GlobeNewswire Inc | Nov 8, 2021 04:05PM EST

November 08, 2021

DENVER, Nov. 08, 2021 (GLOBE NEWSWIRE) -- EverCommerce Inc. (NASDAQ: EVCM), a leading service commerce platform, today announced financial results for the third quarter ended September 30, 2021.

EverCommerces third quarter results were highlighted by 44% revenue growth and adjusted EBITDA margins that exceeded 20%. Our strong results are driven by the value we bring to our SMB services providers as they continue to digitize their businesses. Following our strong quarter, we also recently announced our acquisition of DrChrono, which expands our presence in the health services vertical with another robust system of action," said Eric Remer, EverCommerces Founder and CEO.

Third Quarter 2021 Financial Highlights

-- Revenue for the third quarter of 2021 was $128.5 million, an increase of 44% compared to $89.2 million for the third quarter of 2020. -- Pro forma revenue growth rate was 20% year-over-year in Q3 2021 and 21% year-over-year for the first nine months. -- Net loss was $36.9 million, or $(0.20) per diluted share, for the third quarter of 2021. This compares to a net loss of $5.4 million, or $(0.46) per diluted share, for the third quarter of 2020. -- Adjusted EBITDA was $29.0 million for the third quarter of 2021, compared to Adjusted EBITDA of $29.1 million for the third quarter of 2020. -- Cash flow provided by operations was $13.7 million for the nine months ended September 30, 2021 compared to cash flow provided by operations of $32.1 million for the nine months ended September 30, 2020. -- Cash, cash equivalents and restricted cash was $98.3 million as of September 30, 2021 compared to $98.3 million at December 31, 2020. Total debt was $385.1 million at September 30, 2021, implying net leverage of 2.2x using Credit Agreement Defined Adjusted EBITDA.

A reconciliation of GAAP to Non-GAAP measures has been provided in the financial statement tables included at the end of this press release. An explanation of these measures is also included below under the heading Non-GAAP Financial Measures.

Other Third Quarter and Recent Highlights

-- Announced the acquisition of DrChrono, a leading provider of mobile-first, cloud-based electronic health record (EHR), practice management, medical billing, and revenue cycle management solutions. Based in Sunnyvale, California, DrChrono develops the essential platforms and services for modern medical practices to make healthcare more informed, more interactive, and more personalized, and adds an important system of action to our EverHealth suite of solutions. -- Announced the launch of EverConnect, a performance marketing and lead generation platform. EverConnect consolidates three industry-leading lead generation products to create a one-stop shop for marketers and service professionals to connect with consumers. -- Announced ASF Payment Solutions and Club OS, two solutions of the EverWell solutions group, were selected by World Gym International as their designated software solutions.

Business Outlook

Based on information as of today, November8, 2021, the Company is increasing its outlook for revenue for the fourth quarter and full year 2021 and is issuing the following financial guidance. Please note that the Q4 and full year 2021 outlook includes contributions from our recently announced acquisitions.

Fourth Quarter Fiscal 2021:

-- Revenue is expected to be in the range of $129.5million to $131million. -- Adjusted EBITDA is expected to be in the range of $27 million to $28million.

Full Year 2021:

-- Revenue is expected to be in the range of $484.0million to $485.5million. -- Adjusted EBITDA is expected to be in the range of $105.0million to $106.0million.

A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to certain charges excluded from this non-GAAP measure; in particular, the measures and efforts of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. It is important to note that these charges could be material to EverCommerce's results computed in accordance with GAAP.

Conference Call Information

EverCommerces management team will hold a conference call to discuss our third quarter results today, November8, 2021, at 5:00 p.m. ET. To access this call, dial (877) 313-2140 (domestic) or (470) 495-9545 (international). The conference ID number is 8092737. The conference call will be webcast on the investor relations section of EverCommerces website at ( https://investors.evercommerce.com/). An archived replay of the webcast will be available following the conclusion of the call.

