What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-13 compared with 2024-03-14 · 311 added, 295 removed, 865 unchanged (41% of the section changed)

4 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024, 2023 and 2022

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the years ended December 31, 2023, 2022 and 2021

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022

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We have audited the accompanying consolidated balance sheets of EverCommerce Inc.

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with U.S.

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We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2020.

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Depreciation and amortization 88,824 104,201 110,801

Loss on sale and impairments

39,709 6,325 —

Total operating expenses 698,513 672,943 651,340

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Interest and other expense, net ( 35,559 ) ( 46,407 ) ( 33,902 )

Loss on debt extinguishment — — ( 28,714 )

Net loss before income tax (expense) benefit

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( 41,089 ) ( 45,620 ) ( 59,816 )

Other comprehensive gain (loss):

Foreign currency translation gain (loss), net

Other comprehensive (loss) gain:

Foreign currency translation (loss) gain, net

( 6,301 ) 2,181 ( 8,431 )

1 unchanged sentence

$ ( 47,390 ) $ ( 43,439 ) $ ( 68,247 )

Net loss attributable to common stockholders:

Net loss $ ( 45,620 ) $ ( 59,816 ) $ ( 81,966 )

Adjustments to net loss (see Note 13)

— — ( 15,105 )

Net loss attributable to common stockholders $ ( 45,620 ) $ ( 59,816 ) $ ( 97,071 )

Basic and diluted net loss per share attributable to common stockholders $ ( 0.22 ) $ ( 0.24 ) $ ( 0.31 )

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EverCommerce Inc.

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity

(in thousands)

Total (1) Convertible Preferred Stock

Preferred Stock Common Stock Additional

Paid-In Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders’ Equity

Shares Amount Shares Amount

Balance at January 1, 2021

$ 908,310 — $ — 43,074 $ — $ 40,564 $ ( 431,264 ) $ 1,546 $ ( 389,154 )

Accretion of Series B convertible preferred stock to redemption value 15,105 — — — — ( 15,105 ) — — ( 15,105 )

Issuance of convertible preferred stock, net 109,782 — — — — — — — —

Conversion of convertible preferred stock to common stock upon closing of initial public offering ( 1,033,197 ) — — 125,041 2 1,033,195 — — 1,033,197

Issuance of common stock upon closing of initial public offering, net of issuance costs and underwriters fees of $ 31,278 thousand

— — — 21,882 — 340,708 — — 340,708

Issuance of common stock in a private placement — — — 4,412 — 75,000 — — 75,000

Rollover equity in consideration of net assets acquired — — — 45 — 726 — — 726

Stock-based compensation — — — 571 — 22,095 — — 22,095

Stock option exercises — — — 359 — 1,319 — — 1,319

Release of valuation allowance related to prior equity transactions — — — — — 2,141 — — 2,141

Foreign currency translation loss, net — — — — — — — ( 3,313 ) ( 3,313 )

Net loss — — — — — — ( 81,966 ) — ( 81,966 )

Balance at December 31, 2021

$ — — $ — 195,384 $ 2 $ 1,500,643 $ ( 513,230 ) $ ( 1,767 ) $ 985,648

(1) Represents the aggregate activity for Series A, B and C convertible preferred stock that was converted as a result of the IPO (See Note 11.

The accompanying notes are an integral part of these consolidated financial statements.

EverCommerce Inc.

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Cont’d)

Consolidated Statements of Stockholders’ Equity

(in thousands)

Total Convertible Preferred Stock Preferred Stock Common Stock Additional

Common Stock Additional

Paid-In Capital Accumulated

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Stockholders’ Equity

Shares Amount Shares Amount

Shares Amount

Balance at January 1, 2022 195,384 $ 2 $ 1,500,643 $ ( 513,230 ) $ ( 1,767 ) $ 985,648

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Foreign currency translation gain, net — — — — 2,181 2,181

— — — — — — — 2,181 2,181

Net loss — — — ( 45,620 ) — ( 45,620 )

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186,934 $ 2 $ 1,454,026 $ ( 619,975 ) $ ( 8,017 ) $ 826,036

Issuance of common stock for Employee Stock Purchase Plan 409 — 3,310 — — 3,310

Common stock issued upon vesting of restricted stock units, net of shares withheld for employee taxes

1,437 — ( 3,824 ) — — ( 3,824 )

Stock-based compensation — — 26,491 — — 26,491

Stock option exercises 653 — 4,112 — — 4,112

Repurchase and retirement of common stock, including taxes ( 5,708 ) — ( 57,909 ) — — ( 57,909 )

Foreign currency translation loss, net

— — — — ( 7,298 ) ( 7,298 )

Disposition of Fitness Solutions — — — — 997 997

Net loss — — — ( 41,089 ) — ( 41,089 )

Balance at December 31, 2024 183,725 $ 2 $ 1,426,206 $ ( 661,064 ) $ ( 14,318 ) $ 750,826

The accompanying notes are an integral part of these consolidated financial statements.

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Amortization of deferred financing costs and non-cash interest 1,640 1,651 2,093

Impairment of long lived assets

Loss on sale and impairments

39,720 6,325 —

Bad debt expense 4,660 6,016 5,578

Loss on debt extinguishment — — 28,714

(Gain) loss on interest rate swap valuation adjustments

( 6,384 ) 1,996 2,893

Other non-cash items 2,403 742 1,854

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Capitalization of software costs ( 17,445 ) ( 20,043 ) ( 15,514 )

Acquisition of companies, net of cash acquired ( 14,940 ) — ( 364,873 )

Proceeds from disposition of fitness solutions, net of transaction costs, cash and restricted cash

Acquisition, net of cash acquired

— ( 14,940 ) —

Net cash used in investing activities ( 12,297 ) ( 38,020 ) ( 18,080 )

Cash flows (used in) provided by financing activities:

Cash flows used in financing activities:

Payments on long-term debt

( 5,500 ) ( 5,500 ) ( 9,500 )

Proceeds from long-term debt — — 850,966

Deferred financing costs — — ( 8,135 )

Exercise of stock options 4,112 2,603 1,819

Proceeds from preferred stock issuance, net — — 109,782

Proceeds from common stock issuance, net — — 415,708

Proceeds from common stock issuance for Employee Stock Purchase Plan 3,310 3,550 3,366

Employee taxes paid for RSU withholdings

( 3,824 ) — —

Repurchase and retirement of common stock ( 57,712 ) ( 67,283 ) ( 42,994 )

Net cash (used in) provided by financing activities

Net cash used in financing activities

( 59,614 ) ( 66,630 ) ( 47,309 )

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39,603 355 ( 1,735 )

Cash and cash equivalents and restricted cash:

Cash, cash equivalents and restricted cash:

Beginning of period

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Cash paid for income taxes $ 4,549 $ 3,107 $ 2,511

Supplemental disclosures of noncash investing and financing activities:

Rollover equity in consideration of net assets acquired $ — $ — $ 726

Accretion of Series B preferred stock to redemption value $ — $ — $ 15,105

The accompanying notes are an integral part of these consolidated financial statements.

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

Today, the Company serves more than 708,000 customers across three core verticals:

Home Services;

Health Services;

and Fitness & Wellness Services.

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

As of December 31, 2024, the Company served more than 740,000 customers across three core verticals:

EverPro for Home Services;

EverHealth for Health Services;

and EverWell for Wellness Services.

The platform provides vertically-tailored SaaS solutions that address service SMBs’ increasingly nuanced 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.

The Company is headquartered in Denver, Colorado, and has operations across the United States, Canada, Jordan, United Kingdom, Australia and New Zealand.

Initial Public Offering

On July 6, 2021, the Company completed its Initial Public Offering (“IPO”), in which the Company issued and sold 19.1 million shares of its common stock at a public offering price of $ 17.00 per share (see Note 11.

Summary of Significant Accounting Policies

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All material intercompany transactions have been eliminated in consolidation.

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).

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.

The divestiture did not qualify for reporting as a discontinued operation.

As a result, our unaudited condensed consolidated financial statements include the results of North American Fitness and UK Fitness for all periods through the applicable date of sale.

Use of Estimates

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Actual results could differ from those estimates and assumptions.

