What changed in this filing

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Item 1. Business

2023-03-16 compared with 2022-03-15 · 34 added, 30 removed, 298 unchanged (18% of the section changed)

3 unchanged sentences

Our platform spans across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications.

Today, we serve over 600,000 customers across three core verticals:

Today, we serve more than 685,000 customers across three core verticals:

Home Services;

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Our platform provides vertically-tailored SaaS solutions that address service SMBs’ increasingly specialized demands, as well as highly complementary solutions that complete end-to-end offerings, allowing service SMBs and EverCommerce to succeed in the market, and provide end consumers more convenient service experiences.

For the year ended December 31, 2021, we estimate that approximately 98% of our customers had less than $2,000 in billings and less than 1% had more than $5,000 in billings.

For the year ended December 31, 2022, we estimate that approximately 90% of our customers contributed less than $2,000 in revenue and approximately 5% contributed more than $5,000 in revenue.

Small- and medium-sized businesses (“SMBs”) are an important engine for economic growth.

Collectively, in 2021 SMBs represent the single largest employer and employee category in the U.S.

Collectively, in 2022 SMBs represented the single largest employer and employee category in the U.S.

economy, accounting for 99.9% of businesses in the United States, 46% of the U.S.

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Moreover, our business benefits from attractive unit economics;

we estimate the lifetime value of our customers to be approximately eight times the cost of acquiring them.

we estimate the lifetime value of our customers to be approximately six times the cost of acquiring them.

For a reconciliation of Adjusted EBITDA to the most directly comparable Generally Accepted Accounting Principles (“GAAP”) financial measure, information about why we consider Adjusted EBITDA useful and a discussion of the material risks and limitations of this measure, please see Part II.

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With the confluence of changing consumer preferences towards digital and a younger, more tech-savvy generation of business owners taking seat, businesses are increasingly looking to upgrade and streamline how they engage with their customers.

According to a recent Zendesk poll, more than half of businesses surveyed (56%) said they are making customer experience a top priority in the coming year.

• Digital marketing.

Digital channels are allowing businesses to reach their existing and potential end consumers in more innovative, effective and efficient ways than ever before.

Research from WebFX shows that 80% of SMB end consumers conduct online product research in 2021, highlighting the importance of having a digital presence.

We estimate that approximately 65% of U.S.

SMBs have currently adopted digital marketing tools, of which approximately 60% are expected to increase their spending on such tools, recognizing the power and importance of these digital channels.

We expect both increasing adoption of digital marketing tools, compounded by expected increased spend on such tools, recognizing the power and importance of these digital channels.

These trends continue to give rise to evolving and new digital marketing solutions aimed at helping businesses target end consumers, lower acquisition costs and increase lifetime value.

• Digital payments.

As of just three years ago, we estimate that less than 50% of SMBs in the United States had adopted digital payment processing solutions, and instead relied on paper invoices for payment.

Today, we estimate that approximately 68% of SMBs in the United States have adopted digital payment processing solutions, up more than 20% over the last three years, a trend that we expect to continue in the future.

Digital payment processing solution adoption continues to expand within our core SMB customer base.

Five years ago, we estimated that less than 50% of SMBs in the United States had adopted digital payment processing solutions, and instead relied on paper invoices for payment.

This has expanded to nearly 70% in the last couple of years, a trend that we expect to continue in the future.

Integrated payments (e.g., digital payment acceptance that is embedded into the software that companies use to manage their businesses) have driven operating efficiencies for businesses and have improved payment security and tracking as compared to traditional paper methods.

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According to Cisco, cloud solutions are one of the top three areas for near-term technology investment for small businesses.

• COVID-19 pandemic is accelerating pre-existing trends.

We believe the COVID-19 pandemic has accelerated demand for digital solutions, especially in areas like customer engagement, resulting in SMBs increasing investment in technology to modernize and drive growth and operational efficiencies.