Investor ContactBrian DenyeauICR646-277-1251Brian.denyeau@icrinc.com

Media ContactMeagan DorschVP of Communications, EverCommercemdorsch@evercommerce.com303-915-0823

About EverCommerce

EverCommerce is a leading service commerce platform, providing vertically-tailored, integrated software-as-a-service (SaaS) solutions that help more than 500,000 service-based businesses accelerate growth, streamline operations, and increase retention. Its modern digital and mobile applications create predictable, informed, and convenient experiences between service professionals and their end consumers. Specializing in Home Services, Health Services, and Fitness & Wellness Services industries, EverCommerce solutions include end-to-end business management software, integrated payment acceptance, marketing technology, and customer engagement applications. Learn more at EverCommerce.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our future operations and financial results, the underlying trends in our business, our market opportunity, our potential for growth and our acquisition strategy. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our limited operating history and evolving business; our recent growth rates may not be sustainable or indicative of future growth; we may not achieve profitability in the future; we may continue to experience significant quarterly and annual fluctuations in our operating results due to a number of factors, which makes our future operating results difficult to predict; we may reduce our rate of acquisitions and may be unsuccessful in achieving continued growth through acquisitions; revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets; we may need to incur additional indebtedness or seek capital through new equity or debt financings, which may not be available to us on acceptable terms or at all; we may not be able to continue to expand our share of our existing vertical markets or expand into new vertical markets; we face intense competition in each of the industries in which we operate; the industries in which we operate are rapidly evolving and the market for technology-enabled services that empower SMBs is relatively immature and unproven; economic and political risks, including the business cycles of our clients and changes in the overall level of consumer and commercial spending; we are dependent on payment card networks and payment processors and if we fail to comply with the applicable requirements of our payment network or payment processors, they can seek to fine us, suspend us or terminate our registrations through our bank sponsors; the inability to keep pace with rapid developments and changes in the electronic payments market or are unable to introduce, develop and market new and enhanced versions of our software solutions; real or perceived errors, failures or bugs in our solutions; unauthorized disclosure, destruction or modification of data, disruption of our software or services or cyber breaches; our estimated total addressable market is subject to inherent challenges and uncertainties; failure to effectively develop and expand our sales and marketing capabilities; our systems and our third-party providers systems may fail or our third-party providers may discontinue providing their services or technology or to us specifically; faster growth of lower margin solutions and services than higher margin solutions and services; risks related to the COVID-19 pandemic; our ability to adequately protect or enforce our intellectual property and other proprietary rights; risk of patent, trademark and other intellectual property infringement claims; risks related to governmental regulation; risks related to our sponsor stockholders agreement and qualifying as a controlled company under the rules of The Nasdaq Stock Market; as well as the other factors described in our final prospectus for our initial public offering of common stock dated as of June 30, 2021 and filed with the SEC pursuant to Rule 424(b) on July 6, 2021 and our other filings with the SEC. These factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent managements estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

Key Business and Financial Metrics

Pro Forma Revenue Growth Rate is a key performance measure that our management uses to assess our consolidated operating performance over time. Management also uses this metric for planning and forecasting purposes.

Our year-over-year Pro Forma Revenue Growth Rate is calculated as though all acquisitions closed as of the end of the latest period were closed as of the first day of the prior year period presented. In calculating Pro Forma Revenue Growth Rate, we add the revenue from acquisitions for the reporting periods prior to the date of acquisition (including estimated purchase accounting adjustments) to our results of operations, and then calculate our revenue growth rate between the two reported periods. As a result, Pro Forma Revenue Growth Rate includes pro forma revenue from businesses acquired during the period, including revenue generated during periods when we did not yet own the acquired businesses. In including such pre acquisition revenue, Pro Forma Revenue Growth Rate allows us to measure the underlying revenue growth of our business as it stands as of the end of the respective period, which we believe provides insight into our then-current operations. Pro Forma Revenue Growth Rate does not represent organic revenue generated by our business as it stood at the beginning of the respective period. Pro Forma Revenue Growth Rates are not necessarily indicative of either future results of operations or actual results that might have been achieved had the acquisitions been consummated on the first day of the prior year period presented. We believe that this metric is useful to investors in analyzing our financial and operational performance period over period and evaluating the growth of our business, normalizing for the impact of acquisitions. This metric is particularly useful to management due to the number of acquired entities.

