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EverCommerce Announces Third Quarter 2023 Financial Results

DENVER, Nov. 06, 2023 (GLOBE NEWSWIRE) -- EverCommerce Inc. ("EverCommerce" or the "Company") (NASDAQ: EVCM), a leading service commerce platform, today announced financial results for the quarter ended September 30, 2023.

Third Quarter 2023 Financial Highlights

  • Revenue of $174.7 million, an increase of 10.5% compared to $158.1 million for the quarter ended September 30, 2022.
  • Subscription and transaction fee Revenue of $132.6 million, an increase of 10.5% compared to $120.1 million for the quarter ended September 30, 2022.
  • Net loss was $0.6 million, or $(0.00) per basic and diluted share, for the quarter ended September 30, 2023, compared to net loss of $15.9 million, or $(0.08) per basic and diluted share, for the quarter ended September 30, 2022.
  • Adjusted EBITDA was $41.8 million for the quarter ended September 30, 2023, compared to $30.2 million for the quarter ended September 30, 2022.

“EverCommerce continues to advance its goal of being the leading provider of vertical software for service SMBs,” said Eric Remer, EverCommerce’s Founder and CEO. “Despite modest macroeconomic pressures in the more transactional aspects of our business, we delivered revenue growth that was within our target range and Adjusted EBITDA that exceeded the top end of guidance. Third quarter Adjusted EBITDA grew 38.6% year-over-year, representing 485 basis points of margin expansion.”

A reconciliation of GAAP to Non-GAAP measures has been provided in the financial statement tables included at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Share Repurchases

On November 5, 2023, our Board of Directors approved a $50.0 million increase in the previously announced stock repurchase authorization and extended the authorization through December 31, 2024. The total authorization since the repurchase program began allows for the purchase up to $150.0 million in shares of the Company’s common stock.

The Company repurchased and retired 160,000 shares of common stock for approximately $1.6 million during the three months ended September 30, 2023. As of September 30, 2023, $16.0 million remained available under the Repurchase Program.

Repurchases under the program may be made from time to time in the open market at prevailing market prices or in negotiated transactions off the market. Open market repurchases will be structured to occur within the pricing and volume requirements of Rule 10b-18. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This program does not obligate the Company to acquire any particular amount of common stock and the program may be extended, modified, suspended or discontinued at any time at the Company’s discretion. The Company expects to fund repurchases with cash on hand.

Business Outlook

Based on information as of today, November 6, 2023, the Company is issuing the following financial guidance for the fourth quarter and full year 2023.

Fourth Quarter 2023:

  • Revenue is expected to be in the range of $170 million to $174 million.
  • Adjusted EBITDA is expected to be in the range of $35.5 million to $39.5 million.

Full Year 2023:

  • Revenue is expected to be in the range of $676 million to $680 million.
  • Adjusted EBITDA is expected to be in the range of $148 million to $152 million.

A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to certain charges excluded from this non-GAAP measure; in particular, the measures and efforts of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. It is important to note that these charges could be material to EverCommerce's results computed in accordance with GAAP.

Conference Call Information

EverCommerce’s management team will hold a conference call to discuss our third quarter 2023 results and outlook today, November 6, 2023, at 5:00 p.m. ET. Please visit the "Investor Relations" page of the Company's website (https://investors.evercomerce.com) for both telephonic and webcast access to this call as well as a copy of the presentation materials used on the call. An archive replay will be available following the conclusion of the call.

