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What changed in ON24 INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ON24 INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+266 added−267 removedSource: 10-K (2025-03-13) vs 10-K (2024-03-14)

Top changes in ON24 INC.'s 2024 10-K

266 paragraphs added · 267 removed · 234 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

24 edited+1 added−0 removed153 unchanged
Biggest changeFor example, we sometimes cannot be certain which laws will be deemed applicable to us given the global nature of our business, including with respect to such topics as data privacy and security, pricing, credit card fraud, advertising, taxation, content regulation and intellectual property ownership and infringement. 13 Table of Contents Businesses use our platform to engage with and market to their prospects and customers.
Biggest changeFor example, we sometimes cannot be certain which laws will be deemed applicable to us given the global nature of our business, including with respect to such topics as data privacy and security, pricing, credit card fraud, advertising, taxation, content regulation and intellectual property ownership and infringement.
Our platform uses AI technologies, including generative AI, natural language processing and machine learning, to enable the following capabilities: • The ability to dynamically deliver personalized content recommendations; • Embedded generative AI that automatically creates written content and videos to feed ongoing nurture streams; • Embedded generative AI copywriting assistant tool to help with promotional content; • Enable sales to act on prospects’ unique topical interests with a “Business Interest Cloud” report; • Surface immediate audience feedback from live experiences with a “Key Moments” report, providing marketers with a heatmap report of “Key Moments” that identifies the most engaging segments of a live experience and automatically creates snackable video highlights; • Predictive engagement levels for our customers’ prospective customers; • Automated transcription of audio and video into text, making it searchable and accessible; • Automated translation of transcripts into multiple languages for global audience reach; 10 Table of Contents • Q&A bot, to answer routine support questions during live webinar experiences; and, • Platform audience and presenter load predictions, to help deploy operational resources and provide oversight.
Our platform uses AI technologies, including generative AI, natural language processing and machine learning, to enable the following capabilities: • The ability to dynamically deliver personalized content recommendations; • Embedded generative AI that automatically creates written content, voice-based content and videos to feed ongoing nurture streams; • Embedded generative AI copywriting assistant tool to help with promotional content; • Enable sales to act on prospects’ unique topical interests with a “Business Interest Cloud” report; • Surface immediate audience feedback from live experiences with a “Key Moments” report, providing marketers with a heatmap report of “Key Moments” that identifies the most engaging segments of a live experience and automatically creates snackable video highlights; • Predictive engagement levels for our customers’ prospective customers; • Automated transcription of audio and video into text, making it searchable and accessible; 10 Table of Contents • Automated translation of transcripts into multiple languages for global audience reach; • Q&A bot, to answer routine support questions during live webinar experiences; and, • Platform audience and presenter load predictions, to help deploy operational resources and provide oversight.
The following key trends are impacting sales and marketing strategies today: • Personalized and interactive digital customer engagement at scale is the new imperative. The ability to engage with large numbers of prospective customers and customers in a cost effective manner is crucial.
The following key trends are impacting sales and marketing strategies today: • Personalized and interactive digital customer engagement at scale is the new imperative. The ability to engage with large numbers of prospective customers and existing customers in a cost effective manner is crucial.
For example, several web-based meeting, webinar, and virtual event software products are offered by companies such as Zoom, LogMeIn, Microsoft, Cisco, Cvent, Adobe, RingCentral, Notified and Kaltura. Many of these products have significantly lower prices.
For example, several web-based meeting, webinar, and virtual event software products are offered by companies such as Zoom, LogMeIn, Microsoft, Cisco, Cvent, Adobe, RingCentral and Kaltura. Many of these products have significantly lower prices.
No single customer contributed more than 10% of our total revenue for the year ended December 31, 2023, 2022 and 2021. Sales and Marketing We primarily sell our products through direct sales, which comprises field and inside sales personnel. Our sales organization is comprised of market-centric teams focusing on Enterprise and Commercial customers segmented by employee headcounts.
No single customer contributed more than 10% of our total revenue for the year ended December 31, 2024, 2023 and 2022. Sales and Marketing We primarily sell our products through direct sales, which comprises field and inside sales personnel. Our sales organization is comprised of market-centric teams focusing on Enterprise and Commercial customers segmented by employee headcounts.
No single customer contributed more than 10% of our total revenue for the year ended December 31, 2023, 2022 and 2021. Industry Trends B2B sales and marketing has shifted away from traditional approaches, such as “cold calling,” “snail mail,” industry networking events and in-office visits, to more scalable, digital-based approaches.
No single customer contributed more than 10% of our total revenue for the year ended December 31, 2024, 2023 and 2022. Industry Trends B2B sales and marketing has shifted away from traditional approaches, such as “cold calling,” “snail mail,” industry networking events and in-office visits, to more scalable, digital-based approaches.
Our platform support and customer success teams are organized into a “follow the sun model” to ensure consistent and reliable service across the globe. 6 Table of Contents Our Market Opportunity We estimate the current total addressable market, or TAM, for our solutions is approximately $44 billion worldwide annually.
Our platform support and customer success teams are organized into a “follow the sun model” to ensure consistent and reliable service across the globe. 6 Table of Contents Our Market Opportunity We estimate the current total addressable market, or TAM, for our solutions is approximately $42 billion worldwide annually.
Our Customers Our customer base consists of a diverse set of businesses from fast-growing start-ups to established Fortune 100 enterprises that span a number of industries where B2B sales and marketing is mission critical. As of December 31, 2023, approximately 22% of the Fortune 500 are ON24 customers.
Our Customers Our customer base consists of a diverse set of businesses from fast-growing start-ups to established Fortune 100 enterprises that span a number of industries where B2B sales and marketing is mission critical. As of December 31, 2024, approximately 22% of the Fortune 500 are ON24 customers.
This value was calculated using internally generated data for annual recurring revenue, or ARR, as of December 31, 2023 for the top 25% of our customers by ARR that subscribe to two or more of our products, within each of the Enterprise and Mid-Market bands, and the top 25% by ARR of all our customers within the SMB band.
This value was calculated using internally generated data for annual recurring revenue, or ARR, as of December 31, 2024 for the top 25% of our customers by ARR that subscribe to two or more of our products, within each of the Enterprise and Mid-Market bands, and the top 25% by ARR of all our customers within the SMB band.
We believe these calculations are representative of the current potential spend on our solutions by customers and prospective customers. We multiplied the total number of companies within each band by the calculated annual value for that band. The aggregate calculated value represents the current annual estimated market opportunity in the United States of approximately $22 billion.
We believe these calculations are representative of the current potential spend on our solutions by customers and prospective customers. We multiplied the total number of companies within each band by the calculated annual value for that band. The aggregate calculated value represents the current annual estimated market opportunity in the United States of approximately $21 billion.
With leading enterprise components, we expect our architecture to scale readily without any significant change as our business expands. 11 Table of Contents • Privacy and compliance: Our platform includes features and options designed to support compliance with the EU General Data Protection Regulation, or GDPR, the UK GDPR, the California Consumer Privacy Act, or CCPA, the California Privacy Rights Act, or CPRA, and other privacy laws, and provides options and features to enable customers to make privacy and compliance choices that align to their needs and relevant legal requirements.
With leading enterprise components, we expect our architecture to scale readily without any significant change as our business expands. • Privacy and compliance: Our platform includes features and options designed to support compliance with the EU General Data Protection Regulation, or GDPR, the UK GDPR, the California Consumer Privacy Act, or CCPA, the California Privacy Rights Act, or CPRA, and other privacy laws, and provides options and features to enable customers to make privacy and compliance choices that align to their needs and relevant legal requirements.
Our portfolio of services provides consulting, support for platform, and product and event adoption as well as support for experience management, monitoring and production. Our training team oversees onboarding, training, certification and a knowledge center. We have a data-driven process and well-established operations in place that proactively monitor our customers’ platform adoption, utilization and success.
Our portfolio of services provides consulting, support for platform, and product and event adoption as well as support for experience management, monitoring and production. Our training team oversees onboarding, training, certification and a knowledge center. 12 Table of Contents We have a data-driven process and well-established operations in place that proactively monitor our customers’ platform adoption, utilization and success.
These laws, procedures and restrictions provide only limited protection, and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated. Regulatory Considerations The legal environment of Internet-based businesses is evolving rapidly in the United States and elsewhere.
These laws, procedures and restrictions provide only limited protection, and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated. 13 Table of Contents Regulatory Considerations The legal environment of Internet-based businesses is evolving rapidly in the United States and elsewhere.
This statute provides relief for claims of circumvention of copyright-protected technologies but includes a safe harbor that is intended to reduce the liability of online service providers for listing or linking to third-party websites or hosting content that infringes copyrights of others.
This statute provides relief for claims of circumvention of copyright-protected technologies but includes a safe harbor that is intended to reduce the liability of online service providers for listing or linking to third-party 14 Table of Contents websites or hosting content that infringes copyrights of others.
As our customers create more ON24 content-rich experiences, they gain more connected insights through gathering more data directly from prospective customers, which we refer to as first-person data, to help them create a multiplier effect that strengthens their ability to convert prospective customers and generate revenue. As of December 31, 2023, we had 1,784 customers.
As our customers create more ON24 content-rich experiences, they gain more connected insights through gathering more data directly from prospective customers, which we refer to as first-person data, to help them create a multiplier effect that strengthens their ability to convert prospective customers and generate revenue. As of December 31, 2024, we had 1,645 customers.
As of December 31, 2023, we had 1,784 customers. We intend to leverage our land and expand model to further penetrate customers across these verticals. • Superior, dedicated customer service. Our solutions are designed to be easy to use, featuring drag-and-drop and other similar tools simplifying implementation by our customers.
As of December 31, 2024, we had 1,645 customers. We intend to leverage our land and expand model to further penetrate customers across these verticals. • Superior, dedicated customer service. Our solutions are designed to be easy to use, featuring drag-and-drop and other similar tools simplifying implementation by our customers.
Census Bureau for 2020. We then apply an average annual value to the companies in each band.
Census Bureau for 2021. We then apply an average annual value to the companies in each band.
For most businesses to succeed, we believe their sales and marketing strategies must have digital engagement powered by the latest technology. With the launch of our intelligent engagement platform that includes our new AI-powered Analytics and Content Engine (“ACE”) in January 2024, we are strategically positioned to help businesses and their sales and marketing organizations make this transition.
For most businesses to succeed, we believe their sales and marketing strategies must utilize digital engagement that is powered by the latest technology. With the launch of our intelligent engagement platform that includes our AI-powered Analytics and Content Engine (“ACE”), we are strategically positioned to help businesses and their sales and marketing organizations make this transition.
In the United States and abroad, as of December 31, 2023, we had 19 issued patents and 26 pending patent applications, the earliest of which expires in 2027. We pursue the registration of our domain names, trademarks and service marks in the United States and in certain locations outside the United States.
In the United States and abroad, as of December 31, 2024, we had 27 issued patents and 11 pending patent applications, the earliest of which expires in 2027. We pursue the registration of our domain names, trademarks and service marks in the United States and in certain locations outside the United States.
We continue to transition more of our capabilities to a hybrid cloud infrastructure, which we believe will enhance our platform’s flexibility and scalability. We built our platform and products to address the robust performance demanded by large, multinational enterprises in the following ways: • Performance and scalability: Our Cloud and Network Operations team runs this application in three data centers.
We continue to transition more of our capabilities to a hybrid cloud infrastructure, which we believe will enhance our platform’s flexibility and scalability. 11 Table of Contents We built our platform and products to address the robust performance demanded by large, multinational enterprises in the following ways: • Performance and scalability: Our Cloud and Network Operations team runs this application in four hosting facilities.
Our platform has two main parts: a web application stack, and a streaming infrastructure stack, running on two co-located data centers in the United States and one in the European Union (EU). We also utilize public-cloud providers as part of our infrastructure. Our web application stack processes requests from web browsers and APIs.
Our platform has two main parts: a web application stack, and a streaming infrastructure stack, running in two hosting facilities in the United States and two in the European Union (EU). We also utilize public-cloud providers as part of our infrastructure. Our web application stack processes requests from web browsers and APIs.
The copyright infringement policies that we have implemented for our platform are intended to satisfy the DMCA safe harbor. 14 Table of Contents Employees and Human Capital As of December 31, 2023, we had 462 full-time employees. Of these employees, 366 are based in the United States and 96 are based in international locations.
The copyright infringement policies that we have implemented for our platform are intended to satisfy the DMCA safe harbor. Employees and Human Capital As of December 31, 2024, we had 437 full-time employees. Of these employees, 349 are based in the United States and 88 are based in international locations.
We release major platform upgrades regularly with minor upgrades released as needed. Research and development employees are based primarily in our San Francisco headquarters, and we also contract with remote U.S.-based and offshore workers. Competition Our industry is highly competitive and fragmented.
Research and development employees are based primarily in our San Francisco headquarters, and we also contract with remote U.S.-based and offshore workers. Competition Our industry is highly competitive and fragmented.
This approach enables us to efficiently scale our customer success operations as our customer base grows. 12 Table of Contents Research and Development Our research and development team are responsible for the design, development, testing, and delivery of new products, platform capabilities, product features and platform integrations, connectors and APIs.
This approach enables us to efficiently scale our customer success operations as our customer base grows. Research and Development Our research and development team are responsible for the design, development, testing, and delivery of new products, platform capabilities, product features and platform integrations, connectors and APIs. We release major platform upgrades regularly with minor upgrades released as needed.
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Businesses use our platform to engage with and market to their prospects and customers.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

114 edited+19 added−18 removed305 unchanged
Biggest changeThese provisions, which may delay, prevent or deter a merger, acquisition, tender offer, proxy contest, or other transaction that stockholders may consider favorable, include the following: • the division of our board of directors into three classes until the declassification is completed by 2026; • advance notice requirements for stockholder proposals and director nominations; • provisions limiting our stockholders’ ability to call special meetings of stockholders and to take action by written consent; • restrictions on business combinations with interested stockholders; • in certain cases, the approval of holders representing at least 66.7% of the total voting power of the shares entitled to vote generally in the election of directors will be required for stockholders to adopt, amend or repeal our Bylaws, or amend or repeal certain provisions of our Certificate of Incorporation, including those relating to who may call special meetings of our stockholders, our stockholders’ ability to act by written consent, our board of directors (including the removal of one or more directors), indemnification of our directors and officers and exculpation of our directors, supermajority voting, amendments to our Bylaws and the exclusive forum for litigating specified matters; • no cumulative voting; • the required approval of holders representing at least 66.7% of the total voting power of the shares entitled to vote at an election of the directors to remove directors; and • the ability of our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our governing body.
