user-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________

FORM 10-Q

_________________________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended March 31, 2022


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from ________ to ________
			Commission file number: 001-41049

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UserTesting, Inc.

_________________________________________________

(Exact name of registrant as specified in its charter)


Delaware									26-0339214
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)


144 Townsend Street San Francisco, California 94107
(Address of principal executive offices) (Zip code)

(650) 567-5616
Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	USER	New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

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

As of April 30, 2022, 142,864,646 shares of the registrant’s common stock, $0.0001 par value, were outstanding.

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		Page
Part I - Financial Information
Item 1.	Financial Statements (Unaudited)	6
	Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	6
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021	7
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) for the Three Months Ended March 31, 2022 and 2021	8
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45

Part II - Other Information
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	80
Item 3.	Defaults Upon Senior Securities	80
Item 4.	Mine Safety Disclosures	80
Item 5.	Other Information	80
Item 6.	Exhibits	81
Signatures		82

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), about us and our industry that involve substantial risks and uncertainties. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial condition, our business strategy and plans, market growth and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “target,” “plan,” “expect,” and similar expressions are intended to identify forward-looking statements.

Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•our future financial performance, including our expectations regarding our subscription and professional revenue, cost of revenue, gross profit, gross margin, operating expenses, including changes in operating expenses, and our ability to achieve and maintain future profitability;

•the impact of the COVID-19 pandemic on our operations, financial results, and liquidity and capital resources, including on customers, sales, expenses, and employees;

•our business plan, our pricing model, and our ability to effectively manage our growth;

•anticipated trends, growth rates, and challenges in our business and in the markets in which we operate;

•market acceptance of our products and services and our ability to increase adoption of our products and services;

•beliefs and objectives for future operations;

•our ability to further attract, retain, and expand a community of consumers and participants;

•our ability to timely and effectively scale and adapt our products and services;

•our ability to develop new products and services and bring them to market in a timely manner and enhance our existing products and services;

•our expectations concerning relationships with third parties;

•our ability to maintain, protect, and enhance our intellectual property;

•our ability to continue to expand internationally;

•the effects of increased competition in our markets and our ability to compete effectively;

•future acquisitions or investments in complementary companies, products, services, or technologies;

•our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and internationally;

•economic and industry trends, projected growth, or trend analysis;

• attraction and retention of qualified employees;

•increased expenses associated with being a public company; and

•other statements regarding our future operations, financial condition, and prospects and business strategies.

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and

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circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q or to conform these statements to actual results or to changes in our expectations, except as required by law.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this report and have filed with the Securities and Exchange Commission (SEC) as exhibits to this report with the understanding that our actual future results, performance, and events and circumstances may be materially different from what we expect.

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Part I - Financial Information

Item 1. Financial Statements (Unaudited)

USERTESTING, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(unaudited)


	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	163,018	$	178,430
Accounts receivable, net	46,167		47,973
Costs capitalized to obtain revenue contracts, current	8,380		8,116
Prepaid expenses and other current assets	11,202		6,045
Total current assets	228,767		240,564
Property and equipment, net	3,167		3,257
Operating lease right-of-use assets, net	15,117		16,401
Intangible assets, net	576		640
Goodwill	8,785		8,785
Costs capitalized to obtain revenue contracts, non-current	13,012		12,941
Other long-term assets	873		540
Total assets	$	270,297	$	283,128
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,154	$	1,544
Contract liabilities	94,720		90,952
Operating lease liabilities, current	5,315		5,271
Accrued expenses and other current liabilities	13,286		21,799
Total current liabilities	115,475		119,566
Operating lease liabilities, non-current	11,658		12,996
Other long-term liabilities	887		887
Total liabilities	128,020		133,449
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value per share: 10,000 shares authorized and no shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	—		—
Common stock and capital in excess of par value, $0.0001 par value per share: 2,000,000 shares authorized, and 142,806 and 142,241 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	360,682		352,881
Accumulated deficit	(218,405)		(203,202)
Total stockholders’ equity	142,277		149,679
Total liabilities and stockholders’ equity	$	270,297	$	283,128

The accompanying notes are an integral part of these condensed consolidated financial statements.

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USERTESTING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended March 31,
	2022		2021
Revenue
Subscription	$	43,213	$	28,682
Professional services	2,639		2,508
Total revenue	45,852		31,190
Cost of revenue
Subscription	7,617		6,617
Professional services	2,182		2,085
Total cost of revenue	9,799		8,702
Gross profit	36,053		22,488
Operating expenses:
Sales and marketing	30,069		18,593
Research and development	11,080		9,769
General and administrative	9,945		6,351
Total operating expenses	51,094		34,713
Loss from operations	(15,041)		(12,225)
Interest income, net	12		40
Other expense, net	(80)		(152)
Loss before provision for income taxes	(15,109)		(

SEC Form 10-Q filed by UserTesting Inc.