Non-GAAP Financial Measures

EverCommerce has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). EverCommerce uses these non-GAAP financial measures internally in analyzing its financial results and believes that use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing EverCommerces financial results with other companies in its industry, many of which present similar non-GAAP financial measures.

Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with EverCommerces condensed consolidated financial statements prepared in accordance with GAAP. A reconciliation of EverCommerces historical non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.

Adjusted Gross Profit. Adjusted Gross Profit is a key performance measure that our management uses to assess our operational performance, as it represents the results of revenues and direct costs, which are key components of our operations. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it reflects the gross profitability of our operations, and excludes the indirect costs associated with our sales and marketing, product development, general and administrative activities, and depreciation and amortization, and the impact of our financing methods and income taxes.

We calculate Adjusted Gross Profit as gross profit adjusted to exclude depreciation and amortization allocated to cost of revenues. Gross profit is calculated as total revenues less cost of revenues (exclusive of depreciation and amortization), amortization of developed technology, amortization of capitalized software and depreciation expense (allocated to cost of revenues). Adjusted Gross Profit should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other U.S. GAAP measures of income (loss) or profitability.

Adjusted EBITDA. Adjusted EBITDA is a key performance measure that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods. In addition, we believe that providing Adjusted EBITDA, together with a reconciliation of net income (loss) to Adjusted EBITDA, helps investors make comparisons between our company and other companies that may have different capital structures, different tax rates, and/or different forms of employee compensation.

Adjusted EBITDA is used by our management team as an additional measure of our performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of net income or income from continuing operations. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees. Our Management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies.

We calculate Adjusted EBITDA as net income (loss) adjusted to exclude interest and other expense, net, income tax expense (benefit), loss on debt extinguishment, depreciation and amortization, other amortization, acquisition related costs, stock-based compensation, and other non-recurring costs. Other amortization includes amortization for capitalized contract acquisition costs. Acquisition related costs are specific deal-related costs such as legal fees, financial and tax due diligence, consulting and escrow fees. Other non-recurring costs are expenses such as system implementation costs and severance related to planned restructuring activities. Acquisition related costs and other non-recurring costs are excluded as they are not representative of our underlying operating performance. Adjusted EBITDA should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other U.S. GAAP measures of income (loss). The following table presents a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with U.S. GAAP, to Adjusted EBITDA on a consolidated basis.



