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What changed in EverCommerce Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of EverCommerce Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+381 added−331 removedSource: 10-K (2025-03-13) vs 10-K (2024-03-14)

Top changes in EverCommerce Inc.'s 2024 10-K

381 paragraphs added · 331 removed · 290 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWhile these offerings are not a part of our core suites, they are managed as part of our centralized approach to strategy and operations. Why we win We believe that our offerings deliver tremendous value to our customers and are differentiated by the following qualities: • Tailored, vertical-specific approach.
Biggest changeWhy we win We believe that our offerings deliver tremendous value to our customers and are differentiated by the following qualities: • Tailored, vertical-specific approach. We are exclusively focused on providing service SMBs with tailored solutions to help meet their specific needs.
Together, these trends are contributing to the accelerating adoption of digital technologies. • Increasingly vertical- and micro vertical-specific software needs. SMBs across verticals are specializing in order to better compete and align with end-customer preferences, which has resulted in a greater need for vertically-tailored software solutions to address micro-vertical specific workflows.
Together, these trends are contributing to the accelerating adoption of digital technologies. • Increasingly vertical- and micro vertical-specific software needs. SMBs across verticals are specializing in order to better compete and align with end-customer preferences, which has resulted in a greater need for vertically-tailored software solutions to address micro-vertical specific workflows. • Digital payments.
The principal competitive factors affecting our market include: • Breadth and depth of vertical solutions; • Quality of products and features; • Seamless integration and ease-of-use; I-8 • Customer support capabilities; • Pricing and costs; • Product strategy and pace of innovation; • Name recognition and brand reputation; • Sales and marketing execution; and • Platform security. See Part I.
The principal competitive factors affecting our market include: • Breadth and depth of vertical solutions; • Quality of products and features; • Seamless integration and ease-of-use; • Customer support capabilities; • Pricing and costs; • Product strategy and pace of innovation; • Name recognition and brand reputation; • Sales and marketing execution; and • Platform security. See Part I.
Our fundamental belief is that when a company has a strong relationship with its employees, they in turn deliver exceptional customer service and in turn that delivers strong business performance. We have seen and believe our diverse, inclusive and innovative workforce is and will continue to be a competitive advantage.
Our fundamental belief is that when a company has a strong relationship with its employees, they in turn deliver exceptional customer service and in turn that delivers strong business performance. We have seen and believe our inclusive and innovative workforce is and will continue to be a competitive advantage.
Our centralized IT administration allows for 24-hour support for all our people and platforms worldwide. • Shared infrastructure: We systematically upgrade our data centers, centralize our collaboration platforms onto Office 365 and deploy a variety of standardized third-party software products sourced through EverCommerce.
Our IT administration allows for 24-hour support for all our people and platforms worldwide. • Shared infrastructure: We systematically upgrade our data centers, centralize our collaboration platforms onto Office 365 and deploy a variety of standardized third-party software products sourced through EverCommerce.
Our centralized security efforts also include incident prevention, incident response, monitoring, scanning and alerting. • Offshore development team: Our software is primarily developed internally; however, we also use independent firms and contractors in the United States and internationally to perform some of our product development activities.
Our security efforts also include incident prevention, incident response, monitoring, scanning and alerting. • Offshore development team: Our software is primarily developed internally; however, we also use independent firms and contractors in the United States and internationally to perform some of our product development activities.
Key areas and features of our centralized strategy and operations that serve as a foundation to our technology approach include: • Software development: Our software teams use best-in-class technologies and practices to develop our SaaS, mobile and (in selected situations) on-premise solutions.
Key areas and features of our strategy and operations that serve as a foundation to our technology approach include: • Software development: Our software teams use best-in-class technologies and practices to develop our SaaS, mobile and (in selected situations) on-premise solutions.
Our solutions include: custom website design, development and hosting, responsive web design, marketing campaign design and management, search engine optimization (“SEO”), paid search and display advertising, social media and blog automation, call tracking, review monitoring and marketplace lead generation, among others.
