EverCommerce Inc.

Good day and welcome to EverCommerce's fourth quarter 2024 earnings call. My name is Cherie and I'll be your host for today's call. 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 will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. 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 Ryan Surick, EverCommerce's Chief Financial Officer. Joining them for the Q&A portion of the call our EverCommerce's president, Matt Feierstein, EverPro's chief executive officer, Josh McCarter, and EverHealth's chief executive officer, Evan Berlin. 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, 2024, as well as our 2025 guidance. 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 of 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 in our comments today. Reconciliation of non-GAAP to GAAP historical measures is provided in both our earnings press release and our earnings presentation. Before we discuss fourth quarter results, I would like to highlight a press release that we issued earlier in the week. In this press release, we disclosed that we were actively seeking strategic alternatives for our marketing technology solutions. The company began this process in late 2024, and we expect the sale to occur in 2025. Accordingly, financial guidance provided today will focus on continuing operations and excludes marketing technology. EverCommerce does not intend to make any further public comment regarding the review of strategic alternatives until it has been completed or the company determines that a disclosure is required by law or otherwise deemed appropriate. I will now turn it over to our CEO, Eric Reamer. Please continue.

Thank you, Brad. On today's call, I will highlight fourth quarter 2024 results, as well as provide an update on our top priorities within our key verticals for 2025. After my remarks, Brian will take over and dive deeper into our financial performance. We ended 2024 on a strong note. Our fourth quarter reported revenue exceeded the top end of our guidance range. In fact, throughout 2024, we consistently met or beat expectations. For the fourth quarter, GAAP revenue increased 3.3% year-over-year. At a pro-forward basis, which adjusts prior year for the SAL, the fitness solutions, revenue increased 7% year-over-year. Adjusted EBITDA of $50.4 million also beat the top end of our guidance range, representing a 28.8% margin. Adjusted EBITDA margin expanded nearly 340 basis points year over year. Payments revenue, excluding the fitness solutions, grew 8.9% year over year, driven by 9% growth in TPV. Finally, with last quarter's announcement of Josh McCarter joining as CEO of EverPro, and more recently our announcement that EverBerlin, our prior Chief Operating Officer, has transitioned to the EverHealth CEO role. We have made significant progress in our transformation efforts that are key to achieving our growth acceleration goals. With the establishment of these leaders, the Salver Fitness Solution 2024, and our recent announcement regarding our attempt to sell marketing technology solutions, we are positioning our future growth as a pure-play SaaS and embedded payments platform, empowering critical service providers in the SMB space. EverCommerce provides SaaS solutions for the service S&P economy. We offer tremendous value to our customers by providing the system of action necessary to run their businesses with tailored, unique workflows. As you know, we only update our customer count once per year, and I am now happy to report that we grew our customer count by more than 7% over the past year. We provide end-to-end solutions to more than 740,000 customers across our three major verticals. Our large base of customers is a key strength of EverCommerce. Each one of those customers represents an opportunity to utilize embedded payments, add more features, add more users, and upsell to more robust products as your business grows. We've talked often about our transformation optimization program's financial benefits, whether it's cost savings or accelerated growth. But another key outcome of this program is enhancing our ability to provide more value to our large base of customers. On a pro forma basis, in 2024, we generated $690.7 million of revenue, representing a 5.7% year-over-year growth. Subscription and transaction revenue grew 8.4% year-over-year. For the full year, we generated 25.3% adjusted EBITDA margin, which is approximately 230 basis points of margin expansion year-over-year. Finally, our annualized total payment volume, or DPV, expanded to over $12.6 billion. As Fred highlighted in his opening remarks, we recently announced that we were exploring strategic alternatives to our marketing technology solutions. These solutions are valuable products to our customers, fueled by the fact that service-based small businesses need various digital channels to promote their businesses and acquire customers. What has become clear to us as we've been on a transformation optimization journey, however, is that our primary focus, energy, and investments need to be a providing best-in-class, vertical, fast software with embedded payments. We believe that focusing on these areas will allow us to maximize long-term growth, margin accretion, and ultimately shareholder value. From a more practical standpoint, we