EverCommerce Inc. Q3 FY2024 earnings call

• The sale of fitness products was completed in March and July. Third quarter GAAP revenue exceeded guidance range, with Adjusted EBITDA at $44.5 million (25.3% margin).
• Transformation optimization initiatives include focusing on the EverPro vertical with operational changes and hiring Josh McCarter as leader. Optimization initiatives involve cost-saving measures like vendor consolidation and real-estate rationalization.
• Cross-sell/upsell strategy is emphasized, with initiatives like the Edge program. At quarter end, 212,000 customers were enabled for more than one solution (25% YOY growth) and 88,000 were actively utilizing more than one solution (13% YOY growth).
• Net revenue retention for core software and payment solutions was 96% in the trailing 12 months, impacted by price increases in two solutions.

In the third quarter, total reported revenue was $176.3 million, up 0.9% year-over-year. Subscription and Transaction revenue was $137.6 million, up 3.7% year-over-year, while Marketing Technology solutions revenue was $34.4 million, down 6.7% year-over-year. On a pro forma basis (excluding fitness sale), revenue grew 4.3%, with Subscription and Transaction revenue up 8.3%. Payments revenue, excluding fitness solutions, grew 6.7% year-over-year, accounting for approximately 17% of overall revenue. Annualized total payment volume (TPV) expanded to over $12.4 billion.

• Fourth quarter 2024 guidance: Total revenue expected to be $168 million to $172 million, Adjusted EBITDA expected to be $43 million to $46 million. Full year guidance remains unchanged, excluding fitness assets.

• Forward-looking statements subject to risks and uncertainties in SEC filings.
• Impact of economic conditions on SMB purchasing environment.
• Execution risks related to transformation optimization and cross-sell/upsell strategies.

Q: Matt Hedberg asked about cross-sell initiatives and catalysts for organic reacceleration.

A: Eric Remer and Evan Berlin discussed the Edge program, integrated sales motion, and focus on payment penetration.

Q: Eamon Coughlin inquired about linearity in the quarter and strategic changes as CFO.

A: Matt Feierstein and Ryan Siurek talked about consistent new customer acquisition and focus on transformation/optimization.

Q: DJ Hynes asked about customer enablement growth and driving momentum.

A: Eric Remer and Evan Berlin discussed integrated sales motion and go-to-market focus.

Q: Aaron Kimson asked about the company's position in business optimization and key metric for investors.

A: Eric Remer, Matt Feierstein, and Ryan Siurek talked about parallel paths of transformation/optimization and key metrics like pro forma growth.

Q: Clarke Jeffries asked about organizational structure impact and NRR.

A: Eric Remer and Matt Feierstein discussed organizational structure benefits and NRR context related to pricing changes.

Q: Bill McNamara asked about M&A environment and decentralization impact on headcount.

A: Eric Remer and Matt Feierstein addressed M&A outlook and minimal headcount impact from decentralization