Our solutions include: custom website design, development and hosting, responsive web design, marketing campaign design and management, search engine optimization, paid search and display advertising, social media and blog automation, call tracking, review monitoring and marketplace lead generation, among others.
We expect both increasing adoption of digital marketing tools, compounded by expected increased spend on such tools, recognizing the power and importance of these digital channels. These trends continue to give rise to evolving and new digital marketing solutions aimed at helping businesses target end consumers, lower acquisition costs and increase lifetime value. • Decreasing barriers to software adoption.
We expect both increasing adoption of digital marketing tools, compounded by expected increased spend on such tools, recognizing the power and importance of these digital channels. These trends continue to give rise to evolving and new digital marketing solutions aimed at helping businesses target end consumers, lower acquisition costs and increase lifetime value. I-2 • Decreasing barriers to software adoption.
Our teams relentlessly test and measure results to expand channels, optimize go-to-market, increase sales conversion, identify customer upsell opportunities and explore adjacent expansion verticals. Through this targeted, coordinated approach, we maximize expert resource allocation and allow for growth programs of scale with attractive customer unit economics across our business.
Our teams relentlessly test and measure results to expand channels, optimize go-to-market, increase sales conversion, identify customer upsell opportunities and I-9 explore adjacent expansion verticals. Through this targeted, coordinated approach, we maximize expert resource allocation and allow for growth programs of scale with attractive customer unit economics across our business.
This “land and expand” strategy allows us to acquire customers with key foundational solutions, expand into offerings via product development (“build”) and acquisitions (“buy”) that integrate their workflows, fill gaps in the solutions value chain and power the full scope of our customers’ businesses.
This “land and expand” strategy allows us to acquire customers with key foundational solutions, expand into offerings via product development (“build”) and acquisitions (“buy”) that integrate their I-1 workflows, fill gaps in the solutions value chain and power the full scope of our customers’ businesses.
Given their size and resource capabilities, SMBs generally require lower priced and easier-to-implement technology solutions than larger-scale enterprise businesses. As a result of the innovations in cloud I-2 technology and the proliferation of SaaS, today’s solutions are more affordable and easier for SMBs to implement than ever before.
Given their size and resource capabilities, SMBs generally require lower priced and easier-to-implement technology solutions than larger-scale enterprise businesses. As a result of the innovations in cloud technology and the proliferation of SaaS, today’s solutions are more affordable and easier for SMBs to implement than ever before.
Data privacy and security Regulators around the world have adopted or proposed laws, regulations, standards and requirements regarding the collection, use, transfer, security, storage, destruction and other processing of personal data. These laws are increasing in number and complexity, resulting in higher risk of enforcement, fines and other penalties.
I-10 Data privacy and security Regulators around the world have adopted or proposed laws, regulations, standards and requirements regarding the collection, use, transfer, security, storage, destruction and other processing of personal data. These laws are increasing in number and complexity, resulting in higher risk of enforcement, fines and other penalties.
Although we believe these licenses are sufficient for the operation of our business, these licenses typically limit our use of the third parties’ intellectual property to specific uses and for specific time periods. We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost-effective.
Although we believe these licenses are sufficient for the operation of our business, these licenses typically limit our use of the third parties’ intellectual property to specific uses and for specific time periods. I-11 We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost-effective.
We believe we had an addressable annualized revenue opportunity with our existing customers of greater than $5 billion as of December 31, 2023, as our integrated vertical SaaS solutions allow us to offer customers additional capabilities across their entire customer engagement lifecycle.
We believe we had an addressable annualized revenue opportunity with our existing customers of greater than $5 billion as of December 31, 2024, as our integrated vertical SaaS solutions allow us to offer customers additional capabilities across their entire customer engagement lifecycle.
While we believe DEI is important to our long-term value and performance, we recognize the importance of pursuing so in legally sound manners. DEI efforts are part of our legal compliance considerations, and we are committed to only rewarding legally compliant methods for advancing such efforts.
While we believe inclusivity is important to our long-term value and performance, we recognize the importance of pursuing so in legally sound manners. Inclusivity efforts are part of our legal compliance considerations, and we are committed to only rewarding legally compliant methods for advancing such efforts.
