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EverCommerce Announces Second Quarter 2024 Financial Results

DENVER, Aug. 06, 2024 (GLOBE NEWSWIRE) -- EverCommerce Inc. ("EverCommerce" or the "Company") (NASDAQ: EVCM), a leading service commerce platform, today announced financial results for the quarter ended June 30, 2024.

Second Quarter 2024 Financial Highlights

  • Revenue of $177.4 million, an increase of 4.3% compared to $170.1 million for the quarter ended June 30, 2023. Reported revenue includes $2.7 million from the international fitness assets, which were fully divested on July 1, 2024.
  • Subscription and transaction fee revenue of $137.0 million, an increase of 5.2% compared to $130.3 million for the quarter ended June 30, 2023.
  • Net loss was $3.4 million, or $(0.02) per basic and diluted share, for the quarter ended June 30, 2024, compared to net loss of $0.9 million, or $(0.00) per basic and diluted share, for the quarter ended June 30, 2023.
  • Adjusted EBITDA was $41.2 million for the quarter ended June 30, 2024, compared to $38.8 million for the quarter ended June 30, 2023.

“EverCommerce reported revenue that exceeded the top end of our guidance range and Adjusted EBITDA that exceeded the midpoint of our guidance range, underscoring strong results in the quarter,” said Eric Remer, EverCommerce’s Founder and CEO. “2024 remains a transition year, in which we will continue to balance growth with profitability while investing in our transformation initiatives to benefit 2025 and beyond.”

A reconciliation of GAAP to Non-GAAP measures has been provided in the financial statement tables included at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Share Repurchases

On May 21, 2024, our Board of Directors approved a $50.0 million increase in the previously announced stock repurchase authorization and extended the authorization through December 31, 2025. The total authorization since the repurchase program began allows for the purchase up to $200.0 million in shares of the Company’s common stock.

The Company repurchased and retired 2.5 million shares of common stock for approximately $24.1 million during the three months ended June 30, 2024. As of June 30, 2024, $54.0 million remained available under the Repurchase Program.

Repurchases under the program may be made from time to time in the open market at prevailing market prices or in negotiated transactions off the market. Open market repurchases will be structured to occur within the pricing and volume requirements of Rule 10b-18. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This program does not obligate the Company to acquire any particular amount of common stock and the program may be extended, modified, suspended or discontinued at any time at the Company’s discretion. The Company expects to fund repurchases with cash on hand.

Business Outlook

Based on information as of today, August 6, 2024, the Company is issuing the following financial guidance for the third quarter and full year 2024. Note that the revenue guidance excludes now-divested fitness assets.

Third Quarter 2024:

  • Revenue is expected to be in the range of $172 million to $176 million.
  • Adjusted EBITDA is expected to be in the range of $39 million to $42 million.

Full Year 2024:

  • Revenue is expected to be in the range of $676 million to $696 million.
  • Adjusted EBITDA is expected to be in the range of $167 million to $176 million.

A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to certain charges excluded from this non-GAAP measure; in particular, the measures and efforts of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. It is important to note that these charges could be material to EverCommerce's results computed in accordance with GAAP.

Conference Call Information

EverCommerce’s management team will hold a conference call to discuss our second quarter 2024 results and outlook today, August 6, 2024, at 5:00 p.m. ET. Please visit the "Investor Relations" page of the Company's website (https://investors.evercomerce.com) for both telephonic and webcast access to this call as well as a copy of the presentation materials used on the call. An archive replay will be available following the conclusion of the call.

