Greetings! I wanna thank everyone who's dialed in today for, I'm really thrilled that we have EverCommerce with us. EverCommerce is a market leader. They they are dominating the services or is a, services economy with, a full business management platform that ends up being a system of, of action for these businesses. I'm thrilled. We've got the founder and the CEO, Eric Remer, here, who's gonna take us through the story. Eric, welcome. Great to see you again. Maybe from just a high level, Eric, we can just level set. Maybe we have some listeners here that are new to the EverCommerce- Yeah -story. can you maybe just take us from a really high level, 20,000 feet, to share with us a brief background of the company and then the, the problems that you're helping to solve for your customers? Of course. Well, thanks, Brian, for having me here, and appreciate the opportunity to kind of talk to you and, and everyone else on the phone. You know, as, as background, the predecessor to EverCommerce was a company that I started in 2006 called PaySimple. PaySimple was a cloud-based platform focused on helping service-based small businesses build, collect, manage, and ultimately grow their business. Great platform, continued to scale. About six-plus years ago, as I was talking to customers, what I realized was the need to these service-based businesses were becoming more verticalized, even more micro verticalized. If we had a, you know... Think of, like, a field service contractor, you know, plumber, electrician, HVAC. If we had 1,000 of those in, in our, in our platform, and I wanted to grow that to 5,000 or 10,000, we just didn't have the workflows, and that could be dispatching, inventory management of the truck. Because PaySimple is a horizontal platform, every vertical needed something a little bit different. As I looked at the verticals we were serving and the markets we're going after, what I saw was a bunch of fragmentation, a bunch of point solutions, and nobody was really bringing it together. That's really what EverCommerce set out to do: connect the dots, create end-to-end solutions, helping the service-based small businesses have the tools they need to be more successful. You fast-forward to today, we have over 700,000 active, paying customers, focused on having the tools they need to run their business more effectively, again, in that service SMB category. The important thing to note is the 2 main things that we saw happening, that we really were solving for is, number 1, kind of that digitization of the service economy was happening. We were watching it real time because we're dealing with those customers, and that has continued to evolve. Secondly, as you talked about earlier, how we serve our customers, if you want to take advantage of that digitization, that growth in that marketplace, we felt the best place to take advantage of that was owning that core system of action. That. Think of that ERP for these service SMBs. If you own that core ERP, that core system of action, that allows you to provide them additional products and services as they can grow. Payments is really a kind of our core secondary offering. If you think about, we really are the largest integrated vertical SaaS platform for the service SMB, providing them both core management solutions and integrated payment solutions. Eric, that's a great intro, level set our discussion. Let's dive into it. Let's dive in, into the story. Let me just start very, very broad, broadly here. You know, what are some of the things that, that you're most excited about these days for EverCommerce? You know, I, I just touched on it. You know, we've built a really great platform. As I said, we have, you know, our last reported number at December 31st, was 685,000 customers, and, you know, that is continuing to kind of scale from there. When you think about the opportunity we have to provide more solutions and more value to our customers, it is, it is, I think, under, under realized in the markets right now that our ability to really provide more value to this very, very large base of customers. You know, our payment opportunity within this organization, and we'll talk about it a lot, probably through several of your questions, payments is a very fast part of our growth business. Last quarter, it grew 32% year-over-year. We also talked about on our call yesterday, we had about a 300%, 300 basis point growth year over year in terms of payments as a percentage of total revenue. As we look to continue to scale the business, payments is great for three factors. Number 1, it provides value to the customer, so they get an integrated solution. Number 2, it allows us to have very high-margin business. We, we, we book net revenue on payments, so it's about a 97% gross margin business. Number 3, it significantly increases our retention with those customers that take payments with us. Perfect. Why don't we stick on the payments discussion? It's clearly, you know, it's got a lot of momentum right now with the business, and it's a big part of the discussion. Maybe first, if you level set the landscape, you know, when, when you are replacing payment suppliers in your expansion activities or, or even, you know, when you're onboarding customers and, and you're increasing the attach rates, you know, what are, what are they typically using, these organizations that, that you're replacing? Then, maybe if we could talk a little bit further out over the next three to five years, how do you, how do you think about the product innovation with the business- Yeah ... here in the future? That's a great, great questions. Every vertical is a little bit different. You know, working through main verticals, you know, home field services are our largest vertical. Health