We believe that our patient and provider engagement solutions position us well to benefit from major industry trends such as the digitalization of front-office operations and patient engagement. • EverWell – Fitness & Wellness: Our EverWell solutions are purpose-built for Fitness & Wellness service professionals.
We believe that our patient and provider engagement solutions position us well to benefit from major industry trends such as the digitalization of front-office operations and patient engagement. • EverWell – Wellness: Subsequent to the sale of our Fitness Solutions, our EverWell solutions are purpose-built for Wellness service professionals.
Our integrated solutions include Business Management Software (such as route-based dispatching, medical practice management and gym member management), Billing & Payment Solutions (such as e-invoicing, mobile payments and integrated payment processing), Customer Experience Solutions (such as reputation management and messaging solutions) and Marketing Technology Solutions (such as websites, hosting and digital lead generation).
Our integrated solutions include Business Management Software (such as route-based dispatching and medical practice management), Billing & Payment Solutions (such as e-invoicing, mobile payments and integrated payment processing), Customer Experience Solutions (such as reputation management and messaging solutions) and Marketing Technology Solutions (such as websites, hosting and digital lead generation).
Our go-to-market Our go-to-market organization includes our centralized marketing, business development, sales and customer success functions who align to build positive customer experiences across the business. These teams drive scalable and efficient organic growth in three key areas: new customer acquisition, wallet share expansion and go-to-market of acquired or built products.
Our go-to-market Our go-to-market organization includes our vertically-focused marketing, business development, sales and customer success functions who align to build positive customer experiences across the business. These teams drive scalable and efficient organic growth in three key areas: new customer acquisition, wallet share expansion and go-to-market of acquired or built products.
These laws are enforced by federal, state and local regulatory agencies in the jurisdictions where we operate, and in some I-10 instances also through private civil litigation.
These laws are enforced by federal, state and local regulatory agencies in the jurisdictions where we operate, and in some instances also through private civil litigation.
For example, the business management requirements of Home Services contractors are different than the business management requirements of small physician practices or boutique gyms. As a result, we have built a comprehensive platform designed specifically to meet the unique integrated workflow needs of service SMBs.
For example, the business management requirements of home services contractors are different than the business management requirements of small physician practices. As a result, we have built a comprehensive platform designed specifically to meet the unique integrated workflow needs of service SMBs.
The insight we gain into our approximately 708,000 customers’ use of our offerings informs our product pipeline, allowing us to constantly refine existing solutions and deliver new solutions that are most valuable to them. Our growth strategies We are focused on growing and scaling our business in a rapid, yet sustainable and disciplined fashion.
The insight we gain into our approximately 740,000 customers’ use of our offerings informs our product pipeline, allowing us to constantly refine existing solutions and deliver new solutions that are most valuable to them. I-7 Our growth strategies We are focused on growing and scaling our business in a rapid, yet sustainable and disciplined fashion.
Competition While we have built a scaled, differentiated platform, we compete in a variety of highly fragmented markets and face competition from a variety of sources: • Manual processes, basic PC tools, standalone payment terminals and homegrown solutions, utilized by many service SMBs; • Vertically-specialized competitors, including mobile sales applications and field service management platforms in Home Services, EHR/EMR and practice management platforms in Health Services and facility and employee management and member management and programming platforms in Fitness & Wellness Services; and • Horizontal competitors, including Salesforce for customer relationship management (“CRM”), Intuit for financial products, Square for payments and HubSpot for marketing related solutions.
Competition While we have built a scaled, differentiated platform, we compete in a variety of highly fragmented markets and face competition from a variety of sources: • Manual processes, basic PC tools, standalone payment terminals and homegrown solutions, utilized by many service SMBs; • Vertically-specialized competitors, including mobile sales applications and field service management platforms in Home Services, EHR/EMR and practice management platforms in Health Services and scheduling and customer management in Wellness Services; and • Horizontal competitors, including Salesforce for customer relationship management (“CRM”), Intuit for financial products, Square for payments and HubSpot for marketing related solutions.
