Core Viewpoint - EverCommerce Inc. has been downgraded by RBC Capital, but institutional investors continue to show interest in the company, indicating potential confidence in its future performance [2][3][6] Company Overview - EverCommerce Inc. provides software solutions for service-based businesses across various sectors, including health services, home services, and fitness and wellness [1] Stock Performance - The stock was downgraded from "Outperform" to "Sector Perform" with a price of $11.55 at the time of the downgrade [2] - The stock price decreased by 4.62% to $11.55 following the downgrade [3] - The stock has fluctuated between $10.88 and $12.01, with a yearly high of $14.41 and a low of $7.66 [5][6] - The current market capitalization of EverCommerce stands at approximately $2.1 billion [5] Institutional Investor Activity - Squarepoint Ops LLC acquired 56,648 shares valued at approximately $595,000, showing confidence in EverCommerce [3] - Deutsche Bank AG increased its holdings by 141.9% in the first quarter, now owning 9,836 shares valued at $99,000 [4] - Nuveen LLC and Martingale Asset Management L P have established new positions valued at $493,000 and $202,000, respectively [4]

EverCommerce Conference Call Summary Company Overview - **Company**: EverCommerce (NasdaqGS:EVCM) - **IPO Year**: 2021 [1] Industry Focus - **Main Verticals**: - EverPro (Home Services) - EverHealth (Health Services) - **Revenue Contribution**: Approximately 95% of total revenue from these two verticals [6] Key Insights and Trends - **2025 as a Transition Year**: - 2023 and 2024 were years of transformation and optimization for the organization, focusing on stabilization in 2025 [4][9] - **Market Conditions**: - Current market characterized by uncertainty and volatility, but essential services in home and health sectors are relatively stable and anti-cyclical [3][12][13] Financial Performance - **EBITDA Margin Improvement**: - Achieved a 500 basis points improvement in EBITDA margin from 2022 to 2025, with nearly 1,000 basis points improvement since IPO [7][8] - **Growth Strategy**: - Focus on efficiency, customer value, and reinvestment in key verticals to drive growth in 2026 and beyond [9][59] Market Opportunities - **Underpenetrated Market**: - EverPro has around 300,000-400,000 contractors using its services, representing less than 2% market penetration in North America [18][19] - Total Addressable Market (TAM) includes approximately 30 million contractors globally [20] - **Cross-Selling Opportunities**: - Significant potential in payments, customer engagement solutions, and AI products [27][28][29] AI Integration - **Acquisition of ZyraTok**: - Introduction of AI-driven customer engagement solutions, including an AI Receptionist, aimed at enhancing customer service and operational efficiency [29][30][39] - **AI Applications in EverHealth**: - Plans to integrate AI solutions for ambient voice note-taking and billing processes to improve user experience [50][52] Organizational Changes - **Leadership Changes**: - New leadership in both EverPro and EverHealth, with a focus on building strong teams to drive growth [55][56] - **Talent Acquisition**: - 50 new leadership positions created to enhance focus and execution within the two main verticals [55] Future Outlook - **Growth Projections**: - Anticipated mid-double-digit growth rates as the company reinvests in its core verticals and leverages AI and payment solutions [58][59] - **Capital Allocation**: - Focus on using generated cash flow for strategic acquisitions and share buybacks to enhance shareholder value [66][70] Conclusion - **Long-Term Vision**: - EverCommerce aims to solidify its leadership in the home and health service markets, leveraging technology and operational efficiencies to drive sustainable growth [65][69]

Core Points - EverCommerce Inc. will present at the 2025 RBC Capital Markets Global Technology, Internet, and Media & Telecommunications Conference on November 18, 2025, at 3:20 p.m. EST [1] - The presentation will be led by CEO Eric Remer and SVP of Finance & Head of Investor Relations Brad Korch [1] Company Overview - EverCommerce is a leading service commerce platform that provides vertically-tailored, integrated SaaS solutions for over 725,000 global service-based businesses [3] - The company focuses on helping businesses accelerate growth, streamline operations, and increase customer retention through modern digital and mobile applications [3] - EverCommerce operates under brands such as EverPro, EverHealth, and EverWell, specializing in Home, Health, and Wellness service industries [3] - The company offers end-to-end business management software, embedded payment acceptance, and customer experience applications [3]

