What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-03-14 compared with 2023-03-16 · 67 added, 71 removed, 261 unchanged (35% of the section changed)

EverCommerce is simplifying and empowering the lives of business owners whose services support us every day.

We provide tailored, end-to-end Software-as-a-Service (“SaaS”) solutions that support the highly diverse workflows and customer interactions that professionals in home services, health services, and fitness & wellness services need to automate manual processes, generate new business, and create more loyal customers.

We provide tailored, integrated Software-as-a-Service (“SaaS”) solutions that support the highly diverse workflows and customer interactions that professionals in home services, health services, and fitness & wellness services need to automate manual processes, generate new business, and create more loyal customers.

EverCommerce is a leading provider of integrated, vertically-tailored SaaS solutions for service-based small- and medium-sized businesses (“service SMBs”).

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

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

Today, we serve approximately 708,000 customers across three core verticals:

Home Services;

2 unchanged sentences

Within our core verticals, our customers operate within numerous micro-verticals, ranging from home service professionals, such as home improvement contractors and home maintenance technicians, to physician practices and therapists within Health Services, to personal trainers and salon owners within Fitness & Wellness.

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.

Our platform provides vertically-tailored SaaS solutions that address service SMBs’ increasingly specialized demands, as well as highly complementary solutions that provide fully-integrated 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, 2023, 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.

18 unchanged sentences

For example, the business management requirements of Home Services contractors are different than the business management requirements of small physician practices or boutique gyms.

As a result we have built a comprehensive platform designed specifically to meet the unique end-to-end workflow needs of service SMBs.

Our integrated solutions include Business Management Software (such as route-based dispatching, medical practice management and gym member management), Billing & Payment Solutions (such as e-invoicing, mobile payments and integrated payment processing), Customer Engagement Applications (such as reputation management and messaging solutions) and Marketing Technology Solutions (such as websites, hosting and digital lead generation).

As a result, we have built a comprehensive platform designed specifically to meet the unique integrated workflow needs of service SMBs.

Our integrated solutions include Business Management Software (such as route-based dispatching, medical practice management and gym member management), Billing & Payment Solutions (such as e-invoicing, mobile payments and integrated payment processing), Customer Experience Solutions (such as reputation management and messaging solutions) and Marketing Technology Solutions (such as websites, hosting and digital lead generation).

These solutions help our customers address the challenges posed by legacy solutions by providing software that addresses the complete customer engagement workflow, streamlining front- and back-office processes, driving new sales and retention, enabling deeper performance insights and improving customer experiences with digital, mobile-friendly engagement.

2 unchanged sentences

(2) the EverHealth suite of solutions within Health Services;

and (3) the EverWell suite

of solutions in Fitness & Wellness Services.

and (3) the EverWell suite of solutions in Fitness & Wellness Services.

Within each suite, our Business Management Software – the system of action at the center of a service business’ operation –is typically the first solution adopted by a customer.

14 unchanged sentences

Service SMBs are still in the early innings of transforming their businesses for the digital age.

We estimate that only 9% of the service SMB market has been penetrated with full end-to-end software solutions.

We estimate that only 9% of the service SMB market has been penetrated with fully-integrated software solutions.

However, we believe that small businesses now generally view digitization as critical to long-term success.

5 unchanged sentences

Together, these trends are contributing to the accelerating adoption of digital technologies.

• Increasingly vertical- and micro vertical-specific software needs.

SMBs across verticals are specializing in order to better compete and align with end-customer preferences, which has resulted in a greater need for vertically-tailored software solutions to address micro-vertical specific workflows.

For example, software for instructional dance and martial arts centers has emerged within the Fitness & Wellness industry in recent years to better service the specialized educational training needs of these end-customers.

• Digital payments.

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

Six 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 80% 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.

• Mobile enablement.

8 unchanged sentences

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.

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.

• Increasingly vertical- and micro vertical-specific software needs.

• Decreasing barriers to software adoption.

Given their size and resource capabilities, SMBs generally require lower priced and easier-to-implement technology solutions than larger-scale enterprise businesses.

As a result of the innovations in cloud technology and the proliferation of SaaS, today’s solutions are more affordable and easier for SMBs to implement than ever before.

As a result of the innovations in cloud

technology and the proliferation of SaaS, today’s solutions are more affordable and easier for SMBs to implement than ever before.

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

• 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”).

We believe the effects of COVID-19 on businesses have advanced the shift to modern, cloud-based software solutions.

Limitations of existing approaches

6 unchanged sentences

Existing solutions typically address a single application, use case or stage of a broader customer engagement workflow.