Segment Information

The Company’s Chief Operating Decision Maker (“CODM”), its Chief Executive Officer (“CEO”), evaluates financial performance and allocates resources on a consolidated basis.

Accordingly, the Company has determined that it operates in a single reportable segment.

Revenue and 18.

Geographic Areas for disaggregated information regarding the Company's revenues and long-lived assets by geography, respectively.

Business Combinations

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The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate.

Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate or other appropriate measures of fair value.

If such assets are considered to be impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its estimated fair value.

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During the fourth quarter of 2023, the Company evaluated the recoverability of our fitness asset group.

As a result of our evaluation, we determined that the estimated fair value of our fitness asset group was insufficient to recover the net carrying value of the asset group resulting in an impairment charge of approximately $ 5.1 million during the three months ended December 31, 2023, of which $ 3.1 million related to intangible assets (see Note 19.

Subsequent Event).

Additionally, the Company ceased use of certain leased premises and subleased certain facilities resulting in an impairment charge of $ 1.2 million to impair the right-of-use lease assets to their fair value during the year ended December 31, 2023.

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If the carrying value, including goodwill, exceeds the reporting unit’s fair value, we will recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value.

We did not incur any goodwill impairment losses in any of the periods presented.

During 2024, we recognized $ 34.5 million of goodwill impairment charges, which are included in loss on sale and impairments on the consolidated statements of operations and comprehensive loss.

As a result of our evaluation, we determined that the estimated fair value of our marketing technology reporting unit was insufficient to recover the net carrying value of the reporting unit resulting in an impairment charge of approximately $ 28.1 million during the three months ended December 31, 2024 (see Note 20.

Subsequent Event).

Additionally, we recognized $ 6.4 million of goodwill impairment charges representing the allocated goodwill to Fitness Solutions (see Note 3.

Acquisitions and Dispositions).

We did not incur any goodwill impairment losses during the years ended December 31, 2023 and 2022.

The Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) as of January 1, 2022 and recognized right-of-use (“ROU”) lease assets and lease liabilities on the balance sheet representing the rights and obligations created by those leases and disclosed key information about leasing arrangements.

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Operating ROU lease assets are included in other non-current assets and operating lease liabilities are included in accrued expenses and other and other non-current liabilities on our consolidated balance sheets.

EverCommerce Inc.

Notes to Consolidated Financial Statements

Lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

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The ROU lease assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are adjusted for lease incentives.

EverCommerce Inc.

Notes to Consolidated Financial Statements

The Company’s leases do not provide a readily determinable implicit interest rate and we use our incremental borrowing rate to measure the lease liability and corresponding ROU lease assets.

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Amortization of debt issuance costs, noncash discounts and other credit facility costs are included in interest expense on the consolidated statements of operations and comprehensive loss.

Series A, B and C Convertible Preferred Stock

The Company accounted for its Series A Convertible Preferred Stock (“Series A”), Series B Convertible Preferred Stock (“Series B”) and Series C Convertible Preferred Stock (“Series C”) shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity .

Series A shares, Series B shares and Series C shares were conditionally redeemable preferred stock shares (with redemption rights that were either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) that were classified as Convertible Preferred Stock separate from the stockholders’ equity (deficit) section of the Company’s consolidated balance sheets.

The Series A shares and Series C shares were redeemable upon the occurrence of uncertain events not solely within the Company’s control and these uncertain events were deemed not probable.

Therefore, Series A shares and Series C shares were presented at fair value at the time of issuance and were not subsequently re-measured.

The Company’s Series B shares featured certain redemption rights that were considered to be outside of the Company’s control and these redemption rights were deemed probable of occurrence through March 15, 2021.

Accordingly, Series B shares were presented at redemption value through that date.

In connection with the IPO, all of the Company’s then outstanding convertible preferred stock converted into shares of common stock on a one-for-one basis.

Upon conversion of the convertible preferred stock, the Company reclassified the carrying value of the convertible preferred stock to common stock and additional paid-in capital.

Revenue Recognition

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Subscription revenue primarily consists of the sale of SaaS offerings or the sale of software licenses.

Through the S aaS offerings and

EverCommerce Inc.

Notes to Consolidated Financial Statements

related support services, customers are granted access to a hosted software application over the contract period, generally ranging from one month to five years, without a contractual right to possession of the software.

Through the S aaS offerings and related support services, customers are granted access to a hosted software application over the contract period, generally ranging from one month to five years, without a contractual right to possession of the software.

Alternatively, through the sale of software licenses the customer is provided with a right to use software that provides functionality to the customer on a stand-alone basis, and related support services, which include telephone/technical support, when-and-if available software updates and, in certain instances, hosting services.

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Contracts may contain termination for convenience provisions that allow the Company, customer or both parties the ability to terminate for convenience, either at any time or upon providing a specified notice period, without a penalty.

The contract term for accounting purposes is determined to be the period in which parties to the contract have present enforceable rights and obligations, therefore the contract term for accounting purposes may be shorter than the stated term.

EverCommerce Inc.

Notes to Consolidated Financial Statements

be shorter than the stated term.

• SaaS and related support services :

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Revenue is recognized ratably because the customer simultaneously receives and consumes the benefits of the services throughout the contract period.

Contracts are generally fixed price and may be invoiced on a monthly, quarterly or annual basis, with standard payment terms ranging from 30 to 60 days.

Contracts are generally fixed price and may be invoiced on a monthly, quarterly or annual basis, with standard payment terms ranging from due upon receipt to 30 days.

• License and related support services:

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Within these arrangements, the Company is obligated to make the support services available continuously throughout the contract and the customer simultaneously receives and consumes the benefit of making these services available throughout the contract period.

Contracts are generally fixed price and may be invoiced on a monthly, quarterly or annual basis, with standard payment terms ranging from 30 to 60 days.

Contracts are generally fixed price and may be invoiced on a monthly, quarterly or annual basis, with standard payment terms ranging from due upon receipt to 30 days.

The timing of revenue recognition may differ from the timing of invoicing customers due to the existence of these invoicing practices as well as the requirement to recognize revenue on a relative stand-alone selling price basis.

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Certain arrangements may be invoiced on a quarterly or annual basis.

EverCommerce Inc.

Notes to Consolidated Financial Statements

Consumer connection services relate to the sourcing and delivery of service requests from consumers to home service providers.

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Marketing technology solutions service related contracts are typically short-term with stated contract terms that are less than one year.

EverCommerce Inc.

Notes to Consolidated Financial Statements

Other revenues generally consist of fees associated with the sale of distinct professional services, either in support of subscription revenue or marketing technology revenue, and hardware.

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Professional service contracts are offered at either a fixed or a variable price and may be invoiced in advance or arrears of the services being provided.

Standard payment terms for these arrangements range from 30 to 60 days.

Standard payment terms for these arrangements range from due upon receipt to 30 days.

Contract terms for other revenue arrangements are generally short-term, with stated contract terms that are less than one year.

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We expense the cost of advertising as incurred, which is primarily for internet-based advertising to market our products and services.

For the years ended December 31, 2023, 2022 and 2021, advertising expenses included in sales and marketing expenses on the

EverCommerce Inc.

Notes to Consolidated Financial Statements

consolidated statements of operations and comprehensive loss were $ 23.7 million, $ 21.4 million and $ 19.3 million, respectively.

For the years ended December 31, 2024, 2023 and 2022, advertising expenses included in sales and marketing expenses on the consolidated statements of operations and comprehensive loss were $ 24.4 million, $ 23.7 million and $ 21.4 million, respectively.

Stock-based Compensation

We measure stock-based compensation awards made to employees and directors based on the estimated grant date fair value of the awards and recognize the compensation expense on a straight-line basis over the applicable service period.

We use the Black-Scholes option-pricing model to estimate the fair value of options granted with time-based vesting and market-based vesting terms, respectively, which requires the use of assumptions, including the fair value of the common stock, expected volatility, expected term, risk-free interest rate and expected dividends.

The Company does not have a sufficient third-party history of market prices of its common stock, and as such volatility is estimated, using historical volatilities of comparable public entities for the valuation of its stock options.

At the point when the Company has sufficient and meaningful trading history of its stock, as is the case for the Company’s 2021 Employee Stock Purchase Plan (the “ESPP”) (see Note 12.

