Page 1

KnowBe4 Human error . Conquered . KnowBe4 Announces Second Quarter 2021 Financial Results August 2 , 2021 • Total GAAP revenue increased 43.0 % year - over - year to $ 59.4 million • Annual recurring revenue increased 42.4 % year - over - year to $ 240.6 million • Total number of customers reached over 41,000 • Cash flow from operations was $ 14.1 million and free cash flow was $ 12.8 million TAMPA BAY , Fla . , Aug. 02 , 2021 ( GLOBE NEWSWIRE ) -- KnowBe4 , Inc. ( NASDAQ : KNBE ) , provider of the leading security awareness training and simulated phishing platform , today reported results for the second quarter ended June 30 , 2021 . " Our second quarter results exceeded our expectations across the board with record annual recurring revenue ( ARR ) of $ 241 million and total customers of over 41,000 , " said Stu Sjouwerman , founder and chief executive officer of KnowBe4 . " We are excited about the extremely positive response to the release of our newest product , Compliance Plus , which reaches an entirely new but adjacent market for us . This product allows us to leverage the automation and other advanced capabilities of our existing platform while tapping into a massive compliance market . We also continue to benefit from a regulatory environment that recognizes the growing threat of social engineering and look forward to capitalizing on the current environment to further our growth strategies . " Krish Venkataraman , KnowBe4's co - president and chief financial officer , added , " Our successful second quarter financial results were a testament to the organization's execution on our key growth initiatives . GAAP revenue grew by 43.0 % year - over - year , reflecting robust growth across all of our products and geographies , including increasing multi - product attachment rates of 17 % and year - over - year international growth of 95 % . We are also very pleased to report continued strong gross margins in excess of 80 % and strong free cash flow generation of $ 12.8 million for the quarter . " Second Quarter 2021 Financial Highlights Revenue Annual recurring revenue¹ GAAP gross margin Non - GAAP gross margin¹ GAAP operating margin Non - GAAP operating margin¹ Cash flow provided by operating activities Free cash flow¹ $ $ $ Financial Outlook For the third quarter and full year 2021 , the Company expects : Metric A A $ Q2-2020 Change ( in thousands , except percentage and per share amounts ) 59,350 $ 41,489 + 43.0 % $ 169,003 + 42.4 % 240,595 85.5 % + 0.7 % 85.9 % ( 26.6 ) % 7.6 % 14,076 $ 12,771 $ Q2-2021 84.8 % 85.0 % ( 0.1 ) % 3.2 % 13,034 11,201 Third Quarter Range $ 1 A reconciliation of GAAP to non - GAAP financial measures and definitions for our key business metrics , including annualized recurring revenue and free cash flow , is provided under the heading " Explanation of Non - GAAP Financial Measures . " Recent Business Highlights + 0.9 % + ( 26.5 ) % + 4.4 % 1,042 + 14.0 % • Revenue and ARR increased year - over - year by 43.0 % and 42.4 % respectively , driven primarily by overall business growth resulting from positive multi - product adoption trends , strong international growth and continued expansion of our customer base into both enterprise and SMB . • In June 2021 , we released the Compliance Plus product which brings our " new - school " approach to security awareness into the compliance market . Compliance Plus provides organizations ' employees with relevant and engaging content as well as training modules that address compliance topics ranging from data privacy to diversity , equity and inclusion . Compliance Plus is accessible through our existing platform as an add - on subscription to our core KMSAT product allowing users to benefit from the existing automation features of our platform . • We successfully completed an initial public offering , or IPO , of our Class A common stock on April 26 , 2021. We issued and sold a total of 10,425,000 shares of Class A common stock for net proceeds of $ 156 million which we plan to use for general corporate purposes , including continuing to execute on our growth strategies . Growth