Condensed Consolidated Balance Sheet (in thousands, except per share and share amounts) (unaudited) September, 30 December 31, 2021 2020 Assets Current assets: Cash and cash $ $ equivalents 95,588 96,035Restricted cash 2,757 2,303 Accounts receivable,net of allowance fordoubtful accounts of$1.8million and$1.0 million at 31,699 24,966 September30, 2021andDecember31,2020,respectivelyContract assets 13,595 9,838 Prepaid expenses and 19,015 10,686 other current assetsTotal current assets 162,654 143,828 Non-current assets: Property and 14,080 14,705 equipment, netCapitalized 22,692 16,069 software, netOther non-current 25,793 14,102 assetsIntangible assets, 467,848 470,729 netGoodwill 796,218 668,151 Total non-current 1,326,631 1,183,756 assetsTotal assets $ $ 1,489,285 1,327,584 Liabilities,ConvertiblePreferred Stock and Stockholders? Equity(Deficit)Current liabilities: Accounts payable $ $ 9,643 11,131Accrued expenses and 41,637 46,408 otherDeferred revenue 21,677 13,621 Customer deposits 8,384 8,247 Current maturities 6,279 7,294 of long-term debtTotal current 87,620 86,701 liabilitiesNon-current liabilities:Deferred tax 19,632 10,766 liability, netLong-term deferred 2,511 2,297 revenueLong-term debt, netof currentmaturities and 378,789 691,038 deferred financingcostsOther non-current 16,936 17,626 liabilitiesTotal non-current 417,868 721,727 liabilitiesTotal liabilities 505,488 808,428 Commitments and contingencies Convertible Preferred Stock:Series B convertiblepreferred stock,$0.00001 par value,nosharesauthorized,issued oroutstanding as ofSeptember 30, 2021;75,000,000 shares - 745,046 authorized and72,225,754sharesissued andoutstanding(liquidationpreference of$745.0million) asof December31, 2020Series A convertiblepreferred stock,$0.00001 par value,nosharesauthorized,issued oroutstanding as ofSeptember 30, 2021;50,000,000 shares - 163,264 authorized and44,957,786sharesissued andoutstanding(liquidationpreference of$163.3million) asof December31, 2020Total convertible - 908,310 preferred stockStockholders? equity (deficit):Preferred stock,$0.00001 par value,50,000,000sharesauthorized and no - - shares issued oroutstanding asofSeptember 30,2021Common stock,$0.00001 par value,2,000,000,000 and185,000,000sharesauthorized and195,356,459 and 2 - 43,073,327 sharesissuedandoutstanding atSeptember 30, 2021and December31,2020, respectivelyAccumulated othercomprehensive income (972 ) 1,546 (loss)Additional paid-in 1,493,266 40,564 capitalAccumulated deficit (508,499 ) (431,264 )Total stockholders? 983,797 (389,154 )equity (deficit)Total liabilities,convertible preferred stock and $ 1,489,285 $ 1,327,584 stockholders'equity(deficit)

Condensed Consolidated Statements of Operations and Comprehensive Loss(in thousands, except per share and share amounts) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Revenues: Subscription and $ 91,788 $ 60,017 $ 252,119 $ 168,413 transaction feesMarketingtechnology 31,610 24,359 88,974 62,738 solutionsOther 5,136 4,775 13,397 14,370 Total 128,534 89,151 354,490 245,521 revenuesOperating expenses:Cost of revenues(exclusive ofdepreciation and 42,958 29,480 119,488 86,372 amortizationpresentedseparately below)Sales and 25,156 12,072 67,647 36,305 marketingProduct 12,711 7,622 35,083 22,282 developmentGeneral and 25,779 17,087 79,796 56,388 administrativeDepreciation and 25,996 19,152 73,917 55,300 amortizationTotal operating 132,600 85,413 375,931 256,647 expensesOperating (4,066 ) 3,738 (21,441 ) (11,126 )lossInterest andother expense, (5,148 ) (9,756 ) (31,262 ) (30,653 )netLoss on debt (28,714 ) - (28,714 ) - extinguishmentNet loss beforeincome tax (37,928 ) (6,018 ) (81,417 ) (41,779 )benefitIncome tax 1,022 574 4,182 2,748 benefitNet loss (36,906 ) (5,444 ) (77,235 ) (39,031 ) Othercomprehensive income:Foreign currencytranslation gains (3,430 ) 896 (2,518 ) (528 )(losses), netComprehensive $ (40,336 ) $ (4,548 ) $ (79,753 ) $ (39,559 )loss Net lossattributable to commonstockholders:Net loss $ (36,906 ) $ (5,444 ) $ (77,235 ) $ (39,031 )Adjustments to - (13,686 ) (15,105 ) (39,896 )net lossNet lossattributable to $ (36,906 ) $ (19,130 ) $ (92,340 ) $ (78,927 )commonstockholders Net loss pershareattributable to commonstockholders:Basic $ (0.20 ) $ (0.46 ) $ (1.01 ) $ (1.91 )Diluted $ (0.20 ) $ (0.46 ) $ (1.01 ) $ (1.91 ) Weighted-averageshares of commonstockoutstandingusedin computing net loss per shareattributabletocommonstockholders:Basic 187,994,437 41,694,762 91,655,461 41,355,411 Diluted 187,994,437 41,694,762 91,655,461 41,355,411

Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Nine Months Ended September 30, 2021 2020 Cash flowsprovided by operatingactivities:Net loss $ ) $ ) (77,235 (39,031Adjustments toreconcile netloss to net cash providedby operatingactivities:Loss on debt 28,714 - extinguishmentDepreciationand 73,917 55,300 amortizationAmortizationof discount on 3,318 2,824 long-term debtAmortizationof deferredfinancing 344 144 costs onlong-term debtAmortizationof costs andfees on credit 395 796 facilitycommitmentsDeferred taxes (2,831 ) (120 )Bad debt 1,221 1,636 expensePaid-in-kindinterest on 305 283 long-term debtStock-basedcompensation 16,849 5,297 expenseChanges inoperatingassets andliabilities, net of effectsofacquisitions:Accountsreceivable, (7,047 ) 1,226 netPrepaidexpenses and (11,413 ) (770 )other currentassetsOthernon-current (11,526 ) (6,555 )assetsAccounts (1,886 ) (1,824 )payableAccruedexpenses and (6,802 ) 4,290 otherDeferred 7,924 290 revenueCustomerdeposits andother (574 ) 8,283 long-termliabilitiesNet cashprovided by 13,673 32,069 operatingactivities Cash flowsused in investingactivities:Purchases ofproperty and (1,932 ) (4,321 )equipmentCapitalizationof software (9,065 ) (6,349 )costsPayment ofcontingent - (2,000 )considerationAcquisition ofcompanies, net (183,242 ) (117,972 )of cashacquiredNet cash usedin investing (194,239 ) (130,642 )activities Cash flowsfrom financing activities:Payments on (837,082 ) (54,048 )long-term debtProceeds from 496,466 143,884 long-term debtDeferredfinancing (5,689 ) (4,826 )costsExercise of 1,153 109 stock optionsProceeds frompreferred 109,782 53,157 stockissuance, netProceeds fromcommon stock 415,884 - issuance, netNet cashprovided by 180,514 138,276 financingactivities Effect offoreigncurrency 59 37 exchange ratechanges oncashNet increasein cash andcash 7 39,740 equivalentsand restrictedcash Cash and cashequivalents and restrictedcash:Beginning of 98,338 57,344 yearEnd of year 98,345 97,084

Nine Months Ended September 30, 2021 2020 (in thousands) Supplemental disclosures of cash flow information: Cash paid for interest $ 25,090 $ 24,080Cash paid for income taxes $ 1,544 $ 506 Supplemental disclosures of noncash investing and financing activities:Rollover equity in consideration of net assets acquired $ 726 $ 745Fair value of earnout in consideration of net assets $ - $ 2,455acquiredAccretion of Series B convertible preferred stock to $ 15,105 $ 39,897redemption value

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (in thousands) Reconciliationfrom GrossProfit to Adjusted GrossProfit:Gross profit $ $ $ 220,493 $ 148,641 80,327 56,062Depreciation and 5,249 3,609 14,509 10,508amortizationAdjusted Gross $ $ $ 235,002 $ 159,149Profit 85,576 59,671

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (in thousands) Reconciliationfrom Net loss to AdjustedEBITDA:Net loss $ ) $ ) $ ) $ ) (36,906 (5,444 (77,235 (39,031Adjusted toexclude the following:Interest andother expense, 5,148 9,756 31,262 30,653 netIncome tax (1,022 ) (574 ) (4,182 ) (2,748 )benefitLoss on debt 28,714 - 28,714 - extinguishmentDepreciationand 25,996 19,152 73,917 55,300 amortizationOther 679 477 1,956 1,271 amortizationAcquisition 746 2,249 2,986 4,522 related costsStock-based 4,745 3,470 16,849 5,297 compensationOthernon-recurring 938 40 3,654 1,501 costsAdjusted $ $ $ $ EBITDA 29,038 29,126 77,921 56,765