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KnowBe4 Human error . Conquered . KnowBe4 Announces Third Quarter 2021 Financial Results November 3 , 2021 • Total GAAP revenue increased 42.6 % year - over - year to $ 64.1 million • Annual recurring revenue increased 44.1 % year - over - year to $ 262.2 million • Total number of customers reached more than 44,000 • Cash flow from operations was $ 19.9 million • Free cash flow was $ 18.0 million and free cash flow margin was 28.1 % TAMPA BAY , Fla . , Nov. 03 , 2021 ( GLOBE NEWSWIRE ) -- KnowBe4 , Inc. ( NASDAQ : KNBE ) , provider of the leading security awareness training and simulated phishing platform , today reported results for the third quarter ended September 30 , 2021 . " Our third quarter results exceeded our expectations with record annual recurring revenue ( ARR ) of $ 262.2 million and total customers of more than 44,000 . We continue to scale the business with more than 40 % revenue and ARR growth while generating strong free cash flow margins of 28 % . " said Stu Sjouwerman , founder and chief executive officer of KnowBe4 . " We are extremely excited about the positive response to the recent announcement of our acquisition of Security Advisor , which closed on November 1 , 2021. Through this acquisition , we believe we are creating a new category of cybersecurity that we are calling Human Detection and Response , or HDR . We are also seeing remarkable traction with our own internal product development initiatives , including Password IQ , which is currently in a beta release stage . With such positive momentum , we are looking forward to a strong finish to the year . " Krish Venkataraman , KnowBe4's co - president and chief financial officer , added , " Our successful third quarter financial results show that we continue to execute on our key growth initiatives . GAAP revenue grew by 42.6 % year - over - year , driven by substantial growth across both enterprise and SMB customers , increasing multi - product attachment rates to 19 % and year - over - year growth in international revenues of 99 % . We are also very pleased to report continued strong gross margins in excess of 80 % and strong free cash flow generation of $ 18.0 million for the quarter . " Third 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 flow 1 $ $ LA GA $ $ Q3-2021 ( in thousands , except percentage and per share amounts ) 64,091 $ 44,932 181,924 $ 84.6 % 262,172 85.0 % 85.4 % ( 1.1 ) % 4.6 % 19,949 18,006 Q3-2020 $ $ Change 84.9 % ( 2.2 ) % 0.7 % 12,661 11,017 + 42.6 % + 44.1 % + 0.4 % + 0.5 % + 1.1 % + 3.9 % + 57.6 % + 63.4 % 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 • Revenue and ARR increased year - over - year by 42.6 % and 44.1 % 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 . • On September 23 , 2021 , we hosted our inaugural KB4 - CON EMEA conference which engaged with cybersecurity professionals across the EMEA region to provide relevant industry updates and product overviews and roadmap reviews . The conference was well attended with over 5,000 registrations to the virtual event . • As announced during our KB4 - CON EMEA conference , we have release a beta version of a new product code named " PasswordIQ . " Password IQ will continuously monitor organizations ' employees for password hygiene issues , such as weak or breached passwords , summarize data on an easy - to - read dashboard and allow for automatic training to mitigate password hygiene risk . • On October 21 , 2021 , we held a business update conference call announcing the acquisition of Security Advisor Technologies , Inc. for an estimated aggregate purchase price of $ 80.0 million a portion of which is to be paid upfront through a combination of cash and our Class A common stock and a portion of which is to be paid through future incentives , including earnout provisions and restricted stock unit grants . This acquisition closed on November 1 , 2021 and is subject to customary post - closing adjustments . We look forward to future innovations within the Human Detection and