KnowBe4 Investor Presentation Q2 2022 Investor presentation of a KnowBe4, a public trading company currently in the process of being acquired.

1. Building your last line
of defense

2. ©2022 KnowBe4
2
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements
generally relate to future events or our future performance. In some cases, you can identify forward-looking statements because they contain words such as “will,” “expect,” “plan,” “anticipate,” “going to,” “could,”
“intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, priorities,
plans or intentions. Forward-looking statements in this presentation include, but are not limited to, our expectations regarding branding and launch of new products under development; our expectations
regarding future product performance; the anticipated expansion of our TAM, including from products under development; our expected increases in KnowBe4’s ARR, revenue and expenses; our business
strategy and plans and objectives of management for future operations of KnowBe4 and its subsidiaries. You should not put undue reliance on any forward-looking statements. Forward-looking statements
should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all.
The forward-looking statements in this presentation are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as required by law. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to
risks and uncertainties, including changes in our plans or assumptions, that could cause actual results to differ materially from those projected. These risks include our ability to develop new products and
services and enhance our existing products and services, our ability to attract and retain customers, our ability to develop new products and services and enhance existing products and services, and our ability
to compete in the rapidly changing cybersecurity environment in which we operate. The forward-looking statements contained in this presentation are also subject to other risks and uncertainties, including
those more fully described in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 that will be filed following
this presentation. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation may not occur, and actual results could differ materially from those
anticipated or implied in the forward-looking statements. It is not possible for us 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 or outcomes to differ materially from those contained in any forward-looking statements we make.
In addition to the GAAP financials, this presentation also includes certain non-GAAP financial measures, including free cash flow, free cash flow margin, non-GAAP gross profit, non-GAAP gross margin, non-GAAP
operating income (loss) and non-GAAP operating margin. Non-GAAP measures have limitations as analytical tools and you should not consider them in isolation or as a substitute for the most directly
comparable financial measures prepared in accordance with GAAP. For example, other companies, including companies in the KnowBe4’s industry, may calculate similarly titled non-GAAP financial measures
differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the company’s non-GAAP financial measures as tools for comparison. Definitions of these
measures along with reconciliations of these measures to the most directly comparable GAAP measures are included at the end of this presentation.
This presentation also contains estimates and other statistical and industry data prepared by independent parties and by the Company relating to market size and growth. These data involve a number of
assumptions and limitations, and you are cautioned not to give undue weight to such estimates. The Company has not independently verified the statistical and other industry data generated by independent
parties and contained in this presentation and, accordingly, it cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of KnowBe4’s future performance and the
future performance of the markets in which it competes are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. These and other factors could cause results or outcomes to
differ materially from those expressed in the estimates made by the independent parties and by KnowBe4.
The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be construed as an endorsement of the products or services of the
Company.
This presentation has been prepared by KnowBe4, Inc. ("KnowBe4," "we," "us," "our," or the "Company") for the exclusive use of the party to whom the Company delivers this presentation.
Disclaimer

3. ©2022 KnowBe4
3
Our Mission
Enable employees to make smarter security decisions, everyday

4. ©2022 KnowBe4
4
Key Investment Highlights
Demonstrated scale and durable growth
Integrated AI/ML driven SaaS platform leveraging proprietary data set
$23B+ global opportunity addressing the human layer*
Attractive 80%+ margins and positive FCF as of June 30th, 2022
Easy to deploy and use for companies of all sizes in all verticals
*For further information on how we calculate our global opportunity, please see slide 21

5. ©2022 KnowBe4
5 All financial and operating metrics are as of and for the period ended June 30,2022.
NPS Score is based on surveys completed during April 2022. We determine NPS by totaling up the responses by group and dividing the total number of survey responses. We use our NPS to gauge both customer satisfaction and the willingness to recommend our product to others
See appendix for a definition on Annual Recurring Revenue. Free cash flow margin is a non-GAAP financial metric. For more information about free cash flow margin and a reconciliation of net cash provided by operating activities to free cash flow margin, see appendix.
Q1 2022 Forrester Wave Leader
New-School Security
Awareness SaaS Platform
$81M
Q2 2022 Revenue
25%+ H1 2022
Free Cash Flow Margin
85%+ Q2 2022
Gross Margins
36%+ Q2 2022
YoY Revenue Growth
$328M
Q2 2022 ARR
36%+ Q2 2022
YoY ARR Growth
Strong Net Promoter Score
76
KnowBe4 Snapshot

