EverCommerce Inc. Q4 FY2024 earnings call

• Fourth-quarter GAAP revenue increased 3.3% year over year, and pro forma revenue (adjusting for fitness solutions sale) grew 7% year over year. Adjusted EBITDA of $50.4 million beat the guidance range with a 28.8% margin, and the margin expanded nearly 340 basis points year over year.
• EverPro and EverHealth are key verticals, representing ~95% of consolidated revenue. EverPro focuses on growing customer base, cross-sell opportunities, and payments adoption. EverHealth provides end-to-end capabilities for small physician practices.
• Leadership changes include Josh McCarter as EverPro CEO and Evan Berlin as EverHealth CEO. The company has made progress in transformation efforts, including selling fitness solutions and intent to sell marketing technology solutions, positioning for a pure-play SaaS and embedded payments platform.
• In 2024, pro forma revenue was $690.7 million, up 5.7% year over year. Subscription transaction revenue grew 8.4% year over year. Adjusted EBITDA margin was 25.3%, up 230 basis points year over year. Annualized total payment volume (TPV) expanded to over $12.6 billion.

Total reported revenue in the fourth quarter was $175 million, up 3.3% year over year. Subscription and transaction revenue was $139 million, up 4.2% year over year, while marketing technology solutions revenue was $29.6 million, down 1.6%. On a pro forma basis, excluding the sale of fitness solutions, revenue increased 7% year over year. Subscription and transaction revenue pro forma grew 8.9% year over year. Adjusted EBITDA in the fourth quarter was $50.4 million, beating the guidance range, with a 28.8% margin, and the margin expanded nearly 340 basis points year over year. Payments revenue, excluding fitness solutions, grew 8.9% year over year, driven by 9% growth in TPV. The company's customer count grew by more than 7% over the past year to over 740,000 customers across three major verticals.

• For the first quarter of 2025, the company expects total revenue of $138 to $141 million and adjusted EBITDA of $39 million to $41 million.
• For the full year 2025, total revenue is expected to be $581 million to $601 million and adjusted EBITDA is expected to be $167.5 to $175.5 million. Guidance is based on continuing operations excluding marketing technology solutions.

• The company is actively seeking strategic alternatives for its marketing technology solutions, which could impact financial results.
• Potential macroeconomic impacts on customer acquisition, utilization, and churn, though currently no discernible impact is seen.
• Challenges in implementing transformation efforts, including partnerships, channel optimization, and product development.

Q: Can you give an update on the health of customers and impact from tariffs or hesitancy?

A: Matt Feierstein said currently no discernible macro impact on acquisition, utilization, or churn trends. They monitor near-time indicators like cost per lead, conversion rates, etc. Eric Remer added that main verticals (home field service and health services) are relatively macro-resistant.

Q: Can you expand on augmenting go-to-market with partnerships and channel optimization?

A: Matt Feierstein said partnerships are part of customer acquisition, with digital being the largest source (80%-85%), and partnerships/trade shows as other legs. Evan Berlin added EverHealth is focused on existing and new partnerships for double-digit growth in channel distribution.

Q: Talk about customer count growth and retention factors?

A: Matt Feierstein said 7% customer growth was due to new customer acquisition (driven by digital efforts, partnerships) and retention efforts. They focus on providing more value to their large customer base. Eric Remer emphasized the large scale of 740,000 customers as a key focus.

Q: Discuss investments in payments platform and adoption frictions?

A: Matt Feierstein said investments are in removing inertia of change for SMBs. This includes integrated sales motion for SaaS and payments, payment sales team, and customer success resources to drive utilization and wallet share expansion.

Q: Payments opportunity in EverHealth vs EverPro?

A: Evan Berlin said EverHealth has an early-stage payments opportunity, focusing on patient payments and embedded finance within core platforms, while EverPro has a larger growth opportunity in payments adoption but EverHealth has specific needs in healthcare patient payments.