Biggest changeThese provisions, which may delay, prevent or deter a merger, acquisition, tender offer, proxy contest, or other transaction that stockholders may consider favorable, include the following: • the division of our board of directors into three classes until the declassification is completed by 2026; • advance notice requirements for stockholder proposals and director nominations; • provisions limiting our stockholders’ ability to call special meetings of stockholders and to take action by written consent; • restrictions on business combinations with interested stockholders; • in certain cases, the approval of holders representing at least 66.7% of the total voting power of the shares entitled to vote generally in the election of directors will be required for stockholders to adopt, amend or repeal our Bylaws, or amend or repeal certain provisions of our Certificate of Incorporation, including those relating to who may call special meetings of our stockholders, our stockholders’ ability to act by written consent, our board of directors (including the removal of one or more directors), indemnification of our directors and officers and exculpation of our directors, supermajority voting, amendments to our Bylaws and the exclusive forum for litigating specified matters; • no cumulative voting; • the required approval of holders representing at least 66.7% of the total voting power of the shares entitled to vote at an election of the directors to remove directors; and • the ability of our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our governing body. 36 Table of Contents Moreover, because we are incorporated in Delaware and our Certificate of Incorporation does not contain a provision opting out Section 203 of the Delaware General Corporation Law, or Section 203, we are governed by the provisions of Section 203, which prohibit a person, individually or as a group, who owns, or owned in the preceding three years, 15% or more of our outstanding voting stock from merging or combining with us, unless the merger or combination is approved in a prescribed manner.
You should read these risks before you invest in our common stock. • our ability to grow our revenue; • our ability to attract new customers and expand sales to existing customers; • fluctuation in our performance, our history of net losses and any increases in our expenses; • competition and technological development in our markets and any decline in demand for our solutions or generally in our markets; • adverse general economic and market conditions and spending on sales and marketing technology; • our ability to expand our sales and marketing capabilities and achieve growth; • the impact of the resumption of in-person marketing activities on our customer growth rate; • disruptions, interruptions, outages or other issues with our technology or our use of third-party services, data connectors and data centers; • the impact of any cybersecurity-related attack, significant data breach or disruption of the information technology systems or networks on which we rely; • our sales cycle, our international presence and our timing of revenue recognition from our sales; • interoperability with other devices, systems and applications; • compliance with data privacy, import and export controls, customs, sanctions and other laws and regulations; • intellectual property matters, including any infringements of third-party intellectual property rights by us or infringement of our intellectual property rights by third parties; and • the market for, trading price of and other matters associated with our common stock.
You should read these risks before you invest in our common stock. • our ability to grow our revenue; • fluctuation in our performance, our history of net losses and any increases in our expenses; • our ability to attract new customers and expand sales to existing customers; • competition and technological development in our markets and any decline in demand for our solutions or generally in our markets; • adverse general economic and market conditions and spending on sales and marketing technology; • our ability to expand our sales and marketing capabilities and achieve growth; • the impact of any cybersecurity-related attack, significant data breach or disruption of the information technology systems or networks on which we rely; • disruptions, interruptions, outages or other issues with our technology or our use of third-party services, data connectors and data centers; • the impact of the resumption of in-person marketing activities on our customer growth rate; • our sales cycle, our international presence and our timing of revenue recognition from our sales; • interoperability with other devices, systems and applications; • compliance with data privacy, import and export controls, customs, sanctions and other laws and regulations; • intellectual property matters, including any infringements of third-party intellectual property rights by us or infringement of our intellectual property rights by third parties; and • the market for, trading price of and other matters associated with our common stock.
These economic conditions can arise suddenly, including the recent rise in inflation and overall macroeconomic environment, which has negatively impacted our customers’ marketing budgets.
These economic conditions can arise suddenly, including the recent rise in inflation and the overall macroeconomic environment, which has negatively impacted our customers’ marketing budgets.
Any deficiencies and other failures of the AI-powered capabilities in our platform could reduce the demand for our marketplace, result in user dissatisfaction and adversely affect our business. Ineffective or inadequate AI development or deployment practices by us or others could also result in incidents that impair the acceptance of AI solutions.
Any deficiencies and other failures of the AI-powered capabilities in our platform could reduce the demand for our platform in the marketplace, result in user dissatisfaction and adversely affect our business. Ineffective or inadequate AI development or deployment practices by us or others could also result in incidents that impair the acceptance of AI solutions.
Operating internationally subjects us to special risks, including risks associated with: • recruiting and retaining talented and capable employees outside the United States and maintaining our company culture across all of our offices; • providing our platform and operating our business across a significant distance, in different languages and among different cultures, including the potential need to modify our platform and features to ensure that they are culturally appropriate and relevant in different countries; • determining the appropriate pricing strategy to enable us to compete effectively internationally, which may be different than the pricing strategies that have worked for us in the United States; • compliance with applicable international laws and regulations, including laws and regulations with respect to privacy, data protection and marketing, and the risk of penalties to us and individual members of management or employees if our practices are deemed to be out of compliance; • management of an employee base in jurisdictions that may not give us the same employment and retention flexibility as does the United States; • difficulties in managing and staffing international operations including the proper classification of independent contractors and other contingent workers, differing employer/employee relationships, and local employment laws; • operating in jurisdictions that do not protect intellectual property rights to the same extent as does the United States and the practical enforcement of such intellectual property rights outside of the United States; • foreign government interference with our intellectual property that is developed outside of the United States, such as the risk that changes in foreign laws could restrict our ability to use our intellectual property outside of the jurisdiction in which we developed it; • integration with partners outside of the United States; 23 Table of Contents • compliance by us and our business partners with anti-corruption laws, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory limitations on our ability to provide our platform in certain international markets; • foreign business restrictions, foreign exchange controls and similar laws that might require significant lead time in setting up operations in certain geographic territories and might prevent us from repatriating cash earned outside the United States; • political and economic instability; • changes in diplomatic and trade relationships, including the imposition of new trade restrictions, trade protection measures, import or export requirements, trade embargoes and other trade barriers; • generally longer payment cycles and greater difficulty in collecting accounts receivable; • double taxation of our international earnings and potentially adverse tax consequences due to changes in the income and other tax laws of the United States or the international jurisdictions in which we operate; and • higher costs of doing business internationally, including increased accounting, travel, infrastructure and legal compliance costs.
Operating internationally subjects us to special risks, including risks associated with: • recruiting and retaining talented and capable employees outside the United States and maintaining our company culture across all of our offices; • providing our platform and operating our business across a significant distance, in different languages and among different cultures, including the potential need to modify our platform and features to ensure that they are culturally appropriate and relevant in different countries; • determining the appropriate pricing strategy to enable us to compete effectively internationally, which may be different than the pricing strategies that have worked for us in the United States; • compliance with applicable international laws and regulations, including laws and regulations with respect to privacy, data protection and marketing, and the risk of penalties to us and individual members of management or employees if our practices are deemed to be out of compliance; • management of an employee base in jurisdictions that may not give us the same employment and retention flexibility as does the United States; • difficulties in managing and staffing international operations including the proper classification of independent contractors and other contingent workers, differing employer/employee relationships, and local employment laws; • operating in jurisdictions that do not protect intellectual property rights to the same extent as does the United States and the practical enforcement of such intellectual property rights outside of the United States; • foreign government interference with our intellectual property that is developed outside of the United States, such as the risk that changes in foreign laws could restrict our ability to use our intellectual property outside of the jurisdiction in which we developed it; • integration with partners outside of the United States; • compliance by us and our business partners with anti-corruption laws, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory limitations on our ability to provide our platform in certain international markets; • foreign business restrictions, foreign exchange controls and similar laws that might require significant lead time in setting up operations in certain geographic territories and might prevent us from repatriating cash earned outside the United States; • political and economic instability; • changes in diplomatic and trade relationships, including the imposition of new trade restrictions, trade protection measures, import or export requirements, trade embargoes and other trade barriers; • generally longer payment cycles and greater difficulty in collecting accounts receivable; • double taxation of our international earnings and potentially adverse tax consequences due to changes in the income and other tax laws of the United States or the international jurisdictions in which we operate; and • higher costs of doing business internationally, including increased accounting, travel, infrastructure and legal compliance costs.
These deficiencies and other failures of AI systems could require us to refund fees to customers or subject us to competitive harm, regulatory action, legal liability (including under new proposed legislation regulating AI in jurisdictions such as the US and EU, the application of existing data protection, privacy, intellectual property, and other laws), and brand or reputational harm.
These deficiencies and other failures of AI systems could require us to refund fees to customers or subject us to competitive harm, regulatory action, legal liability (including under new legislation regulating AI in jurisdictions such as the US and EU, the application of existing data protection, privacy, intellectual property, and other laws), and brand or reputational harm.
In addition, extreme price and volume fluctuations in the stock markets have affected and continue to affect the stock prices of many companies. Often, their stock prices have fluctuated in ways unrelated or disproportionate to their operating performance. In the past, stockholders have filed securities class action litigation against companies following periods of market volatility.
Extreme price and volume fluctuations in the stock markets have affected and continue to affect the stock prices of many companies. Often, their stock prices have fluctuated in ways unrelated or disproportionate to their operating performance. In the past, stockholders have filed securities class action litigation against companies following periods of market volatility.
As the CCPA continues to evolve, several U.S. states have recently adopted new privacy laws and various other U.S. states are also actively introducing and considering so-called “omnibus” privacy legislation. In 2023, omnibus privacy laws took effect in Colorado, Connecticut, Virginia and Utah, and several other states have passed omnibus privacy laws.
As the CCPA continues to evolve, several U.S. states have recently adopted new privacy laws and various other U.S. states are also actively introducing and considering so-called “omnibus” privacy legislation. In 2023, omnibus privacy laws took effect in Colorado, Connecticut, Virginia and Utah, and several other states have passed in 2023 and 2024 omnibus privacy laws.
Our solutions face competition from a number of web-based meeting, webinar, physical event and marketing software products offered by companies such as Zoom, LogMeIn, Microsoft, Cisco, Cvent, Adobe, RingCentral, Notified and Kaltura. Many of these products have significantly lower prices.
Our solutions face competition from a number of web-based meeting, webinar, physical event and marketing software products offered by companies such as Zoom, LogMeIn, Microsoft, Cisco, Cvent, Adobe, RingCentral and Kaltura. Many of these products have significantly lower prices.
Furthermore, we made significant headcount reductions in 2022 and 2023 to reduce our cost structure. Reductions in our workforce could result in the loss of valuable skills and knowledge and have a negative impact on morale, which can impact our ability to innovate.
Furthermore, we made significant headcount reductions in 2022, 2023 and 2024 to reduce our cost structure. Reductions in our workforce could result in the loss of valuable skills and knowledge and have a negative impact on morale, which can impact our ability to innovate.
In addition, if the license terms for updated or enhanced versions of the open source software we utilize change, we may be forced to expend substantial time and resources to re-engineer our components of our platform.
In addition, if the license terms for updated or enhanced versions of the open source software we utilize change, we may be forced to expend substantial time and resources to re-engineer affected components in our platform.
Factors that may cause fluctuations in our quarterly results of operations include: • our ability to retain and expand customer usage; • our ability to attract new customers; • our ability to hire and retain employees, in particular those responsible for the selling or marketing of our platform and provide sales leadership in areas in which we are expanding our sales and marketing efforts; • changes in the way we organize and compensate our sales teams; • the timing of expenses and recognition of revenue; • the length of sales cycles; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure, as well as international expansion and entry into operating leases; • timing and effectiveness of new sales and marketing initiatives; • changes in our pricing policies or those of our competitors; • the timing and success of new products, features and functionality by us or our competitors; • interruptions or delays in our service, network outages, or actual or perceived privacy or security breaches; • changes in the competitive dynamics of our industry, including consolidation among competitors; • changes in laws and regulations that impact our business; • the timing or amount of any share repurchases, including any impact from the excise tax on stock buybacks created by the Inflation Reduction Act of 2022; • one or more large indemnification payments to our customers or other third parties; • the timing of expenses related to any future acquisitions; and • general economic and market conditions.
Factors that may cause fluctuations in our quarterly results of operations include: • our ability to retain and expand customer usage; • our ability to attract new customers; • our ability to hire and retain employees, in particular those responsible for the selling or marketing of our platform and provide sales leadership in areas in which we are expanding our sales and marketing efforts; • changes in the way we organize and compensate our sales teams; • the timing of expenses and recognition of revenue; • the length of sales cycles; • seasonality of customer utilization and marketing budgets; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure, as well as international expansion and entry into operating leases; • timing and effectiveness of new sales and marketing initiatives; • changes in our pricing policies or those of our competitors; • the timing and success of new products, features and functionality by us or our competitors; • interruptions or delays in our service, network outages, or actual or perceived privacy or security breaches; • changes in the competitive dynamics of our industry, including consolidation among competitors; • changes in laws and regulations that impact our business; • the timing or amount of any share repurchases, including any impact from the excise tax on stock repurchases created by the Inflation Reduction Act of 2022; • one or more large indemnification payments to our customers or other third parties; • the timing of expenses related to any future acquisitions; and • general economic and market conditions.
Risks Related to Our Business and Our Industry Our revenue growth rate has decreased in recent years following a period of rapid growth, and we may not be able to increase our revenue in future periods. Our revenue growth rate has decreased in recent years following a period of rapid growth.
Risks Related to Our Business and Our Industry Our revenue has decreased in recent years following a period of rapid growth, and we may not be able to increase our revenue in future periods.
While we have incorporated these capabilities into several of our products, including our newly launched ACE, and plan to further use AI in our platform, as with many innovations, AI presents risks and challenges that could affect its availability and adoption, including current legal uncertainties around the use of AI and possible new laws and regulations, and therefore our business.
While we have incorporated these capabilities into several of our products, including ACE, and plan to further use AI in our platform, as with many innovations, AI presents risks and challenges that could affect its availability and adoption, including current legal uncertainties around the use of AI and possible new laws and regulations, and therefore our business.
Renewals of subscriptions may decline or fluctuate because of several factors, such as dissatisfaction with our solutions or support, the loss or reduction of available budget, a change in key stakeholders or decision makers, a customer no longer having a need for our solutions or the perception that competitive products provide better or less expensive options.