Stock-Based Compensation), it will calculate volatility based on its own trading history.

The expected term represents the estimated average period of time that the option will remain outstanding.

Since the Company does not have sufficient historical data for the exercise of stock options, the expected term is based on the “simplified” method that measures the expected term as the average of the vesting period and the contractual term.

Once the Company has sufficient historical data for the exercise of its options it will use Company-specific data.

We use the Black-Scholes option-pricing model to estimate the fair value of options granted with time-based vesting and performance-based vesting terms, respectively, which requires the use of assumptions, including the fair value of the common stock, expected volatility, expected term, risk-free interest rate and expected dividends.

We estimate expected volatility based on the historical volatility of our common stock.

The expected term represents the estimated average period of time that the option will remain outstanding using the “simplified”

EverCommerce Inc.

Notes to Consolidated Financial Statements

method that measures the expected term as the average of the vesting period and the contractual term.

The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of the awards.

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The Company's total provision for taxes includes income taxes on the Company's corporate subsidiaries.

The Tax Cuts and Jobs Act of 2017 ("TCJA") subjects a U.S.

shareholder to current tax on global intangible low-taxed income ("GILTI") earned by foreign subsidiaries.

The Company accounts for GILTI as a period cost as incurred.

The Company records uncertain tax positions based on the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority when it is determined that the tax position will more likely than not be sustained on the basis of the technical merits of the position.

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Net Loss per Share Attributable to Common Stockholders

The Company computes net loss per share attributable to its common stockholders using the two-class method required for participating securities, which determines net loss per common share and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings.

The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

The Company’s convertible preferred stock contractually entitled the holders of such shares to participate in dividends, but did not contractually require the holders of such shares to participate in the Company’s losses.

As such, net losses for the periods presented were not allocated to these securities.

In connection with the IPO, all of the Company’s then outstanding convertible preferred stock converted into shares of common stock on a one-for-one basis.

Diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

The Company computes basic net loss per share attributable to its common stockholders by dividing net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of common stock equivalents.

Diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, because potentially dilutive shares of common stock are not assumed to have been issued if their effect is anti-dilutive.

Foreign Currency Translation

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Assets and liabilities of foreign subsidiaries are translated into U.S.

dollars at the current exchange rate in effect as of the date of the consolidated

EverCommerce Inc.

Notes to Consolidated Financial Statements

balance sheets (the “Spot Rate”).

dollars at the current exchange rate in effect as of the date of the consolidated balance sheets (the “Spot Rate”).

Revenues and expenses are translated at the average exchange rates during the respective periods.

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The Company has elected to use the extended transition period under the JOBS Act until the earlier of the date that it is (i) no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

As a result, the financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

As a result, the financial statements may not be comparable to companies that comply with the new or revised accounting

EverCommerce Inc.

Notes to Consolidated Financial Statements

pronouncements as of public company effective dates.

The adoption dates are discussed below to reflect this election within the Recently Issued Accounting Pronouncements section.

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Accounting pronouncements issued and adopted

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326);

Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, which includes the Company’s accounts receivable and contract assets.

This updated standard is effective for annual reporting periods beginning after December 15, 2022.

The Company adopted this ASU for the year ending December 31, 2023 and it did not have a material impact on the financial statements.

In October 2021, the FASB issued ASU No.

2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which amends the guidance in ASC 805 to require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

FASB’s objective in issuing the ASU is to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity and inconsistency related to both the recognition of an acquired contract liability and payment terms’ effects on subsequent revenue recognized by the acquirer.

This updated standard is effective for annual reporting periods beginning after December 15, 2022.

The Company adopted this ASU on January 1, 2023 and it is prospectively applicable to all business combinations from the adoption date.

The adoption of this standard was not material to the Kickserv Acquisition (see Note 3.

Acquisitions).

In March 2020, the FASB issued ASU No.

2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates.

The guidance was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2024.

There was no material impact to our financial statements from the adoption of this standard.

Accounting pronouncements not yet adopted

In November 2023, the FASB issued ASU No.

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All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

EverCommerce Inc.

Notes to Consolidated Financial Statements

amendments should be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of adopting the amendments in this update on its consolidated financial statements and disclosures.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and requires retrospective application to all prior periods presented in the financial statements.

The Company adopted this ASU for the year ending December 31, 2024, which resulted in Note 19.

Segment Reporting included within the Notes to the Consolidated Financial Statements.

Accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU No.

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The Company is currently evaluating the impact of adopting this update on its consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) :

Disaggregation of Income Statement Expenses , which requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period.

Public companies will be required to disclose the amounts related to purchases of inventory, employee compensation, depreciation, intangible asset amortization, and selling expenses.

The amendments in this update are effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of adopting the amendments in this update on its consolidated financial statements and disclosures.

Acquisitions and Dispositions

2023 Acquisition

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The valuation methods used to determine the estimated fair value of intangible assets included the income approach—relief from royalty method for developed technology with an estimated useful life of five years , and the income approach—multi period excess earnings method for customer relationships with an estimated useful life of 13 years.

A number of assumptions and estimates were involved in the application of these valuation methods, including revenue forecasts, expected competition, costs of revenues, obsolescence, tax rates, capital spending, customer attrition rates, discount rates and working capital changes.

EverCommerce Inc.

Notes to Consolidated Financial Statements

rates, discount rates and working capital changes.

Cash flow forecasts were generally based on pre-acquisition forecasts coupled with estimated revenues and cost synergies available to a market participant.

Our purchase price allocation for the acquisition is preliminary and subject to revision with provisional amounts related to tax-related and other items.

Additional information that existed as of the acquisition date but at the time was unknown to us may become known to us during the remainder of the measurement period, which is not to exceed 12 months from the acquisition date.

Each acquisition allows for an adjustment to the purchase price to be made subsequent to the transaction’s closing date based on the actual amount of working capital and cash delivered to the Company.

The consideration paid and purchase price allocations disclosed reflect the effects of these adjustments.

The financial results of Kickserv since the closing through December 31, 2023, were not material to our consolidated financial statements, nor were they material to our prior period consolidated results on a pro forma basis.

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Total net assets acquired $ 14,974

EverCommerce Inc.

Notes to Consolidated Financial Statements

2021 Acquisitions

During 2021, the Company completed the acquisition of five unrelated businesses in conjunction with the execution of its long-term plans and objectives in building a service commerce platform supporting the success of SMBs.

Total purchase consideration was $ 367.1 million, including $ 366.4 million in cash consideration, and $ 0.7 million of rollover equity.

In connection with these acquisitions, the Company allocated approximately $ 1.4 million of the consideration to cash and cash equivalents, $ 0.5 million to property and equipment, $ 3.4 million to deferred tax asset, $ 20.9 million to developed technology, $ 105.9 million to customer relationships, $ 5.6 million to trade name and non-compete agreements, $ 255.7 million of goodwill, of which $ 36.1 million was deductible for tax purposes, a liability of $ 1.6 million to net working capital and $ 24.7 million to deferred tax liability.

The Company’s consolidated statements of operations and comprehensive loss includes $ 8.4 million of acquisition-related transaction costs in general and administrative for acquisitions consummated in 2021.

For the year ended December 31, 2021 the Company recognized revenue of $ 21.6 million related to acquisitions consummated in 2021.

Fitness Solutions Disposition

On March 13, 2024, the Company entered into definitive sale and purchase agreements to sell its fitness solutions to Jonas Software.

The sale of North American Fitness closed simultaneously with signing and the sale of UK Fitness closed July 1, 2024.

The divestiture did not qualify for discontinued operations.

During the year ended December 31, 2024, the Company recognized losses of $ 4.9 million, related to the sale of Fitness Solutions, which are included in loss on sale and impairments on our consolidated statements of operations and comprehensive loss.

Additionally, the Company recognized $ 6.4 million of goodwill impairment charges representing the allocated goodwill to Fitness Solutions, which is included in loss on sale and impairments in the consolidated statements of operations and comprehensive loss.

Disaggregation of Revenue

11 unchanged sentences

Total $ 698,765 $ 675,369 $ 620,746

EverCommerce Inc.