• COVID-19 pandemic accelerated pre-existing trends.

We believe the COVID-19 pandemic accelerated demand for digital solutions, especially in areas like customer engagement, resulting in SMBs increasing investment in technology to modernize and drive growth and operational efficiencies.

According to Forrester, it saw significant gains in its Customer Experience Index in 2020 due to accelerated implementation and leverage of Voice of Customer (“VoC”) measurement tools like Net Promoter Score (“NPS”).

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Our Billing & Payment Solutions provide integrated payments, billing and invoicing automation and business intelligence and analytics.

Our omni-channel payments capabilities include point-of-sale (“POS”), eCommerce, online bill payments, recurring billing, electronic invoicing and mobile payments.

Our omni-channel payments capabilities include point-of-sale, eCommerce, online bill payments, recurring billing, electronic invoicing and mobile payments.

Supported payment types include credit card, debit card and Automated Clearing House (“ACH”) processing.

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For home improvement and field service professionals, project management and field service management applications serve as their business systems of action, respectively.

Professionals in this market rely significantly on driving business from residential homeowners, and thus value tailored solutions which capture and manage lead generation from those end consumers.

Professionals in this market rely significantly on driving business from residential homeowners, and thus value tailored solutions that capture and manage lead generation from those end consumers.

Ranging from professionals across residential home improvement and remodeling, and field services, to security and alarm professionals across residential installation and monitoring, central stations, corporate and campus planning and government, our EverPro solutions are designed to serve the specific needs of the professionals in these home improvement and field services sub-markets.

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Our EverWell solutions are built specifically for fitness professionals, which include gyms, studios, health clubs, specialized instructors (e.g., educational dance, gymnastics and cheer) and personal trainers and for wellness professionals, which include salons, spas and massage therapists.

We offer select solutions to customers in other services verticals, including education, non-profit, pet care and automotive repair, among many other.

We offer select solutions to customers in other services verticals, including education, non-profit, pet care and automotive repair, among many others.

While these offerings are not a part of our core suites, they are managed as part of our centralized approach to strategy and operations.

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• Customer-driven innovation.

The insight we gain into our over 600,000 customers’ use of our offerings informs our product pipeline, allowing us to constantly refine existing solutions and deliver new solutions that are most valuable to them.

The insight we gain into our more than 685,000 customers’ use of our offerings informs our product pipeline, allowing us to constantly refine existing solutions and deliver new solutions that are most valuable to them.

Our growth strategies

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By improving the awareness of our brands and solutions, we believe that we can increase penetration and sell our complete value chain of solutions to service SMB customers.

Through acquisitions and organic growth of our business, the number of customers on our platform increased from approximately 110,000 at the end of 2018 to over 600,000 at the end of 2021.

Through acquisitions and organic growth of our business, the number of customers on our platform increased from approximately 110,000 at the end of 2018 to more than 685,000 at the end of 2022.

• Expand into new products and verticals:

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• Expand ARPU and grow wallet share:

Today, we serve over 600,000 service SMBs, which represent a significant opportunity for growth.

Today, we serve more than 685,000 service SMBs, which represent a significant opportunity for growth.

As we become more embedded in our customers’ daily business operations, we are better positioned to add value by cross-selling and up-selling adjacent solutions.

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We believe that our methodology, track record and reputation for sourcing, evaluating and integrating acquisitions positions us as an “acquirer-of-choice” for potential targets.

We have acquired 52 companies since our inception, including five in 2021, nine in 2020 and 13 in 2019.

We are currently tracking over 12,000 North American businesses, primarily across our core verticals, as potential acquisition opportunities.

We have acquired 52 companies since our inception, including five in 2021 and nine in 2020.

We are currently tracking over 12,000 businesses around the world, primarily across our core verticals, as potential acquisition opportunities.

Our customers

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Other Non-profits, veterinary care facilities, small accounting and tax firms, educational facilities, social services, pet/veterinary care, professional services, consumer services

As of December 31, 2021, we served over 600,000 customers.

