 million in cash and cash equivalents and short-term investments as of March 31, 2023 and December 31, 2022, respectively.

We believe that existing cash and cash equivalents and short-term investments held by us, cash and cash equivalents anticipated to be generated by us and borrowing capacity under our ~~revolving line of credit~~Revolving Credit Facility are sufficient to meet working capital requirements, anticipated capital expenditures, and contractual obligations for at least the next 12 months and beyond. We also believe that these financial resources will continue to allow us to manage the ongoing impact of COVID-19 on our business operations for the foreseeable future, including mitigating potential reductions in revenue and delays in payments from our customers and partners. Our future capital requirements will depend on several factors, including but not limited to our obligation to repay any amounts outstanding under our Revolving Credit ~~Facilities,~~Facility, our subscription growth rate, subscription renewal activity, billing frequency, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced solutions, ~~and~~ the continuing market adoption of our ~~platform.~~platform and our level of acquisition activity or other strategic transactions. In the future, we may enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights.

We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies, this could reduce our ability to compete successfully and harm our results of operations.

Cash Flows

The following table presents a summary of our consolidated cash flows from operating, investing and financing activities for the three months ended March 31, ~~2022~~2023 and ~~2021:~~2022:


	Three Months Ended March 31,						Three Months Ended March 31,
	2022			2021			2023			2022
	(in thousands)						(in thousands)
Net cash provided by operating activities	$	79,924		$	51,205		$	92,525		$	79,924
Net cash used in investing activities		(17,680	)		(24,963	)		(25,005	)		(17,680	)
Net cash provided by financing activities		510			(10,065	)
Net cash (used in) provided by financing activities								(64,873	)		510
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(1,209	)		(626	)		2,185			(1,209	)
Change in cash, cash equivalents, and restricted cash		61,545			15,551			4,832			61,545
Cash, cash equivalents, and restricted cash at beginning of year		126,629			65,470
Cash, cash equivalents, and restricted cash at end of year	$	188,174		$	81,021
Cash, cash equivalents, and restricted cash at beginning of period								99,923			126,629
Cash, cash equivalents, and restricted cash at end of period							$	104,755		$	188,174
Cash paid for interest	$	2,584		$	4,382		$	2,448		$	2,584

Operating Activities

Net cash provided by operating activities is significantly influenced by the amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business and the amount and timing of customer payments. Cash provided by operations in the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 is primarily attributable to net loss adjusted for non-cash items. Cash provided by operations is also attributable to the change in accounts receivable and deferred revenue, which is driven by the seasonality of our business ~~as a result of higher levels of invoicing in the first and fourth quarters~~ and our collections process. Our cash flows from operating activities are generally reflective of our ability to invoice annual subscription fees upfront with payments due 30 days after the customer’s receipt of the invoice. We experience seasonality in our accounts receivable. The first and fourth quarters historically include a higher level of cash collections, which is a result of higher levels of invoicing in the first and fourth quarters.

For the three months ended March 31, 2023, net cash provided by operating activities was $92.5 million, which was primarily driven by net loss adjusted for non-cash items, increased fees payable to customers related to registration fees collected on behalf of our customers for meetings and events in the future, and cash collections and increased deferred revenue related to calendar year contracts, partially offset by a right-of-use asset associated with a lease we renewed for our India office. For the three months ended March 31, 2022, net cash provided by operating activities was $79.9 million, which was primarily driven by net loss adjusted for non-cash items, ~~a $48.2 million increase~~increased fees payable to customers related to registration fees collected on behalf of our customers for meetings and events in the future, and cash collections and increased deferred revenue and an $18.9 million decrease in accounts receivable, partially offset by a $13.6 million increase in capitalized commissions, net. For the three months ended March 31, 2021, net cash provided by operating activities was $51.2 million, which was primarily driven by net loss adjusted for non-cash items, a $35.9 million increase in deferred revenue, and an $11.2 million increase in accounts payable, partially offset by a $12.5 million increase in capitalized commissions, net, a $4.2 million increase in accounts receivable, and a $3.3 million reduction in operating lease liability.related to calendar year contracts.

Investing Activities

Our investing activities have consisted primarily of costs related to software developed for internal use, purchases of computer equipment and leasehold improvements, purchases and sales of ~~short-term~~ investments and business acquisitions. ~~During 2021~~Investments in software developed for internal use, computer equipment and ~~2022,~~leasehold improvements and business acquisitions are intended to enable sales growth in new, existing, and expanding markets, help us meet product demand, and increase our product offerings across multiple platforms, while the ~~impact~~purchases of ~~the pandemic lessened, and as these effects continue~~investments are intended to ~~lessen and when~~maximize returns from our ~~business begins to grow again, we expect our capital expenditures and our investment activity to continue to increase.~~existing cash balances.

