EverCommerce (NasdaqGS:EVCM) Q3 2025 Earnings Call November 06, 2025 05:00 PM ET Speaker0Thank you for standing by, and welcome to EverCommerce's third quarter 2025 earnings call. My name is Jonathan, and I will be your operator for today. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd lik ...

Financial Data and Key Metrics Changes - Revenue increased by 14% year-over-year to $618 million, driven by higher volume and pricing [4][18] - Gross profit margin improved by 60 basis points to 57% [4][18] - Net income grew by 5% to $106 million, while adjusted EBITDA increased by 18% to $195 million [4][19] - Free cash flow rose by 64% to $296 million, with total cash position reaching $563 million [21] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) member count grew by 8%, marking five consecutive quarters of organic growth [4][9] - Real estate revenue increased by 21%, primarily due to contributions from the 2-10 acquisition [18] - Non-warranty revenue surged by 73% year-over-year, driven by new HVAC and mowing programs [18][16] Market Data and Key Metrics Changes - The real estate channel saw sequential member count growth for the first time since 2020, indicating a shift towards a buyer's market [12][13] - Existing home sales increased by 4.1% in September, although overall sales remain at a 30-year low [12] - Total housing inventory rose by 14% year-over-year, reaching a five-year high [12] Company Strategy and Development Direction - The company is focused on operational excellence, leveraging pricing actions and operational efficiencies to improve margins [5][8] - Plans to expand non-warranty offerings into other trades, with significant growth potential identified in appliance replacement and other categories [16] - The company is committed to enhancing member experience through technology and continuous innovation [5][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record financial results for 2025, with a strong outlook for revenue and adjusted EBITDA [4][25] - The macro environment is improving, which is expected to support the company's strategic initiatives [33] - Management highlighted the importance of member retention and the effectiveness of marketing strategies targeting younger demographics [10][34] Other Important Information - Jessica Ross, the CFO, announced her resignation, effective November 10, with Jason Bailey set to succeed her [25][26] - The company is increasing its marketing spend in Q4 to drive growth, particularly in the DTC channel [22][34] Q&A Session Summary Question: What drove the increase in cost inflation? - Management clarified that inflation was closer to 4%, primarily due to rising appliance costs, but they are managing through it with dynamic pricing strategies [28][29] Question: What promotional strategies were implemented in the real estate channel? - The company ran specific promotions, including a $100 discount, which helped them outpace the real estate market [30] Question: What are the early observations from the non-warranty pilot program? - The company plans to expand the program nationwide in 2026, with initial feedback being positive [31] Question: What is driving the expected decline in DTC revenue? - The decline is attributed to pricing strategies and seasonal adjustments, but retention rates remain strong [32] Question: How much of the real estate channel's success is due to market conditions versus company initiatives? - Management noted that both the improving macro environment and their promotional strategies contributed to the success [33] Question: What is the outlook for long-term margin targets? - Management indicated that they are reevaluating long-term margin targets due to improved execution and pricing capabilities [36][38]

Core Insights - Vulcan Materials (VMC) reported quarterly earnings of $2.84 per share, exceeding the Zacks Consensus Estimate of $2.68 per share, and showing an increase from $2.22 per share a year ago, resulting in an earnings surprise of +5.97% [1][2] - The company achieved revenues of $2.29 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.67%, compared to $2 billion in the same quarter last year [2] - Vulcan has surpassed consensus EPS estimates three times over the last four quarters and topped revenue estimates two times in the same period [2] Earnings Outlook - The sustainability of Vulcan's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $2.39 on revenues of $2.06 billion, and for the current fiscal year, it is $8.50 on revenues of $8.05 billion [7] Industry Context - The Building Products - Concrete and Aggregates industry, to which Vulcan belongs, is currently ranked in the top 22% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Vulcan's stock performance [5][6]