Investor Contact
Brad Korch
SVP and Head of Investor Relations
720-796-7664
IR@evercommerce.com

Media Contact
Jeanne Trogan
VP of Communications
737-465-2897
Press@evercommerce.com

About EverCommerce

EverCommerce (Nasdaq: EVCM) is a leading service commerce platform, providing vertically-tailored, integrated SaaS solutions that help more than 690,000 global service-based businesses accelerate growth, streamline operations, and increase retention. Its modern digital and mobile applications create predictable, informed, and convenient experiences between customers and their service professionals. With its EverPro, EverHealth, and EverWell brands specializing in Home, Health, and Wellness service industries, EverCommerce provides end-to-end business management software, embedded payment acceptance, marketing technology, and customer experience applications. Learn more at EverCommerce.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation, statements regarding our future operations and financial results, our focus on execution and transformation and optimization initiatives, our market opportunity, our potential for growth and our strategy. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our limited operating history and evolving business; our recent growth rates may not be sustainable or indicative of future growth; we have experienced net losses in the past and we may not achieve profitability in the future; we may continue to experience significant quarterly and annual fluctuations in our operating results due to a number of factors, which makes our future operating results difficult to predict; in order to support the growth of our business and our acquisition strategy, we may need to incur additional indebtedness or seek capital through new equity or debt financings; we may not be able to continue to expand our share of our existing vertical markets or expand into new vertical markets; we face intense competition in each of the industries in which we operate; the industries in which we operate are rapidly evolving and the market for technology-enabled services that empower SMBs is relatively immature and unproven; we are subject to economic and political risk, the business cycles of our clients and changes in the overall level of consumer and commercial spending, which could negatively impact our business, financial condition and results of operations; we are dependent on payment card networks, such as Visa and MasterCard, and payment processors, such as Worldpay and PayPal, and if we fail to comply with the applicable requirements of our payment networks or our payment processors, they can seek to fine us, suspend us or terminate our agreements and/or terminate our registrations through our bank sponsors; the inability to keep pace with rapid developments and changes in the electronic payments market or are unable to introduce, develop and market new and enhanced versions of our software solutions; real or perceived errors, failures or bugs in our solutions; unauthorized disclosure, destruction or modification of data, disruption of our software or services or cyber breaches; our estimated total addressable market is subject to inherent challenges and uncertainties; failure to effectively develop and expand our sales and marketing capabilities; our information technology systems and our third-party providers’ information technology systems, including Worldpay, PayPal and other payment processing partners, may fail or our third-party providers may discontinue providing their services or technology generally or to us specifically; our ability to improve our margin, in particular within Marketing Technology Solutions; the impact of a future pandemic, epidemic or outbreak of an infectious disease on our business, financial condition and results of operations, as well as the business or operations of third parties with whom we conduct business; our success in achieving our objectives through acquisitions, divestitures or other strategic transactions; our revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets; risks related to the increasing focus on environmental sustainability and social initiatives; our ability to adequately protect or enforce our intellectual property and other proprietary rights; risk of patent, trademark and other intellectual property infringement claims; risks related to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations; risks related to our sponsor stockholders agreement and qualifying as a “controlled company” under the rules of The Nasdaq Stock Market; as well as the other factors described in our Annual Report on Form 10-K for the year ended December 31, 2023 and updated by our other filings with the SEC. These factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

Non-GAAP Financial Measures

EverCommerce has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). EverCommerce uses these non-GAAP financial measures internally in analyzing its financial results and believes that use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing EverCommerce’s financial results with other companies in its industry, many of which present similar non-GAAP financial measures.

Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with EverCommerce’s consolidated financial statements prepared in accordance with GAAP. A reconciliation of EverCommerce’s historical non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.

Adjusted Gross Profit. Adjusted Gross Profit is a key performance measure that our management uses to assess our operational performance, as it represents the results of revenues and direct costs, which are key components of our operations. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it reflects the gross profitability of our operations, and excludes the indirect costs associated with our sales and marketing, product development, general and administrative activities, and depreciation and amortization, and the impact of our financing methods and income taxes.

Gross profit is calculated as total revenue less cost of revenue (exclusive of depreciation and amortization), amortization of developed technology, amortization of capitalized software and depreciation expense (allocated to cost of revenues). We calculate Adjusted Gross Profit as gross profit adjusted to exclude depreciation and amortization allocated to cost of revenues. Adjusted Gross Profit should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other GAAP measures of income (loss) or profitability.

Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA and Adjusted EBITDA margin are key performance measures that our management uses to assess our financial performance and are also used for internal planning and forecasting purposes. We believe that these non-GAAP financial measures are useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods. In addition, we believe that providing Adjusted EBITDA, together with a reconciliation of net income (loss) to Adjusted EBITDA, helps investors make comparisons between our company and other companies that may have different capital structures, different tax rates, and/or different forms of employee compensation.

Adjusted EBITDA and Adjusted EBITDA margin are used by our management team as additional measures of our performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of Adjusted EBITDA and Adjusted EBITDA margin help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of net income (loss) or income (loss) from continuing operations. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees. Our Management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies.

We calculate Adjusted EBITDA as net loss adjusted to exclude interest and other expense, net, income tax expense (benefit), depreciation and amortization, other amortization, stock-based compensation and transaction-related and other non-recurring costs. Other amortization includes amortization for capitalized contract acquisition costs. Transaction-related costs are specific deal-related costs such as legal fees, financial and tax due diligence, consulting and escrow fees. Other non-recurring costs are expenses such as impairment charges, (gains) losses from divestitures and assets held for sale, system implementation costs, severance expense related to planned restructuring activities, and costs associated with integration and transformation improvements. Transaction-related and other non-recurring costs are excluded as they are not representative of our underlying operating performance. Adjusted EBITDA should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other GAAP measures of income (loss).

 
EverCommerce Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share and share amounts)
(unaudited)
    
 June 30, December 31,
 2024 2023
    
Assets   
Current assets:   
Cash and cash equivalents$86,697  $92,609 
Restricted cash    3,570 
Accounts receivable, net of allowance for expected credit losses of $5.8 million and $6.2 million at June 30, 2024 and December 31, 2023, respectively 52,607   45,417 
Contract assets 16,351   16,117 
Assets held for sale 13,236    
Prepaid expenses and other current assets 26,846   22,434 
Total current assets         195,737   180,147 
Property and equipment, net 7,846   9,734 
Capitalized software, net 40,631   42,511 
Other non-current assets 40,282   42,722 
Intangible assets, net 263,927   315,519 
Goodwill 918,653   927,431 
Total assets         1,467,076   1,518,064 
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$11,075  $8,638 
Accrued expenses and other 55,902   66,265 
Deferred revenue 26,870   24,082 
Customer deposits 11,863   12,891 
Current maturities of long-term debt 5,500   5,500 
Liabilities held for sale 5,532    
Total current liabilities         116,742   117,376 
Long-term debt, net of current maturities and deferred financing costs 524,565   526,696 
Other non-current liabilities 41,677   47,956 
Total liabilities         682,984   692,028 
Commitments and contingencies   
Stockholders’ equity:   
Preferred stock, $0.00001 par value, 50,000,000 shares authorized and no shares issued or outstanding as of June 30, 2024 and December 31, 2023     
Common stock, $0.00001 par value, 2,000,000,000 shares authorized and 184,581,163 and 186,934,031 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively 2   2 
Accumulated other comprehensive loss (10,610)  (8,017)
Additional paid-in capital 1,434,375   1,454,026 
Accumulated deficit (639,675)  (619,975)
Total stockholders’ equity         784,092   826,036 
Total liabilities and stockholders’ equity        $1,467,076  $1,518,064 
        


EverCommerce Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share and share amounts)
(unaudited)
 
 Three months ended
June 30,
 Six months ended
June 30,
 2024 2023 2024 2023
        
Revenues:       
Subscription and transaction fees$137,041  $130,305  $271,765  $254,125 
Marketing technology solutions 35,007   34,455   65,299   66,243 
Other 5,345   5,292   10,442   10,820 
Total revenues         177,393   170,052   347,506   331,188 
Operating expenses:       
Cost of revenues (exclusive of depreciation and amortization presented separately below) 61,347   58,185   118,140   114,131 
Sales and marketing 30,952   30,675   60,720   61,574 
Product development 20,164   18,331   40,364   37,034 
General and administrative 35,654   35,089   69,444   68,952 
Depreciation and amortization 21,938   25,990   44,889   51,940 
Loss on held for sale and impairments 459      11,680   1,063 
Total operating expenses         170,514   168,270   345,237   334,694 
Operating income (loss)         6,879   1,782   2,269   (3,506)
Interest and other expense, net (9,552)  (4,761)  (15,343)  (19,949)
Net loss before income tax (expense) benefit         (2,673)  (2,979)  (13,074)  (23,455)
Income tax (expense) benefit (703)  2,083   (6,626)  1,784 
Net loss         (3,376)  (896)  (19,700)  (21,671)
Other comprehensive loss:       
Foreign currency translation gain (loss), net 942   (682)  (2,593)  (781)
Comprehensive loss        $(2,434) $(1,578) $(22,293) $(22,452)
        
