What changed in this filing

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Item 1. Business

2025-03-13 compared with 2024-03-14 · 55 added, 53 removed, 275 unchanged (28% of the section changed)

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

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.

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 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”).

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Today, we serve approximately 740,000 customers across three core verticals:

Home Services;

Health Services;

and Fitness & Wellness Services.

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.

EverPro for Home Services;

EverHealth for Health Services;

and EverWell for Wellness Services.

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.

For the year ended December 31, 2024, we estimate that approximately 93% of our customers contributed less than $2 thousand in revenue and approximately 3% contributed more than $5 thousand in revenue.

On March 13, 2024, the Company entered into definitive sale and purchase agreements to sell our fitness solutions to Jonas Fitness Portfolio Holdco Inc.

(“Jonas Software”) (see “ Note 3.

Acquisitions and Dispositions” in the Notes to the Consolidated Financial Statements for additional details).

The sale of American Service Finance LLC., ASF Payment Solutions ULC and Technique Fitness Inc.

(collectively, “North American Fitness”), closed simultaneous with signing.

The sale of EverCommerce UK, including wholly-owned subsidiaries Fitii UK (MyPTHub and MyPTHub LLC) and ClubWise UK and its wholly-owned subsidiary ClubWise Australia (collectively, “UK Fitness” and together with North American Fitness, “Fitness Solutions”), closed on July 1, 2024.

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

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However, services SMBs require functionality specific to their vertical market because the workflows vary by vertical.

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

For example, the business management requirements of home services contractors are different than the business management requirements of small physician practices.

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).

Our integrated solutions include Business Management Software (such as route-based dispatching and medical practice 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.

We go to market with suites of solutions that are aligned to our three core verticals.

(1) the EverPro suite of solutions in Home Services;

(2) the EverHealth suite of solutions within Health 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.

This vertically-tailored point-of-entry provides us with an opportunity to cross-sell adjacent products, previously offered as fragmented and disjointed point solutions by other software providers.

This “land and expand” strategy allows us to acquire customers with key foundational solutions, expand into offerings via product development (“build”) and acquisitions (“buy”) that integrate their workflows, fill gaps in the solutions value chain and power the full scope of our customers’ businesses.

workflows, fill gaps in the solutions value chain and power the full scope of our customers’ businesses.

This results in a self-reinforcing flywheel, enabling us to drive more value for our customers and, in turn, fuel our growth by increasing Average Revenue per Unit (“ARPU”), improving customer stickiness and increasing our market share.

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We centralize key functions including marketing, business operations, cybersecurity and general and administrative functions, ensuring consistency in execution across each of our verticals, and ultimately stimulating a culture of operational excellence.

Our financial results have reflected our rapid growth.

Our revenue has grown at a compound annual growth rate (“CAGR”) of 12.5% from 2021 to 2024, and reached $698.8 million for the year ended December 31, 2024, up from $675.4 million for the year ended December 31, 2023, which represents revenue growth of 3.5% from 2023 to 2024.

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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.

For a reconciliation of Adjusted EBITDA to the most directly comparable United States Generally Accepted Accounting Principles (“U.S.

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.

Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business and Financial Metrics—Non-GAAP Financial Measures.”

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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.

Seven 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.

In the last couple of years, this has increased to nearly 80%, 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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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.

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We estimate the total addressable market (“TAM”) for our current solutions was approximately $1.6 trillion globally in 2023, of which approximately $662 billion was in North America, which refers to the United States and Canada.

Of the $662 billion, we estimate a $69 billion opportunity in Home Services, a $115 billion opportunity in Health Services, a $26 billion opportunity in Fitness & Wellness Services and a $452 billion opportunity in other services categories.

Of the $662 billion, we estimate a $69 billion opportunity in Home Services, a $115 billion opportunity in Health Services, a $22 billion opportunity in Wellness Services and a $456 billion opportunity in other services categories.

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

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Our software, designed to meet the day-to-day workflow needs of businesses in specific vertical end markets, streamlines front and back-office processes and provides polished customer-facing experiences.

Using these offerings, service SMBs can streamline their operations and focus on growing their customers and improving their services.

Using these offerings, service SMBs can deliver their services, streamline operations and focus on growing their customers.

• Billing & Payment Solutions:

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Based on the monthly average processing volume for the quarter ended December 31, 2024, we estimate that we process annualized total volume of $12.7 billion.

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.

We further estimate that, based on our current customers and payment volumes, we have an aggregate annualized payment processing opportunity in excess of $100 billion.

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.

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Our solutions include:

custom website design, development and hosting, responsive web design, marketing campaign design and management, search engine optimization (“SEO”), paid search and display advertising, social media and blog automation, call tracking, review monitoring and marketplace lead generation, among others.

custom website design, development and hosting, responsive web design, marketing campaign design and management, search engine optimization, paid search and display advertising, social media and blog automation, call tracking, review monitoring and marketplace lead generation, among others.

Our solutions can be purchased and integrated with EverCommerce business management solutions, as well as sold and integrated into 3rd party solutions via the EverConnect brand and solutions suite.

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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.

• EverWell – Fitness & Wellness:

Our EverWell solutions are purpose-built for Fitness & Wellness service professionals.

The Fitness & Wellness market includes tech-savvy businesses which generally require integrated solutions that provide modern, convenient experiences for end consumers.