For the three months ended March 31, 2023, net cash used in investing activities was $25.0 million, reflecting $12.7 million in capitalized software development, $9.9 million in net purchases of short-term investments and $2.4 million in purchases of property and equipment. For the three months ended March 31, 2022, net cash used in investing activities was $17.7 million, reflecting $11.9 million in capitalized software development, $4.4 million in net purchases of short-term investments and $1.4 million in purchases of property and equipment. For the three months ended March 31, 2021, net cash used in investing activities was $25.0 million, reflecting $15.2 million in net purchases of short-term investments, $8.7 million in capitalized software development and $1.0 million of purchases of property and equipment.

Financing Activities

Our financing activities have consisted primarily of proceeds from and principal payments on the Company’s ~~Term Loan and~~ Revolving Credit Facility and proceeds from the exercise of stock options. Our practice has been to minimize interest expense while maintaining reasonable liquidity. For the three months ended March 31, 2023, net cash used in financing activities was $64.9 million, consisting

primarily of $115.0 million of principal repayments on the Company's Revolving Credit Facility, partially offset by $45.0 million in proceeds from the Company's Revolving Credit Facility and $5.1 million of proceeds from the exercise of stock options. For the three months ended March 31, 2022, net cash provided by financing activities was $0.5 million, consisting of proceeds from the exercise of stock options. ~~For~~

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin

Adjusted Free Cash Flow and Adjusted Free Cash Flow margin are supplemental measures of operating performance monitored by management that are not defined under GAAP and that do not represent, and should not be considered as, an alternative to our consolidated cash flow statement, as determined by GAAP. We define Adjusted Free Cash Flow as our net cash provided by operating activities adjusted to: (i) include purchases of property and equipment, (ii) include capitalized software development costs, (iii) include the changes in fees payable to customers, and (iv) exclude cash payments for interest. Adjusted Free Cash Flow margin represents Adjusted Free Cash Flow divided by revenue. We use Adjusted Free Cash Flow and Adjusted Free Cash Flow margin to understand and evaluate our core operating performance and trends. We believe Adjusted Free Cash Flow and Adjusted Free Cash Flow margin are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical financial periods.

Adjusted Free Cash Flow and Adjusted Free Cash Flow margin have limitations as analytical tools, and you should not consider either in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, you should consider Adjusted Free Cash Flow and Adjusted Free Cash Flow margin alongside other financial performance measures, including operating cash flows, investing cash flows and our other GAAP results. In evaluating Adjusted Free Cash Flow and Adjusted Free Cash Flow margin, you should be aware that in the future we may incur cash flow activities that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted Free Cash Flow and Adjusted Free Cash Flow margin should not be construed to imply that our future results will be unaffected by the types of items excluded from the calculation of Adjusted Free Cash Flow and Adjusted Free Cash Flow margin. Adjusted Free Cash Flow and Adjusted Free Cash Flow margin are not a presentation made in accordance with GAAP and the use of the terms may vary from others in our industry.

The following table presents a summary of our Adjusted Free Cash Flow for each of the three months ended March 31, ~~2021,~~2023 and 2022:


	Three Months Ended March 31,
	2023			2022
	(in thousands)
Adjusted Free Cash Flow:
Net cash provided by operating activities:	$	92,525		$	79,924
Adjustments
Purchase of property and equipment		(2,356	)		(1,375	)
Capitalized software development costs		(12,725	)		(11,891	)
Change in fees payable to customers		(25,210	)		(24,493	)
Interest paid		2,448			2,584
Adjusted Free Cash Flow	$	54,682		$	44,749

Adjusted Free Cash Flow margin:
Revenue	$	166,205		$	137,356
Adjusted Free Cash Flow margin		32.9	%		32.6	%

Adjusted Free Cash Flow for the three months ended March 31, 2023 increased $9.9 million compared to the three months ended March 31, 2022 primarily as a result of an increase in cash provided by operating activities driven by increased fees payable to customers in the first quarter of 2023 as in-person meetings and events continue to return, net ~~cash used~~of decreased deferred revenue due to the timing of contract renewals and a right-of-use asset created in ~~financing activities was $10.1 million, consisting~~the first quarter of $8.4 million in repayments on the Company's Revolving Credit Facility and $2.0 million of scheduled principal payments on the Company’s Term Loan Facility, partially offset by $0.3 million in proceeds from the exercise of stock options.2023.