Notes to Consolidated Financial Statements

Contract Balances

Supplemental balance sheet information related to contracts from customers is as follows:

Supplemental balance sheet information related to contracts from customers as of:

(in thousands)

5 unchanged sentences

Accounts receivable, net:

Accounts receivable represent rights to consideration in exchange for products or services that have been transferred by us, when payment is unconditional and only the passage of time is required before payment is due.

Accounts receivable, net of allowance for expected credit losses, represent rights to consideration in exchange for products or services that have been transferred by us, when payment is unconditional and only the passage of time is required before payment is due.

Contract assets:

Contract assets represent rights to consideration in exchange for products or services that have been transferred (i.e., the performance obligation or portion of the performance obligation has been satisfied), but payment is conditional on something other than the passage of time.

These amounts typically relate to contracts that include on-premise licenses and professional services where

EverCommerce Inc.

Notes to Consolidated Financial Statements

the right to payment is not present until completion of the contract or achievement of specified milestones and the fair value of products or services transferred exceed this constraint.

These amounts typically relate to contracts with the suppliers within our group purchasing programs for which payment is received at least one quarter in arrears from the service period.

They also relate to contracts that include on-premise licenses and professional services where the right to payment is not present until completion of the contract or achievement of specified milestones and the fair value of products or services transferred exceed this constraint.

These amounts typically relate to contracts that include on-premise licenses and professional services where the right to payment is not present until completion of the contract or achievement of specified milestones and the fair value of products or services transferred exceed this constraint.

Contract liabilities :

7 unchanged sentences

Activity in our allowance for expected credit losses is as follows for the years ended December 31, 2024 and 2023 (in thousands):

Balance, December 31, 2021

Bad debt expense 5,578

Write-offs, net of recoveries ( 2,837 )

Balance, December 31, 2022

Allowances for expected credit losses, beginning of year

$ 6,183 $ 4,670

Beginning balance adjustment due to implementation of the new credit loss standard

1 unchanged sentence

Write-offs, net of recoveries

Balance, December 31, 2023

( 5,175 ) ( 5,812 )

Disposition of Fitness Solutions

Allowance for expected credit losses, end of year

$ 5,527 $ 6,183

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of unsatisfied or partially satisfied performance obligations within contracts with an original expected contract term that is greater than one year for which fulfillment of the contract has started as of the end of the reporting period.

Contracts that include 30-day termination rights are considered to be contracts with a term of one month

EverCommerce Inc.

Notes to Consolidated Financial Statements

and are therefore excluded from remaining performance obligations.

Remaining performance obligations generally relate to those which are stand-ready in nature, as found within the subscription and marketing technology solutions revenue streams.

6 unchanged sentences

The Company recorded $ 6.7 million, $ 5.7 million and $ 4.3 million of amortization expense related to assets for the years ended December 31, 2024, 2023 and 2022, respectively, which is included in sales and marketing expense on the consolidated statements of operations and comprehensive loss, as well as $ 3.1 million, $ 2.3 million and $ 1.7 million, respectively, which is included in cost of revenues expense on the consolidated statements of operations and comprehensive loss.

Goodwill consisted of the following as of December 31, 2023 and 2022 (in thousands):

Goodwill activity for the years ended December 31, 2024 and 2023 (in thousands):

Balance, January 1, 2023

Measurement period adjustments (1)

Effect of foreign currency exchange rate changes ( 6,761 )

Balance, December 31, 2022

Acquired goodwill

1 unchanged sentence

Balance, December 31, 2023

(1) The measurement period adjustments of $ 0.6 million relate to acquisitions consummated during the years ended December 31, 2021.

EverCommerce Inc.

Notes to Consolidated Financial Statements

Effect of foreign currency exchange rates

Balance, December 31, 2024

During the fourth quarter of 2024, in conjunction with our review of strategic alternatives for our marketing technology solutions, the Company evaluated the recoverability of our marketing technology reporting unit and determined that the estimated fair value was insufficient to recover the net carrying value of the reporting unit resulting in an impairment charge of approximately $ 28.1 million during the three months ended December 31, 2024 (see Note 20.

Subsequent Event).

Additionally, we recognized $ 6.4 million of goodwill impairment charges representing the allocated goodwill to Fitness Solutions (see Note 3.

Acquisitions and Dispositions).

Goodwill impairment charges are included in loss on sale and impairments on the consolidated statements of operations and comprehensive loss.

There has been no other impairment of goodwill.

Intangible Assets

Intangible assets consisted of the following:

Intangible assets consisted of the following as of:

December 31, 2024

7 unchanged sentences

102,395 83,878 18,517

Trade names (1)

37,287 27,325 9,962

2 unchanged sentences

$ 716,420 $ 489,580 $ 226,840

(1) During the quarter ended December 31, 2023, we recognized an impairment charge including $ 2.7 million of customer relationships, $ 0.3 million of developed technology and $ 0.1 million of trade names included in impairment expense on the consolidated statements of operations and comprehensive loss (see Note 2.

Summary of Significant Accounting Policies).

EverCommerce Inc.

Notes to Consolidated Financial Statements

December 31, 2023

3 unchanged sentences

(in thousands)

Customer relationships 3 - 20 years

Customer relationships (1)

$ 605,908 $ 336,558 $ 269,350

1 unchanged sentence

106,482 74,717 31,765

Trade names (1)

38,627 24,293 14,334

2 unchanged sentences

Total $ 753,425 $ 437,906 $ 315,519

Summary of Significant Accounting Policies).

Amortization expense was $ 74.9 million, $ 91.2 million and $ 101.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

7 unchanged sentences

Total amortization expense for the Company’s intangible assets $ 226,840

EverCommerce Inc.

Notes to Consolidated Financial Statements

Property and Equipment

Property and equipment consisted of the following:

Property and equipment consisted of the following as of:

(in thousands)

5 unchanged sentences

Property and equipment, net $ 6,658 $ 9,734

Depreciation expense was $ 4.6 million for the year ended December 31, 2023 and $ 4.1 million for each of the years ended December 31, 2022 and 2021.

Depreciation expense was $ 3.6 million, $ 4.6 million and $ 4.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

During the three months ended December 31, 2023, we recorded an impairment charge of $ 0.2 million to leasehold improvements, which is included in impairment expense on our consolidated statements of operations and comprehensive loss (see Note 2.

Summary of Significant Accounting Policies).

EverCommerce Inc.

Notes to Consolidated Financial Statements

Capitalized Software

Capitalized software consisted of the following:

Capitalized software consisted of the following as of:

(in thousands)

16 unchanged sentences

Total lease cost $ 7,091 $ 8,821

Included in the consolidated statements of operations and comprehensive loss is total rent expense of $ 9.7 million for the year ended December 31, 2021.

EverCommerce Inc.

Notes to Consolidated Financial Statements

During the three months ended December 31, 2023, we recorded a $ 0.6 million impairment charge related to ROU lease assets, which is included in impairment expense on our consolidated statement of operations and comprehensive loss (See Note 2.

The Company ceased use of certain leased premises and subleased certain facilities resulting in impairment charges of $ 0.4 million and $ 1.2 million for the years ended December 31, 2024 and 2023, respectively, to impair ROU lease assets to their fair value.

During the three months ended December 31, 2023, we recorded a $ 0.6 million impairment charge related to ROU lease assets, which is included in loss on sale and impairments on our consolidated statement of operations and comprehensive loss (see Note 2.

Summary of Significant Accounting Policies).

Supplemental cash flow information related to leases is as follows:

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Supplemental balance sheet information, included in other non-current assets , accrued expenses and other and other non-current liabilities on the consolidated balance sheet, related to leases is as follows:

EverCommerce Inc.

Notes to Consolidated Financial Statements

Year Ended December 31,

11 unchanged sentences

Total present value of lease liabilities $ 17,011

EverCommerce Inc.