Renewals of subscriptions may continue to decline or may fluctuate because of several factors, such as the loss or reduction of available budget, the perception that competitive products provide better or less expensive options, a change in key stakeholders or decision makers, dissatisfaction with our solutions or support, or a customer no longer having a need for our solutions.
There have been, and will continue to be, substantial ongoing costs associated with complying with the various indirect tax requirements in the numerous markets in which we conduct or will conduct business. 35 Table of Contents We may have exposure to greater than anticipated tax liabilities, which could harm our business.
There have been, and will continue to be, substantial ongoing costs associated with complying with the various indirect tax requirements in the numerous markets in which we conduct or will conduct business. 34 Table of Contents We may have exposure to greater than anticipated tax liabilities, which could harm our business.
Our business may be harmed if our sales efforts do not generate a significant increase in revenue. 19 Table of Contents Issues with the use of AI in our platform may result in reputational harm or liability, or could otherwise adversely affect our business.
Our business may be harmed if our sales and marketing efforts do not generate a significant increase in revenue. 19 Table of Contents Issues with the use of AI in our platform may result in reputational harm or liability, or could otherwise adversely affect our business.
In addition, geopolitical developments, such as potential trade wars, and actions or inactions of the U.S. or other major national governments, can increase levels of political and economic unpredictability globally and increase the volatility of global financial markets.
In addition, geopolitical developments, such as presidential elections, potential trade wars, and actions or inactions of the U.S. or other major national governments, can increase levels of political and economic unpredictability globally and increase the volatility of global financial markets.
Factors that could cause fluctuations in the trading price of our common stock include the following: • the COVID-19 pandemic, including recent and any future variants of the virus; • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of technology stocks; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales or purchases of shares of our common stock, or anticipation of such sales, including our repurchases of shares; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections; • announcements by us or our competitors of new products, features, or services; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; • actual or anticipated changes in our results of operations or fluctuations in our results of operations, including as a result of reduced demand for our solutions; • actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; • litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, products, services or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations or principles; • any significant change in our management; and 36 Table of Contents • general economic conditions, including increased inflation, and slow or negative growth of our markets.
Factors that could cause fluctuations in the trading price of our common stock include the following: • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of technology stocks; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales or purchases of shares of our common stock, or anticipation of such sales, including our repurchases of shares; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections; • announcements by us or our competitors of new products, features, or services; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; 35 Table of Contents • actual or anticipated changes in our results of operations or fluctuations in our results of operations, including as a result of reduced demand for our solutions; • actual or anticipated developments in our business, our competitors’ businesses or the competitive landscape generally; • litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, products, services or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations or principles; • any significant change in our management; and • general economic conditions, including increased inflation, and slow or negative growth of our markets.
Additionally, as our market presence grows, we may face increased risks of cyber-related attacks or security threats in the future. Cyberattacks and other malicious internet-based activity continue to increase, and cloud-based providers of products and services have been and are expected to continue to be targeted.
Additionally, as our market presence grows, we may face increased risks of cyber-related attacks or security threats in the future. 20 Table of Contents Cyberattacks and other malicious internet-based activity continue to increase, and cloud-based providers of products and services have been and are expected to continue to be targeted.
There can be cases where enforcement authorities seek to hold us liable for the corrupt or other illegal activities of our employees, agents, contractors, vendors, and other business partners, even if we do not explicitly authorize or have actual knowledge of such activities.
There can be cases where enforcement authorities seek to hold us liable for the corrupt or other illegal activities of our employees, agents, 30 Table of Contents contractors, vendors, and other business partners, even if we do not explicitly authorize or have actual knowledge of such activities.
Under the CCPA, we are both a “business,” as to the ON24 business data, and a “service provider,” as to the platform personal data. The CCPA introduced sweeping definitions and broad individual rights, and imposes 28 Table of Contents substantial requirements and restrictions on the collection, use and disclosure of personal information.
Under the CCPA, we are both a “business,” as to the ON24 business data, and a “service provider,” as to the platform personal data. The CCPA introduced sweeping definitions and broad individual rights, and imposes substantial requirements and restrictions on the collection, use and disclosure of personal information.
Sanctions also apply to persons that appear on, or are majority owned by a person that appears on, OFAC’s List of Specially Designated Nationals and Blocked Persons, or the SDN List. The Department of Commerce and the Department of State also maintain their own sanctions and export control lists.
Sanctions also apply to persons that appear on, or are majority owned by a person that appears on, OFAC’s List of Specially Designated Nationals and Blocked Persons, or the SDN List. The Department of Commerce and the Department of State 29 Table of Contents also maintain their own sanctions and export control lists.
We also do not control the operation of the data centers we use, and they are vulnerable to damage or interruption from human error, intentional bad acts, natural disasters, war, terrorist attacks, cyber attacks and other cybersecurity incidents, power losses, hardware failures, systems failures, telecommunications failures and similar events, any of which could disrupt our service.
We also do not control the operation of the hosting facilities we use, and they are vulnerable to damage or interruption from human error, intentional bad acts, natural disasters, war, terrorist attacks, cyber attacks and other cybersecurity incidents, power losses, hardware failures, systems failures, telecommunications failures and similar events, any of which could disrupt our service.
If we cannot or do not license the infringed technology on reasonable terms or at all, or substitute similar technology from another source, our revenue and operating results could be adversely impacted. Additionally, our customers may not purchase subscriptions to our platform if they are concerned that they may infringe third-party intellectual property rights.
If we cannot or do not license 31 Table of Contents the infringed technology on reasonable terms or at all, or substitute similar technology from another source, our revenue and operating results could be adversely impacted. Additionally, our customers may not purchase subscriptions to our platform if they are concerned that they may infringe third-party intellectual property rights.
For example, some organizations that purchased our ON24 Virtual Conference product are returning to in-person events and no longer need the large-scale virtual event experience functionality provided by this product. In order to grow our business, we strive to add new customers and replace customers who choose not to continue to use our platform.
For example, some organizations that purchased our ON24 Virtual Conference product have returned to in-person events and no longer need the large-scale virtual event experience functionality provided by this product. In order to grow our business, we strive to add new customers and replace customers who choose not to continue to use our platform.
If we are required to defend our customers against, or hold them harmless from, infringement or other claims, our business may be disrupted, our management’s attention may be diverted, and our operating results and financial condition may suffer. 32 Table of Contents Our failure to protect our intellectual property rights and proprietary information could diminish our brand and other intangible assets .
If we are required to defend our customers against, or hold them harmless from, infringement or other claims, our business may be disrupted, our management’s attention may be diverted, and our operating results and financial condition may suffer. Our failure to protect our intellectual property rights and proprietary information could diminish our brand and other intangible assets .
Moreover, our business may be harmed if we experience problems with any new systems and controls that result in delays in their implementation or increased costs to correct any post-implementation issues that may arise. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future.
Moreover, our business may be harmed if we experience problems with any new systems and controls that result in delays in their implementation or increased costs to correct any post-implementation issues that may arise. 26 Table of Contents Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future.
Our ability to acquire new customers significantly depends on our business reputation and on positive recommendations from our existing customers. Any failure to maintain, or a market perception that we do not maintain, high-quality support could harm our business. 27 Table of Contents Our business could be disrupted by catastrophic events.
Our ability to acquire new customers significantly depends on our business reputation and on positive recommendations from our existing customers. Any failure to maintain, or a market perception that we do not maintain, high-quality support could harm our business. Our business could be disrupted by catastrophic events.
Any substantial indebtedness, and the fact that a substantial portion of our cash flow from operating activities could be needed to make payments on this indebtedness, could restrict our business operations or have other adverse consequences, including the following: • reducing the availability of our cash flow for our operations, capital expenditures, future business opportunities and other purposes; • limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate, which could place us at a disadvantage compared to our competitors that may have less debt; • limiting our ability to borrow additional funds; and • increasing our vulnerability to general adverse economic and industry conditions.
Any substantial indebtedness, and the fact that a substantial portion of our cash flow from operating activities could be needed to make payments on this indebtedness, could restrict our business operations or have other adverse consequences, including the following: • reducing the availability of our cash flow for our operations, capital expenditures, future business opportunities and other purposes; • limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate, which could place us at a disadvantage compared to our competitors that may have less debt; • limiting our ability to borrow additional funds; and • increasing our vulnerability to general adverse economic and industry conditions. 33 Table of Contents Our ability to borrow any funds needed to operate and expand our business will depend in part on our ability to generate cash.
You should not rely on our rapid growth in 2021 or 2020, or our revenue decline in 2022 or 2023, or any other prior period, as an indication of our future performance.
You should not rely on our rapid growth in 2021 or 2020, our revenue decline in 2024, 2023 or 2022, or any other trend in a prior period, as an indication of our future performance.
Not every organization covered by our market opportunity estimates will necessarily purchase subscriptions for our solutions or similar products or services at all, and some or many of those organizations may choose to continue using products or services offered by our competitors.
Not every organization covered by our market opportunity estimates will necessarily purchase subscriptions for our solutions or similar products or services in the near-term or at all, and some or many of those organizations may choose to continue using products or services offered by our competitors.
We primarily rely on a combination of patents, trade secrets, domain name protections, trademarks and copyrights, as well as confidentiality, license and subscription agreements with our employees, consultants and third parties, to protect our intellectual property and proprietary rights. In the United States and abroad, as of December 31, 2023, we have 19 issued patents and 26 pending patent applications.
We primarily rely on a combination of patents, trade secrets, domain name protections, trademarks and copyrights, as well as confidentiality, license and subscription agreements with our employees, consultants and third parties, to protect our intellectual property and proprietary rights. In the United States and abroad, as of December 31, 2024, we have 27 issued patents and 11 pending patent applications.
Under these privacy laws, we typically have fewer direct obligations as a “data processor” or “service provider” than our customers do, with respect to platform personal data.
Under these privacy laws, we typically have fewer direct obligations as a “data processor” or “service provider” than our 27 Table of Contents customers do, with respect to platform personal data.
They also could cause the demand for and sales of our platform to decrease and adversely impact our financial results. 29 Table of Contents The costs of compliance with, and other burdens imposed by, privacy laws may limit the use and adoption of our platform, reduce overall demand for our platform, make it more difficult to meet expectations from or commitments to our customers and their users, require us to implement additional features or offer additional contractual terms to satisfy customer and regulatory requirements, lead to significant fines, penalties or liabilities for noncompliance, impact our reputation, or slow the pace at which we close sales transactions, any of which could harm our business.
The costs of compliance with, and other burdens imposed by, privacy laws may limit the use and adoption of our platform, reduce overall demand for our platform, make it more difficult to meet expectations from or commitments to our customers and their users, require us to implement additional features or offer additional contractual terms to satisfy customer and regulatory requirements, lead to significant fines, penalties or liabilities for noncompliance, impact our reputation, or slow the pace at which we close sales transactions, any of which could harm our business.
Interruptions, delays or outages in service from the data centers we use for our technology or infrastructure could impair the delivery and the functionality of our solutions, which may harm our business.
Interruptions, delays or outages in service from the hosting facilities we use for our technology or infrastructure could impair the delivery and the functionality of our solutions, which may harm our business.
Partly in response to stockholder requests, we have also returned $125 million to stockholders through our capital return program, including a $49.9 million special dividend in June 2023 (the “Special Dividend”) and $75 million in open market stock repurchases.
Partly in response to stockholder requests, we returned $125 million to stockholders through our capital return program, including a $49.9 million special dividend in June 2023 and $75 million in open market stock repurchases.
If we are unable to develop, license or acquire new features and capabilities to our platform on a timely and cost-effective basis, or if such enhancements do not achieve market acceptance, our business would be harmed. 22 Table of Contents Our sales cycle with Enterprise customers can be long and unpredictable.
If we are unable to develop, license or acquire new features and capabilities to our platform on a timely and cost-effective basis, or if such enhancements do not achieve market acceptance, our business would be harmed. Our sales cycle with Enterprise customers can be long and unpredictable. A substantial portion of our business is with large Enterprise customers.
We partially rely on third-party providers of AI technology, and those third-party providers may be required to change, suspend, or restrict access to their services. AI algorithms may be flawed. Datasets may be insufficient or contain biased information. Generated content may contain copyrighted or infringing materials.
We partially rely on third-party providers of AI technology, and those third-party providers may be required to change, suspend, or restrict access to their services. AI algorithms and training methods may be flawed. Datasets or outputs may be insufficient or contain errors. Generated content may contain copyrighted or infringing materials.
As of December 31, 2023, we had $123.7 million of U.S. federal net operating loss carryforwards available to reduce future taxable income, a portion of which will begin to expire in 2024 if unused.
As of December 31, 2024, we had $128.9 million of U.S. federal net operating loss carryforwards available to reduce future taxable income, a portion of which will begin to expire in 2025 if unused.
Further, because we generally invoice our customers at the beginning of the contractual terms of their subscriptions to our solutions, our financial condition reflects deferred revenue that we recognize ratably as revenue over the contractual term. As the impact of COVID-19 has lessened, we have observed fewer new subscriptions and renewals, and our cash and deferred revenue have decreased.
Further, because we generally invoice our customers at the beginning of the contractual terms of their subscriptions to our solutions, our financial condition reflects deferred revenue that we recognize ratably as revenue over the contractual term. In recent years, we have observed fewer new subscriptions and renewals, and our cash and deferred revenue have decreased.
We had a net loss of $51.8 million in 2023 and $58.2 million in 2022, and we may incur net losses in the future.
We had a net loss of $42.2 million in 2024 and $51.8 million in 2023, and we may incur net losses in the future.
Activist stockholders who disagree with the composition of a publicly traded company’s board of directors, or with its strategy and/or management seek to involve themselves in the governance and strategic direction of a company through various activities that range from private engagement to publicity campaigns, proxy contests, efforts to force transactions not supported by the company’s board of directors, and in some instances, litigation. 38 Table of Contents We have been, and may in the future be, subject to activities initiated by activist stockholders.
Activist stockholders who disagree with the composition of a publicly traded company’s board of directors, or with its strategy and/or management seek to involve themselves in the governance and strategic direction of a company through various activities that range from private engagement to publicity campaigns, proxy contests, efforts to force transactions not supported by the company’s board of directors, and in some instances, litigation.
Our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC following the later of the date we are deemed to be an "accelerated filer" or a "large accelerated filer," each as defined in the Exchange Act, or the date we are no longer an "emerging growth company," as defined in the JOBS Act.