Group 1 - Naspers Limited (NPSNY) has seen a 20.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Suzano S.A. (SUZ) has experienced a 7.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - EverCommerce Inc. (EVCM) has reported a significant 42.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] Group 2 - LeMaitre Vascular, Inc. (LMAT) has seen a 9.6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Teradyne, Inc. (TER) has experienced a 10.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3]

Core Insights - EverCommerce (EVCM) reported quarterly earnings of $0.03 per share, matching the Zacks Consensus Estimate, and showing improvement from a loss of $0.05 per share a year ago [1] - The company posted revenues of $147.47 million for the quarter ended September 2025, which was 0.39% below the Zacks Consensus Estimate and down from $176.26 million year-over-year [2] - EverCommerce shares have increased approximately 4.9% year-to-date, underperforming the S&P 500's gain of 15.6% [3] Earnings Performance - The company exceeded earnings expectations by delivering a surprise of +400% compared to the prior quarter's forecast of a loss of $0.01 per share [1] - Over the last four quarters, EverCommerce has surpassed consensus EPS estimates only once [1] Future Outlook - The company's earnings outlook will be crucial for determining future stock performance, with current consensus EPS estimates at $0.05 for the upcoming quarter and $0.10 for the current fiscal year [7] - The Zacks Rank for EverCommerce is currently 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which EverCommerce belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - EverCommerce reported revenue of $147.5 million for Q3 2025, reflecting a 5.3% year-over-year growth, consistent with previous guidance [5][18] - Adjusted EBITDA for the quarter was $46.5 million, representing a margin of 31.5%, which is an expansion of 140 basis points year-over-year [5][18] - Payments revenue grew by 6% year-over-year, accounting for approximately 21% of overall revenue [10][11] Business Line Data and Key Metrics Changes - Subscription and transaction revenue totaled $142.2 million, with core SaaS revenue growing over 8% in the quarter [18] - Adjusted gross profit was $114 million, yielding a gross profit margin of 77.3%, slightly down from 78.1% in Q3 2024 [18] - The annualized total payments volume (TPV) reached approximately $13 billion, marking a 5.2% year-over-year growth [11] Market Data and Key Metrics Changes - EverCommerce serves over 725,000 customers across three major verticals: EverPro, EverHealth, and Everwell, with the first two accounting for about 95% of consolidated revenue [8] - The company achieved a net revenue retention (NRR) of 97%, with customers using multiple solutions showing an NRR of over 100% [10] Company Strategy and Development Direction - The strategic acquisition of Zyratok, an AI agentic platform, aims to enhance AI capabilities within the service-based industries, particularly in home and field services [6][12] - The company is focusing on providing AI-powered vertical software to maximize long-term growth and shareholder value [6][8] - EverCommerce plans to continue its transformation and optimization programs to improve customer satisfaction and operational efficiency [19][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the core SaaS business despite some macroeconomic headwinds affecting the rebate program [28][35] - The company has narrowed its revenue and adjusted EBITDA guidance for 2025, expecting total revenue of $584 to $592 million and adjusted EBITDA of $174.5 to $179.5 million [22][23] Other Important Information - The company ended the quarter with $107 million in cash and cash equivalents and $155 million of undrawn capacity on its revolver [21] - EverCommerce repurchased approximately 2.6 million shares for $29.1 million at an average price of $11.10 per share [21][22] Q&A Session Summary Question: Can you elaborate on the Zyratok acquisition and its business model? - Management indicated that Zyratok's product is focused on the home service sector and will be integrated into EverCommerce's systems, enhancing capabilities across the board [25][26] Question: What were the impacts of the rebate program on guidance? - Management noted a small impact from the rebate program due to macroeconomic factors, but emphasized that the core SaaS business remains strong [28][29] Question: What changes to guidance have occurred due to macro trends? - Management confirmed that there were no significant macroeconomic impacts other than those related to the rebate program, maintaining a positive outlook for the core SaaS business [35][36] Question: How is the pricing for Zyratok structured? - The pricing model for Zyratok includes both subscription and usage-based components, with plans to integrate these into EverCommerce's broader SaaS offerings [39][40] Question: How is the spending optimization program progressing? - Management reported successful cost reductions exceeding $10 million in 2025, with ongoing efforts to enhance operational efficiency and margin expansion [46][47]