Notes to Consolidated Financial Statements

Long-Term Debt

Long-term debt consisted of the following:

Long-term debt consisted of the following as of :

(in thousands)

Term notes with interest payable monthly, interest rate at Adjusted SOFR or Alternative Base Rate (“ABR”), plus an applicable margin of 3.25 % ( 8.46283 % at December 31, 2023) quarterly principal payments of 0.25 % of original principal balance with balloon payment due July 2028

Term notes with interest payable monthly, interest rate at Adjusted SOFR, plus an applicable margin of 2.50 % (1) ( 6.85701 % at December 31, 2024) quarterly principal payments of 0.25 % of original principal balance with balloon payment due July 2028

$ 532,125 $ 537,625

Revolver with interest payable monthly, interest rate at Adjusted SOFR or ABR, plus an applicable margin of 3.25 % ( 8.47044 % at December 31, 2023), and outstanding balance due July 2026

Revolver with interest payable monthly, interest rate at Adjusted SOFR, plus an applicable margin of 3.25 % ( 6.85701 % at December 31, 2024), and outstanding balance due July 2026

Principal debt 532,125 537,625

4 unchanged sentences

Long-term portion $ 522,442 $ 526,696

The Company is party to a credit agreement, as amended, that provides for two term loans for an aggregate principal amount of $ 550.0 million (“Term Loans”), a revolver with a capacity of $ 190.0 million (“Revolver”) and a sub-limit of the Revolver available for letters of credit up to an aggregate face amount of $ 20.0 million.

(1) Prior to December 13, 2024, the applicable rate for the Term Loans was 3.00 % for Adjusted SOFR borrowings.

See below for further details regarding the amendments to the Credit Facilities.

The Company is party to a credit agreement, as amended, that provides for one term loan for an aggregate principal amount of $ 550.0 million (the “Term Loan”), a revolver with a capacity of $ 190.0 million (the “Revolver”) and a sub-limit of the Revolver available for letters of credit up to an aggregate face amount of $ 20.0 million.

These debt arrangements are collectively referred to herein as the “Credit Facilities”.

Prior to July 1, 2023, borrowings under the Credit Facilities were available as ABR or Eurocurrency borrowings.

ABR borrowings under the Credit Facilities accrued interest at an alternate base rate plus an applicable rate, and Eurocurrency borrowings accrued interest at an adjusted LIBOR rate plus an applicable rate.

The ABR rate represented the greater of the prime rate, Federal Reserve Bank of New York rate plus ½ of 1%, and an adjusted LIBOR rate for a one month interest period plus 1 %.

Effective as of July 1, 2023, borrowings under the Credit Facilities bear interest at the Company’s option at ABR plus an applicable rate, or at a forward-looking term rate based upon the secured overnight financing rate (“SOFR”), plus (i) (a) with respect to Term Loans, credit spread adjustments of 0.11448 %, 0.26161 %, 0.42826 % and 0.71513 % for interest periods of one, three, six and twelve months, respectively, and (b) with respect to revolving loans, a credit spread adjustment of 0.0 % (“Adjusted SOFR”) plus (ii) an applicable rate, in each case with such applicable rate based on the Company’s first lien net leverage ratio.

EverCommerce Inc.

Notes to Consolidated Financial Statements

Effective as of July 1, 2023, borrowings under the Credit Facilities bear interest at the Company’s option at ABR plus an applicable rate, or at a forward-looking term rate based upon the secured overnight financing rate (“SOFR”), plus (i) (a) with respect to the Term Loan, credit spread adjustments of 0.11448 %, 0.26161 %, 0.42826 % and 0.71513 % for interest periods of one, three, six and twelve months, respectively, and (b) with respect to revolving loans, adjusted SOFR of 0.0 % plus (ii) an applicable rate, in each case with such applicable rate based on the Company’s first lien net leverage ratio.

The ABR represents the highest of the prime rate, Federal Reserve Bank of New York rate plus ½ of 1%, and the Adjusted SOFR for a one month interest period plus 1 %.

The applicable rate for the Term Loans and the Revolver is 3.0 % for Adjusted SOFR borrowings and 2.0 % for ABR borrowings, in each case subject to change based on our first lien net leverage ratio.

On December 13, 2024, the Company entered into an amendment (the “Amendment”) to the Credit Facilities to reduce the applicable margin and remove the credit spread adjustment from the existing Term Loan in their entirety in an aggregate principal amount of $ 533.5 million.

Following the Amendment, the Term Loan bears interest, at the borrower’s election, at (x) a forward-looking term rate based upon SOFR plus an applicable margin of 2.50 %, with a minimum forward-looking SOFR rate 0.50 % or (y) ABR plus an applicable margin of 1.50 %, with a minimum ABR of 1.50 %, in each case, with no step-downs.

The credit spread adjustment was removed in connection with the Amendment.

The refinanced Term Loan priced at par and refinanced all of the existing term loans outstanding under the Credit Agreement immediately prior to giving effect to the Amendment.

The Company determines the fair value of long-term debt based on trading prices for its debt if available.

2 unchanged sentences

The fair value amounts were approximately $ 537.4 million and $ 540.3 million as of December 31, 2024 and 2023, respectively.

Effective October 31, 2022, the Company entered into an interest rate swap agreement (the “Initial Swap”) in connection with the Company’s Credit Facilities for a notional amount of $ 200.0 million to convert a portion of the floating component of the Term Loans from a floating rate to a fixed rate.

The Initial Swap agreement has a term of five years with a fixed rate in the agreement of 4.212 %, as amended in June 2023.

Additionally, effective March 31, 2023, the Company entered into a second interest rate swap agreement (the “Second Swap” and together with the Initial Swap, the “Swap Agreements”) in connection with the Company’s Credit Facilities for a notional amount of $ 100.00 million to convert a portion of the floating rate component of the Term Loans from a floating rate to a fixed rate.

The Second Swap agreement has a term of approximately 4.5 years with a fixed rate in the agreement of 3.951 %, as amended in June 2023.

The Company has entered into the following interest rate swap agreements in connection with its Credit Facilities to convert a portion of the floating rate component of the Term Loan from a floating rate to fixed rate:

Fixed Interest Rate

Notional Amount

Asset (Liability) Fair Value at

December 31, 2024

(in thousands) (in thousands)

October 31, 2022 October 31, 2027 4.212 % $ 200,000 $ ( 947 )

March 31, 2023 October 31, 2027 3.951 % 100,000 232

September 20, 2024 October 31, 2027 3.395 % 125,000 2,210

The Swap Agreements are accounted for as derivatives whereby the fair value of the contract is reported within the consolidated balance sheets, and related gains and losses resulting from changes in the fair value are reported in interest and other expense, net, in the statements of operations and comprehensive loss.

As of December 31, 2023 the fair value of the Swap Agreements was a liability

EverCommerce Inc.

Notes to Consolidated Financial Statements

of $ 4.9 million which are reported in other non-current liabilities on the consolidated balance sheets, and the associated net losses of $ 2.0 million and $ 2.9 million were recognized for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2024 the fair value of the Initial Swap was a liability of $ 0.9 million, while the fair value of the Second and Third Swaps were an asset of $ 2.4 million, which are reported in other non-current liabilities and other non-current assets, respectively, on the consolidated balance sheets.

The related net gains and losses resulting from changes in fair value was a gain of $ 6.4 million and losses of $ 2.0 million and $ 2.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company’s Credit Facilities are subject to certain financial and nonfinancial covenants and are secured by substantially all assets of the Company.

3 unchanged sentences

Total aggregate maturities of the Company’s debt $ 532,125

Shares of convertible preferred stock were as follows (in thousands):

Year Ended December 31, 2021

(in thousands)

Convertible Preferred Stock:

Shares outstanding, beginning of period

72,226 — 44,958

Issuance of convertible preferred stock, net

Conversion to common stock upon closing of IPO

( 72,226 ) ( 7,857 ) ( 44,958 )

Shares outstanding, end of period

On May 5, 2021, the Company amended its Certificate of Incorporation (“Third Amended and Restated Certificate of Incorporation”) to increase the number of authorized shares of Preferred Stock from 125,000,000 shares to 140,000,000 shares of Preferred Stock, $ 0.00001 par value per share, of which 50,000,000 were designated as Series A, 75,000,000 were designated as Series B and 15,000,000 were designated as Series C as of such date.

Each share of Series A, Series B and Series C could have been converted into common stock at any time, at the option of the holder, based on a prescribed formula set forth in the Company’s Third Amended and Restated Certificate of Incorporation.

In the event of a liquidation, dissolution, winding up of the Company or other similar event, liquidation payments would have first been made to the holders of Series B, then to Series C, then to Series A.

In May 2021, the Company issued 7.9 million shares of Series C for proceeds of $ 109.8 million net of issuance costs.

