Summary
EverCommerce closed the September 2021 quarter with revenue of $128.5 million, up 44.2% from $89.2 million a year earlier. Nine-month revenue reached $354.5 million, up 44.4% from $245.5 million. Management separated the reported rate from underlying growth. Pro forma revenue growth, which assumes every acquisition closed on the first day of the prior-year period, was 20.0% for the quarter and 20.6% for the first nine months. The gap is dealmaking. Roughly 95% of revenue was recurring or re-occurring in the nine months ended September 30, 2021, and the average monthly net pro forma revenue retention rate has held at 99% or better in each of the last eight quarters.
EverCommerce keeps buying. It completed four acquisitions in the first nine months of 2021, including Timely, a New Zealand booking and business management software company, for $99.7 million, and MDTech, which sells electronic charge capture tools to physicians, for $15.9 million. It also announced the purchase of DrChrono, which brings an electronic health record and medical billing platform into the EverHealth suite. The company has completed 51 acquisitions since inception, nine of them in 2020. It launched EverConnect, a performance marketing and lead generation platform, and World Gym International selected ASF Payment Solutions and Club OS, two products in the EverWell group.
Profitability moved the opposite way. The quarter swung to an operating loss of $4.1 million, compared with operating income in the prior-year quarter, and operating margin fell to -3.2% from 4.2%, a decline of 7.4 percentage points. For the nine months ended September 30, 2021, the operating loss was $21.4 million and operating margin was -6.0%, down 1.5 percentage points from -4.5%. Net loss widened to $36.9 million from $5.4 million in the quarter and to $77.2 million from $39.0 million for the nine months. The July refinancing drove much of that, since a loss on debt extinguishment tied to the transaction landed in both periods. Diluted EPS improved to -$0.20 from -$0.46 in the quarter and to -$1.01 from -$1.91 for the nine months. Adjusted EBITDA was $29.0 million for the quarter compared with $29.1 million a year earlier, and $77.9 million for the nine months compared with $56.8 million.
Cash flow softened. Operating cash flow for the nine months ended September 30, 2021 was $13.7 million, down 57.4% from $32.1 million a year earlier, as working capital outflows in prepaid expenses, other non-current assets and accounts receivable absorbed the cash the business generated. Capital expenditures were $1.9 million for the nine months, down 55.3%, and acquisitions of companies, net of cash acquired, used $183.2 million. Cash and restricted cash totaled $98.3 million on September 30, 2021, the same as at December 31, 2020, even after the IPO. Total debt was $385.1 million, implying net leverage of 2.2x on the credit agreement definition of adjusted EBITDA, with $155.0 million still available under the new revolver. Current deferred revenue was $21.7 million and remaining performance obligations were $15.9 million.
Guidance covers the December quarter and the full fiscal year. Fourth quarter fiscal 2021 revenue is expected to be $129.5 million to $131 million and adjusted EBITDA $27 million to $28 million. Full year 2021 revenue is guided to $484.0 million to $485.5 million and adjusted EBITDA to $105.0 million to $106.0 million. The company said it is increasing its revenue outlook for both periods, and the ranges include contributions from recently announced acquisitions. A reconciliation of adjusted EBITDA to net income is not offered on a forward-looking basis, partly because stock-based compensation is hard to forecast.