Investor Contact
Brad Korch
SVP and Head of Investor Relations
720-796-7664
IR@evercommerce.com

Media Contact
Jeanne Trogan
VP of Communications
737-465-2897
Press@evercommerce.com

About EverCommerce

EverCommerce (Nasdaq: EVCM) is a leading service commerce platform, providing vertically-tailored, integrated SaaS solutions that help more than 685,000 global service-based businesses accelerate growth, streamline operations, and increase retention. Its modern digital and mobile applications create predictable, informed, and convenient experiences between customers and their service professionals. With its EverPro, EverHealth, and EverWell brands specializing in Home, Health, and Fitness & Wellness service industries, EverCommerce provides end-to-end business management software, embedded payment acceptance, marketing technology, and customer experience applications. Learn more at EverCommerce.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our future operations and financial results, the underlying trends in our business and the macroeconomic environment, our market opportunity, our potential for growth and our strategy. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our limited operating history and evolving business; our recent growth rates may not be sustainable or indicative of future growth; we may not achieve profitability in the future; we may continue to experience significant quarterly and annual fluctuations in our operating results due to a number of factors, which makes our future operating results difficult to predict; we may reduce our rate of acquisitions and may be unsuccessful in achieving continued growth through acquisitions; revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets; we may need to incur additional indebtedness or seek capital through new equity or debt financings, which may not be available to us on acceptable terms or at all; we may not be able to continue to expand our share of our existing vertical markets or expand into new vertical markets; we face intense competition in each of the industries in which we operate; the industries in which we operate are rapidly evolving and the market for technology-enabled services that empower SMBs is relatively immature and unproven; we are dependent on payment card networks and payment processors and if we fail to comply with the applicable requirements of our payment network or payment processors, they can seek to fine us, suspend us or terminate our registrations through our bank sponsors; the inability to keep pace with rapid developments and changes in the electronic payments market or are unable to introduce, develop and market new and enhanced versions of our software solutions; real or perceived errors, failures or bugs in our solutions; unauthorized disclosure, destruction or modification of data, disruption of our software or services or cyber breaches; our estimated total addressable market is subject to inherent challenges and uncertainties; actual or perceived inaccuracies in our operational metrics may harm our reputation; failure to effectively develop and expand our sales and marketing capabilities; failure to maintain and enhance our reputation and brand recognition; inability to retain current customers or to sell additional functionality and services to them may adversely affect our revenue growth; our systems and our third-party providers’ systems may fail or our third-party providers may discontinue providing their services or technology or to us specifically; faster growth of lower margin solutions and services than higher margin solutions and services; risks related to COVID-19; economic and political risks, including the business cycles of our clients and changes in the overall level of consumer and commercial spending; our ability to retain and hire skilled personnel; risks related to our indebtedness; risks related to our material weakness and internal control over financial reporting; risks related to the increasing focus on environmental sustainability and social initiatives; our ability to adequately protect or enforce our intellectual property and other proprietary rights; risk of patent, trademark and other intellectual property infringement claims; risks related to governmental regulation; risks related to our sponsor stockholders agreement and qualifying as a “controlled company” under the rules of The Nasdaq Stock Market; as well as the other factors described in our Annual Report on Form 10-K for the year ended December 31, 2022 and updated by our other filings with the SEC. These factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

Non-GAAP Financial Measures

EverCommerce has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). EverCommerce uses these non-GAAP financial measures internally in analyzing its financial results and believes that use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing EverCommerce’s financial results with other companies in its industry, many of which present similar non-GAAP financial measures.

Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with EverCommerce’s consolidated financial statements prepared in accordance with GAAP. A reconciliation of EverCommerce’s historical non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.

Adjusted Gross Profit. Adjusted Gross Profit is a key performance measure that our management uses to assess our operational performance, as it represents the results of revenues and direct costs, which are key components of our operations. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it reflects the gross profitability of our operations, and excludes the indirect costs associated with our sales and marketing, product development, general and administrative activities, and depreciation and amortization, and the impact of our financing methods and income taxes.

Gross profit is calculated as total revenue less cost of revenue (exclusive of depreciation and amortization), amortization of developed technology, amortization of capitalized software and depreciation expense (allocated to cost of revenues). We calculate Adjusted Gross Profit as gross profit adjusted to exclude depreciation and amortization allocated to cost of revenues. Adjusted Gross Profit should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other GAAP measures of income (loss) or profitability.