Commitments and Contingencies

See the information set forth in Note 12. “Commitments and Contingencies” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Indemnification Agreements

In the ordinary course of business, we enter into agreements of varying scope and terms pursuant to which we agree to indemnify customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses related to breach of confidentiality and claims by third parties of intellectual property infringement, misappropriation or other violation. ~~See Part I, Item 1A. “Risk Factors—We have indemnity provisions under our contracts with our customers, channel partners and other third parties, which could have a material adverse effect on our business” in our Annual Report on Form 10-K for the year ended December 31, 2021.~~ In addition, we ~~enter~~have entered into indemnification agreements with each of our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. There are no indemnification claims that we are currently aware of that could have a material adverse effect on our consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 2. “Summary of Significant Accounting Policies” to the condensed consolidated Financial Statements in Part I, Item 1 of this Quarterly Report and in the Notes to Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 describe the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in foreign currency rates, although we also have some exposure due to potential changes in inflation or interest rates. We do not hold financial instruments for trading purposes.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) or Rule 15d-15(e) under the ~~Securities~~ Exchange Act ~~of 1934, as amended (“the Exchange Act”))~~ as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, and that information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.

Changes in Internal Controls

There were no changes in our internal controls over financial reporting during the period ended March 31, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we ~~may become~~are involved in legal proceedings, regulatory matters or other contingencies arising in the ordinary course of our business. We are not presently ~~a party to~~involved in any legal ~~proceedings~~proceeding, regulatory matter or other contingency that, if determined adversely to ~~us,~~the Company, in our opinion, would individually or in the aggregate have a material adverse effect on our business, operating results or financial ~~condition or cash flows.~~condition.

Item 1A. Risk Factors.

The risks described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, which was filed with the Securities and Exchange Commission (the “SEC”) on March ~~7, 2022,~~14, 2023, remain current in all material respects. Those risk factors do not identify all risks that we ~~face—~~face; our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. If any of the identified risks or others not specified in our SEC filings materialize, our business, financial condition or results of operations could be materially adversely affected. In these circumstances, the market price of our common stock could decline.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The exhibits listed on the Exhibit Index attached hereto are filed or incorporated by reference (as stated therein) as part of this Quarterly Report.

EXHIBIT INDEX


Exhibit Number		Description
2.1		Agreement and Plan of Merger, by and among the Company, Capstone Borrower, Inc. and Capstone Merger Sub, Inc., dated as of March 14, 2023 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 14, 2023).
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	CVENT HOLDING CORP.

Date: May ~~9, 2022~~5, 2023	By:	/s/ William J. Newman, III
		William J. Newman, III
		SVP and Chief Financial Officer


Delaware	98-1560055
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1765 Greensboro Station Place, 7th Floor Tysons, VA	22102
(Address of principal executive offices)	(Zip Code)


	March 31, 2022			December 31, 2021			March 31, 2023			December 31, 2022
	(unaudited)						(unaudited)
Assets
Current Assets:
Current assets:
Cash and cash equivalents	$	188,070		$	126,526		$	102,220		$	99,108
Restricted cash		104			103			2,535			815
Short-term investments		4,952			538			53,872			40,925
Accounts receivable, net of allowance of $3.6 million and $4.5 million, respectively		92,878			112,251
Accounts receivable, net of allowance of $1.8 million and $2.6 million, respectively								97,018			120,362
Capitalized commission, net		24,870			25,393			27,473			26,685
Prepaid expenses and other current assets		27,048			20,376			24,759			17,819
Total current assets		337,922			285,187			307,877			305,714
Property and equipment, net		14,727			15,334			14,577			15,250
Capitalized software development costs, net		104,920			108,851			92,759			96,959
Intangible assets, net		209,376			221,371			161,076			172,781
Goodwill		1,618,067			1,617,880			1,620,270			1,620,312
Operating lease-right-of-use assets		26,225			28,370			28,453			20,398
Capitalized commission, non-current, net		23,499			22,999			23,828			23,477
Deferred tax assets, non-current		2,370			2,403			2,440			2,425
Other assets, non-current, net		3,864			3,684			5,493			8,617
Total assets	$	2,340,970		$	2,306,079		$	2,256,773		$	2,265,933
Liabilities and Stockholders’ Equity
Liabilities and stockholders’ equity
Current liabilities:
Current portion of long-term debt	$	0		$	0		$	-		$	-
Accounts payable		2,185			2,675			2,804			2,147
Accrued expenses and other current liabilities		66,739			79,827			88,993			82,249
Fees payable to customers		49,475			24,982			63,589			38,379
Operating lease liabilities, current		11,236			11,290			11,121			11,070
Deferred revenue		287,504			239,843			302,216			267,882
Total current liabilities		417,139			358,617			468,723			401,727
Deferred tax liabilities, non-current		16,664			16,695			18,126			18,103
Long-term debt, net		262,593			262,302			138,000			208,000
Operating lease liabilities, non-current		27,930			30,809			26,790			19,712
Other liabilities, non-current		8,235			8,200			6,413			7,526
Total liabilities		732,561			676,623			658,052			655,068
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.0001 par value, 1,500,000,000 shares authorized at March 31, 2022 and December 31, 2021, respectively; 481,266,396 and 481,121,695 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		48			48
Common stock, $0.0001 par value, 1,500,000,000 shares authorized at March 31, 2023 and December 31, 2022, respectively; 491,358,090 and 488,296,792 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively								49			49
Additional paid-in capital		2,493,972			2,483,761			2,591,042			2,571,424
Accumulated other comprehensive loss		(2,615	)		(2,746	)		(7,850	)		(8,731	)
Accumulated deficit		(882,996	)		(851,607	)		(984,520	)		(951,877	)
Total stockholders’ equity		1,608,409			1,629,456			1,598,721			1,610,865
Total liabilities and stockholders’ equity	$	2,340,970		$	2,306,079		$	2,256,773		$	2,265,933