Our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC following the date we are no longer an "emerging growth company," as defined in the JOBS Act, assuming we are then an “accelerated filer” or a “large accelerated filer,” as defined pursuant to the Exchange Act.
For example, in June 2021 we were subject to a security incident involving ransomware, which impacted certain internal systems and a limited number of customer events. Some data maintained in our internal systems was also impacted.
For example, in June 2021 we were subject to a security incident involving ransomware, which impacted certain internal systems and a limited number of customer events.
Although the majority of our cash generated from revenue is denominated in U.S. dollars, a small amount is denominated in foreign currencies, and our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations. For 2023, 13% of our revenue and 11% of our expenses were denominated in currencies other than U.S. dollars.
Although the majority of our cash generated from revenue is denominated in U.S. dollars, a small amount is denominated in foreign currencies, and our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations.
We may not successfully plan for future growth. The growth and expansion of our business experienced in 2020 and 2021 placed a continuous, significant strain on our management, operational and financial resources. Our information technology systems and our internal controls and procedures may not adequately keep pace with future growth.
We may not successfully plan for future growth. The growth and expansion of our business in prior periods placed significant strain on our management, operational and financial resources. Our information technology systems and our internal controls and procedures may not adequately keep pace with any future growth.
As a result of the legislative changes in December 2017, $70.2 million of the federal net operating loss carryovers will carry over indefinitely and are limited to 80% of taxable income. As of December 31, 2023, we had state net operating loss carryforward of $91.0 million, which will begin to expire in the year 2025 if unused.
As a result of the legislative changes in December 2017, $76.1 million of the federal net operating loss carryovers will carry over indefinitely and are limited to 80% of taxable income. As of December 31, 2024, we had state net operating loss carryforward of $101.5 million, which will begin to expire in the year 2025 if unused.
We are an “emerging growth company,” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.
We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
While each of our U.S. data centers provide fully redundant processing, we estimate that failover may require as long as 120 minutes to complete, during which time our platform may not be fully available to customers in the event of catastrophic failure at one of those data centers.
While each of U.S. hosting facility provides fully redundant processing for the other U.S. hosting facility and each EU data hosting facility provides fully redundant processing for the other EU hosting facility, we estimate that failover may require as long as 120 minutes to complete, during which time our platform may not be fully available to customers in the event of catastrophic failure at one of those hosting facilities.
A substantial portion of our business is with large Enterprise customers. We define a customer as a unique organization, including its subsidiaries and affiliates, that has entered into an agreement for paid access to our platform. As of December 31, 2023, we had 325 $100k Customers, which are generally large organizations, representing 66% of our ARR.
We define a customer as a unique organization, including its subsidiaries and affiliates, that has entered into an agreement for paid access to our platform. As of December 31, 2024, we had 305 $100k Customers, which are generally large organizations, representing 66% of our ARR.
Occurrence of any catastrophic event, including pandemics such as the COVID-19 pandemic, earthquake, fire, flood, tsunami or other weather event, power loss, telecommunications failure, software or hardware malfunctions, cyberattacks, war or terrorist attacks, could result in lengthy interruptions in our service.
Occurrence of any catastrophic event, including a pandemic such as COVID-19, earthquake, fire, flood, tsunami or other weather event, power loss, telecommunications failure, software or hardware malfunction, cyberattack, war or terrorist attack, could result in lengthy interruptions in our service.
Our board of directors and management team are committed to acting in the best interests of all of our stockholders. The actions taken by our board of directors and management in seeking to maintain constructive engagement with certain stockholders, however, may not be successful.
The actions taken by our board of directors and management in seeking to maintain constructive engagement with certain stockholders, however, may not be successful.
The invasion of Ukraine has triggered unprecedented sanctions against Russia by the U.S., NATO, and other countries which has created global security concerns that have had a lasting impact on regional and global economies, any or all of which could adversely affect our business.
In addition, the ongoing Ukraine- Russia war involves significant military forces in Eastern Europe, and the invasion of Ukraine has triggered unprecedented sanctions against Russia by the U.S., NATO, and other countries. These conditions have created global security concerns that have had a lasting impact on regional and global economies, any or all of which could adversely affect our business.
If we fail to comply with those legal standards, we may face substantial civil and criminal fines, penalties, profit disgorgement, reputational harm, loss of access to certain markets, disbarment from government business, the loss of export privileges, tax reassessments, breach of contract, fraud and other litigation, reputational harm, and other collateral consequences that could harm our business. 31 Table of Contents We use open source software in our platform, which may subject us to litigation or other actions that could harm our business.
If we fail to comply with those legal standards, we may face substantial civil and criminal fines, penalties, profit disgorgement, reputational harm, loss of access to certain markets, disbarment from government business, the loss of export privileges, tax reassessments, breach of contract, fraud and other litigation, reputational harm, and other collateral consequences that could harm our business.
In particular, we compete with many other companies for software developers with high levels of experience in designing, developing and managing software for live engagement technologies, as well as for skilled sales and operations professionals.
Competition for executives, software developers, sales personnel and other key employees in our industry is intense. In particular, we compete with many other companies for software developers with high levels of experience in designing, developing and managing software for live engagement technologies, as well as for skilled sales and operations professionals.
Our growth, brand, reputation and ability to attract and retain customers depends in part on the ability of our customers to access our platform at any time and within an acceptable amount of time. We currently use U.S. data centers in Colorado and California.
Our growth, brand, reputation and ability to attract and retain customers depends in part on the ability of our customers to access our platform at any time and within an acceptable amount of time. We currently use hosting facilities in Colorado, California, the Netherlands and Ireland to host our service.
For example, in March 2023, we entered into the Cooperation Agreement with Indaba Capital Management L.P. (the “Cooperation Agreement”). Pursuant to the Cooperation Agreement, we expanded our board of directors, appointed two new directors, and declassified our board of directors.
We have been, and may in the future be, subject to activities initiated by activist stockholders. For example, in March 2023, we entered into the Cooperation Agreement with Indaba Capital Management L.P. (the “Cooperation Agreement”). Pursuant to the Cooperation Agreement, we expanded our board of directors, appointed two new directors, and declassified our board of directors.
Any decreased use of our platform or limitation on our ability to export or sell our platform would likely harm our business. 30 Table of Contents We are subject to a variety of U.S. and non-U.S. laws and regulations, compliance with which could impair our ability to compete in domestic and international markets and non-compliance with which may result in claims, fines, penalties, and other consequences, all of which could adversely impact our operations, business, or performance.
We are subject to a variety of U.S. and non-U.S. laws and regulations, compliance with which could impair our ability to compete in domestic and international markets and non-compliance with which may result in claims, fines, penalties, and other consequences, all of which could adversely impact our operations, business, or performance.
Other jurisdictions have also instituted specific requirements and restrictions on the cross-border transfer of personal data, and certain countries have passed or are considering passing data localization laws and regulations, which in some cases would require personal data be maintained in the originating jurisdiction and in other cases may prohibit such personal data from being transferred outside of the originating jurisdiction.
We expect continued guidance from applicable authorities, as well as legal challenges to the new frameworks. 28 Table of Contents Other jurisdictions have also instituted specific requirements and restrictions on the cross-border transfer of personal data, and certain countries have passed or are considering passing data localization laws and regulations, which in some cases would require personal data be maintained in the originating jurisdiction and in other cases may prohibit such personal data from being transferred outside of the originating jurisdiction.
Although we currently anticipate that our existing cash and cash equivalents and cash flow from operations will be sufficient to meet our cash needs for the foreseeable future, we may require additional financing.
Historically, we have funded our operations and capital expenditures primarily through equity issuances and cash generated from our operations. Although we currently anticipate that our existing cash and cash equivalents and cash flow from operations will be sufficient to meet our cash needs for the foreseeable future, we may require additional financing.
In addition to traditional computer “hackers,” malicious code (such as viruses and worms), phishing, ransomware, employee theft or misuse and other insider threats, and denial-of-service attacks, sophisticated nation-state and nation-state supported actors now engage in attacks (including advanced persistent threat intrusions). As we grow, we may face increased risk of any such attacks.
In addition to traditional computer “hackers,” malicious code (such as viruses and worms), phishing, ransomware, employee theft or misuse and other insider threats, and denial-of-service attacks, sophisticated nation-state and nation-state supported actors now engage in attacks (including advanced persistent threat intrusions). The development of AI technology may give threat actors new ways to launch cyber-attacks.
We are actively monitoring the conflict in Ukraine to assess its ongoing impact on our business, as well as on our customers and other parties with whom we do business. Separately, in October 2023, an armed conflict began in Israel and the Gaza Strip.
Separately, since October 2023, an armed conflict began in Israel and the Gaza Strip, which has also involved hostilities in surrounding areas. We are actively monitoring these conflicts to assess their ongoing impact on our business, as well as on our customers and other parties with whom we do business.
As a result of these privacy law developments, certain features of our platform and products could pose risks or need to be modified for certain jurisdictions, but not for others.
As a result of these privacy law developments, certain features of our platform and products could pose risks or need to be modified for certain jurisdictions, but not for others. They also could cause the demand for and sales of our platform to decrease and adversely impact our financial results.
Despite efforts to create security barriers to such threats, it is not feasible, as a practical matter, for us to entirely mitigate these risks.
As we grow, we may face increased risk of any such attacks. Despite efforts to create security barriers to such threats, it is not feasible, as a practical matter, for us to entirely mitigate these risks.
If our business does not generate sufficient cash flow from operating activities or if future borrowings, under our Revolving Credit Facility or otherwise, are not available to us in amounts sufficient to enable us to fund our liquidity needs, our operating results, financial condition and ability to expand our business may be adversely affected. 34 Table of Contents Our results of operations, which are reported in U.S. dollars, could be adversely affected if currency exchange rates fluctuate substantially in the future.
If our business does not generate sufficient cash flow from operating activities or if future borrowings, under our Revolving Credit Facility or otherwise, are not available to us in amounts sufficient to enable us to fund our liquidity needs, our operating results, financial condition and ability to expand our business may be adversely affected.
The experience of our customers and their users depends upon the interoperability of our platform across devices, operating systems and third-party applications that we do not control, and if we are not able to maintain and expand our relationships with third parties in order to integrate our platform with their products, our business may be harmed.
In addition, even claims that ultimately are unsuccessful could result in our expenditure of funds in litigation and divert management’s time and other resources. 24 Table of Contents The experience of our customers and their users depends upon the interoperability of our platform across devices, operating systems and third-party applications that we do not control, and if we are not able to maintain and expand our relationships with third parties in order to integrate our platform with their products, our business may be harmed.
Further, as we rely on third-party cloud infrastructure, we depend in part on third-party security measures to protect against unauthorized access, cyberattacks and the mishandling of data and information. 21 Table of Contents Any cybersecurity event or any future vulnerability in our software, cyberattack, intrusion or disruption, could result in significant increases in costs, including costs for remediating the effects of such an event, lost revenue due to network downtime, a decrease in customer and user trust, increases in insurance premiums due to cybersecurity incidents, increased costs to address cybersecurity issues and attempts to prevent future incidents, and harm to our business and our reputation because of any such incident.
Any cybersecurity event or any future vulnerability in our software, cyberattack, intrusion or disruption, could result in significant increases in costs, including costs for remediating the effects of such an event, lost revenue due to network downtime, a decrease in customer and user trust, increases in insurance premiums due to cybersecurity incidents, increased costs to address cybersecurity issues and attempts to prevent future incidents, and harm to our business and our reputation because of any such incident.
In addition, we may not be able to integrate acquired businesses successfully or effectively manage the combined company following an acquisition. If we fail to successfully integrate our acquisitions, or the people or technologies associated with those acquisitions, into our company, the results of operations of the combined company could be adversely affected.
If we fail to successfully integrate our acquisitions, or the people or technologies associated with those acquisitions, into our company, the results of operations of the combined company could be adversely affected.
For example, our revenue decreased in every quarter of 2023 compared to the same periods in 2022 and we may face similar declines in future periods, as our customers and their users resume more in-person marketing activities.
For example, our revenue decreased in every quarter of 2024 compared to the same periods in 2023 and we may face similar declines in future periods.
The global macroeconomic effects of COVID-19 and related impacts on our customers’ business operations and their demand for our solutions may persist, even after any future spikes of COVID-19. In addition, the effects of COVID-19 may heighten many of the other risks we face, including those described in this Report.
The global macroeconomic effects of COVID-19 and related impacts on our customers’ business operations and their demand for our solutions may persist, even after any future spikes of COVID-19.
For 2022,13% of our revenue and 14% of our expenses were denominated in currencies other than U.S. dollars. For 2021, 13% of our revenue and 16% of our expenses were denominated in currencies other than U.S. dollars.
For both 2024 and 2023, 13% of our revenue and 11% of our expenses were denominated in currencies other than U.S. dollars.
In addition, our platform is proprietary, and we depend on the expertise and efforts of members of our operations and software development teams for its continued performance. Our ability to retain, attract, hire and train staff in these groups may prove to be a challenge for a variety of factors and could have an adverse impact on the platform.
Our ability to retain, attract, hire and train staff in these groups may prove to be a challenge for a variety of factors and could have an adverse impact on the platform.
Investors may find our common stock less attractive because we intend to rely on these exemptions, which may result in a less active trading market, increased volatility, or lower market prices for our common stock. 39 Table of Contents Our prior capital return program is now complete and we may not return additional capital to stockholders.
Investors may find our common stock less attractive because we intend to rely on these exemptions, which may result in a less active trading market, increased volatility, or lower market prices for our common stock.
Future efforts to expand our current international operations, including entering new markets or countries, may not be effective. For example, we may not be able to expand further in some markets if we are not able to satisfy certain government- and industry-specific requirements.
For example, we may not be able to expand further in some markets if we are not able to satisfy certain government- and industry-specific requirements.
In addition, if we do not meet any financial guidance that we may provide to the public or if we do not meet expectations of securities analysts or investors, the trading price of our common stock could decline significantly.
In addition, if we do not meet any financial guidance that we may provide to the public or if we do not meet expectations of securities analysts or investors, the trading price of our common stock could decline significantly. 37 Table of Contents Actions of activist stockholders could impact the pursuit of our business strategies and adversely affect our results of operations, financial condition and/or share price.
We sell to customers globally and have international operations primarily in the United Kingdom, Australia, Singapore and Japan. To the extent we expand our international operations, we will become more exposed to the effects of fluctuations in currency exchange rates.
To the extent we expand our international operations, we will become more exposed to the effects of fluctuations in currency exchange rates.
