EverCommerce(EVCM) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported GAAP revenue of $176.3 million for Q3 2024, representing a 0.9% year-over-year increase. On a pro forma basis, revenue increased by 4.3% year-over-year [10][28][31] - Adjusted EBITDA was$ 44.5 million, with a margin of 25.3%, reflecting a 140 basis point expansion year-over-year [11][34] - Total payment volume (TPV) reached approximately $12.4 billion, indicating an 8.4% year-over-year growth [27] Business Line Data and Key Metrics Changes - Subscription and Transaction revenue was$ 137.6 million, up 3.7% year-over-year, while Marketing Technology solutions revenue decreased by 6.7% year-over-year to $34.4 million [28] - Payments revenue, excluding fitness solutions, grew by 6.7% year-over-year, contributing approximately 17% of overall revenue [26][31] Market Data and Key Metrics Changes - The company ended the quarter with approximately 212,000 customers enabled for more than one solution, reflecting a 25% year-over-year growth [22] - Active utilization of more than one solution reached approximately 88,000 customers, representing a 13% year-over-year growth [23] Company Strategy and Development Direction - The company is focused on transformation and optimization initiatives, including the hiring of a new leader for the EverPro vertical to enhance decision-making and customer alignment [12][16] - The strategy emphasizes integrated sales motions and cross-selling opportunities, particularly in payments, to enhance customer value and drive revenue growth [21][56] Management's Comments on Operating Environment and Future Outlook - Management noted that the transformation initiatives are expected to set the stage for organic growth acceleration in the latter half of 2025 and into 2026 [52] - The company is optimistic about its ability to penetrate further into the payments market, which remains a significant opportunity for growth [55] Other Important Information - The company generated$ 27.5 million in cash flow from operations for the quarter, with levered free cash flow of $23 million [38] - The company repurchased approximately 1.4 million shares for$ 14.6 million during the quarter, with $39.4 million remaining in the repurchase authorization [42] Q&A Session Summary Question: Can you talk about specific initiatives for cross-sell optimization? - Management highlighted the Edge program, which has been successfully integrated into multiple solutions, driving significant uptake [46][47] Question: How do you rank the most important catalysts for organic reacceleration in 2025? - Management emphasized the importance of effective customer acquisition, integrated sales processes, and further penetration into the payments market as key catalysts [51][55] Question: Any changes in the broader SMB purchasing environment in Q3? - Management reported no significant changes, with continued ASP expansion and flat to compressed sales cycles [62][63] Question: What are the key focus areas for the new CFO? - The CFO indicated a focus on transformation and optimization, particularly in embedded functionality for 2025 [64] Question: What is driving the growth in customers enabled for more than one product? - Management attributed this growth to an integrated sales motion that emphasizes the full breadth of offerings during customer acquisition [70][71] Question: How does the new organizational structure impact R&D and sales? - The new structure aims to enhance decision-making and resource allocation, improving both R&D and sales effectiveness [102][106] Question: What is the current status of net revenue retention (NRR)? - Management noted that NRR has been impacted by a previous pricing action but is expected to stabilize as the company moves forward [110][111]