Basic and diluted net loss per share attributable to common stockholders$(0.02) $  $(0.11) $(0.11)
Basic and diluted weighted-average shares of common stock outstanding used in computing net loss per share 185,182,906   188,277,209   185,907,621   189,157,212 
                


EverCommerce Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
 Six months ended
June 30,
 2024 2023
    
Cash flows provided by operating activities:   
Net loss$(19,700) $(21,671)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation and amortization 44,889   51,940 
Stock-based compensation expense 12,030   13,755 
Deferred taxes 5,609   (2,119)
Amortization of deferred financing costs and non-cash interest 818   827 
Loss on held for sale and impairments 11,690   1,063 
Bad debt expense 2,283   3,830 
Other non-cash items (5,154)  (1,442)
Changes in operating assets and liabilities:   
Accounts receivable, net (10,040)  (7,344)
Prepaid expenses and other current assets (2,731)  (4,492)
Other non-current assets (46)  2,681 
Accounts payable 2,721   2,591 
Accrued expenses and other (7,360)  1,868 
Deferred revenue 3,372   1,978 
Other non-current liabilities (1,165)  (2,319)
Net cash provided by operating activities         37,216   41,146 
Cash flows used in investing activities:   
Purchases of property and equipment (1,036)  (1,201)
Capitalization of software costs (8,718)  (9,485)
Proceeds from disposition of fitness solutions, net of transaction costs, cash and restricted cash 1,228    
Net cash used in investing activities         (8,526)  (10,686)
Cash flows used in financing activities:   
Payments on long-term debt (2,750)  (2,750)
Exercise of stock options 2,839   909 
Proceeds from common stock issuance for Employee Stock Purchase Plan 1,755   1,765 
Repurchase and retirement of common stock (36,034)  (39,693)
Net cash used in financing activities         (34,190)  (39,769)
Effect of foreign currency exchange rate changes on cash (638)  327 
Net decrease in cash, cash equivalents and restricted cash, including cash and restricted cash classified as held for sale         (6,138)  (8,982)
Cash, cash equivalents and restricted cash, including cash and restricted cash classified as held for sale:   
Beginning of period 96,179   95,824 
End of period$90,041  $86,842 
    
Supplemental disclosures of cash flow information:   
Cash paid for interest$23,048  $22,166 
Cash paid for income taxes$3,199  $1,871 
        


 Three months ended
June 30,
 Six months ended
June 30,
  2024   2023   2024   2023 
 (in thousands)
        
Reconciliation from Gross Profit to Adjusted Gross Profit:       
Gross profit$110,490  $105,772  $218,909  $205,053 
Depreciation and amortization 5,556   6,095   10,457   12,004 
Adjusted gross profit$116,046  $111,867  $229,366  $217,057 
                


 Three months ended
June 30,
 Six months ended
June 30,
 2024 2023 2024 2023
 (in thousands)
        
Reconciliation from Net loss to Adjusted EBITDA:       
Net loss$(3,376) $(896) $(19,700) $(21,671)
Adjusted to exclude the following:       
Interest and other expense, net 9,552   4,761   15,343   19,949 
Income tax expense (benefit) 703   (2,083)  6,626   (1,784)
Depreciation and amortization 21,938   25,990   44,889   51,940 
Other amortization 1,683   1,444   3,353   2,753 
Stock-based compensation expense 6,454   6,241   12,030   13,755 
Transaction-related and other non-recurring costs 4,261   3,341   19,564   5,795 
Adjusted EBITDA$41,215  $38,798  $82,105  $70,737 

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