EverCommerce Inc.

Good day, everyone, and thank you for standing by, and welcome to EverCommerce's fiscal year 2022 second quarter earnings conference call. My name is Jamie, and I will be your operator for today. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one. To withdraw your questions, you may press star and two. As a reminder, today's conference call is being recorded today, Monday, August 8th, 2022. At this time, I'd like to turn the conference over to Brad Korch, SVP and Head of Investor Relations for EverCommerce. Sir, 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 June 30th, 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 on our findings 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. A 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 Bremer.

Thank you, Brad. EverCommerce reported very strong second quarter results that outpaced our guidance for reported revenue and adjusted EBITDA once again. We accomplished this while continuing to balance our growth with profitability and free cash flow generation. We continue to believe EverCommerce is a massive opportunity to drive the digitization of the service economy, which is still in its very early innings, and will provide us a strong tailwind to fuel growth for years to come. On today's call, I will highlight second quarter results and discuss key customer trends and metrics before turning the call over to Mark to dive deeper into our financials. As I've already mentioned, we exceeded the top end of our guidance revenue. For the quarter, our reported revenue growth was 30%. And normalizing for the effects of M&A, our pro forma revenue organic growth was 16%, a solid result given the tougher comp. And on an LTM basis, organic growth was 20%. We operate the business in a balanced way, invest in our solutions to drive growth, while tightly manage our cost structure to support scalable operations and increase operating leverage over time. This financial discipline continues to yield good results. 20% adjusted EBITDA margins in the quarter, and 14% adjusted unleveraged free cash flow margins. Our customer metrics for the quarter were also strong, as our upsell cross-sell motion continues to mature. We reported 26% year-over-year growth in our total payments volume, or TPV, and maintained our annualized net revenue retention above 100%. As a quick reminder, EverCommerce provides vertically 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. Our durable growth is bolstered by the huge under-penetrated market opportunity. Service-based businesses are the backbone of the U.S. economy, and small businesses employ the majority of service professionals. We estimate our North American and global TAM to be $520 billion and $1.3 trillion, respectively. Last quarter, I spoke about the strength and diverse nature of our customer base, and that's an even more pertinent point to make today, given the discussion of the macroeconomic environment across Wall Street and with you, our investors and analysts. We serve over 600,000 paying customers across three main verticals and many sub-verticals, which provides us both customer and vertical diversification. On top of this, many of our customer services are essential or non-discretionary, and all of them are services, which are less effective in recessionary times than 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. And we anticipate this fact to provide resilience for our business. EverCommerce offers tremendous value to our customers by providing solutions tailored to the unique workflows and interactions the various services require. At the core, we provide system of action software across many micro verticals. This is the ERP for these smaller service-based businesses and the way in which each of our customers generate new business, fulfill services, manage day-to-day operations, and engage with their customers. Our software solutions not only provide the systems of action necessary to run the daily business processes, 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 the service businesses. We truly provide end-to-end solutions that our customers need to compete and grow in a marketplace that is rapidly transforming. Our solutions help our customers optimize their business and operate in a more efficient manner, irrespective of their end customer behavior. This provides continuing demand for our solutions, which is underscored by the strength of our solutions' value proposition and attractive pricing. Our second core results are strong, and to date we've seen minimal impact on our business from the macroeconomic environment. Core SaaS subscription and payment revenue, which represents a large majority of our revenue, continues to perform well and be in line with our expectations. We have seen some slower growth year-over-year with certain marketing technology solutions, isolated to those services that are more discretionary in nature and represent a small portion of our revenue. Having said that, we are not going to rest comfortably on our solid first half performance. Our team has proven its ability to balance investing and growth while driving profitability, so we will continue to tightly manage the trajectory of our investments to minimize any potential impact from the macroeconomic climate. Our growth engine is focused on new customer acquisition and also expanding our customer relationships by providing additional products and services, which grows their average revenue and improves retention. With over 600,000 customers using our vertical software system of action, we have a massive embedded opportunity for upsell and cross-sell. We have and will continue to measure our progress by looking at the growth and number of customers that are taking more than one solution. We ended the quarter with more than 65,000 of our customers using more than one solution. That's a 35% increase year over year. Approximately 10% of our total customer base are taking more than one solution today, providing a very long runway for continued growth and expansion. Integrated billing and payments is one of our add-on solutions. 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 with our various software applications. We measure and report our total payment volume, or TPV, quarterly, and we end the quarter with an annualized TPV of approximately $10.1 billion, which represents 26% year-over-year growth. We expect TPV to grow as we continue to embed our payment solutions into our core systems of action. Embedded payments is a key lever for future growth. It not only provides ample opportunity to support continued organic growth, but also provides better customer economics as customers who embed payments yield higher ARPU and improve retention. We will continue to prioritize integration and revenue expansion of our payments and adjacent marketing and customer experience solutions across our entire solution set. Now I'll pass it over to Mark.