	Common Stock				Amount					Accumulated
	Shares		Amount		Additional paid-in capital		Accumulated deficit			other comprehensive income / (loss)			Total stockholders’ equity
Balance as of December 31, 2021		481,121,695	$	48	$	2,483,761	$	(851,607	)	$	(2,746	)	$	1,629,456
Stock-based compensation expense		-		-		9,768		-			-			9,768
Net loss		-		-		-		(31,389	)		-			(31,389	)
Common stock issued under share-based compensation plans		144,701		-		443		-			-			443
Common stock repurchased		-		-		-		-			-			-
Foreign currency translation loss		-		-		-		-			131			131
Balance as of March 31, 2022		481,266,396	$	48	$	2,493,972	$	(882,996	)	$	(2,615	)	$	1,608,409


	Common Stock				Amount					Accumulated
	Shares		Amount		Additional paid-in capital		Accumulated deficit			other comprehensive income / (loss)			Total stockholders’ equity
Balance as of December 31, 2022		488,296,792	$	49	$	2,571,424	$	(951,877	)	$	(8,731	)	$	1,610,865
Stock-based compensation expense		-		-		14,574		-			-			14,574
Net loss		-		-		-		(32,643	)		-			(32,643	)
Common stock issued under share-based compensation plans		3,061,298		-		5,044		-			-			5,044
Other comprehensive income		-		-		-		-			881			881
Balance as of March 31, 2023		491,358,090	$	49	$	2,591,042	$	(984,520	)	$	(7,850	)	$	1,598,721


	Common Stock					Amount						Accumulated
	Shares			Amount		Additional paid-in capital			Accumulated deficit			other comprehensive income / (loss)			Total stockholders’ equity
Balance as of December 31, 2020		416,303,325		$	42	$	1,936,406		$	(765,528	)	$	(69	)	$	1,170,851
Stock-based compensation expense		-			-		608			-			-			608
Net loss		-			-		-			(16,561	)		-			(16,561	)
Common stock issued under share-based compensation plans		221,001			-		319			-			-			319
Common stock repurchased		(123,435	)		-		(122	)		-			-			(122	)
Foreign currency translation loss		-			-		-			-			(621	)		(621	)
Balance as of March 31, 2021		416,400,891		$	42	$	1,937,211		$	(782,089	)	$	(690	)	$	1,154,474


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐


		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	21
	Condensed Consolidated Balance Sheets	21
	Condensed Consolidated Statements of Operations and Comprehensive Loss	32
	Condensed Consolidated Statements of Changes in Stockholders' Equity	43
	Condensed Consolidated Statements of Cash Flows	54
	Notes to Unaudited Condensed Consolidated Financial Statements	65
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1716
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

PART II.	OTHER INFORMATION	30

Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	30
Signatures		32


	March 31, 2022		December 31, 2021
North America	$	9,986	$	10,205
Outside North America		4,741		5,129
Total	$	14,727	$	15,334


Goodwill as of January 1, 2022	$	1,617,880
Foreign currency translation adjustments		187
Goodwill as of March 31, 2022	$	1,618,067


2022 (remaining nine months)	$	36,467
2023		46,715
2024		45,150
2025		39,308
2026		35,584
2027 and thereafter		6,090
Total amortization expense related to acquired intangible assets	$	209,314


	March 31, 2022			December 31, 2021
First Lien Principal amount	$	265,696		$	265,696
Revolving Credit Facility Principal amount	0				0
Less: original issue discount		(401	)		(438	)
Less: unamortized deferred financing costs		(2,702	)		(2,956	)
Total principal amount and related unamortized debt issuance costs, net	$	262,593		$	262,302