EverCommerce Inc.

Thank you for standing by and welcome to EverCommerce fiscal year 2021 fourth quarters earnings call. My name is Carmen and I will be your operator for today. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To participate during the session, you must press the star then the number one on your telephone. As a reminder, this conference call is being recorded today, Monday, March 14, 2022. And now I would like to turn the conference over to Brad Kort, Senior Vice President and Head of Investor Relations for EverCommerce. Please go ahead.

Good afternoon, and thank you for joining. Today's call will be led by Eric Reamer, EverCommerce's Chairman and Chief Executive Officer, and Mark Thompson, EverCommerce's Chief Financial Officer. Joining them for the Q&A portion of the call is EverCommerce's president, Matt Feierstein. This call is being webcast with a slide presentation that reviews the key financial and operating results for the three months and year ended December 31st, 2021. For a link to the live or replay webcast, please visit the investor relations section of the EverCommerce website, www.evercommerce.com. The slide presentation and earnings release are also directly available on the site. Please turn to page two of our earnings call presentation while I review our safe harbor statement. Statements made on this call and contained in the earnings materials available on our website that are not historical in nature may constitute forward-looking statements. Such statements are based on the current expectations and beliefs of management. Actual results may differ materially from these forward-looking statements due to risks and the uncertainties that are described in more detail in our filings with the SEC. We undertake no obligation to publicly update or revise these forward-looking statements, except as required by law. We will also refer to certain non-GAAP financial measures to provide additional information to you, our investors. Our reconciliation of non-GAAP to GAAP historical measures is provided in both our earnings press release and our earnings call presentation. I will now turn the presentation over to our CEO, Eric Reamer.