These solutions lack the necessary integration of business data and operational workflows that service SMBs need to execute end-to-end processes.

These solutions lack the necessary integration of business data and operational workflows that service SMBs need to execute integrated processes.

Moreover, they limit visibility into business performance and businesses’ ability to optimize data gathered across various processes.

12 unchanged sentences

We believe there is considerable runway for long-term growth given the vast majority of our market opportunity is untapped;

we estimate that only 9% of the North America service SMB market has been penetrated with full end-to-end software solutions today, and estimate this number to increase to over 13% by 2025.

we estimate that only 9% of the North America service SMB market has been penetrated with fully-integrated software solutions today, and estimate this number to increase to over 13% by 2025.

We arrive at the TAM by estimating the number of service SMBs, multiplying by the list price of the solutions we provide, and making regional adjustments for the number of firms that could pay the listed price.

4 unchanged sentences

We offer several vertically-tailored suites of solutions, each of which follows a similar and repeatable go-to-market playbook:

offer a “system of action” Business Management Software that streamlines daily business workflows, integrate highly complementary, value-add adjacent solutions and complete gaps in the value chain to create end-to-end solutions.

These solutions provide value to service SMBs by improving their ability to market their services, streamline operations and retain and engage their customers.

9 unchanged sentences

We further estimate that, based on our current customers and payment volumes, we have an aggregate annualized payment processing opportunity of approximately $96 billion.

Our payments platform also provides a full suite of service commerce features, including customer management as well as cash flow reporting and analytics.

Our payments platform also provides a full suite of service commerce

features, including customer management as well as cash flow reporting and analytics.

These value-add features help SMBs to ensure more timely billing and payments collection and provide improved cash flow visibility.

• Customer Engagement Applications:

Our Customer Engagement Applications modernize how businesses engage and interact with customers by leveraging innovative, bespoke customer listening and communication solutions to improve the customer experience and increase retention.

Our software provides customer listening capabilities with real-time customer surveying and analysis to allow standalone businesses and multi-location brands to receive VoC insights and manage the customer experience lifecycle.

• Customer Experience Solutions:

Our Customer Experience Solutions modernize how businesses engage and interact with customers by leveraging innovative, bespoke customer listening and communication solutions to improve the customer experience and increase retention.

Our software provides customer listening capabilities with real-time customer surveying and analysis to allow standalone businesses and multi-location brands to receive Voice of Customer (“VoC”) insights and manage the customer experience lifecycle.

These applications include:

customer health scoring, customer support systems, real-time alerts, NPS-based customer feedback collection, review generation and automation, reputation management, customer satisfaction surveying and a digital communication suite, among others.

customer health scoring, customer support systems, real-time alerts, Net Promoter Score (“NPS”)-based customer feedback collection, review generation and automation, reputation management, customer satisfaction surveying and a digital communication suite, among others.

These tools help our customers gain actionable insights, increase customer loyalty and repeat purchases and improve customer experiences.

• Marketing Technology Solutions:

Our Marketing Technology Solutions work alongside our Customer Engagement Applications to help customers holistically grow their businesses through new business generation and improved engagement and marketing throughout the customer lifecycle.

Our Marketing Technology Solutions work alongside our Customer Experience Solutions to help customers holistically grow their businesses through new business generation and improved engagement and marketing throughout the customer lifecycle.

These solutions help businesses to manage campaigns, generate quality leads, increase conversion and repeat sales, improve customer loyalty and provide a polished brand experience.

3 unchanged sentences

Our verticals

Our solutions, many of which we believe are the market leaders in their industries, are deployed in verticals that are comprised of numerous micro-verticals, which through product development and new solution acquisition, offer natural growth opportunities for EverCommerce.

Our solutions, many of which we believe are market leaders in their industries, are deployed in verticals that are comprised of numerous micro-verticals, which through product development and new solution acquisition, offer natural growth opportunities for EverCommerce.

We currently go to market with three distinct, vertically-tailored, integrated SaaS solution suites:

9 unchanged sentences

We believe that our patient and provider engagement solutions position us well to benefit from major industry trends such as the digitalization of front-office operations and patient engagement.

As with EverPro, we believe we are well positioned to continue to take market-share in current- and future-focus specialty micro-verticals, such as urology, audiology, chronic care management, otolaryngology and nephrology.

• EverWell – Fitness & Wellness:

10 unchanged sentences

Our vertical and micro-vertical approach enables us to provide tailored solutions featuring critical vertical-specific functionality that better serves our customers when compared to industry-agnostic solutions offered by other businesses.