In accordance with ASC 480, Distinguishing Liabilities from Equity, if the carrying value of redeemable preferred stock is less than its redemption value, redeemable preferred stock shall be accreted to its redemption value if it is probable it will become redeemable.

Prior to March 15, 2021, the Company concluded it was probable that the Series B would become redeemable due to the passage of time.

However, after that date the Company concluded that it was no longer probable that the Series B would become redeemable due to the increased likelihood of a successful IPO prior to February 23, 2025.

The Company’s Series B accruing dividends comprised a component of the redemption value of such stock.

The Company recorded the accretion of Series B through March 15, 2021, by increasing its carrying value and recording a corresponding reduction of additional paid-in capital in the amount of $ 15.1 million for the year ended December 31, 2021.

On July 6, 2021, the Company completed its IPO, in which the Company issued and sold 19.1 million shares of its common stock at a public offering price of $ 17.00 per share.

After underwriter discounts and commissions, net proceeds from the IPO were $ 303.9 million.

Additionally, the Company incurred other IPO related fees of $ 6.9 million.

On July 29, 2021, the IPO underwriters fully exercised their over-allotment option, resulting in the sale of an additional 2.8 million shares at the IPO price of $ 17.00 per share and after underwriter discounts, net proceeds were $ 43.9 million.

In connection with the IPO, the Company’s outstanding convertible preferred stock converted into shares of common stock on a one-for-one basis.

Upon conversion of the convertible preferred stock, the Company reclassified the carrying value of the convertible

On July 6, 2021, the Company filed an amended and restated certificate of incorporation with the Secretary of State of the State of Delaware to authorize the issuance of up to 2,050,000,000 shares, par value $ 0.00001 per share, consisting of 2,000,000,000 shares of common stock and 50,000,000 shares of preferred stock.

EverCommerce Inc.

Notes to Consolidated Financial Statements

preferred stock to common stock and additional paid-in capital.

Immediately prior to the closing of the IPO, the Company filed an amended and restated certificate of incorporation on July 6, 2021 with the Secretary of State of the State of Delaware to authorize the issuance of up to 2,050,000,000 shares, par value $ 0.00001 per share, consisting of 2,000,000,000 shares of common stock and 50,000,000 shares of preferred stock.

Repurchase Program

On June 14, 2022, our Board approved a stock repurchase program (as subsequently amended, the “Repurchase Program”) with authorization to purchase up to $ 50.0 million in shares of the Company’s common stock through the expiration of the program on December 21, 2022.

On November 7, 2022, our Board approved an expansion of the Repurchase Program with authorization to purchase up to an additional $ 50.0 million in shares of the Company’s common stock ($ 100.0 million total) and an extension to the expiration of the Repurchase Program through December 31, 2023.

On November 5, 2023, our Board approved an additional expansion of the Repurchase Program with authorization to purchase up to an additional $ 50.0 million in shares of the Company’s common stock (from $ 100.0 million to $ 150.0 million in total) and extended the expiration of the Repurchase Program through December 31, 2024.

On December 14, 2023, our Board approved a stock purchase agreement entered into between the Company and Eric Remer, Matt Feierstein, Marc Thompson, Sarah Jordan, Shane Driggers and Evan Berlin, who currently serve as officers of the Company (collectively, the “Selling Stockholders”).

On November 7, 2022, November 5, 2023, and May 21, 2024, our Board increased the authorization of the Repurchase Program by an additional $ 50.0 million in shares of the Company’s common stock on each date for a total authorization to repurchase up to $ 200.0 million in shares of the Company’s common stock, and most recently, extended the expiration of the Repurchase Program through December 31, 2025.

On December 14, 2023, our Board approved a stock purchase agreement entered into between the Company and Eric Remer, Matt Feierstein, Marc Thompson, Sarah Jordan, Shane Driggers and Evan Berlin, who served as officers of the Company at the time of the agreement (collectively, the “Selling Stockholders”).

On December 19, 2023, as part of our Repurchase Program, the Company repurchased an aggregate of 1,401,472 shares of common stock from the Selling Stockholders at a price of $ 9.82 per share, for an aggregate price of $ 13.8 million.

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The 2016 Plan allowed for the granting of stock-based awards through January 17, 2027.

In connection with the IPO, the Company’s Board adopted, and the Company’s stockholders approved, the 2021 Incentive Award Plan (the “2021 Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO and, as a result of which, the Company can no longer make awards under the 2016 Plan.

In connection with the Initial Public Offering (“IPO”), the Company’s Board adopted, and the Company’s stockholders approved, the 2021 Incentive Award Plan (the “2021 Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO and, as a result of which, the Company can no longer make awards under the 2016 Plan.

The 2021 Plan provides for the issuance of incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based awards.

2 unchanged sentences

Based on the number of outstanding shares of the Company’s common stock as of December 31, 2023, on January 1, 2024 the number of shares reserved for issuance under the 2021 Plan increased by 5.5 million.

In August 2024, the Company adopted a "withhold to cover" program, which allows it to withhold common stock from employees in connection with the settlement of income tax withholding obligations arising from the vesting of restricted stock unit (“RSUs”) under the 2021 Plan.

Stock options

During the years ended December 31, 2024 and 2022, the Company granted time-based and performance-based stock options to employees and directors.

Time-based options granted under the 2016 Plan vest 25 % after one year , and then monthly over the next three years whereas time-based options granted under the 2021 Plan vest 25 % after one year and then quarterly over the next three years .

Time-based options granted under the 2016 Plan vest 25 % after one year , and then monthly over the next three years .

Time-based options granted to newly hired employees under the 2021 Plan generally vest 25 % after one year and then quarterly over the next three years .

The vesting schedule for options granted to existing employees provides that the options vest ratably in quarterly installments over a period of four years .

Time-based options granted under both the 2016 Plan and the 2021 Plan expire 10 years from date of grant and carry an exercise price equal to the fair market value at the date of grant as determined by the Company’s Board for options granted under the 2016 Plan and an exercise price equal to the closing price of the Company’s stock at the date of grant for options granted under the 2021 Plan.

The Company did not grant stock options in 2023.

The overwhelming majority of performance-based options were granted prior to the IPO and had vesting conditions as follows:

50 % of a holder’s award would have vested upon a change in control or an initial public offering if the per share cash price received in connection with such change in control or the per share offering price in such initial public offering was at least $ 27.41 , and the other 50 % of the holder’s award would have vested upon a change in control or an initial public offering if the per share cash price received in connection with such change in control or the per share offering price in such initial public offering was at least $ 36.54 .

EverCommerce Inc.

Notes to Consolidated Financial Statements

performance-based options generally carried an exercise price equal to the fair market value at the date of grant as determined by the Board and expired 10 years from date of grant.

The performance-based options generally carried an exercise price equal to the fair market value at the date of grant as determined by the Board and expired 10 years from date of grant.

For options outstanding following the IPO, there was a market condition based on the Company achieving a volume weighted average stock price ranging from $ 27.41 to $ 36.54 through June 2023, none of which vested.

To date, $ 17.4 million of stock-based compensation expense has been recognized related to the market condition-based options.

EverCommerce Inc.

Notes to Consolidated Financial Statements

The relevant data used to determine the value of the stock options is as follows:

Weighted-average risk-free interest rate 1.82 % 0.97 %

Expected term in years 6.1 6.1

Weighted-average expected volatility 50 % 48 %

Expected dividends 0 % 0 %

Weighted-average risk-free interest rate 1.89 % N/A 1.82 %

Expected term in years 6.1 N/A

Weighted-average expected volatility 50 % N/A 50 %

Expected dividends 0 % N/A 0 %

(1) There were no stock options granted during 2023.

A summary of stock option activity for the year ended December 31, 2024 is as follows:

5 unchanged sentences

13,337 $ 10.03 6.27 $ 22,578

Granted 2,300 10.87

Exercised ( 653 ) 6.30

5 unchanged sentences

The weighted-average grant date fair value of time-based stock options granted was $ 5.31 , nil , and $ 5.76 for the years ended December 31, 2024, 2023 and 2022, respectively.

The weighted-average modification date fair value of the market condition-based options modified in 2021 was $ 6.85 .