6. ©2022 KnowBe4
6
Application traffic
inspection
Identity Web Endpoint Human
Network
Verified identity
for all business
applications
Decentralized and
distributed
enterprise IT
Behavior-based
signature-less
protection
Cloud-based security
awareness platform
Completing the Next Paradigm: Security Awareness

7. ©2022 KnowBe4
7
Balanced Growth at Scale
80K
20K
0K
10K
30K
40K
50K
60K
70K
90K
KnowBe4 ARR Distribution
(as of June 30th, 2022)
48%
52%
Enterprise ARR
SMB ARR
Customer Count
(as of June 30th, 2022)
Zscaler Customer Count: https://ir.zscaler.com/static-files/945e5e89-15fa-4bb0-a264-853633c53859
Okta Customer Count: https://investor.okta.com/static-files/1aa6d999-32a7-44a8-b815-6676ca1f92af
Crowdstrike Customer Count: https://ir.crowdstrike.com/static-files/547e5c92-3594-4eef-9dfc-9eca37b635f4
Palo Alto Customer Count: https://www.paloaltonetworks.com/about-us
52.2K+
$328M
ARR

8. 4,000+
Ransomware
attacks
occur daily
Verizon’s 2022 Data
Breach Investigations
Report found that 82%
of data breaches
involved a human
element
Reported Phishing Attacks
Q1 2020 Q1 2021 Q1 2022
200K
400K
600K
800K
1000K
82%
that will result
Gartner predicts that 30% of critical
infrastructure organizations will experience a
security breach by 2025
security breach by
Gartner predicts that of critical
in the halting of operations
APWG reported over
1 Million phishing
attacks in Q1 2022 –
the highest ever
reported, tripling
early 2020
…that’s over
one attack
every eight
seconds
92%
of
organizations
who paid
ransom do not
get all their
data restored
7.3 Days
The average number of
days a ransomware
incident lasts
$265
Billion
The estimated
annual global cost
of ransomware by
2031, with a new
attack occuring
every two seconds
Globally, 1/3rd of
Organizations
Experience Ransomware
Attacks Weekly
Verizon
Source: Source: FBI
APWG
Source: Sophos
Source:
Coveware
Source:
Cybersecurity Ventures
Source:
Telstra
Source:
Gartner
Source:

9. ©2022 KnowBe4
9 Source: Verizon 2022 Data Breach Investigations Report
https://www.verizon.com/business/resources/reports/2022/dbir/2022-data-breach-investigations-report-dbir.pdf
Verizon 2022 Data Breach Investigations Report
“The human element continues to drive breaches. This
year 82% of breaches involved the human element.
Whether it is the Use of stolen credentials, Phishing,
Misuse, or simply an Error, people continue to play a
very large role in incidents and breaches alike.”
“Additionally, malware and stolen credentials provide a
great second step after a social attack gets the actor in
the door, which emphasizes the importance of having
a strong security awareness program.”

10. ©2022 KnowBe4
10
Organizations Globally Have Increased Investment in
Cybersecurity, Yet Breaches Continue to Increase
1. Identity Theft Resource Center
446
656
498
662
419 420
761
780
1,091
1,579
1,257
614
$68
$114
IT
SECURITY
PRODUCTS
SPEND
CY2007 CY2008 CY2009 CY2010 CY2011 CY2012 CY2013 CY2014 CY2015 CY2016 CY2017 CY2018 CY2019 CY2020 CY2021 CY2022 CY2023 CY2024
WORLDWIDE IT SECURITY PRODUCTS SPEND VS. NUMBER OF REPORTED BREACHES1
$BN / # OF BREACHES
WORLDWIDE % of IT SECURITY PRODUCT SPEND2
40%
22%
18%
17%
<3%
NETWORK ENDPOINT WEB IDENTITY HUMAN
2. IDC: Breakdown of worldwide IT security products spend as of 2021.
1,108
1,473
NUMBER OF
REPORTED
BREACHES
1,862
CY2025