It is impossible to build every product feature that every customer wants, and our competitors may develop and offer features that our platform does not provide.
It is impossible to build every product feature that every customer wants, and our competitors may develop and offer features that our platform does not provide. In presenting our total addressable market, we are not making any claim that we can realistically serve that market.
Any of these factors could cause network disruptions, or even network failure, reduce our revenue, subject us to liability, and cause our customers to decline to renew their subscriptions, any of which could harm our business.
Any of these factors could cause network disruptions, or even network failure, reduce our revenue, subject us to liability, and cause our customers to decline to renew their subscriptions, any of which could harm our business. Cybersecurity-related attacks, significant data breaches or disruptions of the information technology systems or networks on which we rely could negatively affect our business.
Finally, our subscription-based revenue model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers or from existing customers that increase their usage of our product offerings must be recognized over the applicable subscription term. 24 Table of Contents Our ability to sell subscriptions to our products could be harmed by real or perceived material defects or errors in our platform or by other matters that may interrupt the availability of our platform or cause performance issues.
Finally, our subscription-based revenue model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers or from existing customers that increase their usage of our product offerings must be recognized over the applicable subscription term.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThrough ongoing communications, these teams monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and report such threats and incidents to our board of directors when appropriate. 40 Table of Contents Our CIO has over 20 years of professional experience specializing in business transformation, change management, executive leadership, and IT strategy, and has worked with technology security, banking and media companies.
Biggest changeThrough ongoing communications, these teams monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time and report such threats and incidents to our board of directors when appropriate.
We periodically assess and test our cybersecurity policies and practices. These efforts include tabletop exercises, vulnerability and penetration tests, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning. We also engage third parties to assess our cybersecurity measures. Governance Our board of directors oversees cybersecurity as part of its risk oversight function.
We periodically assess and test our cybersecurity policies and practices. These efforts include tabletop exercises, vulnerability and penetration tests, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning. We also engage third parties to assess our cybersecurity measures.
Our head of Information Security also brings over 20 years of security, privacy, and compliance experience from public and private sector roles of which he spent the last ten years specifically leading security programs at late-stage SaaS companies.
Our head of Information Security also brings over 20 years of security, privacy, and compliance experience from public and private sector roles, including leading the security programs at SaaS companies for over a decade.
Our CIO and other leaders work collaboratively across our organization to protect our information systems from cybersecurity threats and to promptly respond to incidents in accordance with our incident response plan, including the necessary steps to ensure remediation.
We follow an incident response plan that includes reporting prompt and timely information regarding material cybersecurity incidents, remediation, and related matters. 39 Table of Contents Our CIO and other leaders work collaboratively across our organization to protect our information systems from cybersecurity threats and to promptly respond to incidents in accordance with our incident response plan, including the necessary steps to ensure remediation.
Removed
Our board of directors receives regular presentations and reports on cybersecurity risks, prompt and timely information regarding cybersecurity incidents that meet specified thresholds, and updates on such incidents until they have been addressed.
Added
As of December 31, 2024, we are not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition, although we are unable to provide any assurance that such risks will not become material in the future.
Added
Governance Our board of directors oversees cybersecurity as part of its risk oversight function. The audit committee also assists our board of directors in fulfilling its responsibilities with respect to oversight of our cybersecurity programs, including assisting with reviewing the adequacy and effectiveness of our cybersecurity policies and practices and receiving regular presentations and reports from management.
Added
The audit committee provides regular briefings to our board of directors as appropriate.
Added
Our CIO has over 20 years of professional experience specializing in business transformation, change management, executive leadership, and IT strategy, and has worked with technology security, banking and media companies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters is located in San Francisco, California. We currently lease 28,353 square feet of office space pursuant to leases expiring in October 2025, of which 9,526 square feet is being actively marketed for sublease.
Biggest changeItem 2. Properties. Our corporate headquarters is located in San Francisco, California. We currently lease 28,353 square feet of office space pursuant to leases expiring in October 2025, of which 9,526 square feet is being marketed for sublease. We also lease facilities in Charlotte, London and Sydney pursuant to leases expiring in July 2026, July 2035 and April 2027, respectively.
We also lease facilities in Charlotte, London and Sydney pursuant to leases expiring in July 2026, July 2025 and April 2027, respectively. We believe our facilities are suitable to meet our current needs.
We believe our facilities are suitable to meet our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe consolidated complaint purports to assert claims under Sections 11 and 15 of the Securities Act of 1933 on behalf of all persons and entities that purchased, or otherwise acquired, our common stock issued in connection with our IPO.
Biggest changeSecurities Litigation, 4:21-cv-08578-YGR (filed in November 2021), in the United States District Court for the Northern District of California. The consolidated complaint purports to assert claims under Sections 11 and 15 of the Securities Act of 1933 on behalf of all persons and entities that purchased, or otherwise acquired, our common stock issued in connection with our IPO.
The defendants filed a motion to dismiss the complaint in May 2022, which the court granted with leave to amend in July 2023. Plaintiff filed its amended complaint in September 2023, and the defendants filed a motion to dismiss the amended complaint in October 2023. In March 2024, the court granted the defendants’ motion to dismiss with prejudice.
The defendants filed a motion to dismiss the complaint in May 2022, which the district court granted with leave to amend in July 2023. Plaintiff filed its amended complaint in September 2023, and the defendants filed a motion to dismiss the amended complaint in October 2023. In March 2024, the district court granted the defendants’ motion to dismiss with prejudice.
Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. Mine Safety Disclosures. Not applicable. PART II
Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. Mine Safety Disclosures. Not applicable. 40 Table of Contents PART II
Item 3. Legal Proceedings. We, our Chief Executive Officer, our Chief Financial Officer, certain current and former members of our board of directors, and the underwriters that participated in our initial public offering (“IPO”) are named as defendants in a consolidated putative class action, captioned In re ON24, Inc.
Item 3. Legal Proceedings. We, our Chief Executive Officer, our Chief Financial Officer, certain current and former members of our board of directors, and the underwriters that participated in our IPO are named as defendants in a consolidated putative class action, captioned In re ON24, Inc.
We believe that the allegations in the amended complaint are without merit. From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business.
Plaintiff has filed a notice of appeal of the district court’s order and that appeal is currently ongoing. We believe that the allegations in the amended complaint are without merit. From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business.
Removed
Securities Litigation, 4:21-cv-08578-YGR (filed in November 2021), that is currently pending in the United States District Court for the Northern District of California.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeMine Safety Disclosures 41 PART II Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41 Item 6 Reserved 43 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 43 Item 7A Quantitative and Qualitative Disclosures about Market Risk 56 Item 8 Financial Statements and Supplementary Data 57 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 86 Item 9A Controls and Procedures 86 Item 9B Other Information 87 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 87 PART III Item 10 Directors, Executive Officers and Corporate Governance 87
Biggest changeMine Safety Disclosures 40 PART II Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41 Item 6 Reserved 42 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 43 Item 7A Quantitative and Qualitative Disclosures about Market Risk 56 Item 8 Financial Statements and Supplementary Data 57 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 86 Item 9A Controls and Procedures 86 Item 9B Other Information 86 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 87 PART III Item 10 Directors, Executive Officers and Corporate Governance 87

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total number of shares purchased Average price paid per shares (1) Total number of shares purchased as part of publicly announced plans or program Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs (in millions) (2) October 1, 2023 to October 31, 2023 1,234,909 $ 6.33 1,234,909 $ 12.8 November 1, 2023 to November 30, 2023 452,208 $ 7.10 452,208 $ 9.6 December 1, 2023 to December 31, 2023 558,381 $ 7.70 558,381 $ 5.3 Total 2,245,498 $ 6.83 2,245,498 $ 5.3 (1) Includes commission of $0.02 per share paid to broker.
Biggest changePeriod Total number of shares purchased Average price paid per shares (1) Total number of shares purchased as part of publicly announced plans or program Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs (in millions) (2) October 1, 2024 to October 31, 2024 456,936 $ 6.24 456,936 $ 8.8 November 1, 2024 to November 30, 2024 312,409 6.53 312,409 6.8 December 1, 2024 to December 31, 2024 340,694 6.70 340,694 4.5 Total 1,110,039 $ 6.46 1,110,039 $ 4.5 (1) Includes commission of $0.02 per share paid to broker.
Dividend Policy While in 2023 we paid the Special Dividend as part of our capital return program, our capital return program has concluded in February 2024 and we currently intend to retain any future earnings for use in the operation and expansion of our business. We do not plan to declare or pay cash dividends in the foreseeable future.
Dividend Policy While in 2023 we paid the Special Dividend as part of our capital return program, our capital return program concluded in February 2024 and we currently intend to retain any future earnings for use in the operation and expansion of our business. We do not plan to declare or pay cash dividends in the foreseeable future.
Holders of Record As of March 5, 2024, we had 107 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Holders of Record As of March 5, 2025, we had 96 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
In addition, our ability to pay dividends is currently restricted by the terms of our revolving credit facility. Unregistered Sales of Equity Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table summarizes the repurchases of our shares of common stock in the fourth quarter of 2023.
In addition, our ability to pay dividends is currently restricted by the terms of our revolving credit facility. 41 Table of Contents Unregistered Sales of Equity Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table summarizes the repurchases of our shares of common stock in the fourth quarter of 2024.
The historic stock price performance is not necessarily indicative of future stock price performance. 41 Table of Contents This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act.
This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act.
The graph assumes $100 was invested on February 3, 2021 in our common stock and each index and all dividends were reinvested.
The graph assumes $100 was invested on February 3, 2021 in our common stock and each index and all dividends were reinvested. The historic stock price performance is not necessarily indicative of future stock price performance.
This capital return program replaced the prior share repurchase program, and it was completed in February 2024. 42 Table of Contents Use of Proceeds from our Initial Public Offering of Common Stock In February 2021, we received net proceeds from our IPO of $347.8 million, after deducting the underwriting discount and estimated offering expenses.
(2) In March 2024, our board of directors authorized the 2024 Repurchase Program for up to $25 million in share repurchases over a 12-month term. Use of Proceeds from our Initial Public Offering of Common Stock In February 2021, we received net proceeds from our IPO of $347.8 million, after deducting the underwriting discount and estimated offering expenses.
Removed
(2) In March 2023, our board of directors authorized a $125 million capital return program, $75 million of which was to be effected through stock repurchases.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear ended December 31, 2023 Year ended December 31, 2022 Severance and Related Charges (1) Lease Impairment Charges Total Severance and Related Charges Lease Impairment Charges Total (in thousands) Cost of revenue Subscription and other platform $ 2,215 $ 108 $ 2,323 $ 363 $ — $ 363 Professional services 149 119 268 27 — 27 Total cost of revenue 2,364 227 2,591 390 — 390 Sales and marketing 2,246 256 2,502 1,146 — 1,146 Research and development 1,397 569 1,966 86 — 86 General and administrative 391 409 800 37 — 37 Total restructuring costs $ 6,398 $ 1,461 $ 7,859 $ 1,659 $ — $ 1,659 Comparison of the Year Ended Months Ended December 31, 2023 and 2022 Revenue Year Ended December 31, 2023 As a % of Total Revenue 2022 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Subscription and other platform $ 149,882 92% $ 171,841 90% $ (21,959) (13)% Professional services 13,826 8% 19,031 10% (5,205) (27)% Total revenue $ 163,708 100% $ 190,872 100% $ (27,164) (14)% Year Ended December 31, 2023 As a % of Total Revenue 2022 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Core Platform Subscription and other platform $ 145,223 89% $ 160,772 84% $ (15,549) (10)% Professional services 12,876 8% 17,029 9% (4,153) (24)% Total core platform revenue 158,099 97% 177,801 93% (19,702) (11)% Virtual Conference Subscription and other platform 4,659 3% 11,069 6% (6,410) (58)% Professional service 950 —% 2,002 1% (1,052) (53)% Total virtual conference revenue 5,609 3% 13,071 7% (7,462) (57)% Total revenue $ 163,708 100% $ 190,872 100% $ (27,164) (14)% Total revenue decreased $27.2 million, or 14%, in 2023 compared 2022.
Biggest changeYear Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 Severance and related Charges Lease Impairment Charge Total Severance and related Charges Lease Impairment Charge Total Severance and related Charges Lease Impairment Charge Total (in thousands) Cost of revenue Subscription and other platform $ 377 $ — $ 377 $ 2,215 $ 108 $ 2,323 $ 363 $ — $ 363 Professional services 23 — 23 149 119 268 27 — 27 Total cost of revenue 400 — 400 2,364 227 2,591 390 — 390 Sales and marketing 1,705 — 1,705 2,246 256 2,502 1,146 — 1,146 Research and development 112 — 112 1,397 569 1,966 86 — 86 General and administrative 339 — 339 391 409 800 37 — 37 Total restructuring costs $ 2,556 $ — $ 2,556 $ 6,398 $ 1,461 $ 7,859 $ 1,659 $ — $ 1,659 Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, 2024 As a % of Total Revenue 2023 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Subscription and other platform $ 136,412 92% $ 149,882 92% $ (13,470) (9)% Professional services 11,669 8% 13,826 8% (2,157) (16)% Total revenue $ 148,081 100% $ 163,708 100% $ (15,627) (10)% Year Ended December 31, 2024 As a % of Total Revenue 2023 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Core Platform Subscription and other platform $ 133,841 90% $ 145,223 89% $ (11,382) (8)% Professional services 11,104 8% 12,876 8% (1,772) (14)% Total core platform revenue 144,945 98% 158,099 97% (13,154) (8)% Virtual Conference Subscription and other platform 2,571 2% 4,659 3% (2,088) (45)% Professional service 565 —% 950 —% (385) (41)% Total virtual conference revenue 3,136 2% 5,609 3% (2,473) (44)% Total revenue $ 148,081 100% $ 163,708 100% $ (15,627) (10)% 49 Table of Contents Total revenue decreased $15.6 million, or 10%, in 2024 compared to 2023.
Accordingly, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies or that have opted out of using such extended transition period. 55 Table of Contents Recent Accounting Pronouncements See Note 1 to our consolidated financial statements included elsewhere in this Form 10-K for more information.
Accordingly, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies or that have opted out of using such extended transition period. Recent Accounting Pronouncements See Note 1 to our consolidated financial statements included elsewhere in this Form 10-K for more information. 55 Table of Contents
Net cash used in operating activities is primarily impacted by our net loss adjusted for certain non-cash items such as stock-based compensation, depreciation and amortization, amortization of deferred contract acquisition costs, amortization (accretion) on marketable securities, as well as the effect of changes in operating assets and liabilities.