Adjusted EBITDA. Adjusted EBITDA is a key performance measure that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods. In addition, we believe that providing Adjusted EBITDA, together with a reconciliation of net income (loss) to Adjusted EBITDA, helps investors make comparisons between our company and other companies that may have different capital structures, different tax rates, and/or different forms of employee compensation.

Adjusted EBITDA is used by our management team as an additional measure of our performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of net income or income from continuing operations. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees. Our Management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies.

We calculate Adjusted EBITDA as net loss adjusted to exclude interest and other expense, net, income tax expense (benefit), depreciation and amortization, other amortization, acquisition related costs and non-recurring costs, and stock-based compensation. Other amortization includes amortization for capitalized contract acquisition costs. Acquisition related costs and non-recurring costs are specific deal-related costs such as legal fees, financial and tax due diligence, consulting and escrow fees as well as expenses such as system implementation costs and severance related to planned restructuring activities. Acquisition related and non-recurring costs are excluded as they are not representative of our underlying operating performance. Adjusted EBITDA should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other GAAP measures of income (loss).


EverCommerce Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share and share amounts)
(unaudited)
 September 30, December 31,
  2023   2022 
    
Assets   
Current assets:   
Cash and cash equivalents$87,335  $92,625 
Restricted cash 3,488   3,199 
Accounts receivable, net of allowance for expected credit losses of $6.3 million and $4.7 million at September 30, 2023 and December 31, 2022, respectively 50,725   48,032 
Contract assets 13,233   12,971 
Prepaid expenses and other current assets 24,480   23,760 
Total current assets 179,261   180,587 
Property and equipment, net 10,261   11,930 
Capitalized software, net 40,607   32,554 
Other non-current assets 46,563   46,855 
Intangible assets, net 340,841   405,720 
Goodwill 923,766   914,082 
Total assets 1,541,299   1,591,728 
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$8,354  $8,373 
Accrued expenses and other 57,935   56,963 
Deferred revenue 24,639   22,885 
Customer deposits 12,188   11,360 
Current maturities of long-term debt 5,500   5,500 
Total current liabilities 108,616   105,081 
Long-term debt, net of current maturities and deferred financing costs 527,762   530,946 
Other non-current liabilities 42,765   49,008 
Total liabilities 679,143   685,035 
Commitments and contingencies   
Stockholders’ equity:   
Preferred stock, $0.00001 par value, 50,000,000 shares authorized and no shares issued or outstanding as of September 30, 2023 and December 31, 2022     
Common stock, $0.00001 par value, 2,000,000,000 shares authorized and 188,927,445 and 191,447,237 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively 2   2 
Accumulated other comprehensive loss (12,919)  (10,198)
Additional paid-in capital 1,471,713   1,489,935 
Accumulated deficit (596,640)  (573,046)
Total stockholders’ equity 862,156   906,693 
Total liabilities and stockholders’ equity$1,541,299  $1,591,728 


EverCommerce Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share and share amounts)
(unaudited)

 Three months ended
September 30,
 Nine months ended
September 30,
  2023   2022   2023   2022 
        