The total intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022 was $ 2.8 million, $ 2.2 million and $ 2.3 million, respectively.

1 unchanged sentence

The unrecognized compensation expense associated with outstanding time-based stock options at December 31, 2024 was $ 8.7 million, which is expected to be recognized over a weighted average period of 2.85 years.

There was no remaining unrecognized compensation expense associated with outstanding market condition-based stock options at December 31, 2023.

Restricted Stock Awards

Prior to 2021, the Company granted 1.6 million shares of funding restricted stock awards (“RSAs”).

The unvested awards were subject to modification upon an investment by the equity sponsors, which occurred when the Company issued Series C convertible preferred stock in May 2021 to fund an acquisition (see Note 11.

In connection with these contributions, the RSAs were modified, and approximately 0.6 million of funding RSAs vested at $ 17.00 per share.

Compensation expense of $ 9.7 million was recognized in general and administrative in the statements of operations and comprehensive loss for the year ended December 31, 2021.

In connection with the IPO, all remaining unvested funding awards were cancelled.

Restricted Stock Units

During the years ended December 31, 2023, 2022 and 2021, the Company issued time vesting restricted stock units (“RSUs”).

During the years ended December 31, 2024, 2023 and 2022, the Company issued time vesting RSUs.

The vesting schedule for awards granted to newly hired employees provides that the awards vest over a four-year period starting on the grant date, with 25 % of the awards vesting on the one-year anniversary, and then in equal quarterly installments for the subsequent three years .

1 unchanged sentence

The Company records compensation expense for these awards on a straight-line basis, which approximates the service period.

Compensation expense of $ 12.8 million, $ 6.0 million and $ 1.2 million related to these awards was recognized in the statements of operations and comprehensive loss for the years ended December 31, 2023, 2022 and 2021,

EverCommerce Inc.

Notes to Consolidated Financial Statements

respectively.

The unrecognized compensation expense associated with the RSUs at December 31, 2023 was $ 30.5 million , which is expected to be recognized over a weighted average perio d of 2.84 years.

Compensation expense of $ 19.7 million, $ 12.8 million and $ 6.0 million related to these awards was recognized in the statements of operations and comprehensive loss for the years ended December 31, 2024, 2023 and 2022, respectively.

The unrecognized compensation expense associated with the RSUs at December 31, 2024 was $ 35.2 million, which is expected to be recognized over a weighted average period of 2.74 years.

The summary of time vesting restricted stock units activity for the year ended December 31, 2024 is as follows:

10 unchanged sentences

3,901 $ 10.18

EverCommerce Inc.

Notes to Consolidated Financial Statements

2021 Employee Stock Purchase Plan

14 unchanged sentences

Total stock-based compensation expense $ 26,491 $ 25,559 $ 26,818

EverCommerce Inc.

Notes to Consolidated Financial Statements

Net Loss Per Share Attributable to Common Stockholders

2 unchanged sentences

2024 2023 2022

(in thousands except share and per share amounts)

Net loss $ ( 45,620 ) $ ( 59,816 ) $ ( 81,966 )

Accretion of Series B to redemption value — — ( 15,105 )

Numerator for basic and diluted EPS – net loss attributable to common stockholders $ ( 45,620 ) $ ( 59,816 ) $ ( 97,071 )

Denominator for basic and diluted EPS – Weighted-average shares of common stock outstanding used in computing net loss per share 188,938,892 194,624,968 117,795,280

(in thousands except per share amounts)

Net loss attributable to common stockholders

$ ( 41,089 ) $ ( 45,620 ) $ ( 59,816 )

Weighted-average shares of common stock outstanding, basic and diluted

184,898 188,939 194,625

Basic and diluted net loss per share attributable to common stockholders $ ( 0.22 ) $ ( 0.24 ) $ ( 0.31 )

4 unchanged sentences

Shares of common stock pursuant to ESPP

277,656 341,389 14,755

Total anti-dilutive outstanding potential common stock 18,586 16,952 19,300

EverCommerce Inc.

Notes to Consolidated Financial Statements

Fair Value of Financial Instruments

11 unchanged sentences

There were no transfers between fair value measurement levels during the years ended December 31, 2024 and 2023.

EverCommerce Inc.

Notes to Consolidated Financial Statements

The following table presents information about the Company's financial assets and liabilities measured at fair value on a recurring basis:

The following table presents information about the Company's financial assets and liabilities measured at fair value on a recurring basis as of:

December 31, 2024 Balance Sheet Classification

3 unchanged sentences

Interest rate swaps

— 2,443 — 2,443 Other non-current assets

Interest rate swaps

$ — $ 947 $ — $ 947 Other non-current liabilities

5 unchanged sentences

$ — $ 4,889 $ — $ 4,889 Other non-current liabilities

The following is a reconciliation of the opening and closing balance for contingent consideration measured at fair value on a recurring basis within Level 3 of the fair value hierarchy during the year ended December 31, 2022 (in thousands):

Opening balance $ 675

Fair value adjustments ( 18 )

Amounts settled through payment ( 657 )

Ending balance $ —

Retirement Plan

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The Company may make discretionary and/or matching contributions to the 401(k).

We began making discretionary employer contributions effective January 1, 2020 equal to 25 % of employee contributions up to 8 % and increased this contribution to 100 % of employee contributions up to 4 % effective January 1, 2022.

The Company matched 100 % of employee contributions up to 4 % of eligible compensation.

Employer matching contributions were $ 5.6 million, $ 5.3 million and $ 4.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

EverCommerce Inc.

Notes to Consolidated Financial Statements

The components of our net loss before income tax (expense) benefit are as follows:

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subsidiaries are not permanently reinvested, however, due to a combination of anticipated tax treatment and losses, no material deferred tax liability exists.

EverCommerce Inc.

Notes to Consolidated Financial Statements

The components of the provision for income taxes consists of the following:

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(in thousands)

Federal $ 173 $ — $ —

State 1,256 1,649 1,539

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$ 5,782 $ 1,639 $ ( 4,680 )

EverCommerce Inc.

Notes to Consolidated Financial Statements

The Company’s deferred tax assets and liabilities, included in other non-current assets and other non-current liabilities on the consolidated balance sheets, related to temporary differences and operating loss carryforwards were as follows:

7 unchanged sentences

Lease liability 4,240 5,837

Capital loss carryforward

Other 2,974 2,589

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Net deferred tax liabilities $ ( 8,590 ) $ ( 7,577 )

EverCommerce Inc.

Notes to Consolidated Financial Statements

The Company had net operating loss and tax credit carryforwards as of the financial statement date as follows:

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Net operating losses, federal (Pre January 1, 2018)

$ 2,030 2033 - 2037

Net operating losses, state $ 7,459 Various

Net operating losses, foreign $ 1,748 2038 - Indefinite

Capital loss, federal

$ 10,795 2029

Tax credits, federal $ 266 2037

4 unchanged sentences

$ 64.4 million will be recognized as a reduction of income tax expense and $ 0.4 million will be recorded as an increase in equity.

EverCommerce Inc.

Notes to Consolidated Financial Statements

A reconciliation of our valuation allowance on deferred tax assets is as follows:

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Additions recorded in acquisition accounting — 216

Reductions recorded from sale of business

Additions recorded as a decrease in equity 771 8

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Gross additions based on tax positions related to the current year 57 167

Gross reductions based on tax positions related to prior years

Balance at end of period $ 550 $ 531

As of December 31, 2023 and 2022, unrecognized tax benefits o f $ 0.5 million and $ 0.4 million, respectively, were recorded in other long-term liabilities, which would impact the annual effective tax rate if recognized.

The Company recognizes interest and penalties, if

EverCommerce Inc.

Notes to Consolidated Financial Statements

any, related to unrecognized tax positions in the provision for income taxes in the accompanying consolidated statements of operations and comprehensive loss.

As of December 31, 2024 and 2023, unrecognized tax benefits of $ 0.6 million and $ 0.5 million, respectively, were recorded in other long-term liabilities, which would impact the annual effective tax rate if recognized.

The Company recognizes interest and penalties, if any, related to unrecognized tax positions in the provision for income taxes in the accompanying consolidated statements of operations and comprehensive loss.

The Company does not expect a significant increase or decrease in unrecognized tax benefits over the next twelve months.