services, think of traditional as well as behavioral health, medical, and then fitness and wellness. In our core vertical, you know, largest vertical home field services, it's really a mix. You have a lot of. Think of your, you know, your service providers. You know, you could have a landscaper, a plumber, HVAC, where they're still handing you a paper invoice, and they want you to pay a check. Literally, they may be literally taking nothing at this moment in time. Some of them are a little bit more proactive and maybe have a Square reader. Very few of them have an integrated solution with their kind of system of action to take payments. When you think about what we're really replacing, in this system of actions that you're utilizing, we are the only show in town, because if you want to use one of our salon owners as a great example. Imagine, not for me, but for you, you check into a salon and you're getting your hair cut. You make your appointments, you show up at the salon, they give you your stylist. You get a, you know, I, you know, I know you like to get some tint sometimes, your little tint in your hair, and it's all in the same system. As you check out, if you utilize our payment solution, it all happens within the same system, and all of that is aggregated together. If you decide not to, you literally leave that system, all the customer information, go over here, swipe a credit card, and then have to reconcile over here. It's almost illogical to not utilize us within that solution. We talk about replacing. You know, we don't allow anybody else within our kind of system of actions, so we really have a core base of customers that when we talk about, we don't believe it's if, it's really just when, and the inertia of getting these people to utilize it. When we, when we give the stats of, you know, $120 billion of, you know, potential opportunity to kind of go after from a TPV perspective, and we're at $11 billion or, you know, numbers like that, we believe our opportunity to chip away at that, you know, day after day, week after week, quarter after quarter, is, is something we will continue to do. The second part- Oh, sorry. Go ahead. I, I was going to ask you a second part of the question, but I'll leave a break there for any follow-up on that. Yeah. The one follow-up I had was just: What are you doing specifically, the company, in terms of initiatives to drive in the payments adoption or even identifying high propensity, you know, payment prospects for the business? It's, it's a great question. We have, as you can imagine, several, you know, many things going on all at once, and so a lot of things we're doing is, you know, number one, you have to create awareness. Awareness happens through both the in-product marketing, as when they sign up, it becomes part of the product sale. Then proactively, in fact, we recently launched, very proactively, outbound customer success and outbound reach out service. So we now have teams that are testing, the outbound reach to people that have both activated and are utilizing and those who have not activated yet. What we've seen on the early feedback on some of this is the numbers are pretty compelling in terms of our ability to touch somebody because, you know, I, I gave you that example, that salon owner. It. As I said, it doesn't make sense for them not to utilize it. Sometimes, and this is our fault, why they're not utilizing it, they might not even realize that was an opportunity. So us creating a higher level of awareness is number one. Number two, as awareness continues to grow, we've begun to mandate payments within a lot of our solutions. In talking about increasing awareness, the mandates are basically saying, you know, A, you could take our payment processor, integrated at similar rates you're currently paying, or B, you don't have to, but you're going to increase your price 25%, in terms of your software fee. We're providing very proactive incentives for them to take the payments, because ultimately we'd much rather have that payment processor, you know, even though it may take time to kind of get that full thing, then we update it. If they don't take it, we win either way from that perspective. You know, I mean, obviously, you know, those are the two biggest things we're doing right now. If you think about all the different funnel metrics that we're doing from opening the funnel, creating better-- You, you mentioned something earlier in terms of product, which is related to payments. One of the really important things that people don't think about with payments is: Do you have the right solution? Is the integration, both in the onboarding and the solution you're providing, the right solution for your customers? I'll give a really great example of this one. We're the largest provider of kind of down-market salon software in UK. I'm sorry, in New Zealand and Australia. Really great platform. Historically, our ability to take payments at that was just for the appointment. When somebody logged on, they can take a payment to reserve the appointment, which was like a 10% of the total potential. We didn't have in-app, you know, in-store POSs to finish the actual payment, so we were getting about 10% of the potential revenue. In April this year, we launched our POS platform with that, with that business, and we've launched out, you know, our POS terminals within those customers, which there's, there's thousands of customers in that, in that base, and that's having a right product offering in that market, and we're seeing a high level of penetration that's coming through now. There's a lot of things we're doing, both from a marketing standpoint as well as a product innovation standpoint, to make the payment an easier and a