EngageSmart, Inc.

Good morning. Thank you for attending today's EngageSmart second quarter 2022 earnings call. My name is Aaron and I'll be your moderator today. Currently all phone lines are in a listen only mode. Later there'll be an opportunity to ask questions during a question and answer session. You may register to ask a question at any time by pressing the star then one on your telephone keypad. I'll now turn the call over to Josh Schmidt of EngageSmart.

Josh? Thank you. Good morning and welcome to our fourth quarterly earnings call as a public company. With me on today's call are Bob Bennett, Chief Executive Officer, and Cassandra Hudson, Chief Financial Officer. Our earnings press release, supplemental presentation, and associated form 8K can be found at investors.engagesmart.com. During this call, we will be discussing certain forward-looking information. Actual results could differ materially from those contemplated by these forward-looking statements. Please refer to the risk factors section of our annual report on form 10K and other SEC filings for more information on the risks regarding these forward-looking statements and risk factors associated with our business. On this call, we will discuss certain non-GAAP metrics, including adjusted EBITDA, a reconciliation of non-GAAP metrics to the nearest GAAP metric, as well as statements regarding why management believes these measures provide useful information can be found in our earnings press release and supplemental presentation, both of which are available on the investor relations section of our website. This call is being webcast live and will be available for replay on our website at investors.engagedsmart.com. I would now like to turn the call over to our CEO, Bob Bennett.