11. ©2022 KnowBe4
11
The Regulatory Environment Finally Sees the Light
“Provide practical exercises in literacy training
that simulate events and incidents. Practical
exercises include non-notice social
engineering attempts…”1
“Employee awareness of their network security
obligations and anti-phishing training, in
particular, are critical. Required cybersecurity
awareness training… should include recurrent
phishing training, including how to spot, avoid,
and report phishing attempts.”2
“Reduce the risk of phishing emails from
reaching end users by enabling strong spam
filters and implementing user awareness and
training programs”3
“Meaningful steps taken to reduce the risk of
extortion by a sanctioned actor through adopting
or improving cybersecurity practices… such steps
could include maintaining offline backups of
data, developing incident response plans,
instituting cybersecurity training…”4
US Department
of the Treasury
Implementing initiatives for a “security-minded
culture” by giving all state employees
“continuous phishing training”5
1) NIST: https://csrc.nist.gov/CSRC/media/Publications/sp/800-53/rev-5/final/documents/sp800-53r5-controls.xlsx
2) New York Department of Financial Services https://www.dfs.ny.gov/industry_guidance/industry_letters/il20210630_ransomware_guidance
3) CISA https://www.cisa.gov/sites/default/files/publications/CISA_Fact_Sheet-Protecting_Sensitive_and_Personal_Information_from_Ransomware-Caused_Data_Breaches-508C.pdf
4) US Department of the Treasury https://home.treasury.gov/system/files/126/ofac_ransomware_advisory.pdf
5) California Department of Technology https://cdt.ca.gov/wp-content/uploads/2021/01/2020-Annual-Report-Department-of-Technology.pdf
6) ISO https://www.iso.org/standard/75652.html (Section 7.2.2 Information security awareness, education, and training)
“All employees of the organization and, where,
relevant, contractors and third-party users
should receive appropriate awareness
training and regular updates in organizational
policies…”6

12. ©2022 KnowBe4
12
We Acquired SecurityAdvisor to Reinforce the The Human Layer
Human-Based
Social Engineering Risk
Human-Based
Technical Error Risk
Deep Fakes
Business Email
Compromise
Phishing
SMShing
Endpoint Infection
Web Violation
MFA
Deception at Scale Misuse of Technology
KMSAT
Unsanctioned
Cloud App
Insecure File
Sharing
Data
Leakage

13. ©2022 KnowBe4
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Extension of the Security Budget— Expanding our TAM and Reach
Awareness
Behavior
Culture
Security
IT Security Budget
Security Awareness Training
Phishing Simulation &
Analysis
SOAR Capabilities
SOC Budget
Real-Time Security Behavior
Analysis
Automated SecurityTips
Risky User Targeting
Expected New Category:
Human Detection & Response
SOC Budget Entry Point CIO/CISO Strategic
Improves Existing Security
Layers
Deeper Alliance
Opportunities

14. ©2022 KnowBe4
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Human Detection & Response – Platform Extension
Strategic InfoSec Integration
Correlation of data across the security
stack to reduce incidents and help
establish a stronger security culture
SAT & Phishing Simulation
Users are taught security
fundamentals and tested with
frequent phishing campaigns
Real-Time Coaching
Unsecure user behavior is identified and
remediated in real-time

15. ©2022 KnowBe4
15
KMSAT
Our Core Product- Analyze, assess, and train user security behavior. Launch simulated phishing
campaigns, assign training, and monitor individual user risk scores.
KnowBe4
Platform
PhishER
Our SOAR Product- Uses ML to analyze and prioritize all user-reported phishing attacks.
Includes features to RIP from every inbox and FLIP into a new simulated attack.
Compliance Plus
New-School Compliance Training- Highly engaging, interactive, customizable
content that expands the KMSAT platform with a compliance library.
KCM
Our GRC Product- Assign and document all requirements to keep an
organization compliant. Complete audits in half the time.
Security Coach (H2 2022 Launch Date)
Human Detection & Response- Uses an organization’s
security stack to identify human-based security alerts,
notify end-users, and correct their behavior in real-time.
Machine
Learning
Artificial
Intelligence
Cloud-Based
Software
Advanced Analytics
and Insights
Engaging
Content
Award
Winning
Deeply
Localized
KnowBe4’s Platform Is Purpose-Built to Protect the Human Layer