Our software is purpose-built to meet the specific needs of the industries we serve. • Tech and IT shared services: Our shared services across its technology platforms provides a centralized and consistent approach to software development, as well as cloud engineering and data center migration.
Our software is purpose-built to meet the specific needs of the industries we serve. • Tech and IT shared services: Our technology platforms provides a consistent approach to software development, as well as cloud engineering and data center migration.
Within our core verticals, our customers operate within numerous micro-verticals, ranging from home service professionals, such as home improvement contractors and home maintenance technicians, to physician practices and therapists within Health Services, to personal trainers and salon owners within Fitness & Wellness.
Within our core verticals, our customers operate within numerous micro-verticals, ranging from home service professionals, such as home improvement contractors and home maintenance technicians, to physician practices and therapists within Health Services, and salon owners within Wellness.
Collectively, in 2023 SMBs represented the single largest employer and employee category in the U.S. economy, accounting for 99.9 % of businesses in the United States, 46 % of the U.S. private workforce and over 40% of U.S. GDP. The services sector is the backbone of the U.S. economy, representing approximately 77% of U.S. GDP and 80% of U.S. employment.
Collectively, in 2024 SMBs represented the single largest employer and employee category in the U.S. economy, accounting for 99.9% of businesses in the United States, 46% of the U.S. private workforce and over 43% of U.S. GDP. The services sector is the backbone of the U.S. economy, representing approximately 77% of U.S. GDP and 80% of U.S. employment.
Through acquisitions and organic growth of our business, the number of customers on our platform increased from approximately 110,000 at the end of 2018 to approximately 708,000 at the end of 2023. • Expand ARPU and margin: Today, we serve approximately 708,000 customers, which represent a significant opportunity for growth.
Through acquisitions and organic growth of our business, the number of customers on our platform increased from approximately 110,000 at the end of 2018 to approximately 740,000 at the end of 2024. • Expand ARPU and margin: Today, we serve approximately 740,000 customers, which represent a significant opportunity for growth.
As of December 31, 2023, we had 149 registered trademarks in the United States (including EverCommerce), three registered trademarks in the EU (for the EverCommerce logo), two registered trademarks in Puerto Rico, one registered trademark in Canada, 15 registered trademarks in New Zealand, six registered trademarks in Australia and seven registered trademarks in the United Kingdom; six trademark applications in process in the United States and six trademark applications in process in Canada; 37 registered copyrights in the United States and one registered copyright in Canada; and seven issued patents in the United States.
As of December 31, 2024, we had 140 registered trademarks in the United States (including EverCommerce), three registered trademarks in the EU (including the EverCommerce logo), two registered trademarks in Puerto Rico, two registered trademarks in Canada, 15 registered trademarks in New Zealand, six registered trademarks in Australia and four registered trademarks in the United Kingdom (including the EverCommerce logo); seven trademark applications in process in the United States and three trademark applications in process in Canada; 37 registered copyrights in the United States and one registered copyright in Canada; and seven issued patents in the United States.
I-9 As of December 31, 2023, we had approximately 2,100 employees operating across six countries, including approximately 1,600 employees located in the United States. Our technology Our SaaS solutions are strategically integrated to best serve our service SMB customers and ensure they have all the tools to help them grow and scale.
As of December 31, 2024, we had approximately 2,000 employees operating across six countries, including approximately 1,500 employees located in the United States. Our technology Our SaaS solutions are strategically integrated to best serve our service SMB customers and ensure they have all the tools to help them grow and scale.
We plan to continue to make investment in our human capital a priority. We believe in and prioritize diversity, equality and inclusivity (“DEI”) in our workplace and behave in a manner where these values are the underpinnings of how we build programs, in the selection and promotion of individuals and how we support the growth and development of our people.
We plan to continue to make investment in our human capital a priority. We believe in and prioritize inclusivity and employee engagement in our workplace and aim to behave in a manner where these values are the underpinnings of how we build programs and support the growth and development of our people.