Thank you, Josh, for the succinct yet comprehensive introduction. Good morning, everyone, and thank you for joining us on our call to discuss our Q2 results. We are excited to report another strong quarter marked by high growth and outstanding profitability that yet again exceeded our expectations. EngageMart delivered record revenue of $73.9 million, representing 43% year-over-year growth, all organic, and adjusted EBITDA of $12 million, which is 16.2% of revenue for the quarter. Our success is a result of our strong business model and excellent execution as we continue to simplify customer and client engagement through vertically tailored, true SaaS solutions with integrated payments. SMB's strong growth of 56% year-over-year, combined with enterprise's highly durable growth of 29% year-over-year, reflects the strength of our solutions and the dedication of our teammates. Our people are relentless in their pursuit of customer satisfaction. Before Cassandra dives deeper into the details of our financial performance, I'd like to share some of this quarter's highlights. We continue to see great traction in our SMB segment, where we now serve over 89,000 customers and more than 140,000 practitioners in 10 wellness verticals. We delivered outstanding growth of 56% that was driven by a mix of new customer ads and continued revenue growth from our existing customers. In our enterprise segment, our results were again excellent, showing great durability. InvoiceCloud, our largest enterprise solution, posted another strong go-live quarter, and we continue to see robust growth with our older cohorts through digital adoption from existing customers. DonorDrive, our best-in-class fundraising solution, also had several significant customer wins, successful events held for existing customers, and received an award from Salesforce for Nonprofit Product Partner of the Year. And finally, as you might expect, the demand environment for our offerings continues to show relative strength given the predominant tie to mental health and wellness, as well as payments of non-discretionary bills, such as real estate taxes and utilities. To provide more color on our outstanding results in the SMB segment, our second quarter includes the first full quarter impact of the pricing and packaging rebundling. Our new three-tiered offering structure is proving successful as it aligns well with where our customers are in their professional journey. SimplePractice continues to experience great traction, especially in our core mental health market. The shortage of mental health and wellness professionals, driven by the large increase in demand for treatment, continues to put a strain on the industry. SimplePractice, with its 140,000 practitioners, is uniquely well-positioned to help solve this problem, as the solution dramatically reduces practitioners' administrative burden, allowing them to treat more patients. Our Monarch solution is an exciting extension of our efforts to drive access to care. Marnark creates a network for practitioners and patients, fueling our flywheel by attracting more professionals to simple practice and helping them grow their patient base. We see exciting opportunities with Marnark to ease the strain for people who are trying to find practitioners, especially those in their insurance networks, and are seeing interest in our solution from both employers and health plans. Last quarter, we mentioned that we launched a pilot program with an employee assistance program, an EAP. This quarter, we signed contracts with two more EATs. We're encouraged by our progress and continue to develop a robust pipeline of opportunities in this space. You can learn more about Monarch by going to meetmonarch.com. Beyond mental health, we continue to serve our nine other wellness specialties. Our focus areas are on speech language pathology, occupational therapy, chiropractic, and physical therapy because these practice areas offer the largest addressable market and are attractive segments for us. In addition to our strategy of prioritizing features for mental health group practices, we have found that many of the other specialties we currently serve often operate as multidisciplinary group practices and therefore will also benefit from the development of those new features. In the second half of this year, as we balance our opportunities and resources, we plan to continue expanding on our strength and market leadership and mental health, given the ripeness of the market. Additionally, we plan to continue investing in new features across our verticals, as well as digital marketing to broaden our brand awareness. We continue to believe simple practice has great potential beyond mental health. We have laid the foundation and remain confident in our ability to replicate this model in new verticals over time. As a final thought, we believe that simple practice's ability to simplify customer facing and back office work streams and to connect practitioners to patients has the potential to become even more valued during a time when labor availability and costs are top of mind. Now turning to our enterprise segment, we saw strong customer growth in GoLives this quarter. We now serve more than 3,200 customers across our three vertically tailored solutions. Success in this space is driven by new customer wins, fueled by our partner-assisted selling motion, customer GoLives, and the adoption of our digital solutions. Q2 was one of InvoiceCloud's biggest GoLive quarters to date. Notable examples this quarter include Georgia Farm Bureau Insurance and Financial Services and Central States Water and the City of Clearwater, Florida and Utilities. Customers choose InvoiceCloud because our solution drives superior rates of digital adoption. What's so remarkable about our solution is how quickly we achieve results. As an example, in the first nine months of using our product, the city of Escondido, California, saw a 69% decrease in payment-related customer service calls, giving staff back valuable time to focus on other high-priority projects. The city also saw an 83% increase in paperless billing enrollment in those first nine months, significantly reducing print and mail expenses. And we continue to drive digital adoption over time. The city of Escondido has now achieved 62% overall self-service electronic payment adoption. We are seeing great results not only in utilities, but also in tax and government. Municipal organizations are seeking more robust fintech solutions that are simple for IT teams to deploy and secure and convenient for billers and payers to use. and they find that Invoice Cloud is the perfect fit for them. As an example, James City County, Virginia, saw an 11x increase in electronic payments with Invoice Cloud's innovative payment solution, as well as more than 5x increase in paperless enrollment since 2019. To drive new customer growth in Invoice Cloud, we continue to invest in our strategic alliances to add partners and strengthen our relationships through shared go-to-market strategies. We believe our strong new customer growth and high adoption rates are driven by our product leadership. While most of our competitors are still selling hosted offerings, Invoice Cloud is true SaaS. This enables us to release new features faster and more often and allows us to continuously make further enhancements to our platform. Since 2016, we have released more than 60 new features, all designed to simplify the core biller and payer experience. And we continue to invest in R&D to drive product leadership. We've recently launched functionalities that enhance data reporting, data exchange, and data visualization. This is part of our broader ongoing initiative to provide better data management tools to our customers. By establishing processes and policies for data usage and building trust in our data, we are enabling customers to make better decisions across their organization and respond more efficiently to market changes and their customers' needs. Finally, world-class data security and privacy are top priorities for us. Our software is dependent upon for managing important financial transactions and sensitive information, and we are committed to upholding and investing in the highest security standards. Another highlight for the enterprise segment this quarter is donor drive, where we sign new marquee customers, held several successful fundraising events for customers in the quarter, and developed a strong pipeline. Our focus in this fundraising space is on building strong alliances with nonprofit organizations, and it's paying off. New customers signed include Crohn's and Colitis Foundation and Massachusetts Down Syndrome Congress. Customer fundraising events with DonorDrive this quarter included the San Francisco AIDS Foundation and Canadian Cancer Society. We're seeing this strength due to several factors. The return of in-person conferences and trade shows fuels marketing-generated pipeline growth. Increased interest in live streaming to support hybrid events spurs new fundraising growth areas. And in terms of product innovation, this quarter we released new advanced recurring donation options. Lastly, we were thrilled to be awarded the Salesforce Nonprofit Partner of the Year Award at their Unite Summit in June, a reflection of the strength of our partnership with Salesforce. In summary, we've had an exciting second quarter and first half of the year during which we have exceeded our expectations. We are balancing profitability and growth and are driving further traction in the market for products that help save labor costs, increase operational efficiency, and drive customer satisfaction. At the same time, we are helping people find needed medical care, enable digital billing and payments, and raise funds for worthy causes. We delivered excellent results across our vertically tailored SaaS solutions driven by strong customer growth, payer adoption on our platform, and customer retention. We believe that this is a testament to the strength of our business model and our market leadership position in customer engagement software with integrated payments. With that, I'll hand the call over to our CFO, Cassandra Hudson. Cassandra?