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During the year ended December 31, 2023, we restructured the ownership of certain intellectual property, which resulted in an income tax benefit.

During the year ended December 31, 2024, we sold Fitness Solutions as discussed in Note 3.

Acquisitions and Dispositions, which resulted in an income tax benefit.

EverCommerce Inc.

Notes to Consolidated Financial Statements

The income tax benefit differs from the expected tax benefit computed by applying the U.S.

13 unchanged sentences

Intellectual property migration — — — — ( 8,805 ) 13.65

Change in deferred state income tax rate

633 ( 1.79 ) 193 ( 0.44 ) ( 65 ) 0.10

US taxation of foreign income

13 ( 0.04 ) 1,512 ( 3.44 ) — —

Goodwill impairment

6,284 ( 17.80 ) — — — —

Sale of fitness solutions

( 9,424 ) 26.69 — — — —

( 546 ) 1.55 — — — —

Other 402 ( 1.14 ) 1,103 ( 2.51 ) ( 57 ) 0.09

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An adverse determination in one or more of these pending matters could have an adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

EverCommerce Inc.

Notes to Consolidated Financial Statements

On January 31, 2024, plaintiff Vladimir Gusinsky Revocable Trust filed a putative class action lawsuit in the Court of Chancery of the State of Delaware against the Company, members of its Board of Directors (the “Board”) and the other parties to its sponsor stockholders agreement, dated June 30, 2021, Providence Strategic Growth II L.P., Providence Strategic Growth II-A L.P., SLA Eclipse Co-Invest, L.P., and SLA CM Eclipse Holdings, L.P.

(collectively, the “Sponsor Stockholders”), captioned Vladimir Gusinsky Revocable Trust v.

Eric Remer, Penny Balwdin, et.

Eric Remer, Penny Baldwin, et.

al., Case No.

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The complaint generally alleges violations of Section 141(a) of the Delaware General Corporation Law (“DGCL”) by providing the Sponsor Stockholders with a veto right over the Board’s ability to hire or fire the Company’s Chief Executive Officer (the “CEO Approval Right”) on the basis that it unlawfully limits the Board’s authority to manage the business and affairs of the Company.

The plaintiff seeks declaratory judgment that the CEO Approval Right is invalid and void, other declaratory and equitable relief for the class and/or the Company, attorneys’ and experts’ witness fees and other costs and expenses, and other equitable relief.

The plaintiff seeks declaratory judgment that the CEO Approval Right is invalid and void, other declaratory and equitable relief for the class and/or the Company, attorneys’ and experts’

EverCommerce Inc.

Notes to Consolidated Financial Statements

witness fees and other costs and expenses, and other equitable relief.

On June 14, 2024, the Company filed its opening brief in support of its Motion to Dismiss, and on July 15, 2024, Plaintiff opposed that motion.

On July 16, 2024, the court entered a stipulation and order dismissing the director defendants from the action.

On August 29, 2024, the remaining defendants, the Company and Sponsor Stockholders (collectively, “Defendants”), filed their reply in support of the Motion to Dismiss, and pursuant to a stipulation between the parties, Plaintiff filed a sur-reply on September 26, 2024, which Defendants filed a response to on October 10, 2024.

On October 15, 2024, Defendants filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction, arguing that the claims alleged are not ripe for adjudication and on November 15, 2024 Plaintiff opposed that motion.

On December 9, 2024, Defendants filed their reply in support of the Motion to Dismiss for Lack of Subject Matter Jurisdiction.

On January 3, 2025, the Court entered a minute order deferring oral argument on the pending Motion to Dismiss until after the disposition of the appeal in Moelis & Company v.

West Palm Beach Firefighters’ Pension Fund, Case No.

340, 2024 (Del.

The Company believes it has meritorious defenses to the claims of the plaintiff and members of the class and any liability for the alleged claims is not currently probable and the potential loss or range of loss is not reasonably estimable.

9 unchanged sentences

International $ 10,072 $ 11,111

Segment Reporting

The Company operates in a single reportable segment.

The segment derives revenue from providing SaaS and other technology-based solutions to help service SMB’s optimize their operations, improve customer relationships and experience, and accelerate growth.

The Company primarily focuses on three core vertical markets:

EverPro for Home Services, EverHealth for Health Services, and EverWell for Wellness Services.

The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer.

The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

Based on being a single reportable segment company, the Company has disclosed net loss as its primary measure of profit or loss used by the CODM, which is reported on the consolidated statement of operations and comprehensive loss as net loss.

The CODM is provided financial information inclusive of net loss, which is used to assess performance of the segment and decide how to allocate resources.

The CODM uses net loss, among other metrics, to assist in evaluating the financial performance of the Company and monitoring budget versus actual results.

The CODM does not review assets in evaluating segments results, and therefore, such information is not presented.

The measure of segment assets is reported on the consolidated balance sheets as total assets.

Disaggregated information is not used for assessing the performance of the Company or for making resource allocation decisions.

The CODM reviews financial information presented on an aggregated and consolidated basis, together with revenue information of the three core vertical markets.

The software and technology-based solutions provided by the Company are deployed and implemented to customers in a similar manner regardless of industry.

Revenue and 18.

Geographic Areas for disaggregated information regarding the Company's revenues and long-lived assets by geography, respectively.

EverCommerce Inc.

Notes to Consolidated Financial Statements

The following table provides segment information for revenues, net loss and significant expenses:

Year Ended December 31,

2024 2023 2022

(in thousands)

Total revenues $ 698,765 $ 675,369 $ 620,746

Employee expense 260,709 260,641 254,532

Lead generation, marketing and advertising

113,305 112,245 102,915

Communication services

22,291 29,232 29,137

Third-party commissions

21,328 22,609 21,411

Software, tools and hosting

59,219 49,997 44,534

Legal and professional fees

46,060 33,837 31,384

Loss on sale and impairments

39,709 6,325 —

Other segment items (2)

47,068 53,856 56,626

Depreciation and amortization

88,824 104,201 110,801

Interest and other expense, net

35,559 46,407 33,902

Income tax expense (benefit)

5,782 1,639 ( 4,680 )

Total expenses

739,854 720,989 680,562

$ ( 41,089 ) $ ( 45,620 ) $ ( 59,816 )

(1) The significant expense categories and amounts align with information that is regularly reviewed by the CODM.

(2) Other segment items include corporate overhead expenses, transaction-related and other non-recurring or unusual costs, facility expenses, bad debt and other miscellaneous cost of services.

Year Ended December 31,

2024 2023 2022

(in thousands)

Other Segment Disclosures

Interest income

$ ( 3,112 ) $ ( 1,024 ) $ ( 263 )

Interest expense

41,749 43,681 28,811

Other Significant Non-cash Items:

Stock-based compensation

26,491 25,559 26,818

There are no reconciling items or adjustments between segment revenues, net loss, total assets and consolidated revenues, net loss and total assets.

Subsequent Event

On March 13, 2024, the Company entered into definitive sale and purchase agreements to sell our fitness solutions to Jonas Software (see Note 2.

Summary of Significant Accounting Policies).

The Company expects the transaction to close in two parts.

The North American businesses, Club OS and ASF, have closed simultaneous with signing.

The international businesses, ClubWise and MyPTHub, are expected to close during the third quarter of 2024 following customary closing conditions and regulatory approvals.

As a result of the definitive sale and purchase agreement, the Company concluded that the transaction will meet the held for sale criteria in the first quarter of 2024.

As such, the assets and liabilities of the asset disposal group will be classified as held for sale and presented within other current assets and other current liabilities on our consolidated balance sheets as of March 31, 2024.

The Company does not consider the sale of the asset disposal group to be a strategic shift that will have a material effect on its operations and financial results, and therefore it does not qualify for reporting as a discontinued operation.

In late 2024, the Company began a process to review strategic alternatives for its marketing technology solutions.

On March 5, the Board, in conjunction with Company management committed to a plan to sell the Company’s marketing technology solutions, which is expected to result in a sales transaction in 2025.

The Company is currently engaged in an active program to sell its marketing technology solutions.

As such, the Company will present marketing technology solutions as discontinued operations beginning with the first quarter 2025.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

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 8. Financial Statements and Supplementary Data