The risks are familiar. EverCommerce has lost money since inception and warns that growth may not be sustainable if it slows the pace of acquisitions. Integration is the recurring theme: acquired revenue may fall short, key employees and customers may leave, and undisclosed liabilities may surface. Competition includes Salesforce, Intuit, Square and HubSpot, plus vertically specialized rivals. COVID-19 still weighs on sales to fitness and wellness customers, even as health services improve. Leverage of 2.2x comes with covenant tests tied to the revolver, and Providence Strategic Growth and Silver Lake hold about 78.1% of the common stock, so EverCommerce stays a controlled company that can rely on governance exemptions. It also qualifies as an emerging growth company.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2021 | Q2 FY2021 | QoQ | Q3 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $128.5M | $121.0M | +6.2% | — | — |
| Research & development | $12.7M | $12.0M | +5.5% | — | — |
| Sales & marketing | $25.2M | $22.8M | +10.3% | — | — |
| General & administrative | $25.8M | $31.9M | -19.2% | — | — |
| Total operating expenses | $132.6M | $131.9M | +0.6% | — | — |
| Operating income (loss) | -$4.1M | -$10.8M | +62.4% | — | — |
| Operating margin | -3.2% | -8.9% | +5.8 pp | — | — |
| Net income (loss) | -$36.9M | -$24.3M | -51.7% | — | — |
| Net margin | -28.7% | -20.1% | -8.6 pp | — | — |
| Diluted EPS | -$0.20 | -$0.56 | +$0.36 | — | — |
| Customers | 500,000 | 500,000 | ±0.0% | — | — |
Risks
EverCommerce has consummated 51 acquisitions since April 2017, including four in the first nine months of 2021 for $185.3 million and nine in 2020 for $415.3 million, and the filing warns that integration, undiscovered liabilities, post-acquisition client attrition, and impairment charges could cause revenue or profits to fall short of estimates. The company may also need additional debt or equity financing to sustain acquisitions, which could dilute stockholders or impose restrictive covenants.
Net loss widened to $36.9 million in FY2021 Q3 from $5.4 million in FY2020 Q3 and to $77.2 million year to date from $39.0 million, while operating income swung to a $4.1 million loss in Q3 from $3.7 million income and operating margin fell to -3.2% from 4.2%. The company expects increased public-company and growth investments to keep expenses elevated.
Sales and marketing expense increased 108.4% in FY2021 Q3 and 86.3% year to date, far exceeding revenue growth of 44.2% and 44.4%, and management expects sales and marketing expenses to increase as a percentage of revenue in the near and medium term. If the expanded sales force does not achieve expected productivity or cross-sell, margins and profitability could be harmed.
Payment-related transactions comprised approximately 14% of revenue in 2020, and the company depends on payment card networks such as Visa and MasterCard and processors such as Worldpay and PayPal. Failure to comply with network rules or PCI DSS and NACHA obligations could lead to fines, suspension, or termination of registrations, and if processing of Visa and MasterCard transactions were precluded, the company states it would lose substantially all of its revenue.
The company collects and processes sensitive payment card and health care data, and a breach or unauthorized disclosure could trigger payment network fines, litigation, loss of bank sponsorship, and reputational harm. It acknowledges experiencing cyber-attacks and other security incidents of varying degrees from time to time, though none individually or in the aggregate has materially impacted operations.
Revenue grew 44.2% in FY2021 Q3 and 44.4% year to date, but management states the historical growth rate may not be sustainable and expects growth to slow, partly because future acquisitions may be fewer or absent. Pro Forma Revenue Growth Rate was 20.0% for Q3 and 20.6% year to date, below reported GAAP growth.
COVID-19 negatively affected certain service SMBs, with continued impacts on sales to fitness and wellness customers, and management says the extent of future impact on financial condition, results, or liquidity remains uncertain. Q3 2021 revenue increased 17.7% over Q3 2020 excluding all acquisitions closed after June 30, 2020, while sequential revenue growth was 3.4%.
The company faces intense competition in fragmented markets with low barriers to entry, and its partners, including payment processing partners and EHR/PM integration partners, could become competitors. Horizontal competitors include Salesforce, Intuit, Square, and HubSpot, which may have greater resources.
The FY2021 Q3 net loss included a $28.7 million loss on debt extinguishment from the Refinance, which increased by $28.7 million for both the three and nine months ended September 30, 2021 compared with the corresponding periods in 2020. Interest and other expense, net decreased 47.2% in Q3 but increased 2.0% year to date.
EverCommerce operates in Canada, the United Kingdom, Australia, and Jordan and uses independent contractors in jurisdictions including India. Misclassification of contractors as employees or failure to comply with international laws could create monetary exposure and harm results.
SaaS KPIs
All quarters →Total Customers
Pro Forma Revenue Growth Rate
Adjusted Gross Profit
Adjusted EBITDA
Summary, forecast, risks and KPIs are extracted from EverCommerce Inc.'s SEC filings for Q3 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.