Summary
EverCommerce closed fiscal 2021 with a fourth quarter that grew revenue quickly and shrank its losses. Revenue for the quarter ended December 31, 2021 was $135.65 million, up 47.4% from $92.00 million in the prior-year quarter. Full-year revenue reached $490.14 million, up 45.2% from $337.52 million. Management attributed the increase to a bigger customer base, higher transaction volumes on the payments platform and revenue from acquisitions completed in 2021 and 2020. Subscription and transaction fees grew 51.0% for the year, ahead of the 37.0% increase in marketing technology solutions and the 9.7% gain in other revenue.
Profitability split sharply between the quarter and the year. The fourth-quarter operating loss narrowed to $5.75 million from $10.91 million a year earlier, and operating margin improved to negative 4.2% from negative 11.9%. Net loss for the quarter was $4.73 million, far better than the $20.92 million loss reported in the fourth quarter of 2020. The full year runs the other way. Operating loss widened to $27.19 million from $22.04 million, and net loss widened to $81.97 million from $59.95 million. Even so, the full-year operating margin of negative 5.5% was better than the negative 6.5% recorded in 2020. Diluted loss per share for 2021 was $0.82, compared with a loss of $3.06 per share in 2020. The annual net loss also carried the cost of the refinancing completed in the third quarter of 2021. Adjusted EBITDA, a non-GAAP measure, was $107.2 million for the year, up from $78.8 million in 2020.
Cash flow did not keep pace. Fourth-quarter operating cash flow was $23.81 million, down 6.5% from $25.47 million in the prior-year quarter, and full-year operating cash flow fell 34.9% to $37.48 million from $57.54 million. Capital expenditures were $1.17 million in the quarter, up from $0.20 million, while the full-year total declined 31.4% to $3.10 million from $4.52 million. The lower full-year operating cash flow reflects the net loss and working capital movements, including outflows tied to accounts receivable. Deferred revenue, current portion, was $22.99 million at December 31, 2021, up 68.8% from $13.62 million a year earlier, and remaining performance obligations stood at $22.40 million. On the balance sheet, the company reported availability under its New Revolver and borrowings under the New Credit Facilities. The New Term Loans carried an effective interest rate of about 3.9% from July 6, 2021 through December 31, 2021, and mature in July 2028, while the New Revolver matures in July 2026.
Scale keeps building. EverCommerce served more than 600,000 customers at the end of 2021, up from over 500,000 at the end of 2020. Roughly 294,000 sit in Home Services, 90,000 in Health Services and 67,000 in Fitness & Wellness. The Pro Forma Revenue Growth Rate, which adjusts for acquisitions, was 21.5% for the year. The net pro forma revenue retention rate was 99% or more in each of the last 8 quarters, and about 95% of revenue in 2021 and 2020 was recurring or re-occurring. Since inception the company has acquired 52 businesses, including five in 2021 for total consideration of $367.1 million and nine in 2020 for $415.3 million.
The 10-K offers no numeric guidance for the first quarter of 2022 or for the full year, but it does lay out cost direction. Sales and marketing and product development spending is expected to rise as a percentage of total revenue over the near term, and general and administrative expense is expected to increase in absolute dollars as public company costs build. Sarbanes-Oxley compliance spending is expected to have a bigger effect in 2022 and beyond. Risk disclosures flag that recent growth rates may not be sustainable and that the growth rate is expected to slow, that acquisitions may generate less revenue or profit than anticipated, and that integration or diligence failures could create unanticipated costs and impairment charges. COVID-19 remains an open item. The filing states that the pandemic hurt the second quarter of 2020 and continued to weigh on results to a lesser degree through the rest of 2020 and 2021, mainly in Fitness & Wellness and Health Services. For a business that still posted a full-year operating loss and net loss, the combination of rising costs, a leveraged balance sheet and a slower expected growth rate is the central tension heading into 2022.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $135.6M | $128.5M | +5.5% | — | — |
| Research & development | $14.4M | $12.7M | +13.5% | — | — |
| Sales & marketing | $26.1M | $25.2M | +3.9% | — | — |
| General & administrative | $30.6M | $25.8M | +18.6% | — | — |
| Total operating expenses | $141.4M | $132.6M | +6.6% | — | — |
| Operating income (loss) | -$5.8M | -$4.1M | -41.4% | — | — |
| Operating margin | -4.2% | -3.2% | -1.1 pp | — | — |
| Net income (loss) | -$4.7M | -$36.9M | +87.2% | — | — |
| Net margin | -3.5% | -28.7% | +25.2 pp | — | — |
| Diluted EPS | -$0.04 | -$0.20 | +$0.16 | — | — |
| Customers | 600,000 | 500,000 | +20.0% | — | — |
Risks
EverCommerce warns its historical growth rates may not be sustainable and it expects its growth rate to slow. Pro Forma Revenue Growth Rate increased to 21.5% for the year ended December 31, 2021, and management expects sales and marketing and product development expenses to increase as a percentage of total revenue over the near term, which may negatively impact short-term profitability.
The company completed 52 acquisitions since April 2017, including five in 2021, and says acquisitions may be difficult to integrate, may not achieve anticipated synergies, and may expose it to undisclosed liabilities. It completed five acquisitions in 2021 for total consideration of $367.1 million.
Payment-related transactions comprised approximately 14% of revenue in 2021. EverCommerce says if it were precluded from processing Visa and MasterCard transactions through its payment processor arrangements, it would lose substantially all of its revenue.
The company collects, processes, stores, and transmits sensitive payment card and health care data, and states it has been and could in the future be subject to breaches. A significant breach could result in payment network fines, prohibit it from processing transactions on those networks, or cause loss of financial institution sponsorship.
EverCommerce uses independent contractors in India, Russia, and Ukraine for software development and warns that increased tensions, including the invasion of Ukraine by Russia, could disrupt or delay operations, communications, or funding for those resources, or render them unavailable.
The company may need additional debt or equity financing and warns such financing may not be available on acceptable terms or at all and may dilute stockholders. Net cash provided by operating activities decreased to $37.5 million for the year ended December 31, 2021 from $57.5 million for the year ended December 31, 2020, and it had $548.6 million outstanding under its New Credit Facilities as of December 31, 2021.
The company has incurred significant operating losses since inception, and net loss widened to $82.0 million for the year ended December 31, 2021 from $60.0 million for the year ended December 31, 2020. It expects operating expenses may increase substantially as it invests to grow and comply with public company requirements.
COVID-19 negatively impacted financial performance in the second quarter of 2020 and to a lesser degree through 2020 and 2021, primarily through declines in revenue attributable to customers in the Fitness & Wellness and Health Services verticals. The company says the extent of any further impact remains uncertain and difficult to predict.
EverCommerce faces intense competition in fragmented markets from vertically-specialized and horizontal competitors, including Salesforce, Intuit, Square, and HubSpot, and says some partners could become competitors. It expects the intensity of competition to increase in the future.
As a public company, EverCommerce expects rules and regulations to increase legal and financial compliance costs, with a greater impact from Sarbanes-Oxley compliance expected in 2022 and beyond. These costs could decrease net income or increase net loss.
SaaS KPIs
All quarters →Total Customers
Summary, forecast, risks and KPIs are extracted from EverCommerce Inc.'s SEC filings for Q4 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.