EverCommerce(EVCM) - 2025 Q4 - Annual Report

Financial Performance - Revenue from continuing operations grew at a CAGR of 7.1% from 2022 to 2025, reaching $588.9 million for the year ended December 31, 2025, up 4.8% from $562.2 million in 2024[27] - Net income from continuing operations was $18.2 million for the year ended December 31, 2025, compared to a net loss of $15.2 million in 2024[27] - Adjusted EBITDA from continuing operations reached $180.5 million for the year ended December 31, 2025, an increase from $164.4 million in 2024[27] Market Opportunity - The total addressable market (TAM) for current solutions was approximately $1.6 trillion globally in 2023, with $662 billion in North America[31] - The estimated payment processing opportunity exceeds $100 billion based on current customers and payment volumes[39] - The number of service SMBs globally was approximately 456 million in 2023, with 35 million in North America[30] - Mobile commerce is estimated to represent approximately 60% of dollars spent online, with rapid growth outpacing other forms of eCommerce[28] Customer Base and Growth - The customer base increased from approximately 110,000 at the end of 2018 to approximately 745,000 at the end of 2025[49] - As of December 31, 2025, the company served approximately 745,000 customers, with 68% based in the United States and 32% international[54] - The company aims to expand average revenue per user (ARPU) by cross-selling payment solutions and enhancing customer experience through integrated digital offerings[49] Acquisitions and Strategic Initiatives - The acquisition of ZyraTalk enhances AI capabilities, providing fully autonomous AI agents for improved customer experience[39] - The company has acquired 54 companies since its inception, focusing on filling gaps in vertically tailored solutions and entering new verticals and geographies[51] - The company aims to expand its market presence through targeted customer acquisition and upsell opportunities[58] Employee and Culture - The company emphasizes a human-first culture, with approximately 1,800 employees across five countries, including 1,400 in the United States[63] - The company prioritizes inclusivity and employee engagement, investing in human capital to enhance business performance[59] Intellectual Property and Brand Protection - The company has a portfolio of approximately 3,200 registered domain names to protect its brands[70] - The company has 115 registered trademarks in the United States and 37 registered copyrights, along with seven issued patents[70] Financial Risk Management - The company has mitigated interest rate risk on $425.0 million of its $526.6 million outstanding under its Term Loan through interest rate swap agreements[426] - The Term Loan bears interest at either Term SOFR plus an applicable margin of 2.25% or Alternate Base Rate plus an applicable margin of 1.25%, with minimum rates of 0.50% and 1.50% respectively[426] - The company executed three interest rate swaps totaling $425 million to convert a portion of its floating rate Term Loan to fixed rates, with the Initial Swap at 4.2120%, the Second Swap at 3.951%, and the Third Swap at 3.395%[427] - For every 100 basis point increase in the Adjusted SOFR rate, the company would incur approximately $1.0 million of additional annual interest expense based on the outstanding balance of the Credit Facilities as of December 31, 2025[428] - The company has foreign currency risks related to subsidiaries in Canada, the UK, New Zealand, and Australia, but does not expect a 10% change in the relative value of the U.S. dollar to materially affect cash flows and operating results[429] - Currently, the company does not hedge foreign currency exposure but may consider using currency forward contracts or options in the future to mitigate foreign currency risk[430]