• Integrated solutions for end-to-end workflow.

Our end-to-end suites integrate solutions across the full range of our customers’ workflows (including internal and back-office functions and customer-facing services), simplifying their operations and providing a frictionless experience when compared to disjointed point solutions offered by other software businesses.

• Integrated solutions.

Our business management software integrates solutions across the full range of our customers’ workflows (including internal and back-office functions and customer-facing services such as integrated payments and billing and invoicing automation), simplifying their operations and providing a frictionless experience when compared to disjointed point solutions offered by other software businesses.

• SaaS-based solutions.

10 unchanged sentences

• Customer-driven innovation.

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.

The insight we gain into our approximately 708,000 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

6 unchanged sentences

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 more than 685,000 at the end of 2022.

• Expand into new products and verticals:

Given our position in the service SMB ecosystem, as well as our relationships and level of entrenchment with our customers, we use insights gained through our customer lifecycle to identify additional solutions that are value-additive for our customers.

These insights allow us to continually assess opportunities to develop or acquire solutions to further expand market share, drive customer stickiness and fuel growth for our business.

• Expand ARPU and grow wallet share:

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

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 approximately 708,000 at the end of 2023.

• Expand ARPU and margin:

Today, we serve approximately 708,000 customers, 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.

1 unchanged sentence

As we continue to develop, acquire and transform our solutions, we aim to continue adding value to our customers by displacing point-solution competitors and legacy, manual methods with our integrated digital offerings, increasing our ARPU and improving customer experience and retention.

A primary focus for ARPU expansion focuses on cross-selling payments solutions to customers in an effort to prioritize margin growth.

• Expand into new products and verticals:

These insights allow us to continually assess opportunities to develop or acquire solutions to further expand market share, drive customer stickiness and fuel growth for our business.

In conjunction with the strategies cited above, we also acquire solutions to accelerate our position as a market leader, fill gaps within our vertically tailored solutions, deepen our competitive moats in existing verticals and enter new verticals and geographies.

We have an established framework for identification, execution, integration and onboarding of targets.

These acquired solutions bring deep industry expertise and vertically-tailored software

solutions that provide additional sources of growth.

These acquired solutions bring deep industry expertise and vertically-tailored software solutions that provide additional sources of growth.

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 and nine in 2020.

We have acquired 53 companies since our inception.

We are currently tracking over 13,000 businesses around the world, primarily across our core verticals, as potential acquisition opportunities.

5 unchanged sentences

Our customers provide expert services which, in turn, play a critical role in supporting the everyday lives of millions of end consumers – for their homes, their health and their well-being.

Our Verticals Micro-vertical Examples

Home Services HVAC/plumbing, electrical professionals, remodeling and home improvement contractors, window and door replacement specialties, security and alarm installation and monitoring businesses

Health Services Specialty private medical practices, mental health therapists, chronic care specialists, ambulatory and EMT services, specialty branches of hospital systems

Fitness & Wellness Services Chain and franchise gyms, full-service health clubs, boutique studios, personal trainers, dance and instructional schools, salons and spas, massage therapists

Our Verticals Vertical Brands

Micro-vertical Examples

Home Services EverPro

HVAC/plumbing, electrical professionals, remodeling and home improvement contractors, window and door replacement specialties, security and alarm installation and monitoring businesses

Health Services EverHealth

Specialty private medical practices, mental health therapists, chronic care specialists, ambulatory and EMT services, specialty branches of hospital systems

Fitness & Wellness Services EverWell

Chain and franchise gyms, full-service health clubs, boutique studios, personal trainers, dance and instructional schools, salons and spas, massage therapists

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, 2022, we served more than 685,000 customers.

As of December 31, 2023, we served approximately 708,000 customers.

Of these customers, approximately 67% were based in the United States and approximately 33% were international.

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:

1 unchanged sentence

• Vertically-specialized competitors, including mobile sales applications and field service management platforms in Home Services, EHR/EMR and practice management platforms in Health Services and facility and employee management and member management and programming platforms in Fitness & Wellness Services;

• Horizontal competitors, including Salesforce for CRM, Intuit for financial products, Square for payments and HubSpot for marketing related solutions.

• Horizontal competitors, including Salesforce for customer relationship management (“CRM”), Intuit for financial products, Square for payments and HubSpot for marketing related solutions.