Net cash provided by (used in) operating activities is primarily impacted by our net loss adjusted for certain non-cash items such as stock-based compensation, depreciation and amortization, amortization of deferred contract acquisition costs, amortization (accretion) on marketable securities, as well as the effect of changes in operating assets and liabilities.
The amendment allows us to borrow up to $50.0 million if we maintain at least $100.0 million on deposit with Comerica Bank. If such deposit is less than $100.0 million, we may borrow up to the lesser of $50.0 million or an amount determined by our trailing five months of recurring revenue, annualized renewal rate and annualized monthly churn rate.
The amendment allows us to borrow up to $25.0 million if we maintain at least $100.0 million on deposit with Comerica Bank. If such deposit is less than $100.0 million, we may borrow up to the lesser of $25.0 million or an amount determined by our trailing five months of recurring revenue, annualized renewal rate and annualized monthly churn rate.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in the section titled “Risk Factors” and in other parts of this Report. This section generally discusses 2023 and 2022 items and year-to-year comparisons.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in the section titled “Risk Factors” and in other parts of this Report. This section generally discusses 2024 and 2023 items and year-to-year comparisons.
We believe it is important to continue investing in sales and marketing to continue to generate revenue growth. Accordingly, we expect sales and marketing expenses to increase in absolute dollars over the long term but may decrease in the near term due to active cost management.
We believe it is important to continue investing in sales and marketing to continue to generate revenue growth. Accordingly, we expect sales and marketing expenses to fluctuate in absolute dollars over the long term but may decrease in the near term due to active cost management.
We expect our research and development expense to decrease moderately in absolute dollars in 2024 as we focus on further developing our platform and infrastructure while we actively manage costs given the current macro-economic environment.
We expect our research and development expense to decrease moderately in absolute dollars in 2025 compared to 2024 as we focus on further developing our platform and infrastructure while we actively manage costs given the current macro-economic environment.
Provision for (Benefit from) Income Taxes Provision for (benefit from) income taxes consists primarily of income taxes related to foreign and state jurisdictions in which we conduct business. 47 Table of Contents Results of Operations We manage and operate as one reportable segment.
Provision for Income Taxes Provision for income taxes consists primarily of income taxes related to foreign and state jurisdictions in which we conduct business. 47 Table of Contents Results of Operations We manage and operate as one reportable segment.
In addition to our products, we also provide professional services such as experience management, monitoring and premium support services, which provide the opportunity for recurring revenue, as well as implementation and other services. In 2021, we launched ON24 Breakouts, which expanded the functionality and interactivity of webinars built with ON24 Elite.
In addition to our products, we also provide professional services such as experience management and integration support, which provide the opportunity for recurring revenue, as well as implementation and other services. In 2021, we launched ON24 Breakouts, which expanded the functionality and interactivity of webinars built with ON24 Elite.
In instances where we do not sell or price a product or 54 Table of Contents service separately, we estimate the standalone selling price by considering available information, such as market conditions, internally approved pricing guidelines and internal discounting tables. Based on these results, we estimate SSP for each distinct product or service delivered to customers.
In instances where we do not sell or price a product or service separately, we estimate the standalone selling price by considering available information, such as market conditions, internally approved pricing guidelines and internal discounting tables. Based on these results, we estimate SSP for each distinct product or service delivered to customers.
We serve customers of all sizes, ranging from small businesses to global Fortune 100 organizations across a diverse set of industries, including technology, financial services, healthcare, industrial and manufacturing, professional services and B2B information services companies. We had a diverse customer base of 1,784 customers as of December 31, 2023.
We serve customers of all sizes, ranging from small businesses to global Fortune 100 organizations across a diverse set of industries, including technology, financial services, healthcare, industrial and manufacturing, professional services and B2B information services companies. We had a diverse customer base of 1,645 customers as of December 31, 2024.
Expanding our international operations will require considerable management attention and other resources and may present challenges associated with complying with local expectations, customs, laws and regulations, and geopolitical disputes (including the Ukraine-Russia war and Gaza-Israel conflict), which may impact our ability to sell subscriptions to our solutions and otherwise cause our results to vary from period to period.
Expanding our international operations will require considerable management attention and other resources and may present challenges associated with complying with local expectations, customs, laws and regulations, and geopolitical disputes (including the Ukraine-Russia war and the conflict in the Middle East), which may impact our ability to sell subscriptions to our solutions and otherwise cause our results to vary from period to period.
We have been applying a disciplined approach to focus our investments on research and development areas that offer the greatest opportunities, including our investments in generative AI capabilities for our product offering such as ACE, as we expand our platform and bring new products to the market.
We have been applying a disciplined approach to focus our investments on research and development areas that we believe offer the greatest opportunities, including investments in our generative AI capabilities such as ACE, as we expand our platform and bring new products to the market.
Similar discussion for 2021 items and year-to-year comparisons may be found in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our 10-K for the year ended December 31, 2022, filed with the SEC on March 15, 2023.
Similar discussion for 2022 items and year-to-year comparisons may be found in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our 10-K for the year ended December 31, 2023 , filed with the SEC on March 14, 2024.
For most businesses to succeed, we believe their sales and marketing strategies must have digital engagement powered by the latest technology. Our platform provides an innovative way both to scale digital marketing and deepen prospective customer engagement.
For most businesses to succeed, we believe their sales and marketing strategies must utilize digital engagement that is powered by the latest technology. Our platform provides an innovative way both to scale digital marketing and deepen prospective customer engagement.
Liquidity and Capital Resources As of December 31, 2023, we had cash, cash equivalents and marketable securities of $198.7 million. Our investments generally consist of money market mutual funds, certificates of deposit, U.S. Treasury securities, U.S. Agency securities and debt securities, all of which are available for use in our current operations.
Liquidity and Capital Resources As of December 31, 2024, we had cash, cash equivalents and marketable securities of $182.7 million. Our investments generally consist of money market mutual funds, U.S. Treasury securities, U.S. Agency securities and debt securities, all of which are available for use in our current operations.
If we are unable to raise additional capital when desired, our business, results of operations and financial condition could be materially and adversely affected. 52 Table of Contents The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2023 2022 2021 Net cash (used in) provided by operating activities $ (12,202) $ (20,461) $ 5,189 Net cash provided by (used in) investing activities $ 162,315 $ (88,981) $ (219,190) Net cash (used in) provided by financing activities $ (124,183) $ (28,618) $ 320,514 Operating Activities Our largest source of operating cash is cash collections from our customers for subscriptions to use our platform.
If we are unable to raise additional capital when desired, our business, results of operations and financial condition could be materially and adversely affected. 52 Table of Contents The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ 4,806 $ (12,202) $ (20,461) Net cash (used in) provided by investing activities (19,451) 162,315 $ (88,981) Net cash used in financing activities (23,274) (124,183) $ (28,618) Operating Activities Our largest source of operating cash is cash collections from our customers for subscriptions to use our platform.
The integration of Vibbio’s video capabilities across the ON24 platform is intended to allow customers to produce video content that creates more engagement, generates first-party data, and drives further personalization. In January 2024, we launched the ON24 AI-powered Analytics and Content Engine (“ACE”).
The integration of Vibbio’s video capabilities across the ON24 platform allows customers to produce video content that creates more engagement, generates first-party data and drives further personalization. 43 Table of Contents In January 2024, we launched the ON24 AI-powered Analytics and Content Engine (“ACE”).
Our liquidity requirements arise primarily from our working capital needs, capital expenditures and debt service requirements. We have historically funded our liquidity requirements through sales of convertible preferred stock, cash generated from our operations, borrowings and availability under our revolving credit facility, and most recently through our IPO in February 2021.
Our liquidity requirements arise primarily from our working capital needs, capital expenditures and debt service requirements. We have historically funded our liquidity requirements through sales of convertible preferred stock, cash generated from our operations, borrowings and availability under our revolving credit facility, and through our initial public offering (“IPO”) in February 2021.
The risk-free interest rate for the expected term is based on the U.S. Treasury yield curve in effect at the time of the grant. • Expected Term. The expected term represents the period of time that an equity award is expected to be outstanding.
The risk-free interest rate for the expected term is based on the U.S. Treasury yield curve in effect at the time of the grant. • Expected Term. The expected term represents the period of time that an equity award is expected to be outstanding and is the longer of the requisite service period or the performance period. • Expected Volatility.
We expect to incur additional restructuring costs of $0.6 million to $0.9 million in the first quarter of 2024 related to our ongoing cost reduction efforts and may incur additional costs in future periods for restructuring activities.
We expect to incur additional restructuring costs of $0.8 million to $1.0 million in the first quarter of 2025 related to our ongoing cost reduction efforts and may incur additional costs in future periods for restructuring activities.
The following table sets forth our number of customers, our annual recurring revenue (“ARR”), our dollar-based net retention rate (“NRR”) and our customers contributing at least $100,000 in ARR (“$100k Customers”) as of the dates indicated (dollars in thousands): December 31, 2023 December 31, 2022 December 31, 2021 Customers 1,784 1,990 2,122 ARR $ 139,708 $ 159,570 $ 171,384 ARR - Core Platform (1) $ 136,155 $ 152,554 $ 157,648 NRR 82% 87% 97% NRR - Core Platform (1) 84% 90% 99 % $100k Customers 325 345 366 (1) ARR and NRR for Core Platform exclude Virtual Conference product.
The following table sets forth our number of customers, our annual recurring revenue (“ARR”), our dollar-based net retention rate (“NRR”) and our customers contributing at least $100,000 in ARR (“$100k Customers”) as of the dates indicated (dollars in thousands): December 31, 2024 December 31, 2023 December 31, 2022 Customers 1,645 1,784 1,990 ARR $ 129,659 $ 139,708 $ 159,570 ARR - Core Platform (1) $ 127,341 $ 136,155 $ 152,554 NRR 89% 82% 87% NRR - Core Platform (1) 89% 84% 90% $100k Customers 305 325 345 (1) ARR and NRR for Core Platform exclude Virtual Conference product.
As of December 31, 2023, 2022 and 2021, our ARR was $139.7 million, $159.6 million and $171.4 million, respectively, and our ARR for Core Platform, which excludes Virtual Conference product, was $136.2 million, $152.6 million and $157.6 million, respectively.
As of December 31, 2024, 2023 and 2022, our ARR was $129.7 million, $139.7 million and $159.6 million, respectively, and our ARR for Core Platform, which excludes Virtual Conference product, was $127.3 million, $136.2 million and $152.6 million, respectively.
Prior period ARR is the ARR for all engagement platform customers as of twelve months prior to such period end. Current period ARR is the ARR for the same customers as of the specified period end.
Our NRR as of a specified period end is calculated by dividing current period ARR by prior period ARR. Prior period ARR is the ARR for all engagement platform customers as of twelve months prior to such period end. Current period ARR is the ARR for the same customers as of the specified period end.
This model simulates the various movements of our stock price and each constituent company of the benchmark index using certain assumptions, including the stock price of our common stock and those of the constituent companies, stock price volatility, risk-free interest rate and expected dividend yield.
This model simulates the various stock price movements of our company and each constituent company of the benchmark index using certain assumptions, including the stock price of our common stock and those of the constituent companies, stock price volatility, risk-free interest rate and expected dividend yield. Compensation cost is recognized regardless of whether the market condition is ultimately satisfied.
Research and development costs are expensed as incurred. We believe continued development of our platform and infrastructure is important for our future growth. We expect our research and development expense to increase in absolute dollars in the long term but may decrease in the near term due to active cost management.
Research and development costs are expensed as incurred. We believe continued development of our platform and infrastructure is important for our future growth. We expect our research and development expense to fluctuate in absolute dollars in the long term as well as in the near term.
This unfavorable change in working capital was impacted by, among other items, the timing of vendor payments and prepayment as well as the timing of cash receipts from customers. Investing Activities Net cash provided by investing activities for 2023 was $162.3 million compared to used cash of $89.0 million for 2022.
This favorable change in working capital was impacted by, among other items, the timing of vendor payments and prepayment, the timing of cash receipts from customers as well as our active cost management. Investing Activities Net cash used in investing activities for 2024 was $19.5 million compared to provided cash of $162.3 million for 2023.
We have seen a decrease in our customer count in recent quarters, and our net customers decreased by 206 in 2023 compared to 2022, primarily due to customer churn and fewer new customers acquired during the period.
We have seen a decrease in our customer count in recent years, and our net customers decreased by 139 in 2024 compared to 2023, primarily due to customer churn, offset in part by new customers acquired during the period.
We expect gross margin for 2024 to be relatively consistent with 2023. We have continued to increase our utilization of the public cloud for our newer product offerings while we actively manage costs given the current macro-economic environment.
We have continued to increase our utilization of the public cloud for our newer product offerings while we actively manage costs given the current macro-economic environment.
The favorable change was primarily driven by an increase in proceeds from maturities and sales of marketable securities of $226.1 million and a decrease in purchases of marketable securities of $21.2 million. Our most significant capital expenditures have been investments in our equipment to support ongoing operations. We expect our capital investment to continue in the future.
The unfavorable change was primarily driven by a decrease in proceeds from maturities and sales of marketable securities of $261.3 million, offset in part by a decrease in purchases of marketable securities of $79.6 million. Our most significant capital expenditures have been investments in our equipment to support ongoing operations. We expect our capital investment to continue in the future.
The terms of the agreement permit voluntary prepayment without premium or penalty. The revolving credit facility matures in August 2024 and is secured by substantially all of our assets. We are required to pay a quarterly commitment fee of 0.15% per annum on the undrawn portion available under the revolving line of credit.
The revolving credit facility matures in August 2026 and is secured by substantially all of our assets. We are required to pay a quarterly commitment fee of 0.10% per annum on the undrawn portion available under the revolving line of credit.
Financing Activities Net cash used in financing activities for 2023 was $124.2 million compared to $28.6 million for 2022. The increase in cash outflow was primarily driven by the $49.9 million payment of the one-time special dividend in the second quarter of 2023 and $45.4 million of increased spending on our share repurchases during the period.
Financing Activities Net cash used in financing activities for 2024 was $23.3 million compared to $124.2 million for 2023. The decrease in cash outflow was primarily driven by the $49.9 million payment of the special one-time dividend in the second quarter of 2023 and $48.8 million of decreased spending on share repurchases during the period.