Customer Base and Revenue - As of December 31, 2024, EverCommerce served over 740,000 customers across three core verticals: EverPro, EverHealth, and EverWell, with more than 725,000 customers excluding marketing technology solutions[131]. - Approximately 97% of EverCommerce's revenue was recurring or re-occurring for both the nine months ended September 30, 2025 and 2024, maintaining an annualized net revenue retention rate of approximately 97% for the same periods[137]. - Total revenues for the three months ended September 30, 2025, were $147.466 million, an increase of $7.360 million from $140.106 million in the same period of 2024[152]. - Total revenues increased by $7.4 million, or 5.3%, for the three months ended September 30, 2025, and by $19.3 million, or 4.6%, for the nine months ended September 30, 2025, compared to the same periods in 2024[175]. - Revenue growth rate was 5.3% for the three months and 4.6% for the nine months ended September 30, 2025[149]. Acquisitions and Business Development - On October 31, 2025, EverCommerce completed the sale of its marketing technology solutions business for approximately $45 million in cash, recognizing a gain of $2.1 million during the three months ended September 30, 2025[140][141]. - EverCommerce acquired Joblyt LLC, dba ZyraTalk, for approximately $36.1 million in cash on September 15, 2025, enhancing its AI-driven customer engagement capabilities[143]. - The company plans to extend the capabilities of ZyraTalk across its other verticals, indicating a focus on expanding AI-driven solutions[143]. Financial Performance - Adjusted Gross Profit for the three months ended September 30, 2025, was $113.991 million, up $4.510 million from $109.481 million in the same period of 2024[152]. - Adjusted EBITDA from continuing operations for the three months ended September 30, 2025, was $46.453 million, an increase of $4.329 million from $42.124 million in the same period of 2024[155]. - Operating income for the three months ended September 30, 2025, was $15.9 million, compared to $10.2 million for the same period in 2024, reflecting an increase of $5.8 million[175]. - Net income from continuing operations for the three months ended September 30, 2025, was $5.8 million, compared to a loss of $9.1 million for the same period in 2024, representing a turnaround of $14.9 million[175]. - The company reported a net income of $11.1 million for the three months ended September 30, 2025, compared to a loss of $9.2 million for the same period in 2024, reflecting a significant improvement[175]. Expenses and Cost Management - Cost of revenues for the three months ended September 30, 2025, was $33.475 million, an increase of $2.850 million from $30.625 million in the same period of 2024[152]. - General and administrative expenses are expected to increase in absolute dollars due to costs associated with being a public company[165]. - Product development expenses are anticipated to rise in absolute dollars and as a percentage of revenue during 2025 as the company invests in expanding its solutions[164]. - The company expects sales and marketing expenses to increase in absolute dollars and potentially as a percentage of revenue to support growth initiatives[163]. - Sales and marketing expenses decreased by $2.0 million, or 7.1%, for the three months ended September 30, 2025, but increased by $0.9 million, or 1.0%, for the nine months ended September 30, 2025[179]. Cash Flow and Financing - Net cash provided by operating activities was $90.2 million for the nine months ended September 30, 2025, compared to $64.8 million for the same period in 2024[194]. - Net cash used in investing activities was $56.5 million for the nine months ended September 30, 2025, primarily due to the acquisition of ZyraTalk for approximately $35.9 million[196]. - For the nine months ended September 30, 2025, net cash used in financing activities was $51.3 million, primarily for the repurchase and retirement of common stock totaling $50.6 million[198]. - The Company repurchased and retired 5.7 million shares of common stock for approximately $60.9 million during the nine months ended September 30, 2025[213]. - As of September 30, 2025, the outstanding amount under the Credit Facilities was $528.0 million, all related to the Term Loan, with an effective interest rate of approximately 6.95%[211]. Market Conditions and Challenges - The macroeconomic climate, including rising inflation and supply chain disruptions, has posed challenges to EverCommerce's revenue and demand for its products and services[139]. Performance Metrics - The Pro Forma Revenue Growth Rate is a key performance measure used by management to assess consolidated operating performance over time, normalizing for acquisitions and divestitures[146][148]. - Pro Forma Revenue Growth rate was 5.3% for the three months and 7.0% for the nine months ended September 30, 2025, driven by new customers and expanded solutions for existing customers[149].