Of the $662 billion, we estimate a $69 billion opportunity in Home Services, a $115 billion opportunity in Health Services, a $26 billion opportunity in Fitness & Wellness Services and a $452 billion opportunity in other services categories.
Of the $662 billion, we estimate a $69 billion opportunity in Home Services, a $115 billion opportunity in Health Services, a $22 billion opportunity in Wellness Services and a $456 billion opportunity in other services categories.
These solutions help our customers address the challenges posed by legacy solutions by providing software that addresses the complete customer engagement workflow, streamlining front- and back-office processes, driving new sales and retention, enabling deeper performance insights and improving customer experiences with digital, mobile-friendly engagement.
These solutions help our customers address the challenges posed by legacy solutions by providing software that addresses the complete customer engagement workflow, streamlining front- and back-office processes, driving new sales and retention, enabling deeper performance insights and improving customer experiences with digital, mobile-friendly engagement. We go to market with suites of solutions that are aligned to our three core verticals.
Our net loss was $45.6 million for the year ended December 31, 2023, compared to a net loss of $59.8 million for the year ended December 31, 2022. Our Adjusted EBITDA reached $155.6 million for the year ended December 31, 2023, up from $119.0 million for the year ended December 31, 2022.
Our net loss was $41.1 million for the year ended December 31, 2024, compared to a net loss of $45.6 million for the year ended December 31, 2023. Our Adjusted EBITDA reached $177.0 million for the year ended December 31, 2024, up from $155.6 million for the year ended December 31, 2023.
Of these customers, approximately 67% were based in the United States and approximately 33% were international.
Of these customers, approximately 69% were based in the United States and approximately 31% were international.
Our EverWell solutions are built specifically for fitness professionals, which include gyms, studios, health clubs, specialized instructors (e.g., educational dance, gymnastics and cheer) and personal trainers and for wellness professionals, which include salons, spas and massage therapists. I-6 We offer select solutions to customers in other services verticals, including education, non-profit, pet care and automotive repair, among many others.
Our EverWell solutions are built specifically for wellness professionals, which include salons, spas and massage therapists. I-6 We offer select solutions to customers in other services verticals, including education, non-profit, pet care and automotive repair, among many others.
Our Verticals Vertical Brands Micro-vertical Examples Home Services EverPro HVAC/plumbing, electrical professionals, remodeling and home improvement contractors, window and door replacement specialties, security and alarm installation and monitoring businesses Health Services EverHealth Specialty private medical practices, mental health therapists, chronic care specialists, ambulatory and EMT services, specialty branches of hospital systems Fitness & Wellness Services EverWell Chain and franchise gyms, full-service health clubs, boutique studios, personal trainers, dance and instructional schools, salons and spas, massage therapists Other Non-profits, veterinary care facilities, small accounting and tax firms, educational facilities, social services, pet/veterinary care, professional services, consumer services As of December 31, 2023, we served approximately 708,000 customers.
I-8 Our Verticals Vertical Brands Micro-vertical Examples Home Services EverPro HVAC/plumbing, electrical professionals, remodeling and home improvement contractors, window and door replacement specialties, landscaping design services, security and alarm installation and monitoring businesses. pest control Health Services EverHealth Specialty private medical practices, mental health therapists, chronic care specialists, general practitioners, specialty branches of hospital systems Wellness Services EverWell Salons and spas, massage therapists, medi-aesthetics, wellness specialists Other Non-profits, veterinary care facilities, small accounting and tax firms, educational facilities, social services, pet/veterinary care, professional services, consumer services As of December 31, 2024, we served approximately 740,000 customers.
We are exclusively focused on providing service SMBs with tailored solutions to help meet their specific needs. Our vertical and micro-vertical approach enables us to provide tailored solutions featuring critical vertical-specific functionality that better serves our customers when compared to industry-agnostic solutions offered by other businesses. • Integrated solutions.
Our vertical and micro-vertical approach enables us to provide tailored solutions featuring critical vertical-specific functionality that better serves our customers when compared to industry-agnostic solutions offered by other businesses. • Integrated solutions.
