EverCommerce Inc.

Thank you for standing by and welcome to EverCommerce's fiscal year 2022 fourth quarter earnings call. My name is Sarah and I will be your operator for today. All participants will be in 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 then one on your touch-tone phone. To withdraw from the question queue, please press star then two. As a reminder, this conference call is being recorded today, Wednesday, March 15, 2023. And I would now like to turn the conference over to Brad Korch, SVP and Head of Investor Relations for EverCommerce. Please go ahead.

Good afternoon. 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 December 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 containing 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. 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 Reamer. Thank you, Brad.

On today's call, I will highlight fourth quarter results and discuss key customer trends and metrics before turning the call over to Mark to dive deeper into our financials. EverCommerce finished the year strong, beating the top end of the fourth quarter guidance for both revenue and adjusted EBITDA. For the quarter, our reported year-over-year revenue growth was 19%, and normalizing for defects of M&A, our pro forma revenue growth was 14% for the quarter. For 2022, our year-over-year pro forma revenue growth was 16%. We continue to operate the business balancing growth with profitability. For the fourth quarter, our adjusted EBITDA and adjusted unlevered free cash flow margins were higher than previous quarters at approximately 22% and 16% respectively. For the full year, adjusted EBITDA margins were 19%, while adjusted unlevered free cash flow margins were 14%. Customer and payments growth are a key part of our business strategy. Our total payments volume, or TPV, grew 90% year over year. We continue to see increased uptake of payments processing within our core vertical system of actions. Our annualized net revenue retention, or NRR, was also steady at 100% in the quarter. 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. At the core, we provide system of action software across many macro verticals. This is the ERP for these smaller, vertical service-based businesses and the way in which our customers generate new business, fulfill services, manage day-to-day operations, and engage with their customers. Our vertical software solutions not only provide the system of action necessary to run their 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 business thrives through two motions, acquiring new customers and expanding our revenue base with existing customers by selling more seats, more features, and cross-selling other solutions like embedded payments. We ended the year serving approximately 690,000 customers across our many diverse verticals and sub-verticals. We acquire customers at strong economics as the overwhelming majority of our customers acquire digitally. Our large customer base represents an incredible opportunity for continued expansion of cross-sell upsell of our solutions. Over the past year, the average ARPU at the solution level grew approximately 8% year over year. One of the biggest drivers for ARPU expansion is our land expand motion of selling core system of action software to our customers and then upselling them new features and cross-selling them new capabilities such as payments and customer engagement solutions. We measure our cross-sell progress by looking at the growth in the number of customers that are taking more than one solution. We ended the quarter with more than 71,000 of our customers using more than one solution, a 29% increase year over year. Embedded Payments is our most accretive add-on solution, representing the lion's share of our cross-sell activity today. We measure and report our payments ecosystem growth through TPV. We ended the quarter with an annualized TPV of approximately $10.9 billion, which represents 90% year-over-year growth. We expect TPV to grow as we continue to embed our payment solutions into our core systems of action. Our priorities for 2023 underscore our focus of providing premier systems of action software across many verticals, embedding payments and adding ancillary services that promote our customer successes. We often discuss our time with you, and in doing so, we've cited a greater than $500 billion opportunity in the U.S. and over a $1.3 trillion opportunity globally. With nearly 690,000 customers currently using our software and solutions, we have a tremendous opportunity right in front of us to provide more value and sell additional services to existing customers. We are prioritizing our investments towards our best opportunities to achieve our growth objectives, and at the top of this list is driving adoption of embedded payments. Embedded payments not only drive continued or grounded growth, but also provide better customer economics as customers who have embedded payments yield higher ARPU and improved retention. Entering 2023, we're expanding our EverCommerce payments team to accelerate payments adoption across our solution set. To do so, we are taking steps to improve the seamless onboarding of payments capabilities for our customers, and later in the year, we'll be introducing new capabilities. Recognizing the environment we're in, we'll be even more deliberate on price. Our pricing philosophy at EverCommerce has been to price to value, that is, increment price over time as new features are added and the customer value proposition is enhanced. In 2023, we will keep this philosophy at our core, but we'll be pressing harder on the price lever where appropriate. We're also doubling down on the notion of balancing growth and profitability by institutionalizing a disciplined focus on cost controls, particularly in the areas of people costs, general administrative spend, and sales and marketing costs. We continue to target 20% EBITDA margins with an eye towards operating leverage-driven margin expansion beyond 2023. Finally, we will continue to optimize our solution and product mix, including utilizing M&A where appropriate to add capabilities and targeted market verticals and compound consistent organic growth. Now I'll pass it over to Mark, who will review our financial results in more detail, as well as provide guidance for the first quarter and the full year 2023. Thanks, Eric.