EverCommerce(EVCM)2023-03-16 02:39Financial Data and Key Metrics - Q4 2022 revenue grew 19% YoY, with pro forma revenue growth of 14% for the quarter and 16% for the full year 2022 [3] - Adjusted EBITDA for Q4 2022 was $35.2 million, representing a 21.7% margin, while full-year 2022 adjusted EBITDA was $119 million, with a 19.2% margin [8] - Adjusted gross profit for Q4 2022 was $107.9 million, with an adjusted gross margin of 66.7%, while full-year 2022 adjusted gross profit was $403.4 million, with a 65% margin [9] - Q1 2023 revenue guidance is $157 million to $160 million, with adjusted EBITDA of $27 million to $29 million, and full-year 2023 revenue guidance is $680 million to $700 million, with adjusted EBITDA of $134 million to $142 million [10] Business Line Data and Key Metrics - Cross-sell progress showed 71,000 customers using more than one solution, a 29% YoY increase [4] - Embedded payments are a key focus, driving higher ARPU and improved retention, with annualized TPV reaching $10.9 billion, a 19% YoY growth [6][81] - Health care services, the largest vertical, continues to grow the fastest, followed by health services and fitness and wellness [34] Market Data and Key Metrics - The company operates across multiple verticals, with nearly 700,000 customers, and sees continued growth opportunities in core verticals [20][97] - The U S TAM is estimated at over $500 billion, with a global TAM exceeding $1 3 trillion [5] Company Strategy and Industry Competition - The company prioritizes investments in embedded payments and cross-sell adoption to drive growth and retention [66] - Strategic acquisitions are selectively used to augment organic growth, with a focus on vertical SaaS solutions and embedded payments [7][126] - The company is optimizing its solution and product mix, including M&A, to add capabilities in targeted market verticals [100] Management Commentary on Operating Environment and Future Outlook - The company is well-positioned to benefit from the digital transformation among SMBs and service SMB companies [11] - Management expects continued softness in the macro environment but remains confident in achieving growth and profitability targets [121][138] Other Important Information - The company has diversified banking relationships and did not expect the potential failure of SVB to disrupt its operations [26] - A temporary hiring freeze was implemented in Q4 2022 to manage costs, with plans to continue disciplined expense management in 2023 [102] Q&A Summary Question: Margin guidance and potential upside from faster growth [12] - Management believes investments are baked into the guidance, with a focus on cost structure to drive margin improvement [13] Question: Customer count growth and vertical performance [32] - Health care services is the fastest-growing vertical, followed by health services and fitness and wellness [34] Question: Demand environment and macro impact [19] - Marketing side of the business has flattened out, with no significant degradation in subscription metrics [38] Question: Payments growth and revenue contribution [46] - Payments represent a significant growth opportunity, with TPV at $10 9 billion and a $100 billion opportunity ahead [46] Question: Cost control and hiring freeze impact [60] - The company is managing capacity and expects to adjust sales and marketing investments based on market conditions [61] Question: Pricing strategy and inflation impact [41] - The company is proactive in implementing price increases to reflect value and inflation costs [42] Question: Net revenue retention (NRR) and cross-sell success [90] - NRR remains steady at 100%, driven by cross-sell and upsell activities, particularly in payments [31][129] Question: M&A priorities and private market valuations [135] - The company remains selective in M&A, focusing on opportunities that add value to the ecosystem [35] Question: Linearity of customer acquisition and revenue growth [141] - Seasonality impacts Q4, with stronger growth expected in Q2 and Q3 [124]