I-7 • Expand into new products and verticals: Given our position in the service SMB ecosystem, as well as our relationships and level of entrenchment with our customers, we use insights gained through our customer lifecycle to identify additional solutions that are value-additive for our customers.
A primary focus for ARPU expansion focuses on cross-selling payments solutions to customers in an effort to prioritize margin growth. • Expand into new products: Given our position in the service SMB ecosystem, as well as our relationships and level of entrenchment with our customers, we use insights gained through our customer lifecycle to identify additional solutions that are value-additive for our customers.
The Fitness & Wellness market includes tech-savvy businesses which generally require integrated solutions that provide modern, convenient experiences for end consumers. Member management and consumer-facing scheduling and facility access solutions are “must-have” software capabilities for modern gyms, spas and salons.
The Wellness market includes tech-savvy businesses which generally require integrated solutions that provide modern, convenient experiences for end consumers. Consumer-facing scheduling and facility access solutions are “must-have” software capabilities for spas and salons. In addition, adjacent solutions in relationship management and inventory management are increasingly needed to support a seamless, value-add consumer experience.
For a reconciliation of Adjusted EBITDA to the most directly comparable Generally Accepted Accounting Principles (“GAAP”) financial measure, information about why we consider Adjusted EBITDA useful and a discussion of the material risks and limitations of this measure, please see Part II.
GAAP”) financial measure, information about why we consider Adjusted EBITDA useful and a discussion of the material risks and limitations of this measure, please see Part II.
This results in a self-reinforcing flywheel, enabling us to drive more value for our customers and, in turn, fuel our growth by increasing Average Revenue per Unit (“ARPU”), improving customer stickiness and increasing our market share.
This results in a self-reinforcing flywheel, enabling us to drive more value for our customers and, in turn, fuel our growth by increasing Average Revenue per Unit (“ARPU”), improving customer stickiness and increasing our market share. While we offer multiple products and address several verticals and micro-verticals, we manage our business with a singular, centralized approach to strategy and operations.
Our software, designed to meet the day-to-day workflow needs of businesses in specific vertical end markets, streamlines front and back-office processes and provides polished customer-facing experiences.
Our software, designed to meet the day-to-day workflow needs of businesses in specific vertical end markets, streamlines front and back-office processes and provides polished customer-facing experiences. Using these offerings, service SMBs can deliver their services, streamline operations and focus on growing their customers.
Our financial results have reflected our rapid growth. Our revenue has grown at a compound annual growth rate (“CAGR”) of 26.0% from 2020 to 2023, and reached $675.4 million for the year ended December 31, 2023, up from $620.7 million for the year ended December 31, 2022, which represents revenue growth of 8.8% from 2022 to 2023.
Our revenue has grown at a compound annual growth rate (“CAGR”) of 12.5% from 2021 to 2024, and reached $698.8 million for the year ended December 31, 2024, up from $675.4 million for the year ended December 31, 2023, which represents revenue growth of 3.5% from 2023 to 2024.
I-1 While we offer multiple products and address several verticals and micro-verticals, we manage our business with a singular, centralized approach to strategy and operations. We centralize key functions including marketing, business operations, cybersecurity and general and administrative functions, ensuring consistency in execution across each of our verticals, and ultimately stimulating a culture of operational excellence.
We centralize key functions including marketing, business operations, cybersecurity and general and administrative functions, ensuring consistency in execution across each of our verticals, and ultimately stimulating a culture of operational excellence.
We provide tailored, integrated Software-as-a-Service (“SaaS”) solutions that support the highly diverse workflows and customer interactions that professionals in home services, health services, and fitness & wellness services need to automate manual processes, generate new business, and create more loyal customers. EverCommerce is a leading provider of integrated, vertically-tailored SaaS solutions for service-based small- and medium-sized businesses (“service SMBs”).
Item 1. Business Overview EverCommerce is simplifying and empowering the lives of business owners whose services support us every day. We provide tailored, integrated Software-as-a-Service (“SaaS”) solutions that support the highly diverse workflows and customer interactions that professionals in home services, health services, and wellness services need to automate manual processes, generate new business, and create more loyal customers.