Member management and consumer-facing scheduling and facility access solutions are “must-have” software capabilities for modern gyms, spas and salons.

In addition, adjacent solutions in relationship management, inventory management, personal training scheduling and fitness tracking are increasingly needed to support a seamless, value-add consumer experience.

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.

• EverWell – Wellness:

Subsequent to the sale of our Fitness Solutions, our EverWell solutions are purpose-built for Wellness service professionals.

The Wellness market includes tech-savvy businesses which generally require integrated solutions that provide modern, convenient experiences for end consumers.

Consumer-facing scheduling and facility access solutions are “must-have” software capabilities for spas and salons.

In addition, adjacent solutions in relationship management and inventory management are increasingly needed to support a seamless, value-add consumer experience.

Our EverWell solutions are built specifically 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 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.

We believe that our offerings deliver tremendous value to our customers and are differentiated by the following qualities:

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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:

• Expand into new products:

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.

During 2023, we introduced EverPro Edge, which allows customers to save, learn and grow, and creates a universal channel and trusted brand for engagement, Edge is an expansion opportunity enabling customers to receive targeted business growth and education content, as well as cash-back rebates on supplies they purchase at leading vendors.

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.

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

In addition, from time to time, we evaluate our positioning with respect to our existing verticals and may determine to dispose of offerings that do not align with our growth initiatives.

For example, in the year ended December 31, 2024, we sold Fitness Solutions as described above.

Our customers

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Home Services EverPro

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

HVAC/plumbing, electrical professionals, remodeling and home improvement contractors, window and door replacement specialties, landscaping design services, 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

Specialty private medical practices, mental health therapists, chronic care specialists, general practitioners, specialty branches of hospital systems

Wellness Services

Salons and spas, massage therapists, medi-aesthetics, wellness specialists

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

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• Manual processes, basic PC tools, standalone payment terminals and homegrown solutions, utilized by many service SMBs;

• 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;

• 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 scheduling and customer management in Wellness Services;

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

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Our go-to-market

Our go-to-market organization includes our centralized marketing, business development, sales and customer success functions who align to build positive customer experiences across the business.

Our go-to-market organization includes our vertically-focused marketing, business development, sales and customer success functions who align to build positive customer experiences across the business.

These teams drive scalable and efficient organic growth in three key areas:

new customer acquisition, wallet share expansion and go-to-market of acquired or built products.

Our centralized, highly-trained team members are organized into several targeted and coordinated groups to address specific service SMB market’s highly varied audiences, while aligning priorities through Centers of Excellence to ensure the broader set of unified EverCommerce growth and scale objectives are met.

Our teams relentlessly test and measure results to expand channels, optimize go-to-market, increase sales conversion, identify customer upsell opportunities and explore adjacent expansion verticals.

Our teams relentlessly test and measure results to expand channels, optimize go-to-market, increase sales conversion, identify customer upsell opportunities and

explore adjacent expansion verticals.

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.

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Our fundamental belief is that when a company has a strong relationship with its employees, they in turn deliver exceptional customer service and in turn that delivers strong business performance.

We have seen and believe our diverse, inclusive and innovative workforce is and will continue to be a competitive advantage.

We have seen and believe our inclusive and innovative workforce is and will continue to be a competitive advantage.

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

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 believe in and prioritize inclusivity and employee engagement in our workplace and aim to behave in a manner where these values are the underpinnings of how we build programs and 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.

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

Inclusivity 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.

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We leverage a common set of best practices, IT infrastructure and architectures that serve as a foundation for highly scalable and secure software solutions.

Key areas and features of our centralized strategy and operations that serve as a foundation to our technology approach include:

Key areas and features of our strategy and operations that serve as a foundation to our technology approach include:

• Software development:

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• Tech and IT shared services:

Our shared services across its technology platforms provides a centralized and consistent approach to software development, as well as cloud engineering and data center migration.

Our centralized IT administration allows for 24-hour support for all our people and platforms worldwide.

Our technology platforms provides a consistent approach to software development, as well as cloud engineering and data center migration.

Our IT administration allows for 24-hour support for all our people and platforms worldwide.

• Shared infrastructure:

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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.

Our centralized security efforts also include incident prevention, incident response, monitoring, scanning and alerting.

Our security efforts also include incident prevention, incident response, monitoring, scanning and alerting.

• Offshore development team:

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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.

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We rely on a combination of trademark, copyright, patent, trade secret and other intellectual property laws in the United States and other jurisdictions, as well as written agreements and other contractual provisions, to protect our proprietary technology, processes and other intellectual property.

As of December 31, 2023, we had 149 registered trademarks in the United States (including EverCommerce), three registered trademarks in the EU (for the EverCommerce logo), two registered trademarks in Puerto Rico, one registered trademark in Canada, 15 registered trademarks in New Zealand, six registered trademarks in Australia and seven registered trademarks in the United Kingdom;

six trademark applications in process in the United States and six trademark applications in process in Canada;

As of December 31, 2024, we had 140 registered trademarks in the United States (including EverCommerce), three registered trademarks in the EU (including the EverCommerce logo), two registered trademarks in Puerto Rico, two registered trademarks in Canada, 15 registered trademarks in New Zealand, six registered trademarks in Australia and four registered trademarks in the United Kingdom (including the EverCommerce logo);

seven trademark applications in process in the United States and three trademark applications in process in Canada;

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

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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