Core Insights - Snabbit, an on-demand home-help startup in India, has raised $30 million in funding, increasing its valuation from $80 million to $180 million in just five months [1][2] - The startup has experienced significant growth, with daily job bookings rising from approximately 1,000 in May to over 10,000 [3] - Snabbit aims to expand its services beyond its current markets and plans to enter additional cities soon [5] Funding and Valuation - The recent Series C funding round was led by Bertelsmann India Investments, with participation from existing investors including Lightspeed, Elevation Capital, and Nexus Venture Partners [2] - Total funding for Snabbit has now reached $55 million [2] Business Growth - Snabbit has grown its total orders to over 300,000 as of October, up from 25,000 in May [5] - The startup has a retention rate of 30% to 35% and projects an annual recurring revenue of $11 million [7] Service Offering - Founded in 2024, Snabbit provides various on-demand home services, including cleaning, dishwashing, laundry, and kitchen prep, through a fleet of 5,000 women experts [4] - The services are priced at around ₹150 (approximately $2) per hour, with an average ticket size of ₹240 (about $3) [8] Market Presence - Snabbit currently operates in 40 micro markets across five major cities: Mumbai, Bengaluru, Gurugram, Noida, and Pune [5] - The company plans to expand into Hyderabad, Chennai, Delhi, and Calcutta [5] Customer Demographics - Most users of Snabbit's services are between 30 and 40 years old, including bachelors and working professionals [5] - The startup targets customers who prefer ad hoc solutions rather than full-time house help [6]

Core Insights - Service Nation is hosting the 10th annual Service World Expo, a significant event for residential service business leaders, taking place from October 26-30 at Caesars Forum & Harrah's Las Vegas [1][3] - The expo will focus on education and training for residential contractors, emphasizing seven key pillars: business design, financials, human resources, leadership, marketing, operations, and sales [2] Event Highlights - The event will feature keynote speakers including Danica Patrick, Jeff Civillico, Jade Simmons, Darren LaCroix, and sessions on maximizing AI for automation and business leads [5] - Attendees will have access to general sessions, panels, and workshops led by industry experts, providing actionable insights and strategies [5] - Networking opportunities will be available through curated events such as mixers, costume parties, and business coaching happy hours [5] Company Overview - EverCommerce is a leading service commerce platform that supports over 725,000 global service-based businesses with integrated SaaS solutions [4] - The company specializes in providing end-to-end business management software, payment acceptance, marketing technology, and customer experience applications across various service industries [4]

Core Insights - Investors should consider adding stocks with strong liquidity to their portfolios, as these stocks are associated with business growth and potential maximum returns [1][2] - Four top-ranked stocks identified for potential investment are Remitly Global, Inc. (RELY), Frontdoor, Inc. (FTDR), Pagaya Technologies Ltd. (PGY), and Willdan Group, Inc. (WLDN) [1][9] Liquidity Measures - Current Ratio: Measures current assets against current liabilities; a ratio below 1 indicates more liabilities than assets, while a range of 1-3 is ideal [4] - Quick Ratio: Indicates ability to pay short-term obligations, with a desirable ratio of more than 1 [5] - Cash Ratio: The most conservative measure, focusing on cash and equivalents relative to current liabilities; a ratio greater than 1 is desirable but may indicate inefficiency [6] Screening Parameters - Asset Utilization: A measure of efficiency, calculated as total sales over the last 12 months divided by the average total assets; companies with a ratio higher than their industry average are considered efficient [7][8] - Growth Score: A proprietary metric added to ensure that liquid and efficient stocks also have solid growth potential [8] Company Highlights - **Remitly Global, Inc. (RELY)**: Specializes in digital financial and remittance services, with revenues of $411.9 million for Q2 2025, up 34% year over year; active customers grew 24% to over 8.5 million [12][10] - **Frontdoor, Inc. (FTDR)**: Parent company of home service plan brands, reported revenues of $617 million for Q2 2025, up 14% year over year; DTC member count increased by 9% [15][14] - **Pagaya Technologies Ltd. (PGY)**: Focuses on AI infrastructure for finance, with total revenues of $326 million for Q2 2025, a 30% increase year over year; annualized run-rate for POS and Auto segments reached $1.2 billion and $2 billion, respectively [17][18] - **Willdan Group, Inc. (WLDN)**: Provides consulting services to government and private sectors, with net revenues expected between $340 million and $350 million for 2025; contract revenues jumped 23% year over year [20][21]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Frontdoor (FTDR) identified as a promising candidate due to its favorable growth metrics and strong Zacks Rank [1][2]. Group 1: Earnings Growth - Frontdoor has a historical EPS growth rate of 17.1%, with projected EPS growth of 8.8% for the current year, surpassing the industry average of 8.5% [4]. - Double-digit earnings growth is preferred by growth investors as it indicates strong future prospects and potential stock price gains [3]. Group 2: Asset Utilization - Frontdoor's asset utilization ratio (sales-to-total-assets ratio) stands at 1.03, indicating that the company generates $1.03 in sales for every dollar in assets, which is higher than the industry average of 0.82 [5]. Group 3: Sales Growth - The company's sales are projected to grow by 11.9% this year, significantly outpacing the industry average growth of 0.3% [6]. Group 4: Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Frontdoor, with the Zacks Consensus Estimate for the current year increasing by 5.3% over the past month [8][7]. Group 5: Overall Assessment - Frontdoor has achieved a Growth Score of A and holds a Zacks Rank 1, indicating it is a potential outperformer and a solid choice for growth investors [10].