Financial Performance - Revenue reached $147.5 million, representing a 5.3% year-over-year growth[12, 38] - Adjusted EBITDA margin expanded by 140 bps year-over-year to 31.5%[13] - Pro Forma Last Twelve Months (LTM) Revenue was $585.1 million, with a 7.6% year-over-year growth[14] - Pro Forma annualized Total Payments Volume (TPV) is estimated at $13.0 billion[14] - Levered Free Cash Flow (LFCF) for Q3 2025 was $23.3 million[46] - Adjusted Unlevered Free Cash Flow (aUFCF) for Q3 2025 was $32.3 million, a 8.8% year-over-year decline[45] Customer Growth and Cross-Selling - 276,000 total customers are enabled with more than one solution, a 33% year-over-year increase[17, 18] - 116,000 customers actively utilize more than one solution, reflecting a 32% year-over-year growth[17, 18] Payments and Acquisitions - Payments revenue grew by 6.0% year-over-year, driven by Total Payments Volume (TPV) growth[13, 21] - The company closed the acquisition of AI agent ZyraTalk, an AI agentic platform[13] Outlook - Q4 2025 revenue is projected to be between $148 million and $152 million[49] - Q4 2025 Adjusted EBITDA is expected to be between $39.5 million and $41.5 million[49] - Full year 2025 revenue is guided to be between $584 million and $592 million[49] - Full year 2025 Adjusted EBITDA is guided to be between $174.5 million and $179.5 million[49]

Financial Performance - Revenue from continuing operations for Q3 2025 was $147.5 million, a 5.3% increase from $140.1 million in Q3 2024[7] - Adjusted EBITDA for Q3 2025 was $46.5 million, compared to $42.1 million in Q3 2024[7] - Net income for Q3 2025 was $5.8 million, or $0.03 per share, compared to a net loss of $9.1 million, or $(0.05) per share, in Q3 2024[7] - Total revenues for Q3 2025 reached $147.466 million, a 5.3% increase from $140.106 million in Q3 2024[25] - Adjusted EBITDA for the nine months ended September 30, 2025, was $45.960 million, compared to $13.562 million for the same period in 2024[25] - Net income for Q3 2025 was $11.116 million, a significant recovery from a net loss of $9.156 million in Q3 2024[25] - The company reported a basic net income per share of $0.06 for both Q3 2025 and the nine months ended September 30, 2025, compared to a loss of $0.05 per share in Q3 2024[25] - Adjusted EBITDA from continuing operations for the nine months ended September 30, 2025, was $136,355, an increase of 13.4% from $120,207 in the same period of 2024[33] Revenue Breakdown - Subscription and transaction fees revenue for Q3 2025 was $142.2 million, a 4.3% increase from $136.3 million in Q3 2024[7] - Subscription and transaction fees contributed $142.184 million to revenues in Q3 2025, up from $136.263 million in Q3 2024, reflecting a growth of 4.3%[25] - Pro Forma Revenue for Q3 2025 was $148.3 million, up 5.3% from $140.8 million in Q3 2024[7] - Pro forma revenue for Q3 2025, including acquisition revenue, was $148.340 million, compared to $140.815 million in Q3 2024[30] - Pro Forma Subscription and Transaction Fees Revenue for Q3 2025 reached $143,058, a 4.0% increase from $136,972 in Q3 2024[31] - Subscription and transaction fees revenue for the nine months ended September 30, 2025, totaled $422,804, compared to $405,329 in 2024, marking a growth of 4.3%[31] Cash Flow and Assets - Cash flows provided by operating activities for the nine months ended September 30, 2025, totaled $90.183 million, compared to $64.750 million in the same period of 2024[27] - Total assets as of September 30, 2025, were $1.403 billion, slightly down from $1.421 billion at the end of 2024[24] - Total liabilities increased to $674.592 