better utilization tool for us. Perfect. Eric, maybe moving on into just talking about the overall business, why don't I ask you the obligatory, macro update question? You just reported two Q results, you know, yesterday. You had good results, nice reaction to the stock here today. What can you share with us in terms of what you're seeing, in terms of the lens of, your markets, just in terms of demand and behavior? Yeah. You know, you know, we have a lot of customers, so we have a good view of it. Now, it's important to note, we believe we are very fortunate. We're in three main verticals that we think are incredibly resilient verticals. Home field services, I mean, that vertical, I mean, it took a breath in April of 2020, and it never, never slowed down since. Pre, pre-COVID, during COVID, post-COVID. Same with health services. We're dealing with small, traditional physician, doctor practices. It's kind of a business as usual. Then our fitness and wellness. Salons, again, took a small break when they were shut down, but beyond that, it's been good business. Fitness is the only vertical that is not fully recovered. We're seeing some of the recovery starting to happen, but it's still a little bit slower. In terms of the core verticals we serve, feel very fortunate. The businesses that we're providing value to, continue to be very resilient, and we have not seen, you know, any type of, you know, degradation or deterioration in our funnels or in their, you know, daily volumes of, the payments that we're processing. Thanks for sharing that, Eric. Eric, want to talk, touch upon also the multi-product story at EverCommerce. I think that's a, a big part of the story, too. You know, maybe you can touch upon the cross-selling initiatives- Yeah ... and strategy that the company is embarking upon to cross-sell the platform technologies, and in fairness, what could be different buyers? You, you have three different operating segments. You have demand generation technologies, business management technologies. Share with us the strategy of increasing the product penetration within the install base. It's a great question. I'll, I'll start at the high level. You know, we, we gave the stat yesterday, which we'll continue to report going forward. We actually have 162,000 customers that have signed up and onboarded for more than one solution, which is a 29% year-over-year increase over last year. We're seeing a lot of opportunity within those numbers we think will continue to grow. You know, how do we do it? You know, our, our focus is always meeting the customer where they are for what they need. Our focus is not, "Let's just throw them a bunch of stuff and see what sticks." How do we create very, you know, obvious touchpoints where they need to be taking these products and services? The majority of that second product is, at this point, payments. Our focus is, again, you asked me how we penetrate payments, it's making them realize at that moment that we're going to take a payment, that they could have taken it within the app. Again, that is from in-product messaging, that is from outbound reach, that is from customer success as they reach into us, and making sure that we're providing them the knowledge and information that their businesses can be more effective. In other solutions, you know, we have reputation management integrated within our softwares. We have other things that we know will provide more value to our customers. So we try to create those solutions that become seamless. If you're a customer utilizing our software, what else can we provide you that ultimately becomes more valuable to your, to your, your business and your customers, and make that seamless within the process? It starts with, you know, you can't upsell, cross-sell something until you've done a really good job creating the right product, integrated it into the solution, and then going after them. When you think about our evolution, I mean, you've watched us from the beginning, we've gotten really big, really fast, and that's great. A lot of the last, you know, 12-18 months has been really focused on creating better integration points for our technology, so we could then effectively really increase the sell-through of the upsell, cross-sell opportunities. We're starting to see that happen. We're watching the trajectory begin to go, and we think within the next six, 12, 18 months, we're gonna start seeing that accelerate even faster. It sounds exciting. It's a good lead-in into my next question, which wanted to get your thoughts on the potential for a re-acceleration story next year for the business. Maybe I, I would tee it up this way, Eric. Last year, the business was growing top line in the low 20%. Q2, last 12 months, I think it's 15% is, is that organic number. Yeah. You know, what would need to happen for the business to get back to the high teens, or even let's call it a 20% organic growth rate? Does the macro have to re-accelerate, or is there something company-specific that could re-accelerate the top line if it goes- Yeah, it's a great question, and it's much more, the company. I mean, we, we don't... The macro is not... Look, when, when the, when the markets are down in general, everyone gets affected on the fringes, no matter what. It just, it just is what it is. We're not seeing any deterioration in our, in our funnels. Does that mean that everyone's out on buying sprees? No, of course not. There's, there's always kind of general macro stuff that you deal with, but we don't, we don't believe that is a major pushback in our organization. The opportunity for us, and you, you saw that in Q2, the drag in our business right now is some in the marketing services and some of the kind of historic businesses that