The principal competitive factors affecting our market include:

10 unchanged sentences

Our product strategy

Our product strategy organization develops an in-depth understanding of the customer and their varied workflow needs across our target industries, in order to pursue holistic “buy” vs “build” strategies to deliver an integrated value chain to our customers.

The product management organization partners closely with our marketing, sales and customer teams to hear market insights and VoC feedback to improve retention and wallet expansion, build stronger integrations between solutions and pursue adjacent market penetration opportunities.

Our product strategy and management organization develops an in-depth understanding of the customer and their varied workflow needs across our target industries and focuses on strategies to deliver an integrated value chain to our customers.

The product strategy and management organization partners closely with our marketing, sales and customer teams to hear market insights and VoC feedback to improve retention and wallet expansion, build stronger integrations between solutions and pursue adjacent market penetration opportunities.

Our go-to-market

5 unchanged sentences

Through this targeted, coordinated approach, we maximize expert resource allocation and allow for growth programs of scale with attractive customer unit economics across our business.

As an example of this approach, we acquired and onboarded Joist in our EverPro solutions group in December 2018.

Joist is a mobile app used by small contractors to provide estimates, invoices and collect payment for a project.

At the time of acquisition, Joist went to market with a freemium model in the very early stages of monetization.

Shortly after onboarding Joist, we began executing several different growth and profitability initiatives, including:

(i) product enhancements to transition from its freemium model to a tiered subscription model;

(ii) leveraging our centralized digital marketing capabilities, we accelerated customer acquisition and added more than 40,000 SaaS customers in 18 months;

and (iii) modifying payments integration to increase unit profitability by leveraging the scale of our payments platform.

In the aggregate, these actions helped to drive an approximately five times increase in revenue over our first two years of ownership of Joist.

Our people, culture and values

4 unchanged sentences

We plan to continue to make investment in our human capital a priority.

We believe in and prioritize diversity, equality and inclusivity in our workplace and behave in a manner where these

values are the underpinnings of how we build programs, in the selection and promotion of individuals and how we support the growth and development of our people.

We believe in and prioritize diversity, equality and inclusivity (“DEI”) in our workplace and behave in a manner where these values are the underpinnings of how we build programs, in the selection and promotion of individuals and how we support the growth and development of our people.

We aggressively manage and measure our identification, selection, retention, growth and development of our current and future employees.

We have a robust methodology that enables us to successfully and with a high level of engagement, integrate individuals into our organization.

While we believe DEI is important to our long-term value and performance, we recognize the importance of pursuing so in legally sound manners.

DEI efforts are part of our legal compliance considerations, and we are committed to only rewarding legally compliant methods for advancing such efforts.

We are committed to not making employment (including hiring, promotion, and compensation) or other contracting decisions on the basis of legally protected characteristics, except to the extent required or permitted by law.

Our human-first culture has been built upon our values and they are a critical part of how we behave, lead and engage with our people.

19 unchanged sentences

Migration of more than half of our technology solutions to AWS has allowed for gains in productivity, cost efficiency, expanded capacity and faster innovation.

• Cyber security:

• Cybersecurity:

Our Security Operations team uses industry best practices and functional expertise to perform regular risk assessments, audits and remediation across our IT infrastructure and the data we maintain therein.

4 unchanged sentences

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 laws, regulations, standards and 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.

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.

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 the United States, numerous federal and state laws and regulations, including data breach notification laws and consumer protection laws govern the collection, use, disclosure, and protection of personal information.

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 the Health Insurance Portability and Accountability Act of 1996, 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.

Certain foreign laws also govern the privacy and security of personal data.

For example, we may be subject to the Personal Information Protection and Electronic Documents Act (“PIPEDA”) and Personal Health Information Protection Act (“PHIPA”) in Canada.

Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

7 unchanged sentences

In addition to the potential for evolving laws and regulations, the application and interpretation of these laws and regulations are often uncertain.

These laws are enforced by federal, state and local regulatory agencies in the jurisdictions where we operate, and in some instances also through private civil litigation.

These laws are enforced by federal, state and local regulatory agencies in the jurisdictions where we operate, and in some

instances also through private civil litigation.

Violation of any of such laws or any other governmental regulations that apply may result in penalties, including, without limitation, significant administrative, civil and criminal penalties, damages, fines, disgorgement, additional reporting and/or compliance obligations to settle allegations of non-compliance, contractual damages, the curtailment or restructuring of operations, exclusion from participation in governmental healthcare programs and imprisonment.

5 unchanged sentences

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

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

and seven issued 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.

4 unchanged sentences

We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost-effective.

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.”

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

Corporate Information

7 unchanged sentences

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