16. ©2022 KnowBe4
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Complete Suite Manages the Ongoing
Risks of Social Engineering
• Automatic processing from
custom rules
• Automated message disposition
• Continual employee feedback loop
• Risk scoring and tagging for
prioritization of threats
• Automation of security operations
workflow
• Manage and automate
compliance and audit cycles
• Centralize policy distribution and
tracking
• Identify, monitor and remediate risk
• Interactive training modules
• Engaging & effective content
• Continual assessment of
employee behavior
• Evolving threat simulations
based on real-world attacks
• User-centric experience
• Custom attack simulations
• Actionable metrics and insights
into enterprise risk profile
• Ability to tailor additional
training based on results
Security Awareness
• High quality, customizable
content
• Wide variety of topics covered
from discrimination to
workplace safety
Compliance Plus
• Completely automated training
campaigns with extensive
reporting
Click to
Watch Demo

17. ©2022 KnowBe4
17
• Purpose-built to alter human behavior and
continually reinforce secure behaviors
• Strengthens security posture by reducing the
risks of social engineering
• Complements existing security infrastructure
investments
Dedicated Security Awareness Platform
KnowBe4 Makes the Human Layer
the Last Line of Defense
Technology
Misuse
Social
Engineering
SecurityCoach (Q4 2022 Launch Date)
KMSAT Platform

18. ©2022 KnowBe4
18
The KnowBe4 Vision for Security Awareness
THIS PLATFORM DRIVES THE ABC’s – AWARENESS, BEHAVIOR, AND CULTURE
Human Layer
Active User Participation
in Security Posture
Adaptive Learner
Experience
User Behavior Management
Security Orchestration
Compliance
Content Delivery
Platform Automation
Continuous Testing
Increased Awareness For
Infosec and IT Pros
Security Stack
Integrations
= Existing TAM

19. ©2022 KnowBe4
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The Path to $1B+ in ARR
Note: Vertical Industry Distribution Reflects ARR by Industry as of December 31, 2021.
*Graphic not to scale

20. ©2022 KnowBe4
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Highly Efficient Go-to-Market Strategy
Targets the Whole Market
Go-to-Market
Enterprises
Small and
Midsized Businesses
Inside Sales
Greenfield Market
Short Sales Cycle
Strong MSP Presence
Inside Sales
Experienced Reps
Mix of Greenfield and Replacement
• Highly efficient inside sales-driven model translates
across customer segments
• Combination of platform functionality and ease-of-
use scales to enterprise
• Channel partners provide significant sales leverage &
enterprise pull
• Short sales cycle and Greenfield opportunity drives
lower acquisition costs
• Favorable customer unit economics generate
operating leverage

21. ©2022 KnowBe4
21
1. Estimated using the total number of employees in select countries & regions globally, using data from various government data sources from each respective region and country, such as the U.S. Census Bureau and ILSTAT, as compiled by Omdia (formerly Ovum)
2. U.S. component estimated using the total number of employees in United States, using data from U.S. Census Bureau, as complied by Omdia (formerly Ovum); international component estimated using international multiplier implied by domestic and international sizing estimates for
Security Awareness Training and PhishER products
3. Calculated using internal company data over the last 24 month period
TAM
~$23Bn
1,2,3
: (# of employees by org size & geography) x (Avg price per employee)
: (# of organizations by size & geography) x (Avg price per organization)
: (# of employees by org size & geography) x (Avg price per employee)
: (# of employees by org size & geography) x (Avg price per employee)
: (# of employees by org size & geography) x (Avg price per employee)
KMSAT
Significant and Underpenetrated Market Opportunity