are not core. I mean, our core business, full stop, is providing core management system action software with integrated payments. That's our core business. We have other solutions that we think provide more value in the current quarter, and really in the 12 months, have been most affected by some of the macro stuff. That part of the business has 100% been affected by macro, and as we reported yesterday, has been really the drag on the overall business. How does that shift? Some of it is macro. As that comes around, the market service goes up, but a bigger part of it is just our core focus. As I mentioned yesterday or earlier on this call, percentage of revenue, 300 basis points higher on payments than it was last year. My hope, that number will continue to grow. Software and payments, which represents over 75% of our business today, as that number becomes 80, you know, 85% of our business, that's the part of the business that is both growing the fastest, that has the highest gross margin, highest profitability, and that just genuinely lends itself to that growth rate's increasing. Market services is fine. It's a part of our business. We provide value to our customers. It's not our core part of our business, and it will get better, and it will continue to kind of grow. But what really drives the future growth of this business is the core focus on providing great software solutions, integrating payments, and that, that gets our growth rates up to where we want them to be. Eric, let's touch upon the competitive moat here for, for the listeners. Can you share with us, you know, why you win in the market, and, you know, what the differentiation is for the business, and just in general, the, the competitive moat for EverCommerce? Yeah, you know, every vertical is a little bit different, but, I mean, we start off by saying every vertical we're in, we wanna have the best solution. You know, having the best software for full stop, that's, that's, that's the best way to win, right? Having great software. Secondly, you know, as you, you know, have that strategy to integrate multiple solutions, it really becomes a competitive advantage. I'll use the, the area that we're probably the furthest along with that full integrated solution, our EverHealth group. You know, EverHealth was a combination of a lot of, you know, EHR practice management and other types of solutions. If you think about EverHealth really now is becoming out a, a single brand, which we'll be launching to the market fully in kind of Q1 of next year. EverHealth is now run as one single organization. If you're a doctor's office, you know, it's led with that EHR practice management software. That's great. You need that. Now, if that's what you got from a competitor, that's where you would stop. Well, now we're able to sell you under one sales process, not only your EHR practice management, but we were able to, you know, provide you your, you know, patient engagement solution. It's fully integrated. Your patient pay, fully integrated, and your clearinghouse all under one solution, under one sales experience. That historically for you as a doctor's office, you're gonna be making four different relationships, four different contracts, four different phone calls with four different providers. It's a huge advantage to the marketplace when you can provide these seamless end-to-end experiences. You have one place to go for service, one place to go to connect the dots, and from a customer experience standpoint, it becomes a very, very seamless experience. We're super excited about the organization that's brought together that. We're actually operating that as one sales organization, one success organization, one product organization, and then from a branding perspective, excuse me, in Q1 of 2024, it'll be one branding organization as well. That's just an example of how we're really differentiation in some marketplaces, and each market's a little bit different, but ultimately it's connecting the dots and providing more value under one solution, so that end user, which again, remember, is that S of that SMB, has less friction for the buying process. Eric, let's let's touch upon generative AI and the AI opportunity. If I think about your business, EverCommerce, you have been doing AI. You've been doing predictive analytics for, for a long time in the business. Can you talk about an opportunity to bring, you know, additional AI functionality into the suite of products? Is there an opportunity to maybe even partner through integrations with some of these generative AI providers to bring that functionality into your digital marketing tools, or your web solutions, or content generation? Maybe just share how, how you think about EverCommerce's role in the future of generative AI. Yeah. No, a lot... all of it. I mean, as you said before, we've been utilizing AI internally for our own operations and our own predictive analytics for quite some time. The first tool we actually launched in the market, we just launched in mid-Q2, was a product, excuse me, in one of our survey tools that we provide to our customers. It's an integrated AI solution, which was a little bit of an upsell that they have to take, but allows our customers to utilize a survey tool to basically be able to filter through mass amounts of data, get really good insights, and be able to do things and act on those insights much, much more faster than they could otherwise. That's just one really small example of something that we launched in Q2, and we have other, other scenarios that we're doing with new products and solutions that we plan on integrating into our off- offerings. Some of those will just be making our products easier to use and provide more value. Some of those