Core Insights - Frontdoor (FTDR) is expected to report quarterly earnings of $1.44 per share, reflecting a 13.4% increase year-over-year, with revenues projected at $602.1 million, an 11.1% increase compared to the previous year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, indicating analysts' reassessment of their projections [1][2] - Analysts predict specific revenue metrics for Frontdoor, including $458.90 million from 'Revenue by Customer Channel- Renewals', a 9% year-over-year increase [3] Revenue Projections - 'Revenue by Customer Channel- Other' is expected to reach $47.45 million, indicating a significant year-over-year change of 35.6% [4] - 'Revenue by Customer Channel- Direct-to-consumer (First-Year)' is projected at $55.00 million, reflecting a 10% increase year-over-year [4] - 'Revenue by Customer Channel- Real estate (First-Year)' is anticipated to be $41.40 million, suggesting a 15% year-over-year change [5] Stock Performance - Frontdoor's shares have decreased by 3.1% over the past month, contrasting with a 0.6% increase in the Zacks S&P 500 composite [5] - The company holds a Zacks Rank 3 (Hold), indicating expectations to mirror overall market performance in the near future [5]

Core Insights - Angi is launching an "AI Helper" to enhance the service request experience for homeowners, coinciding with its 30th anniversary, aimed at simplifying connections with service professionals and meeting the demand for smarter home improvement solutions [1][5] Technology Enhancement - The new AI system utilizes advanced large language models (LLMs) and job assessment questions developed with service professionals to create more accurate service requests, allowing homeowners to describe their needs in their own words [2][4] - The AI improves match accuracy by approximately 30% compared to traditional methods, ensuring precise recommendations and quicker quotes from qualified professionals [4] Market Insights - Angi's State of Home Spending report indicates that 45% of homeowners experience stress and anxiety due to a lack of knowledge about repairs, highlighting a significant market need for improved service matching [3] - The company has evolved significantly since its founding in 1995, with key milestones including its IPO in 2011 and strategic mergers, reinforcing its position as a leading home services platform [5][6] Commitment to Innovation - Angi's continuous training of its AI system using historical data and real-world interactions has led to significant improvements in service match accuracy and quality, demonstrating the company's commitment to enhancing user experience [5] - The introduction of the AI-powered feature reflects Angi's dedication to evolving with community needs and streamlining the home improvement process [4]

Core Viewpoint - Frontdoor (FTDR) is experiencing solid improvement in earnings estimates, which is likely to positively impact its stock price momentum [1][2]. Earnings Estimate Revisions - Analysts show growing optimism regarding Frontdoor's earnings prospects, reflected in upward revisions of earnings estimates [2]. - The current quarter's earnings estimate is $1.35 per share, representing a 6.3% increase from the previous year [6]. - Over the last 30 days, the Zacks Consensus Estimate for Frontdoor has increased by 11.09%, with three estimates moving higher and one lower [6]. - For the full year, the expected earnings are $3.29 per share, indicating a 1.79% decrease from the prior year, but there is a positive trend in estimate revisions [7]. Zacks Rank - Frontdoor currently holds a Zacks Rank 2 (Buy), indicating promising estimate revisions and a favorable investment outlook [8]. - The Zacks Rank system has a strong track record, with Zacks 1 Ranked stocks averaging a 25% annual return since 2008 [3]. Stock Performance - Frontdoor shares have increased by 43.1% over the past four weeks, suggesting strong investor confidence in its earnings growth prospects [9].