million as of September 30, 2025, from $670.442 million at the end of 2024[24] Strategic Initiatives - The acquisition of ZyraTalk was highlighted as a key strategic move to enhance AI solutions for service SMBs[3] - The company announced a $50 million increase in its stock repurchase authorization, totaling $300 million since the program began[4] - The company repurchased 2.6 million shares for approximately $29.1 million during Q3 2025[5] - The company incurred $35.856 million in acquisition costs during the nine months ended September 30, 2025[27] Expenses - Depreciation and amortization expenses for Q3 2025 were $4,846, slightly down from $5,247 in Q3 2024[32] - The company incurred stock-based compensation expenses of $6,724 in Q3 2025, compared to $7,950 in Q3 2024, indicating a reduction of 15.4%[33] - Transaction-related and other non-recurring costs for the nine months ended September 30, 2025, were $14,111, down from $22,280 in the same period of 2024, reflecting a decrease of 36.5%[33]

Core Insights - EverCommerce Inc. reported third quarter financial results for the period ending September 30, 2025, with revenue in line with guidance and Adjusted EBITDA exceeding expectations, driven by cost optimization efforts and the acquisition of ZyraTalk, enhancing its AI capabilities for service SMBs [3][9]. Financial Performance - Revenue for the third quarter was $147.5 million, a 5.3% increase from $140.1 million in the same quarter of 2024 [9]. - Subscription and transaction fees revenue was $142.2 million, up 4.3% from $136.3 million year-over-year [9]. - Net income from continuing operations was $5.8 million, or $0.03 per share, compared to a net loss of $9.1 million, or $(0.05) per share, in the prior year [9][31]. - Adjusted EBITDA for the quarter was $46.5 million, compared to $42.1 million in the same quarter of 2024 [9]. Share Repurchase Program - The Board of Directors approved a $50 million increase in the stock repurchase authorization, bringing the total to $300 million since the program's inception [4][5]. - During the third quarter, the company repurchased 2.6 million shares for approximately $29.1 million, leaving $22.3 million available under the repurchase program as of September 30, 2025 [5][6]. Business Outlook - For the fourth quarter of 2025, revenue is expected to be between $148 million and $152 million [8]. - Full-year revenue guidance is projected to be in the range of $584 million to $592 million, with Adjusted EBITDA expected between $174.5 million and $179.5 million [15]. Key Metrics - Pro Forma Revenue for the third quarter was $148.3 million, reflecting a 5.3% increase compared to $140.8 million in the same quarter of 2024 [9][36]. - Pro Forma Subscription and Transaction Fees Revenue was $143.1 million, a 4.4% increase from $137.0 million year-over-year [9][38]. Balance Sheet Highlights - As of September 30, 2025, total assets were $1.403 billion, a slight decrease from $1.421 billion at the end of 2024 [28]. - Total liabilities stood at $674.6 million, compared to $670.4 million at the end of 2024 [28]. - Stockholders' equity was $728.5 million, down from $750.8 million at the end of 2024 [29]. Cash Flow Analysis - Net cash provided by operating activities for the nine months ended September 30, 2025, was $90.2 million, compared to $64.8 million in the same period of 2024 [33]. - Cash used in investing activities totaled $56.5 million, primarily due to acquisitions and capitalized software costs [34]. - Cash used in financing activities was $62.3 million, which included stock repurchases and payments on long-term debt [34].