EverCommerce Inc.

Thank you for standing by, and welcome to EverCommerce's third quarter 2023 earnings conference call. My name is Norma, and I'll be your operator today. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. As a reminder, this conference is being recorded today, Monday, November 6, 2023. I would now like to turn the conference over to Brad Korch, 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 ended September 30th, 2023. 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 filings of the SEC. We undertake no obligation to publicly update or revise these forward-looking statements except as required by law. We also refer to certain non-GAAP financial measures to provide additional information to you, our investors. Reconciliation of non-GAAP historical measures is provided in both our earnings press release and our earnings call presentation. I will now turn it over to our CEO, Eric Reamer. Please continue.

Thank you, Brad. On today's call, I will highlight third-core results and discuss key customer trends and metrics before turning the call to Mark to dive deeper into our financials. EverCommerce continues to advance its goal of being the leading provider of vertical software for service SMBs. With our business management software, which we refer to as systems of action, we are simplifying the lives of those service providers that support us every day. These core software platforms are critical to our customers' businesses and have proven to be resilient revenue streams. As you've highlighted in the past, you have seen modest macroeconomic pressures in the more transactional aspects of our business. And this was true in the third quarter as well. Despite this, EverCommerce's year-over-year revenue growth expanded over 200 basis points when compared to the growth rate reported last quarter. So in the more uncertain macroeconomic environment, we continue to actively manage our costs and double down on the mantra of balancing growth with profitability. This quarter, we once again exceeded the top end of our guidance range for just the ODA, which grew 39% year over year and equated to a 24% margin. Year over year, this represents over 485 basis point of margin expansion. With upside to profitability, we are creating the opportunity to incrementally invest, in areas that can accelerate growth in 2024 and beyond. Private payments adoption continues to be a key element of our growth strategy, and for the third quarter, we increased our payment revenue by 28%. Finally, I am pleased to announce that last week our board of directors authorized an upsize and extension to our share repurchase authorization. Increased by an additional $50 million, our authorization now runs through year-end 2024. 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. As a leading service commerce platform, we provide system of action software across our many market verticals. which in turn drive the workflows to help our customers generate new business, fulfill services, manage day-to-day operations, and engage with their customers. We continue to execute our land and expand strategy. We land with our core business management software and then upsell and cross-sell our existing customers additional features, service, and products. This enhances the value our customers receive from the relationship with EverCommerce and drives additional revenue. As we've shown in various examples on previous earning calls, this translates to lower churn and higher retention. Last quarter, we introduced a new metric that we feel best reflects our current cross-sell progress, the number of customers that have contracted and onboarded for more than one solution. This metric is higher in the funnel than our traditional disclosure of customers actively utilizing more than one solution. For payments specifically, This metric tracks our customers' payments enablement progress, which is a critical milestone in their journey to regularly accepting payments and contributing to our TPV growth. At the end of the third quarter, while we continue to see expansion of customers utilizing more than one solution to approximately 82,000, the number of customers that have contracted and boarded for two or more products grew 28% year-over-year to approximately 173,000. And with over 685,000 total Upper Commerce customers as of the beginning of 2023, we continue to have a very large embedded opportunity to continue to grow this base of multi-solution customers. Finally, when we look back over the trailing 12 months, our annualized net revenue retention, or NRR, for our core software and payment solutions remained above 100%. Embedded payments is our most accretive cross-sell solution and stands to be a long-term driver for EverCommerce revenue growth and margin expansion. Year-over-year, our payments revenue grew 28%, accounting for approximately 17% of overall revenue. We report our payments revenue on a net basis, and as a result, payments revenue contributes approximately 95% gross margin and is a meaningful contributor to overall adjusted EBITDA margin expansion. Third quarter annualized total payment volume, or TPV, was approximately $11.7 billion, representing 11% year-over-year growth. We expect TPV and overall payments revenue to grow as we continue to embed our payment solutions into our core systems of action. Accelerating payments attachment and utilization are key elements of our long-term growth plan, and we continue to see success through our core system of action solutions. Last quarter, we mentioned that we were actively testing implementing new strategic initiatives designed to increase the attachment of payment capabilities, drive more payment-enabled customers into active processing, and further increase the wallet share of the customers that are already processing. Lastly, I want to highlight a small but important acquisition that we made in the quarter, KickServe. KickServe is a cloud-based web mobile system of action enabling field service providers such as plumbers and HVAC technicians to manage all aspects of the business, including job and customer management, payments, reporting, and business operations. We actively pursued KickServe as part of our overall EverPro product strategy because it filled the gap we had to appropriately serve customers that are too large for our Joyce product, yet too small for our Service Fusion products. KickServe does offer payments integration today, but the solution is both under-penetrated and under-utilized, creating a meaningful cross-sell opportunity with our payment engine. We also expect that our go-to-market engine can help accelerate growth with this product. Now I will pass it over to Mark, who will review our financial results in more detail, as well as provide fourth quarter and updated full year 2023 guidance.