Revenues:       
Subscription and transaction fees$132,640  $120,085  $386,765  $343,734 
Marketing technology solutions 36,838   36,276   103,081   101,340 
Other 5,263   1,765   16,083   13,874 
Total revenues 174,741   158,126   505,929   458,948 
Operating expenses:       
Cost of revenues (exclusive of depreciation and amortization presented separately below) 61,471   57,655   175,602   163,503 
Sales and marketing 30,086   29,440   91,660   89,531 
Product development 19,318   18,508   56,352   53,568 
General and administrative 31,538   32,164   101,553   96,748 
Depreciation and amortization 26,035   27,613   77,975   82,524 
Total operating expenses 168,448   165,380   503,142   485,874 
Operating income (loss) 6,293   (7,254)  2,787   (26,926)
Interest and other expense, net (6,666)  (8,890)  (26,615)  (21,070)
Net loss attributable to common stockholders before income tax (expense) benefit (373)  (16,144)  (23,828)  (47,996)
Income tax (expense) benefit (241)  291   1,543   5,953 
Net loss attributable to common stockholders (614)  (15,853)  (22,285)  (42,043)
Other comprehensive loss:       
Foreign currency translation losses, net (1,940)  (6,978)  (2,721)  (15,811)
Comprehensive loss attributable to common stockholders$(2,554) $(22,831) $(25,006) $(57,854)
Basic and diluted net loss per share attributable to common stockholders$  $(0.08) $(0.12) $(0.22)
Basic and diluted weighted-average shares of common stock outstanding used in computing net loss per share 188,805,421   194,542,764   189,039,709   195,205,260 


EverCommerce Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

 Nine months ended
September 30,
  2023   2022 
    
Cash flows provided by operating activities:   
Net loss$(22,285) $(42,043)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation and amortization 77,975   82,524 
Stock-based compensation expense 19,610   19,776 
Deferred taxes (2,066)  (6,855)
Amortization of deferred financing costs and non-cash interest 1,240   1,622 
Bad debt expense 5,285   2,362 
Other non-cash items (4,807)  1,583 
Changes in operating assets and liabilities:   
Accounts receivable, net (9,145)  (11,722)
Prepaid expenses and other current assets (1,331)  (7,151)
Other non-current assets 4,511   (1,313)
Accounts payable (62)  (1,450)
Accrued expenses and other 1,436   (1,308)
Deferred revenue 1,514   2,503 
Other non-current liabilities (3,288)  (916)
Net cash provided by operating activities 68,587   37,612 
Cash flows used in investing activities:   
Purchases of property and equipment (2,140)  (2,155)
Capitalization of software costs (14,727)  (11,440)
Acquisition, net of cash acquired (14,959)   
Net cash used in investing activities (31,826)  (13,595)
Cash flows used in financing activities:   
Payments on debt (4,125)  (6,125)
Exercise of stock options 1,982   1,675 
Proceeds from common stock issuance for Employee Stock Purchase Plan 1,765   1,754 
Repurchase and retirement of common stock (41,268)  (21,863)
Net cash used in financing activities (41,646)  (24,559)
Effect of foreign currency exchange rate changes on cash (116)  (1,796)
Net decrease in cash and cash equivalents and restricted cash (5,001)  (2,338)
Cash and cash equivalents and restricted cash:   
Beginning of period 95,824   97,559 
End of period$90,823  $95,221 
    
Supplemental disclosures of cash flow information:  
Cash paid for interest$34,112  $19,460 
Cash paid for income taxes$2,939  $1,950 


 Three months ended
September 30,
 Nine months ended
September 30,
  2023  2022  2023  2022
 (in thousands)
        
Reconciliation from Gross Profit to Adjusted Gross Profit:       
Gross profit$106,886 $95,027 $311,939 $278,847
Depreciation and amortization 6,384  5,444  18,388  16,598
Adjusted gross profit$113,270 $100,471 $330,327 $295,445


 Three months ended
September 30,
 Nine months ended
September 30,
  2023   2022   2023   2022 
 (in thousands)
        
Reconciliation from Net loss to Adjusted EBITDA:       
Net loss$(614) $(15,853) $(22,285) $(42,043)
Adjusted to exclude the following:       
Interest and other expense, net 6,666   8,890   26,615   21,070 
Income tax expense (benefit) 241   (291)  (1,543)  (5,953)
Depreciation and amortization 26,035   27,613   77,975   82,524 
Other amortization 1,431   1,093   4,184   3,063 
Stock-based compensation expense 5,855   7,133   19,610   19,776 
Acquisition-related and other non-recurring costs 2,190   1,570   7,985   5,429 
Adjusted EBITDA$41,804  $30,155  $112,541  $83,866 

 


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