22. ©2022 KnowBe4
22
Scale & Recognition
Dedicated Platform
Product
Integration
Organization-wide
implementation
Machine Learning & AI
Reporting &
Analytics
Automated
Training Campaigns
Data Driven Insight
Security
Workstreams
AI/ML
Oriented
Strategic Patent Library
52,200+
Logos
Tens of Millions
of End Users
Expansive Customer Base
Guided by the
Industry’s Best
Award
Winning
Deeply
Localized
Thought Leaders Robust Content Variety
Industry-Recognized Capabilities
Q1 2022
Forrester Wave
Leader
Okta Top 10
App by
Customers
Market Leadership
Further Integration into
Security Ecosystem
More Value from
Security Stack
Vendor
Integration
Go-to-Market
Multi-Product
Leverage
Inside Sales
Team
Strategic Moats

23. ©2022 KnowBe4
23
Global Phishing Campaigns Effectiveness of Content
Human Actions / Behavior
Threat Intel
Immense Dataset Comprised of Billions of Events
Collect External Intelligence
Run Campaigns to Generate User Results
Index
Analyze
Collect Intelligence from Users & Security Stack
Run Campaigns to Change User Behavior
Analyze
Report
Company Risk Scoring
AI/ML
Individual Risk Scoring
One of the Key Strategic Moats of the KnowBe4
Platform

24. ©2022 KnowBe4
24
Reduction in susceptibility
to social engineering attempts
Initial Baseline Phish-Prone
Percentage (Pre-Training):
~6.5x
3 Months Later:
12 Months Later:
17.6%
32.4%
5.0%
0 1 2 3 4 5 6 7 8 9 10 11 12+
PHISH-PRONE
PERCENTAGE
TRAINING PERIOD TOTAL MONTHS SINCE ADOPTION
Source: Derived from KnowBe4 existing customer data; note the initial phish prone percentage is calculated on the basis of all users evaluated. These users had not received any training with the KnowBe4 platform prior to the evaluation.
Subsequent time periods reflect phish prone percentages for the subset of users who received training with the KnowBe4 platform.
For more information on industry and geographic breakdown, visit the full report at the following link: https://info.knowbe4.com/phishing-by-industry-benchmarking-report
Based on 9.5 Million Users
Delivering Quantifiable Results for Customers

25. ©2022 KnowBe4
25
…and Awarded
Across the Industry
KnowBe4 is now part of
the Top Ten Most
Popular Apps by Number
of Customers… “up a jaw-
dropping five notches,
and 56%— the largest
year-over-year growth
from our top 15 most
popular apps.”
Source: Okta Businesses at Work 2022 Report

26. ©2022 KnowBe4
26
Source: https://www.knowbe4.com/security-awareness-customer-reviews As of June 30th ,2022

27. ©2022 KnowBe4
27
…and Awarded
Across the Industry
“As one of the largest and most
established vendors in this space,
KnowBe4 has an enviable growth
trajectory.”
Source: The Forrester Wave™: Security Awareness And Training Solutions, Q1 2022

28. ©2022 KnowBe4
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…and Awarded Across the Industry
Microsoft Azure AD App Gallery
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
RANK 2018 2019 2020
Top 15 Apps by Number of Organizations
Source: Data sourced from applications available in the Azure AD app gallery, December 2020. Microsoft owned applications such as Office 365, Teams, Azure, Dynamics and other Microsoft apps have been excluded.
Salesforce
Google Cloud/Google Workspace
ServiceNow
Amazon Web Services (AWS)
Atlassian Cloud
Adobe Creative Cloud
Dropbox Business
Box
Freshservice
Zoom
SAP Concur
KnowBe4 Security Awareness Training
Citrix ShareFile
Slack
Zendesk
Salesforce
Google Cloud/Google Workspace
ServiceNow
Adobe Creative Cloud
Amazon Web Services (AWS)
Zoom
Atlassian Cloud
KnowBe4 Security Awareness Training
Freshservice
Box
Dropbox Business
SAP Concur
Slack
Zendesk
Citrix ShareFile
Zoom
Salesforce
Google Cloud/Google Workspace
ServiceNow
KnowBe4 Security Awareness Training
Atlassian Cloud
Amazon Web Services (AWS)
Docusign
Freshservice
Mimecast Personal Portal
Cisco Webex
Palo Alto Networks Prism Access
Box
Dropbox Business
Zendesk
Microsoft Azure 2020 Report
Education
Human
Resources
The Most Popular Apps by Category
Source: Data sourced from applications available in the Azure AD app gallery, December 2020. Microsoft owned applications such as Office 365, Teams, Azure, Dynamics and other Microsoft apps have been excluded.
Canvas
IT Service
Management
Data
Services
Clever
Blackboard
Learn
Brightspace by
Desire2Learn
Apple School
Manager
Workday
SAP Success
Factors
Cornerstone
OnDemand
UltiPro
Kronos
Palo Alto Networks
Prisma Access
Zscaler Private
Access (ZPA)
Cisco AnyConnect
Citrix ADC
ServiceNow
Freshservice
TOPdesk
Dialpad
Ivanti Service
Manager (ISM)
Tableau
Domo
SAP Analytics
Cloud
Splunk Enterprise
and Splunk Cloud
Snowflake
KnowBe4 Security
Awareness Training
Security
Source: Microsoft Azure Report 2020
https://www.microsoft.com/security/blog/2021/01/27/the-state-of-apps-by-microsoft-identity-azure-ad-app-gallery-apps-that-made-the-most-impact-in-2020/

