EverCommerce Inc.

Thank you for standing by and welcome to Everett Commerce's fiscal year 2022 first quarter earnings call. My name is Josh and I'll be your operator for today. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone. As a reminder, this conference call is being recorded today, Monday, May 9th, 2022. If you require any further assistance, please press star zero. And I would now like to turn the conference over to Brad Korsh, SVP 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 ended March 31st, 2022. 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 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. EverCommerce's first quarter results were very strong. Our reported revenue and adjusted EBITDA results both exceeded the top end of the guidance ranges. while we also maintain pro-form organic growth above the high end of our 15% to 20% range and continue to generate healthy cash flow. These results are underpinned by our massive opportunity to drive digitization of the service economy, which is still in the early innings and provides us a strong tailwind to fuel growth for years to come. On today's call, I will highlight our first quarter results, reiterate our investment thesis, and discuss our key customer trends and metrics before turning the call over to Mark to dive deeper into our financials. Last quarter, we highlighted our long-term strategy of balancing growth with profitability, and our strong first quarter 22 results exemplify this. We exceeded the top end of our guidance ranges for both revenue and adjusted EBITDA, and our reported revenue growth was 37%. Normalizing for M&A, pro forma organic revenue growth exceeded 20%. Our adjusted EBITDA margin was 16% for the seasonally low first quarter and includes front-end loaded investments in scalable operations and public company infrastructure, as well as a headwind from our Dr. Crono acquisition, which is still transitioning to profitable operations this year. Our customer metrics accelerated in the quarter as well. Total payment volume, or TPV, grew 26% year over year, and our annualized net revenue retention expanded to above 100%. As a quick reminder, 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 use to automate manual processes, generate new business, and create more loyal customers. EverCommerce is leading the digital transformation of the service economy with a mission to simplify and empower the lives of business owners whose services support us every day. EverCommerce generates over half a billion dollars in annual revenue. Further, we are among the elite group of growth-focused software companies that balance durable growth with sustainable profitability. EverCommerce offers tremendous value to our customers by providing solutions tailored to the unique workflows and interactions their various services require. From a plumber to a pediatrician to a yoga instructor, the way in which each of our customers generates new business, fulfills services, manage day-to-day operations, and engage with their customers is unique. Our software solution does not only provide the systems of action necessary to run their daily business operations, but also the marketing solutions to attract new business, the billing and payment solutions to collect effortlessly, and the customer experience 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 our customers need to compete and grow in a marketplace that is rapidly transforming. I can't emphasize enough the magnitude of our market opportunity. Service-based businesses are the backbone of the U.S. economy, accounting for 77% of the U.S. GDP, and small businesses employ the majority of service professionals. Within North America, there are 31 million small and medium-sized businesses, and their needs equate to a $520 billion total addressable market, and we've penetrated less than 1%. Globally, our TAM expands to $1.3 trillion, and we've penetrated less than 0.1% of that. Our focus today is on three main verticals, which are home services, health services, and fitness and wellness services. The addressable market for the software and service EverCommerce provides within these verticals today is over $160 billion just in North America. Many service-based small businesses still operate in a low-tech world of paper, pen, phone calls, and maybe Excel. And the digitization of the service economy is propelling these business owners to search for a better way to operate and grow. And EverCommerce solutions enable them to accelerate their digital transformation. We continue to grow our very large, diversified base of over 600,000 customers. These customers are spread across three main EverBrands. but within each of these brands are several distinct customer segments. We believe the size, nature, and diversity of our customer base provides us tremendous organic growth opportunity for upsell and cross-sell, while also proving resilient as our customers are focused on providing services, many of them essential, not goods. In any economic downturn, consumers will still need to fix their air conditioning and plumbing leaks, go to the doctor, and get their hair cut. Our solutions help our customers optimize their business and operate in a more efficient manner, irrespective of their end customer behavior. This provides continued demand for our solutions, which is underscored by the strength of our solutions' value proposition and attractive pricing. We also believe that the SMB service market is a super attractive customer base to serve. I just spoke about the diversity and sheer quantity of the more than 600,000 customers, which eliminates any concentration considerations. And if you look briefly at the chart on slide nine, you'll get a glimpse of our customer journey and attractive customer acquisition and retention economics. Our customer acquisition costs are low because approximately 85% of our customers are sourced and onboard in a digital self-service manner. These low acquisition costs help us drive our high LTV to CAC ratio. As customers use our software and ultimately take additional products such as embedded payments, our customer retention increases as well. Our company average annualized net revenue retention is over 100%, but as customers mature, NRR increases. For customers that have been with EverCommerce longer than one year, NRR improves greater than 200 basis points. As I've mentioned a few times, we have a very large base of diverse customers. We ended 2021 with approximately 617,000 customers, and that number continues to grow. 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 action, facilitating upsell and cross-sell with our customers. We measure the success of this expansion by looking at the growth in the number of customers that are taking more than one solution. We ended the quarter with more than 60,000 of our customers using more than one solution, a nearly 40% increase year over year. While the increase is impressive, with less than 10% of our customers taking more than one solution, our runway for continued growth through upsell and cross-sell is long. Our most mature upsell-cross-sell motion is 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 payments process means higher conversion rates, better efficiency, accelerated cash receipts, and increased revenue. EverCommerce's payment solutions provide an intuitive front-end experience for consumers and is tightly embedded within our various software applications. Increasingly, we see customers embracing this powerful combination. We ended the quarter with an annualized total payment value, or TPV, of approximately $9.5 billion, which represents 26% year-over-year growth. Customers who embed payments not only yield higher ARPU and revenue, but also improved retention. Highlighting just one solution, SalonBiz, a software focused on salon and spas, we can illustrate this outcome with tangible results. SalonBiz customers that embed our payment solutions generate approximately three times higher ARPU than customers who don't embed payments. SalonBiz payments customers also have higher revenue retention. Our upsell-cross-sell strategy is both simple and proven. We will continue to prioritize the integration and revenue expansion of our payments and adjacent marketing and customer experience solutions across our entire solution set. Finally, I would like to highlight once again our key priorities for 2022. We will continue to invest in building trust and awareness of our ever brands in the respective verticals and to scale 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 optimized solutions to support new feature launches and maintain market competitiveness. We will advance our scalable operation initiatives, including systems and organizational consolidation, to drive increased operating leverage over time. We plan to selectively utilize M&A to expand capabilities and penetrate target market segments as we augment our organic growth engine. Before I turn the call over to Mark to discuss our financial results in more detail, I'd like to quickly highlight some leadership changes in the company. I'm pleased to announce that last week we welcomed Shane Triggers to the EverCommerce team as our Chief Human Resources Officer. Shane is a proven leader with a track record of thoughtful action in advancing people and culture initiatives forward. He'll be responsible for all aspects of our global employee experience at EverCommerce and joins us most recently from ServiceNow. In addition, our Chief Operating Officer, Stone D'Souza, will be leaving the company in a couple of weeks to pursue another opportunity. I'd like to thank Stone for his work over the past year. Matt Fierstein, EverCommerce's president, will reassume Stone's duties and direct reports, most of which reported to Matt for many years prior to Stone. Now I'll pass it over to Mark.