EverCommerce(US:EVCM)2024-08-07 00:53Financial Data and Key Metrics Changes - Total reported revenue for Q2 2024 was $177.4 million, up 4.3% year-over-year, exceeding the top end of guidance and marking the highest quarterly revenue on record [20][22] - Adjusted EBITDA was $41.2 million, representing a 23.2% margin, which is an increase from 22.8% in Q2 2023 [22] - Pro forma revenue growth, excluding the North American fitness assets sold, was 6% year-over-year [21] - Adjusted gross profit was $116.1 million, with a gross margin of 65.4%, slightly down from 65.8% in Q2 2023 [22] Business Line Data and Key Metrics Changes - Payments revenue, excluding fitness solutions, grew 8% year-over-year, driven by an 8.4% growth in total payment volume (TPV) [7][11] - Subscription and transaction revenue was $137 million, up 5.2% from the prior year period [20] - Marketing technology solutions revenue was $35 million, up 1.6% year-over-year, indicating a return to growth after previous declines [20][21] Market Data and Key Metrics Changes - The company ended the quarter with approximately $12.1 billion in annualized TPV, reflecting an 8.4% year-over-year growth [11] - The number of customers enabled for more than one solution grew by 25% year-over-year, reaching 199,000 [9] - Active utilization of more than one solution increased by 60% year-over-year, with approximately 87,000 customers actively using multiple solutions [10] Company Strategy and Development Direction - The company is focused on balanced profitability and has increased its share repurchase authorization by $50 million, extending the program through the end of 2025 [7][25] - A transformation and optimization program is underway, aimed at consolidating spend and enhancing operational efficiencies [17][18] - The company is prioritizing investments in its core software solutions and cross-sell opportunities, particularly in payments and the newly launched EverPro Edge [12][15] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic conditions have remained stable, with no significant changes impacting revenue [30] - The company expects continued growth in TPV and payment revenue, with a focus on optimizing pricing and enhancing customer value [31][52] - For Q3 2024, the company anticipates total revenue between $172 million and $176 million, maintaining its full-year guidance [26][27] Other Important Information - The company appointed Ryan Siurek as the new Chief Financial Officer, effective September 6, 2024, following Marc Thompson's departure [19] - The company has maintained a strong free cash flow generation, with levered free cash flow of $19 million for the quarter, down 16% year-over-year due to working capital changes [24][25] Q&A Session Summary Question: Marketing technology solutions growth - Management indicated that the 1.6% growth in marketing technology solutions was a mix of execution and macro factors, with stabilization expected [30] Question: Payments revenue growth alignment with TPV - Management explained that the convergence of payments revenue growth with TPV growth is due to ongoing optimization of pricing and customer relationships [31] Question: Optimization initiatives progress - Management confirmed that optimization initiatives are on track and will continue under the new CFO, with expected impacts materializing in 2025 [34][35] Question: Net retention rate dynamics - Management noted that the net revenue retention rate remains stable, with some impact from prior pricing increases but overall consistency in retention dynamics [37][38] Question: Capital allocation strategy - Management emphasized a focus on internal investments and share repurchases, while remaining open to external opportunities if they align with strategic goals [48] Question: EverHealth consolidation progress - Management reported good progress in the EverHealth consolidation, with improvements in customer acquisition and payment enablement [64][65]