believe that removing this campaign-based revenue stream and lower margin business will help highlight the higher growth, higher gross margin businesses from our core SaaS and payments businesses. Post the planned sale of the marketing technology business, our core verticals will be EverPro for home services, EverHealth for health services, and EverWell for wellness. with the two former verticals representing approximately 95% of consolidated revenue. EverPro is an industry-leading provider of integrated workflow-driven solutions for the SMB field service professionals, providing end-to-end management from lead management, scheduling and dispatch, estimating, invoicing, and value-added solutions such as payments and customer experience management. EverPro faces a fragmented and largely unaddressed market. While there are competitors in our space, our growth opportunity in EverPro largely stems from attracting customers who are not using integrated solutions and from increasing payments adoption. Our 2025 priorities with EverPro are to focus on growing our basic customers and improving the expansion and cross-sell opportunities inherent in the business. Most importantly, adoption of payments. We plan to augment our go-to-market approach, including scaling our efforts in partnerships and channel optimization. Additionally, we are streamlining product development and engineering by unifying roadmaps, rationalizing platforms, and leveraging AI to continue to provide market-leading products to our customers. While we have publicly announced Josh Arrival's Delete EverPro, we've also augmented his leadership team with a hurry to prove successful leaders across sales, marketing, product, and technology. We have broken down the fragmented, solution-centric organizational structure within EverPro and built a strong, functional organization that we believe will improve efficiency, enable faster decisions, and accelerate growth. EverHealth is a leading provider of end-to-end capabilities for small physician practice, from scheduling to practice management to patient engagement to revenue cycle management that our healthcare customers need. The capstone appointment with EverHealth was our announcement in January that EverBalint will be taking the reins as the new CEO. We are investing in our product to provide enhanced features, AI-driven workflows, and deeper integration to create more value for our customers that we believe will provide better customer acquisition and higher retention. Our platform enables providers to select a single partner of choice to support their entire operation. While we lead with SaaS to empower our customers, accelerating payments continues to be a high priority for EverCommerce. Not only have we made good progress throughout 2024, but the real-time investments we're making today are geared toward increased enablement and usage. As I mentioned last quarter, we are specifically investing in our product capabilities and go-to-market motions to prioritize payment attachment at the point of initial SaaS sale, as opposed to a separate add-on sales motion. At the end of the fourth quarter, approximately 219,000 customers were enabled for more than one solution, reflecting a 22% year-over-year growth. As we discussed when we introduced this metric, enabling customers for more than one solution, is the first step in the funnel that leads to increased revenue, retention, and ultimately profitability of these customers. Once customers are enabled, the next action item for us is to facilitate usage. In the case of payments, this is getting our customers to actively process on our platform. We measure this step in the funnel as utilization. At the end of the fourth quarter, approximately 91,000 customers were actively utilizing more than one solution, reflecting more than a 14% year-over-year growth, an acceleration over the year-over-year growth reported in the prior quarter. Customers that purchase and utilize more than one solution are nationally some of our most profitable and stickiest customers. As we've illustrated in the past earnings calls, the effect of more customers taking payments and other add-on features and services is higher net revenue retention. Looking back over the traveling 12 months, our annualized net revenue retention, or NRR, for the core software payment solutions was 96%, consistent with our prior quarter. Year over year, our payments revenue on a pro forma basis grew 9%, accounting for approximately 17% of overall revenue. This is an acceleration in growth versus last quarter, and it speaks to the continued progress we're making in payments adoption. We report our payments revenue on a net basis, and as a result, payments revenue contributes approximately 95% gross margin as a meaningful contributor to overall adjusted EBITDA margin. Fourth quarter estimated annual total payments volume, or TPV, with approximately $12.6 billion, representing a 9% year-over-year growth. As I mentioned earlier, we're making strategic high ROI investments into our payments platform and team, which we believe will result in increased payments adoption, TPV growth, and revenue acceleration. Now, I will pass it over to Ryan, who will review our financial results in more detail, as well as provide first quarter and full year 2025 guidance.