will be upsell, cross-sell opportunities within those products and solutions to provide greater value to the customers. We think we're at the very early innings, and our focus is always: how do we simplify and empower that life of that small business owner, and what tools can we give them to be more effective? You gotta be thoughtful. You have to be very careful that you're giving them something simple, easy to use. I mean, if it's more complicated than a ChatGPT search, they're not gonna utilize it. So you have to be really thoughtful about what you're doing. That's part of the process that we're going through right now. What are the things we could add into their workflows that are gonna make them better, smarter, more successful, but also make it very simple for them to easy to use and understand? Eric, thinking about maybe the potential profile and the scale of the business, just wanted to ask you about the Rule of 40 business profile. In the past, the company has operated at a Rule of 40. You did it on a higher growth rate, and it was really part of the M&A cycle that you did. Again, you don't have guidance out there, so I don't want you to throw out the guidance. Do you think that a Rule of 40 business profile is achievable at a larger scale, maybe even like a billion-dollar revenue run rate, but it would be on a more balanced growth and profits margin profile? Maybe the question is to ask you: Where are the future operating leverage points in the model, you know, to get the business back to the Rule of 40 on, on... Yeah ... profit? I think it's on both vectors. I mean, we, we believe our, our growth rates will get back up to, you know, the mid to high teens, even up to, you know, higher than that over time. As we continue to kind of grow back up to where we expect them to be long-term, that becomes a baseline, and we've already given the guidance, you know, a little at our IPO over two years ago, that we believe this company will be high 20%-30%, you know, EBITDA margins at, you know, the, you know, mid to long-term. You know, we, we see the leverage in the operations of this business, and you do the math, and we do believe we are a Rule of 40 business. You know, we flew, I mean, this quarter, you know, well before we believe we'd be there. I mean, we just put out over 23% EBITDA margin quarter, and there's a lot of opportunity in there. How does that happen? It's both with operational scale you talked about. You talked about, you know, being a billion-dollar-plus company. You know, your G&A expense will continue to go down. I mean, it's still high relative to where we believe it'll ultimately be. There's several points within that. Our gross margin will continue to go up. You know, I talked about our, our shift in business products. With our marketing service products, although they provide value to our customer, you know, those are low-margin businesses, versus payments being for high business. As payments become a much greater part of our business, our gross margin's gonna naturally go up. As software and payments continue to scale and our gross margin goes up, and you're able to kind of, you know, maintain some operational efficacy in the business, we believe strongly that our ability to get to very, very, you know, solid and impressive EBITDA margins in this business sustainably for, for actually the long term, allows us to get well over the Rule of 40 number. Terrific. Eric, last question I wanted to ask you, for the presentation is maybe just get your latest thoughts on how you're thinking about M&A and the strategy. You know, in the past, the company has used M&A to, to expand the platform, even help move into new markets. The company hasn't been utilized M&A for quite a while now, I, I think more than a year at least. How do you think about, you know, that aspect of, of using M&A in the future for inorganic R&D or, or growth? Where does that fit in the? Yeah kind of uses of cash? Yeah, I mean, I'll, I'll step back a little bit and realize that M&A was a, a means to an end. You know, we, we realized there was a huge opportunity and utilized M&A to really put us in position to own certain marketplaces and be able to kind of operate them effectively. We are there now, and the core story of this business is to make sure that as an operational business, we are growing at a great rate, generating great profits, full stop. M&A, we believe, is a complementary part of the business that allows us to compound that growth. We're really good at it. We have ability to kind of grow, integrate, and provide increased value of the business we've bought. We've, we've shown that over and over again. The reason we've been very conservative in the last, you know, really 18 months, is we thought the markets were upside down. The private market deals that we usually buy, in many cases still are, have been valued significantly higher than the public markets. The fortunate thing about our business is was, you know, we are able to be very prudent because the core business, without M&A, it just does great by itself. Will we use M&A going forward to accentuate that growth vehicle? 100%. We use it to compound our both top and bottom line, 100%, and we're looking at several things as we speak now as potential opportunities. If we find something that we think makes sense, we think the price makes sense, we think it's accretive to our business and accretive to our customer base, 100% we'll be active in M&A. Sounds great. Eric, we've run out of time, but, really appreciate your time and presenting EverCommerce. It's a great story there, and I hope our listeners will will take a look at it- Awesome Reach out. Brian, I really appreciate you having me here today, buddy. Take care. Yeah. Go Blue!