As of December 31, 2022, we served more than 685,000 customers.

Of these customers, approximately 66% were based in the United States and approximately 34% were international.

Despite the COVID-19 pandemic forcing hundreds of thousands of SMBs across the United States to permanently close, we grew our total customer base by approximately 20% in the year ended December 31, 2021.

Despite not having merger and acquisition driven customer additions in 2022, we grew our total customer base organically by approximately 14% for the year.

While we have built a scaled, differentiated platform, we compete in a variety of highly fragmented markets and face competition from a variety of sources:

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Our values reflect who EverCommerce is and serve as our guiding force on how we plan to achieve our organizational objectives.

In addition to providing continuous learning, autonomy and engaging work, we provide a series of competitive benefits, including health insurance for employees and dependents, a 401k match, paid parental leave and paid time off.

We allot over 15,000 hours per year for our employees to volunteer for causes that are important to them.

3 unchanged sentences

As of December 31, 2022, we had approximately 2,300 employees operating across six countries, including approximately 1,800 employees located in the United States.

Given the ever-changing dynamic of the work environment due to the COVID-19 pandemic, we have become increasingly nimble and flexible, with a significant portion of our workforce worldwide working remotely since March 2020.

Our technology

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Data privacy and security

Regulators around the world have adopted or proposed requirements regarding the collection, use, transfer, security,

storage, destruction and other processing of personal data.

Regulators around the world have adopted or proposed requirements regarding the collection, use, transfer, security, storage, destruction and other processing of personal data.

These laws are increasing in number and complexity, resulting in higher risk of enforcement, fines and other penalties.

Our privacy and legal teams are committed to processing and fulfilling any requests regarding the exercise of an individual’s privacy rights with respect to personal information.

Our privacy and legal teams are committed to

processing and fulfilling any requests regarding the exercise of an individual’s privacy rights with respect to personal information.

In addition, our consumer transactions business is now, or may in the future be, subject to certain financial services laws, regulations and rules, such as the Payment Card Industry Data Security Standards, the Gramm-Leach-Bliley Act and the National Automated Clearing House Association ACH Rules, and our healthcare services businesses are subject to certain healthcare security and privacy laws, such as HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and regulations promulgated thereunder (collectively, “HIPAA”) in the United States and Personal Information Protection and Electronic Documents Act and Personal Health Information Protection Act (“PIPEDA”) in Canada.

16 unchanged sentences

35 registered copyrights in the United States and one registered copyright in Canada;

and three issued patents in the United States.

and six issued patents in the United States and four pending patents in the United States.

We also have a portfolio of approximately 3,200 registered domain names for websites that we use in our business or that are registered defensively to protect our brands.

In addition, we generally enter into confidentiality agreements and assignment of invention agreements with employees and contractors throughout our business, including those involved in the development of our proprietary

intellectual property.

We also enter into confidentiality agreements with our customers, partners and third parties who have access to our confidential information.

3 unchanged sentences

See “Risk Factors—Risks Related to Intellectual Property—We may be unable to adequately protect and enforce, and we may incur significant costs in enforcing or defending, our intellectual property and other proprietary rights.”

Corporate Information

We were initially formed under the laws of the state of Delaware in September 2016 under the name PaySimple Holdings, Inc., with “EverCommerce” being our “doing business as” name.

In December 2020, we changed our name to EverCommerce Inc.

Our website address is www.evercommerce.com.

We file or furnish electronically with the Securities and Exchange Commission (“SEC”) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information, as well as amendments to those reports.

These and other SEC filings are available to the public over the Internet at the SEC’s website at http://www.sec.gov.

We make available on our website at www.evercommerce.com, under “Investor Relations,” free of charge, copies of these reports as soon as reasonably practicable after filing or furnishing these reports with the SEC.

The information contained on our website is not incorporated by reference into this Annual Report on Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business