EverCommerce(EVCM) - 2025 Q3 - Quarterly Report

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].