Thank you, Brad. I'm excited to share with you that EverCommerce reported excellent fourth quarter results that capped a great year for the company and exceeded revenue and EBITDA guidance. EverCommerce is delivering on its strategy to be a leading provider of service commerce solutions, simplifying and empowering the lives of business owners across the globe. On today's call, I will summarize our investment thesis. highlight fourth quarter results, and discuss our key priorities for 2022 before turning our call over to Mark to dive deeper into our financials. EverCommerce provides tailored end-to-end SaaS solutions that support the highly diverse workflows and customer interactions that professionals in home services, health services, and fitness and wellness services need to automate manual processes, generate new business, and create more loyal customers. With a diverse set of over 600,000 global customers, EverCommerce is leading the digital transformation of the service economy. EverCommerce generates nearly half a billion dollars in annual revenue. Further, we are among an elite group of growth-focused software companies that balance durable growth with sustainable profitability. We grew revenue 45% in 2021, which is inclusive of 21% pro forma organic growth. We did this while maintaining 22% adjusted EBITDA margins. Supporting this growth and profitability are strong customer economics illustrated through a high LTV to CAC ratio. We have a massive market opportunity with one of the largest dressable markets in software and technology. There are over 400 million SMBs and over a trillion dollar market opportunity globally. In the U.S. alone, with the vast majority of our businesses, there is an over half a trillion dollar opportunity and more than 30 million businesses. Services are the backbone of the U.S. economy, accounting for 77% of U.S. GDP, and small businesses employ the majority of service professionals. By focusing and serving the vast community of service businesses that support consumers, homeowners, patients, and members of the local communities, EverCommerce is transforming the service economy. EverCommerce offers tremendous value to our customers by providing solutions tailored to the unique workflows and interactions that various service types require. From a plumber to a doctor to a yoga instructor, the way in which they generate new business, fulfill services, manage day-to-day operations, and engage with customers is very unique. Our software solutions not only provide the system of actions necessary to run our customers' daily business processes, but but also the marketing solutions to attract new businesses, the billing and payment solutions to collect effortlessly, and the customer engagement solutions to create predictable and convenient experiences. Our solutions are cost-effective, easy to implement, and purpose-built for service businesses. We truly provide end-to-end solutions that these businesses need to compete and grow in a marketplace that is rapidly transforming. Looking at our key verticals, which are home services, health services, and fitness and wellness services, all of them independently have very large TAMs. Even with the growth we've experienced, globally we've penetrated less than 0.1% of the market and domestically just over 1%. As you know, we are focused on penetrating these verticals through a deliberate and tiered marketing and brand strategy that maximizes the legacy benefits of our solutions brands and while building awareness and consolidated customer focus for EverPro, EverHealth, and EverWell brands in their respective target verticals. Continued investment in these brands and consolidation of acquired brands enhance our cross-sell effectiveness, customer experience, and overall scalability. Our strong performance in the fourth quarter and for the full year validates our strategy. In the fourth quarter, we reported 47% year-over-year revenue growth, which included 24% pro forma organic growth. For the year, we drove more than 20% customer growth, and our total payment volume, or TPV, increased 21%. We balanced our durable growth with sustained profitability and free cash flow generation. In the fourth quarter, we reported 22% adjusted EBITDA margins and 16% adjusted unlevered free cash flow margins. Our operational momentum continued to accelerate with great progress on our onboarding of Dr. Crono and other solutions according to 2021. Continued centralization of operational functions, integration of solutions and operational platforms, and investment in brand consolidations have supported both new customer acquisition and ARPU expansion. We also continue to make the investments necessary to stand our growth, scale operations, and operate as a public company. As I mentioned earlier, we have a large base of diverse customers. We ended the year with approximately 617,000 customers, an increase of more than 20% year-over-year. One of the powerful levers in our business model is the massive embedded opportunity to provide additional integrated solutions into our vertical software systems of actions, facilitating upsell and cross-sell with our customers. For the full year, we estimate that the average solutions ARPU expanded approximately 15% compared to the prior year. On an annualized basis, our net revenue retention was approximately 100% in Q4. We ended the year with more than 55,000 of our customers using more than one solution from EverCommerce and more than 25% increase year-over-year. We've barely scratched the surface of our estimated $5 billion embedded annual revenue opportunity. I'd like to spend a moment to drill deeper into the specific opportunity we have with our integrated billing and payment solutions. Facilitating a frictionless payment process is mission critical for any small business. Consumers have come to expect payment for products or services to be digital, easy to use, mobile friendly, and secure. For business owners, a seamless payment process means higher conversion rates, better efficiency, accelerated cash receipts, and increased revenue. Everconverse payment solutions provide an intuitive front-end experience for consumers and is tightly embedded within our various software applications. Increasingly, we see our customers embracing this powerful combination. We ended 2021 with an annualized total payment volume, or TPV, of approximately $9.1 billion, which represents a 21% growth since we first published this metric as part of our S-1 for the period ended March 31, 2021. Facilitating the continued integration and revenue expansion for payment and adjacent marketing and customer engagement solutions via cross-sell is a top priority for us. To support the durability of our growth, we have successfully augmented organic growth with a number of acquisitions that expand our market reach with additional systems of actions that provide new opportunity for customer acquisition and ARPU expansion. We have developed a proven M&A playbook that allows us to quickly onboard new solutions, expand growth momentum, and deploy best practices. Our recent acquisition of Dr. Crono, a leading SaaS practice management, EHR, and billing solution that serves more than 4,600 independent practices and 13,000 providers across various medical specialties, is a great example of our M&A strategy in action. It is accretive to our organic growth profile and significantly expands our market reach and penetration in a key vertical market. In the five months since we acquired Dr. Crono, we are fully on board with this solution, and we are already seeing early positive results cross-selling on one of the Everhouse solutions. We are actively investing in product enhancements in 2022 to fully capitalize on the growth opportunity with Dr. Crono, while also driving better-than-expected cost optimization results as we leverage our centralized operating model. While Dr. Crono still provides a headwind to adjusted EBITDA margin in 2022, we expect it to be adjusted EBITDA neutral this year versus an adjusted EBITDA loss of approximately $4.5 million in 2021 on a pro forma basis. We expect it to be a positive contributor to consolidated adjusted EBITDA in 2023 and beyond as the steps we've taken positions the solution well for strong revenue and profitability growth going forward. Dr. Crono is a great example of the types of acquisitions we will pursue. As always, we have a very active funnel of M&A opportunities that we are evaluating through our acquisition framework. However, as we have stated several times in the past, we view M&A as a complementary or highly predictable organic growth model, which allows us to remain very disciplined and only pursue opportunities that both enhance the overall EverCommerce ecosystem and our economic profile. Looking ahead, we have several key priorities for our business in 2022. We will continue to invest in building trust and awareness of our ever-failing brands in their respective verticals, and to continue scaling our marketing, sales, and customer success engines to maintain at least a 15% to 20% organic growth for the foreseeable future. We will invest in product development and build and optimize solutions, support new feature launches, and maintain market competitiveness. We will advance our scalable operations initiatives, including systems and organizational consolidation, to drive increased profitability and operating leverage over time. And we plan to selectively utilize M&A to expand capabilities and penetrate target market segments as you augment our organic growth engine. Now I'll pass things over to Mark.