Revenue excluding our Virtual Conference product decreased $19.7 million, or 11%, in 2023 compared to 2022. We continue to see less demand for our Virtual Conference product and we have deemphasized this product. Subscription and other platform revenue decreased $22.0 million in 2023 compared to 2022.
Revenue excluding our Virtual Conference product decreased $13.2 million, or 8%, in 2024 compared to 2023. We continue to see less demand for our Virtual Conference product and we have deemphasized this product. Subscription and other platform revenue decreased $13.5 million in 2024 compared to 2023.
Subscription and other platform revenue excluding our Virtual Conference product decreased $15.5 million in 2023 compared to 2022. The 49 Table of Contents decrease was primarily due to lower net customers and reduced ARR as discussed in the section titled “Key Business Metrics.” Professional services revenue decreased $5.2 million in 2023 compared to 2022.
Subscription and other platform revenue excluding our Virtual Conference product decreased $11.4 million in 2024 compared to 2023. These decreases were primarily due to lower net customers and reduced ARR as discussed in the section titled “Key Business Metrics.” Professional services revenue decreased $2.2 million in 2024 compared to 2023.
Debt Obligations Revolving Credit Facility In September 2021, we amended our revolving credit facility with Comerica Bank with an effective date of August 31, 2021, which increases our borrowing capacity to a maximum of $50.0 million with a letter of credit sublimit of $4.0 million and a credit card sublimit of $1.0 million.
Debt Obligations Revolving Credit Facility In August 2024, we amended our revolving credit facility with Comerica Bank to decrease our borrowing capacity from a maximum of $50.0 million to $25.0 million with a letter of credit sublimit of $4.0 million and a credit card sublimit of $1.0 million.
The grant date fair value of the market performance-based restricted stock awards is calculated using a Monte Carlo simulation which factors in the number of awards to be earned based on the achievement of the market condition.
The time-based restricted stock unit awards we grant to employees generally vest over three to four years. The grant date fair value of the market performance-based restricted stock unit awards is estimated using a Monte Carlo simulation which factors in the number of awards to be earned based on the achievement of the market condition.
The decrease in general and administrative expense in 2023 was partially offset by the $2.7 million professional advisory expenses associated with activism defense we incurred in the first half of 2023. We expect our general and administrative expense to decrease modestly in absolute dollars in 2024 as we continue to actively manage costs given the current macro-economic environment.
The decrease in 2024 was also attributable to the $2.7 million professional advisory expenses associated with activism defense we incurred in 2023, which we did not incur in 2024. We expect our general and administrative expense to decrease moderately in absolute dollars in 2025 compared to 2024 as we continue to actively manage costs given the current macro-economic environment.
The following tables set forth selected consolidated statements of operations data for each of the periods presented: Year Ended December 31, 2023 2022 2021 (in thousands) Revenue: Subscription and other platform $ 149,882 $ 171,841 $ 175,876 Professional services 13,826 19,031 27,737 Total revenue 163,708 190,872 203,613 Cost of revenue: Subscription and other platform (1)(4) 34,751 39,241 33,400 Professional services (1)(4) 11,512 13,544 13,965 Total cost of revenue 46,263 52,785 47,365 Gross profit 117,445 138,087 156,248 Operating expenses: Sales and marketing (1)(4) 89,200 109,599 104,063 Research and development (1)(2)(4) 41,122 44,102 34,835 General and administrative (1)(3)(4) 49,124 43,969 40,940 Total operating expenses 179,446 197,670 179,838 Loss from operations (62,001) (59,583) (23,590) Interest expense 93 181 464 Other (income) expense, net (11,303) (2,514) 487 Loss before provision for (benefit from) income taxes (50,791) (57,250) (24,541) Provision for (benefit from) income taxes 995 958 (285) Net loss $ (51,786) $ (58,208) $ (24,256) (1) Includes stock-based compensation as follows: Year Ended December 31, 2023 2022 2021 (in thousands) Cost of revenue Subscription and other platform $ 2,814 $ 3,375 $ 1,897 Professional services 545 676 382 Total cost of revenue 3,359 4,051 2,279 Sales and marketing 13,974 14,304 8,806 Research and development 9,126 7,958 4,402 General and administrative 18,558 12,230 10,163 Total stock-based compensation expense $ 45,017 $ 38,543 $ 25,650 (2) Research and development expense includes amortization of acquired intangible asset of $558 thousand for 2023, $434 thousand for 2022 and nil for 2021.
The following tables set forth selected consolidated statements of operations data for each of the periods presented: Year Ended December 31, 2024 2023 2022 (in thousands) Revenue: Subscription and other platform $ 136,412 $ 149,882 $ 171,841 Professional services 11,669 13,826 19,031 Total revenue 148,081 163,708 190,872 Cost of revenue: Subscription and other platform (1)(4) 28,037 34,751 39,241 Professional services (1)(4) 9,975 11,512 13,544 Total cost of revenue 38,012 46,263 52,785 Gross profit 110,069 117,445 138,087 Operating expenses: Sales and marketing (1)(4) 78,077 89,200 109,599 Research and development (1)(2)(4) 36,250 41,122 44,102 General and administrative (1)(3)(4) 46,399 49,124 43,969 Total operating expenses 160,726 179,446 197,670 Loss from operations (50,657) (62,001) (59,583) Interest expense 34 93 181 Other income, net (9,168) (11,303) (2,514) Loss before provision for income taxes (41,523) (50,791) (57,250) Provision for income taxes 633 995 958 Net loss $ (42,156) $ (51,786) $ (58,208) (1) Includes stock-based compensation as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Cost of revenue Subscription and other platform $ 2,612 $ 2,814 $ 3,375 Professional services 535 545 676 Total cost of revenue 3,147 3,359 4,051 Sales and marketing 12,371 13,974 14,304 Research and development 8,911 9,126 7,958 General and administrative 20,758 18,558 12,230 Total stock-based compensation expense $ 45,187 $ 45,017 $ 38,543 (2) Research and development expense includes amortization of acquired intangible asset of $551 thousand for 2024, $558 thousand for 2023 and $434 thousand for 2022.
We pursued additional reductions in our workforce in 2023 to further reduce our cost structure and may continue to do so in 2024. Acquiring New Customers We are focused on growing the number of customers that use our platform.
We pursued additional reductions in our workforce in 2023 and 2024 to further reduce our cost structure. We expect to incur additional restructuring costs in the first quarter of 2025 related to our ongoing cost reduction efforts. Acquiring New Customers We are focused on growing the number of customers that use our platform.
We believe there is a compelling opportunity to continue to elevate expansion opportunities for our solutions internationally, both in countries where we currently operate and countries where we do not yet sell subscriptions to our solutions.
For 2024 and 2023, approximately 23% of our revenue came from outside the United States, compared to 24% in 2022. We believe there is a compelling opportunity to continue to elevate expansion opportunities for our solutions internationally, both in countries where we currently operate and countries where we do not yet sell subscriptions to our solutions.
Operating Expenses Sales and Marketing Year Ended December 31, 2023 As a % of Total Revenue 2022 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Sales and marketing $ 89,200 54% $ 109,599 57% $ (20,399) (19)% Sales and marketing expense decreased $20.4 million, or 19%, in 2023, compared to 2022.
Operating Expenses Sales and Marketing Year Ended December 31, 2024 As a % of Total Revenue 2023 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Sales and marketing $ 78,077 53% $ 89,200 54% $ (11,123) (12)% Sales and marketing expense decreased $11.1 million, or 12%, in 2024 compared to 2023.
General and Administrative Year Ended December 31, 2023 As a % of Total Revenue 2022 As a % of Total Revenue $ Change % Change (in thousands, except percentages) General and administrative $ 49,124 30% $ 43,969 23% $ 5,155 12% General and administrative expense increased $5.2 million, or 12%, in 2023 compared to 2022.
General and Administrative Year Ended December 31, 2024 As a % of Total Revenue 2023 As a % of Total Revenue $ Change % Change (in thousands, except percentages) General and administrative $ 46,399 31% $ 49,124 30% $ (2,725) (6)% General and administrative expense decreased $2.7 million, or 6%, in 2024 compared to 2023.
Excluding the $6.3 million increase of stock-based compensation expense, general and administrative expense decreased $1.1 million compared to 2022. The decrease was primarily attributable to our active cost management and headcount reduction related to our restructuring activities that began in the second half of 2022.
Excluding the $2.2 million increase of stock-based compensation expense, general and administrative expense decreased $4.9 million compared to 2023. The decrease was primarily due to our active cost management and headcount reduction related to our restructuring activities.
For valuations of option grants made after the closing of our IPO and PSUs, the fair value of each share of common stock was based on the closing price of our common stock on the date of grant, as reported on the New York Stock Exchange . • Risk-Free Interest Rate.
The assumptions and estimates used in the Monte Carlo valuations are as follows: • Fair Value of Common Stock . The fair value of each share of common stock was based on the closing price of our common stock on the date of grant, as reported on the New York Stock Exchange. • Risk-Free Interest Rate.
Interest Expense Year Ended December 31, 2023 As a % of Total Revenue 2022 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Interest expense $ 93 —% $ 181 —% $ (88) (49%) Interest expense for 2023 remained relatively flat in absolute dollars compared to 2022. 51 Table of Contents Other Income, Net Year Ended December 31, 2023 As a % of Total Revenue 2022 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Other income, net $ (11,303) (7)% $ (2,514) (1)% $ 8,789 350% The change in other income, net for 2023 compared to 2022 was primarily driven by the increase in investment income.
Interest Expense Year Ended December 31, 2024 As a % of Total Revenue 2023 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Interest expense $ 34 —% $ 93 —% $ (59) (63%) Interest expense for 2024 remained relatively flat in absolute dollars compared to 2023. 51 Table of Contents Other Income, Net Year Ended December 31, 2024 As a % of Total Revenue 2023 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Other income, net $ (9,168) (6)% $ (11,303) (7)% $ (2,135) (19)% The decreases in other income, net for 2024 compared to 2023 were primarily driven by the decrease in investment income.
The decrease was primarily attributable to the $6.4 million decrease in net loss and $2.3 million increase in non-cash expenses, partially reduced by the $0.5 million unfavorable changes in operating assets and liabilities between the periods. In 2023, we made total restructuring related payments of $6.5 million compared to $1.5 million in 2022. See Note 17 for additional information.
This favorable change was primarily attributable to the $9.6 million decrease in net loss and $8.6 million favorable changes in operating assets and liabilities between the periods, partially offset by the $1.2 million decrease in non-cash expenses. We made total restructuring related payments of $2.6 million in 2024 compared to $6.5 million in 2023.
As our go-to-market strategies evolve, we may modify our pricing strategies in the future, which could result in changes to SSP. Stock-Based Compensation We issue stock-based compensation awards to employees in the form of restricted stock and stock options. We measure stock-based compensation expense related to these awards based on the fair value of the awards on grant date.
As our go-to-market strategies evolve, we may modify our pricing strategies in the future, which could result in changes to SSP. 54 Table of Contents Stock-Based Compensation We issue stock-based compensation awards to employees, primarily in the form of restricted stock units.
For market performance-based restricted stock awards granted since 2022, the expected volatility is estimated using a weighting of our historical volatility and the historical volatility of a peer group of publicly traded companies. • Expected Dividend Yield.
For awards granted before 2024, the expected volatility is estimated using a weighting of our historical volatility and the historical volatility of a peer group of publicly traded companies. For awards granted in 2024, the expected volatility is estimated using our historical volatility. • Expected Dividend Yi eld.
Additionally, we incurred aggregate restructuring and other charges of $7.9 million in 2023, primarily related to severance and one-time termination benefits and impairment charges on our headquarters lease. See Note 17 to the consolidated financial statements for further information.
We have pursued workforce reductions to reduce our cost structure and incurred aggregate restructuring and other charges of $2.6 million in 2024, primarily related to severance and one-time termination benefits. See Note 17 to the consolidated financial statements for further information.
Our cash flows from operating activities used net cash of $12.2 million in 2023 compared to $20.5 million in 2022, resulting in a decrease of cash outflow of $8.3 million.
Our cash flows from operating activities provided net cash of $4.8 million in 2024 compared to used net cash of $12.2 million in 2023, resulting in a cash inflow of $17.0 million.
The decrease was primarily attributable to a decrease in personnel-related expenses of $13.1 million due to headcount reduction related to our restructuring activities that began in the second half of 2022. The remainder of the decrease was primarily driven by our active cost management given the current macro-economic environment.
The decrease was primarily attributable to a decrease in personnel-related expenses of $3.6 million due to headcount reduction related to our restructuring activities. The remainder of these decreases was primarily driven by our active cost management.
As of December 31, 2023, we had 1,784 customers. Our revenue was $163.7 million for 2023, compared to $190.9 million for 2022 and $203.6 million for 2021, representing a period-over-period decrease of 14% and 6%, respectively. We had a net loss of $51.8 million, $58.2 million and $24.3 million for 2023, 2022 and 2021, respectively.
As of December 31, 2024, we had 1,645 customers. Our revenue for 2024 was $148.1 million and $163.7 million for 2023, representing a period-over-period decrease of 10%. We had a net loss of $42.2 million for 2024 and $51.8 million for 2023.
For time-based awards, we recognize stock-based compensation on a straight-line basis over the requisite service period, which generally equals the vesting period. For market-performance based awards, we recognize stock-based compensation ratably over the requisite service period, which generally equals the performance period. We account for forfeited awards as they occur.
For market performance-based awards, we recognize stock-based compensation ratably over the requisite service period, which generally equals the performance period. We account for forfeited awards as they occur. The fair value of the restricted stock unit awards is based on the closing market value of our common stock on the grant date.
Professional services revenue excluding our Virtual Conference product decreased $4.2 million in 2023 compared to 2022. The decrease was primarily due to more customers electing to be “self-service” and not utilize our professional services offerings.
Professional services revenue excluding our Virtual Conference product decreased $1.8 million in 2024 compared 2023. These decreases were primarily due to more customers electing to be “self-service” and not utilize our professional services offerings as well as a decrease in total customer count which reduced the demand for our services.
Cost of Revenue and Gross Margin Year Ended December 31, 2023 As a % of Total Revenue 2022 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Subscription and other platform $ 34,751 21% $ 39,241 21% $ (4,490) (11)% Professional services 11,512 7% 13,544 7% (2,032) (15)% Total cost of revenue $ 46,263 28% $ 52,785 28% (6,522) (12)% Gross profit $ 117,445 72% $ 138,087 72% (20,642) (15)% Gross margin 72 % 72 % Cost of Revenue Cost of revenue decreased $6.5 million, or 12%, in 2023 compared 2022, primarily reflecting the result of our active cost management and headcount reduction related to our restructuring activities that began in the second half of 2022.