29. ©2022 KnowBe4
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Financials

30. ©2022 KnowBe4
30
Significant Scale
$81Million
Revenue
Rapid Growth
36%
YoY Revenue Growth
Attractive
Margins
85%+
Gross Margin
25%+
H1 2022 Free Cash Flow Margin
$328 Million
ARR
36%
YoY ARR Growth
All financial and operating metrics are as of and for the period ended June 30, 2022
See Appendix for the definition of ARR. For more information about Free Cash Flow margin and a reconciliation of net cash provided by operating activities to free cash flow margin, see Appendix
Financial Highlights
(as of and for the period ended June 30th,2022)

31. ©2022 KnowBe4
31
NUMBER OF CUSTOMERS
ANNUAL RECURRING REVENUE
(ARR)
22.5K
30.3K
36.8K
47.2K
52.2K
2020
2018 Q2 2022
2019 2021
+28%
$89M
$145M
$198M
$285M
$328M
Q2 2022
2020
2018 2019 2021
+48%
Q2 2019 Q2 2020 Q2 2021 Q2 2022
$28M
$41M
$59M
$81M
+49%
+43%
+36%
GAAP REVENUE
Strong and Consistent Growth in Revenue and
Customer Base
See Appendix for definition of Customers and Annual Recurring Revenue

32. ©2022 KnowBe4
32 See Appendix for definitions on logo retention rate and net dollar retention rate
RevenueDurabilitySupportedby
FavorableRetention Dynamics
90%+
FY 2021 Logo
Retention Rate for
Both SMB & Enterprise
108%
FY 2021 Net Dollar
Retention Rate
$240M
$200M
$120M
$280M
$0M
$160M
$40M
$80M
$320M
$360M
Q4 17 Q3 19
2022
Q1 18
Q2 17
Q1 17
2019
Q3 17 Q2 18 Q3 18 Q4 18 Q1 19 Q2 20
Q2 19 Q4 19 Q1 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22
Pre 2017
2017
2018
2020
2021
Q2 22
ARR

33. ©2022 KnowBe4
33
Customers With Multiple Products
% of Total Accounts
1.2%
7.7%
13.7%
22.1%
26.3%
2019
2018 2020 2021 Q2 2022
260
2,337
5,048
10,425
13,725
2021 Q2 2022
2018 2019 2020
+242%
Total Customers With Multiple
Products
Proven Up/Cross Sell Ability with Room to Grow