Cost of Revenue and Gross Margin Year Ended December 31, 2024 As a % of Total Revenue 2023 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Subscription and other platform $ 28,037 19% $ 34,751 21% $ (6,714) (19)% Professional services 9,975 7% 11,512 7% (1,537) (13)% Total cost of revenue $ 38,012 26% $ 46,263 28% $ (8,251) (18)% Gross profit $ 110,069 74% $ 117,445 72% $ (7,376) (6)% Gross margin 74 % 72 % Cost of Revenue Cost of revenue decreased $8.3 million, or 18%, in 2024 compared to 2023, primarily reflecting the result of our active cost management and headcount reduction related to our restructuring activities.
In 2022, we launched ON24 Forums that joins our portfolio of experience products and unifies engagement and data. ON24 Forums provides a new way to moderate interactive discussions and drive immediate action with audiences. For example, it enables audiences to participate in face-to-face, two-way video discussions. In April 2022, we acquired Vibbio AS (“Vibbio”), a video software company in Norway.
ON24 Forums provides a way to moderate face-to-face, video-based discussions that drive multi-way conversation, engagement, and immediate interaction with audiences. For example, it enables audiences to conduct attendee roundtable discussions, interactive workshops and trainings, and community-like experiences. In April 2022, we acquired Vibbio AS (“Vibbio”), a video software company in Norway.
Our ability to pursue this opportunity will require us to retain our customers, scale our sales and marketing organization and otherwise increase our operating expenses, and we may not be successful on the timetable we anticipate, or at all, for any number of reasons, which may cause our results to vary from period to period. 44 Table of Contents Innovation and Expansion of Our Platform We plan to continually develop new products that enhance the functionality of our platform, improve our user experiences and drive customer engagement in order to further capitalize on new opportunities, which includes building AI-powered capabilities into our product offerings.
Our ability to pursue this opportunity will require us to retain our customers, scale our sales and marketing organization and otherwise increase our operating expenses, and we may not be successful on the timetable we anticipate, or at all, for any number of reasons, which may cause our results to vary from period to period.
(3) General and administrative expense for 2023 includes professional advisory expenses associated with activism defense and related costs of $2,656 thousand. 48 Table of Contents (4) The results of operations include restructuring costs, which primarily represent severance and related expense due to restructuring activities, and impairment charges on our headquarters lease, as follows. See Note 17 for additional information.
We did not incur such costs in 2024 or 2022. 48 Table of Contents (4) The results of operations include restructuring costs, which primarily represent severance and related expense due to restructuring activities, and impairment charges on our headquarters lease, as follows. See Note 17 to the consolidated financial statements for additional information.
For example, our new AI-powered ACE became available across our platform starting in January 2024. We intend to sell these new solutions to both existing and new customers, with the goal of driving an increase in revenue as the breadth and depth of our solutions and use cases expands.
We intend to sell these new solutions to both existing and new customers, with the goal of driving an increase in revenue as the breadth and depth of our solutions and use cases expands. We also intend to continue investing in our platform and related infrastructure over time to improve capacity, security and scalability.
We anticipate the restructuring activities to continue in the first quarter of 2024. Gross Margin Gross margin for 2023 remained flat compared to 2022. While we made cost reductions across our business starting in the second half of 2022, we continued to invest in our cloud infrastructure capabilities to support our business needs.
While we continued to invest in our cloud infrastructure capabilities to support our business needs, we have made cost reductions across our business since the second half of 2022 to streamline our operations. We expect gross margin for 2025 to be relatively consistent with 2024.
In 2021, we also launched ON24 Go Live, which provides a new self-service virtual event solution for companies to stand up live-streaming video events faster and easier. Organizations can build a complete end-to-end external or internal event ranging from roadshows, customer conferences, virtual pop-ups, town halls, and company meetings, using pre-built templates and an easy-to-use and engaging interface.
Organizations can build a complete end-to-end external or internal event ranging from roadshows, customer conferences, virtual pop-ups, town halls and company meetings, using pre-built templates and an easy-to-use and engaging interface. In 2022, we launched ON24 Forums that joined our portfolio of experience products and unifies engagement and data.
Customers Contributing $100,000 or More to ARR As of December 31, 2023, 2022 and 2021, we had 325, 345 and 366 $100k Customers, respectively, demonstrating our penetration of larger organizations. The decrease in ARR contribution from our $100k customers since 2021 has primarily been driven by lower value contract renewals and fewer new customer acquisitions in the period.
Customers Contributing $100,000 or More to ARR As of December 31, 2024, 2023 and 2022, we had 305, 325 and 345 $100k Customers, respectively, demonstrating our penetration of larger organizations.
Provision for Income Taxes Year Ended December 31, 2023 As a % of Total Revenue 2022 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Provision for income taxes $ 995 1% $ 958 1% $ 37 4% Provision for income taxes remained relatively flat in absolute dollars compared to 2022.
Provision for Income Taxes Year Ended December 31, 2024 As a % of Total Revenue 2023 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Provision for income taxes $ 633 —% $ 995 1% $ (362) (36%) The decrease in provision for income taxes for 2024 compared to 2023 was primarily driven by the decreased income in foreign jurisdictions.
The total non-cash adjustments for 2023 was $64.7 million compared to $62.4 million for 2022, reflecting a $2.3 million favorable change of non-cash adjustment. Working capital used cash of $25.2 million in 2023 compared to $24.7 million in 2022, an increase of cash outflow of $0.5 million.
See Note 17 to the consolidated financial statements for additional information. The total non-cash adjustments for 2024 was $63.5 million compared to $64.7 million for 2023, reflecting a $1.2 million unfavorable change of non-cash adjustment. Working capital used cash of $16.6 million in 2024 compared to $25.2 million in 2023, a decrease of cash outflow of $8.6 million.
The referenced prime rate was 8.50% as of December 31, 2023 and 7.50% as of December 31, 2022. As of December 31, 2023, we had not drawn down on our line of credit under the revolving credit facility.
The referenced prime rate was 7.50% as of December 31, 2024 and 8.50% as of December 31, 2023.
Commitments and Contractual Obligations The following table summarizes our non-cancelable contractual obligations as of December 31, 2023 (in thousands): Payments Due by Period Total 2024 2025 to 2026 2027 to 2028 2029 and Thereafter Operating lease obligations $ 5,470 $ 2,933 $ 2,503 $ 34 $ — Finance lease obligations 128 128 — — — Equipment loans 72 72 — — — Purchase commitments (1) 3,585 2,259 1,211 115 — Other (2) 833 476 265 92 — Total $ 10,088 $ 5,868 $ 3,979 $ 241 $ — (1) Amounts primarily represent our off-balance sheet commitments under various software license and co-location facilities and services agreements.
Commitments and Contractual Obligations The following table summarizes our non-cancelable contractual obligations as of December 31, 2024 (in thousands): Payments Due by Period Total 2025 2026 to 2027 2028 to 2029 2030 and Thereafter Operating lease obligations $ 3,583 $ 2,482 $ 923 $ 178 $ — Purchase commitments (1) 4,772 3,229 1,543 — — Other (2) 4,589 3,257 1,332 — — Total $ 12,944 $ 8,968 $ 3,798 $ 178 $ — (1) Amounts primarily represent our commitments under various software license and hosting facilities and services agreements.
Restricted stock awards we grant to employees generally vest over three to four years. Stock-based compensation expense related to restricted stock awards is based on the closing market value of our common stock on the grant date and is recognized as expense over the requisite service period on a straight-line basis.
We measure stock-based compensation expense related to these awards based on the grant date fair value of the awards. For time-based awards, we recognize stock-based compensation on a straight-line basis over the requisite service period, which generally equals the vesting period.
Dollar-Based Net Retention Rate We believe NRR is an important metric that provides insight into the long-term value of our subscription agreements and our ability to retain and organically grow revenue from our customers. Our NRR as of a specified period end is calculated by dividing current period ARR by prior period ARR.
The decrease in ARR from December 31, 2023 was primarily due to customer churn and rationalizing contractual entitlements, decreased demand for our deemphasized Virtual Conference product, and to a lesser extent, fewer new customers acquired during the period. 45 Table of Contents Dollar-Based Net Retention Rate We believe NRR is an important metric that provides insight into the long-term value of our subscription agreements and our ability to retain and organically grow revenue from our customers.
We also intend to continue investing in our platform and related infrastructure over time to improve capacity, security and scalability. These development efforts will require significant investments, some of which may be episodic or otherwise cause our expenses to vary from period to period.
These development efforts will require significant investments, some of which may be episodic or otherwise cause our expenses to vary from period to period. 44 Table of Contents International Expansion We believe the expansion of real-time, revenue-generating marketing intelligence in international markets is a significant opportunity.
In April 2023, we further amended our revolving line of credit to allow for certain transactions, including payment of dividends and share repurchases from open market purchases or through an accelerated share repurchase program, subject to certain terms and conditions. 53 Table of Contents Outstanding principal amounts on the revolving credit facility incur interest at a rate equal to Comerica Bank’s prime referenced rate, as defined in the loan agreement.
We had an outstanding standby letter of credit of $1.2 million as a guarantee for a leased space as of December 31, 2024 53 Table of Contents Outstanding principal amounts on the revolving credit facility incur interest at a rate equal to Comerica Bank’s prime referenced rate, as defined in the loan agreement.
For example, breakouts enable attendees and presenters to network with each other face-to-face, sales teams to 43 Table of Contents connect immediately with prospects and subject matter experts to offer two-way communication to support customer education and training.
For example, breakouts enable attendees and presenters to network with each other face-to-face, sales teams to connect immediately with prospects and subject matter experts to support customer education and training. In 2021, we also launched ON24 Go Live, which provides a self-service virtual event solution for companies to stand up live-streaming video events faster and easier.
We expect our sales and marketing expense to decrease in absolute dollars in 2024 as we continue to support demand for our digital experiences and the development of the next generation intelligent engagement platform while tightening our sales and marketing spend given the current macro-economic environment. 50 Table of Contents Research and Development Year Ended December 31, 2023 As a % of Total Revenue 2022 As a % of Total Revenue $ Change % Change (in thousands, except percentages) Research and development $ 41,122 25% $ 44,102 23% $ (2,980) (7)% Research and development expense decreased $3.0 million, or 7%, in 2023 compared to 2022.
The remainder of these decreases was primarily driven by our active cost management as we focused on driving improved sales efficiency under the current macro-economic environment. 50 Table of Contents We expect our sales and marketing expense to decrease in absolute dollars in 2025 compared to 2024 as we continue to tighten our sales and marketing spend given the current macro-economic environment while supporting demand for our digital experiences and our next generation intelligent engagement platform.
Our NRR was 82%, 87% and 97% as of December 31, 2023, 2022 and 2021, respectively, and our NRR for Core Platform was 84%, 90% and 99%, respectively.
Our NRR was 89%, 82% and 87% as of December 31, 2024, 2023 and 2022, respectively, and our NRR for Core Platform was 89%, 84% and 90%, respectively. The increase in NRR from 2023 to 2024 was primarily driven by our improved customer retention as customers realize the value-added capabilities of our solutions including our AI-powered ACE.
The decrease was primarily attributable to our active cost management and headcount reduction related to our restructuring activities that began in the second half of 2022, offset in part by the increased stock-based compensation expense of $1.2 million.
The decrease was primarily attributable to a decrease in personnel-related expenses of $8.6 million due to headcount reduction related to our restructuring activities.
In 2023, we spent a total of $74.6 million on share repurchases (including commissions). In the first quarter of 2024 we completed the remainder of capital return program. We substantially completed our 2022 cost reduction plan during the first quarter of 2023.
Together with the $125 million capital return program we concluded in February 2024, we spent a total of $25.8 million on share repurchases (including commissions) in 2024. We spent $4.0 million on share repurchases (including commissions) in the first quarter of 2025 through March 9, 2025 and had $0.5 million available for future share repurchases under the 2024 Repurchase Program.
Removed
International Expansion We believe the expansion of real-time, revenue-generating marketing intelligence in international markets is a significant opportunity. For 2023, approximately 23% of our revenue came from outside the United States, compared to 24% in 2022 and 26% in 2021.
Added
Innovation and Expansion of Our Platform We plan to continually develop new products that enhance the functionality of our platform, improve our user experiences and drive customer engagement in order to further capitalize on new opportunities, which includes building AI-powered capabilities into our product offerings. For example, our new AI-powered ACE became available across our platform starting in January 2024.
Removed
The decrease in ARR from 45 Table of Contents December 31, 2022 was primarily due to rationalizing contractual entitlements, customer churn and decreased demand for our Virtual Conference product, offset in part by new customer contracts and contract expansions within existing customers.
Added
The decrease in our $100k Customers from December 31, 2023 was primarily driven by fewer new customer acquisitions, customers reducing their spend with us below the $100K threshold and fewer customers increasing their spending with us in 2024 compared to 2023.
Removed
The decrease in NRR from 2023 to 2022 was primarily driven by elevated churn from existing customers rationalizing their expansions as well as lower expansion opportunities from existing customers given the impact of the macro-economic environment during 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table presents the hypothetical fair values of our marketable securities assuming immediate parallel shifts in the yield curve of 50 basis points (“BPS”), 100 BPS and 150 BPS as of December 31, 2023 (in thousands): (150 BPS) (100 BPS) (50 BPS) Fair Value as of December 31, 2023 50 BPS 100 BPS 150 BPS Marketable securities $ 146,778 $ 146,351 $ 145,924 $ 145,497 $ 145,070 $ 144,643 $ 144,216 56 Table of Contents
Biggest changeThe following table presents the hypothetical fair values of our marketable securities assuming immediate parallel shifts in the yield curve of 5 0 basis points (“BPS”), 100 BPS and 150 BPS as of December 31, 2024 (in thousands): (150 BPS) (100 BPS) (50 BPS) Fair Value as of December 31, 2024 50 BPS 100 BPS 150 BPS Marketable securities $ 169,396 $ 168,865 $ 168,334 $ 167,803 $ 167,271 $ 166,740 $ 166,209 56 Table of Contents
The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our historical consolidated financial statements for the years ended December 31, 2023 , 2022 and 2021.
The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our historical consolidated financial statements for the years ended December 31, 2024 , 2023 and 2022.

Other ONTF 10-K year-over-year comparisons