34. ©2022 KnowBe4
34
The Rule of 40 is a principle stating that a company’s combined growth rate and profit margin should be equal to or greater than 40%. We calculate this metric (which we refer to as our “Rule of 40”) for a
given period by taking the some of (i) the Year-over-Yar growth rate of ARR as of the end of that period and (ii) free cash flow margin for that period. Our management believes that Rule of 40 is a useful
metric in assessing trade-offs of balancing growth and profitability as we scale.
See Appendix for a definition of ARR. For more information about free cash flow margin and a reconciliation of net cash provided by operating activities to free cash flow margin, see Appendix
64.0
36.5
43.9
15.7
21.0
28.9
H1 2022
2019
Free Cash Flow Margin
36.5
2020 2021
27.3
ARR YoY Growth
40
79.7
72.8
57.5
63.8
Long-Term Balance of Growth and Profitability:
Greater than Rule of 40
Rule of 40
(Sum of YoY ARR growth rate and Free Cash Flow Margin, in %)

35. ©2022 KnowBe4
35
Gross Margins Non-GAAP Op. Margins* Free Cash Flow Margins*
Steadily Improving
Expanding
Remain High
For more information about non-GAAP operating margin and free cash flow margin and a reconciliation of each to the most directly comparable GAAP financial measure, please see the appendix
83.1% 82.9%
84.7%
85.7%
86.5%
H1 2022
2019 2020
2018 2021
-10.8%
-5.7%
2.3%
11.5%
12.8%
H1 2022
2019
2018 2021
2020
11.6%
15.7%
21.0%
28.9%
27.3%
2019
2018 2020 2021 H1 2022
Expanding Margin Profile

36. ©2022 KnowBe4
36
Appendix

37. ©2022 KnowBe4
37
Non-GAAP Reconciliations
FREE CASH
FLOW
NET CASH PROVIDED
BY OPERATING
ACTIVITES
LESS: PURCHASES OF
PROPERTY AND
EQUIPMENT
LESS: CAPITALIZED
INTERNAL- USE
SOFTWARE
LESS: PAYMENTS ON
PRINCIPAL OF FINANCE
LEASES
$14.1M
-$0.5M
-$0.8M
$0.0M
$12.8M
2Q21
$44.9M
-$5.4M
-$2.7M
$0.0M
$36.7M
2020
-
$29.7M
-$5.6M
-$5.2M
$18.9M
2019
$21.9M
-$0.5M
-$0.4M
$0.0M
$21.0M
1Q21
$19.9M
-$1.2M
-$0.8M
$0.0M
$17.9M
3Q21
$21.0M
-$0.8M
-$0.6M
$0.0M
$19.6M
4Q21
$25.1M
-$1.0M
-$0.7M
$0.0M
$23.4M
1Q22
$22.3M
-$1.6M
-$1.5M
$0.0M
$19.1M
2Q22
FREE CASH
FLOW Margin
21.6%
21.0%
15.7% 39.1% 27.9% 28.2% 31.1% 23.7%

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38
Non-GAAP Reconciliations
Revenues
GAAP Operating Income
Add: Stock-Based
Compensation Expense
Add: Amortization of
Acquired Intangible Assets
Add: Acquisition and
Integration Related Costs
Non-GAAP Operating Income
Non-GAAP Operating Margin
2Q21
$59.4M
-$15.8M
$18.9M
$0.3M
$1.1M
$4.5M
7.6%
2020
$174.9M
-$1.5M
$5.2M
$0.3M
$0.0M
$4.0M
2.3%
2019
$120.6M
-$125.5M
$118.1M
$0.2M
$0.3M
-$6.9M
-5.7%
1Q21
$53.6M
$2.8M
$1.7M
$0.2M
$1.3M
$5.9M
11.0%
3Q21
$64.1M
-$0.7M
$2.7M
$0.3M
$0.6M
$3.0M
4.6%
4Q21
$69.3M
$7.1M
$6.1M
$0.6M
$1.2M
$15.1M
21.7%
$75.0M
$2.6M
$5.6M
$0.8M
$0.0M
1Q22
$9.0M
12.0%
$80.8M
$2.8M
$7.0M
$1.1M
$0.0M
2Q22
$11.0M
13.6%

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39
Explanation of Non-GAAP Financial Measures
To supplement our financial information presented in accordance with generally accepted accounting principles in the United States ("GAAP"), we consider certain
financial measures that are not prepared in accordance with GAAP, including [non-GAAP gross profit, non-GAAP gross margin ], non-GAAP operating income (loss), non-
GAAP operating margin, free cash flow and free cash flow margin, as useful in evaluating our operating performance.
Non-GAAP Gross Profit and Non-GAAP Gross Margin
We define non-GAAP gross profit as GAAP gross profit excluding stock-based compensation expense, amortization of acquired intangible assets and acquisition and
integration related costs. Costs associated with acquisitions and integration include legal, accounting and other professional fees, changes in the fair value of contingent
consideration obligations and other costs related to the transition of the acquired business. We believe non-GAAP gross profit and non-GAAP gross margin provide our
management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of our results of operations,
as these metrics generally eliminate the effects of certain variables unrelated to our overall operating performance.
Non-GAAP Operating Income (Loss) and Non-GAAP Operating Margin
We define non-GAAP operating income (loss) as GAAP operating income (loss) excluding stock-based compensation expense, amortization of acquired intangible assets
and acquisition and integration related costs. Costs associated with acquisitions and integration include legal, accounting and other professional fees, changes in the fair
value of contingent consideration obligations and other costs related to the transition of the acquired business. We believe non-GAAP operating income (loss) provides
our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this
metric generally eliminates the effects of certain variables unrelated to our overall operating performance. Non-GAAP operating margin is calculated as non-GAAP
operating income (loss) divided by revenue.
Free Cash Flow and Free Cash Flow Margin
We define free cash flow as net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, less purchases
of property, equipment, amounts capitalized for internal-use software and principal payments on finance leases. We believe that free cash flow is a meaningful indicator
of liquidity to management and investors about the amount of cash generated from our operations that, after the investments in property, equipment and capitalized
internal-use software, can be used for strategic initiatives. Free cash flow margin is calculated by dividing free cash flow by revenues.
These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These
non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures
presented by other companies.

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40
Explanation of Metrics
In addition to GAAP measures of performance, we regularly monitor certain financial and operating metrics, including Number of Customers, Annual Recurring Revenue (ARR),
Net Dollar Retention Rate and Logo Retention Rate, in order to measure our current performance and estimate our future performance. We regularly review and may adjust our
processes for calculating our internal metrics to improve their accuracy.
Number of Customers
We define a customer as a separate and distinct buying entity, such as a company, an educational or government institution or a distinct business unit of a large company that
has an active contract with us to access our platform. We do not consider our channel partners as separate customers as our contracts are executed with the end user, and we
treat MSPs, who may purchase our products on behalf of multiple companies, as a single customer. We believe that our ability to increase and retain the number of customers on
our platform is an indicator of our market penetration, the growth of our business and potential future business opportunities.
Annual Recurring Revenue
We define ARR as the annualized value of all contractual subscription agreements as of the end of the period. We perform this calculation on an individual contract basis by
dividing the total dollar amount of a contract by the total contract term stated in months and multiplying this amount by twelve to annualize. Calculated ARR for each individual
contract is then aggregated to arrive at total ARR. We believe that ARR is a key metric to measure our business performance because it is driven by our ability to acquire new
customers and to maintain and expand our relationship with existing customers.
Net Dollar Retention Rate
We define net dollar retention rate as ARR at the end of the current reporting period for customers who were also active at the end of the same reporting period in the prior year
divided by ARR for the same reporting period in the prior year. Our net dollar retention rate measures our ability to increase revenue across our existing customer base through
expanded use of our platform, offset by customers whose subscriptions with us are not renewed or are renewed at a lower amount. We believe the momentum in net dollar
retention over prior periods reflects the investments we have made across our platform and within our customer success teams. Our management believes net dollar retention
rate is an indicator of our ability to cross sell our products and has become increasingly important as we have expanded our platform through the introduction of new products.
Logo Retention Rate
We calculate our logo retention rate as the number of customers with an active contract at the end of the current reporting period who were also active customers at the end of
the same reporting period of the prior year divided by the number of active customers at the end of the same reporting period of the prior year. Our logo retention rate
measures our ability to keep selling to our existing customer base, offset by customers who do not renew their subscriptions with us.
Additional Definitions
SMB: We define SMB in the context of our customer base as customers that have fewer than 1,000 employees
Enterprise: We define enterprise in the context of our customer base as customers that have 1,000 or more employees