Moreover, our business benefits from attractive unit economics; we estimate the lifetime value of our customers to be approximately six times the cost of acquiring them.
Moreover, our business benefits from attractive unit economics; we estimate the lifetime value of our customers to be approximately six times the cost of acquiring them. For a reconciliation of Adjusted EBITDA to the most directly comparable United States Generally Accepted Accounting Principles (“U.S.
We are currently tracking over 13,000 businesses around the world, primarily across our core verticals, as potential acquisition opportunities. Our customers We define a customer as an individual or entity that utilized or was capable of utilizing an EverCommerce solution or service for which they paid any one or combination of recurring, re-occurring or transactional fees in a given period.
For example, in the year ended December 31, 2024, we sold Fitness Solutions as described above. Our customers We define a customer as an individual or entity that utilized or was capable of utilizing an EverCommerce solution or service for which they paid any one or combination of recurring, re-occurring or transactional fees in a given period.
Our platform spans across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications. Today, we serve approximately 708,000 customers across three core verticals: Home Services; Health Services; and Fitness & Wellness Services.
EverCommerce is a leading provider of integrated, vertically-tailored SaaS solutions for service-based small- and medium-sized businesses (“service SMBs”). Our platform spans across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications. Today, we serve approximately 740,000 customers across three core verticals: EverPro for Home Services; EverHealth for Health Services; and EverWell for Wellness Services.
Six years ago, we estimated that less than 50% of SMBs in the United States had adopted digital payment processing solutions, and instead relied on paper invoices for payment. This has expanded to nearly 80% in the last couple of years, a trend that we expect to continue in the future.
Digital payment processing solution adoption continues to expand within our core SMB customer base. Seven years ago, we estimated that less than 50% of SMBs in the United States had adopted digital payment processing solutions, and instead relied on paper invoices for payment.
We further estimate that, based on our current customers and payment volumes, we have an aggregate annualized payment processing opportunity of approximately $96 billion. Our payments platform also provides a full suite of service commerce I-4 features, including customer management as well as cash flow reporting and analytics.
Our payments platform also provides a full suite of service commerce features, including customer management as well as cash flow reporting and analytics.
Using these offerings, service SMBs can streamline their operations and focus on growing their customers and improving their services. • Billing & Payment Solutions: Our Billing & Payment Solutions provide integrated payments, billing and invoicing automation and business intelligence and analytics. Our omni-channel payments capabilities include point-of-sale, eCommerce, online bill payments, recurring billing, electronic invoicing and mobile payments.
I-4 • Billing & Payment Solutions: Our Billing & Payment Solutions provide integrated payments, billing and invoicing automation and business intelligence and analytics. Our omni-channel payments capabilities include point-of-sale, eCommerce, online bill payments, recurring billing, electronic invoicing and mobile payments. Supported payment types include credit card, debit card and Automated Clearing House (“ACH”) processing.
Supported payment types include credit card, debit card and Automated Clearing House (“ACH”) processing. Based on the monthly average processing volume for the quarter ended December 31, 2023, we estimate that we process annualized total volume of $11.9 billion.
Based on the monthly average processing volume for the quarter ended December 31, 2024, we estimate that we process annualized total volume of $12.7 billion. We further estimate that, based on our current customers and payment volumes, we have an aggregate annualized payment processing opportunity in excess of $100 billion.
For the year ended December 31, 2023, we estimate that approximately 90% of our customers contributed less than $2,000 in revenue and approximately 5% contributed more than $5,000 in revenue. Small- and medium-sized businesses (“SMBs”) are an important engine for economic growth.
For the year ended December 31, 2024, we estimate that approximately 93% of our customers contributed less than $2 thousand in revenue and approximately 3% contributed more than $5 thousand in revenue. On March 13, 2024, the Company entered into definitive sale and purchase agreements to sell our fitness solutions to Jonas Fitness Portfolio Holdco Inc.
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Item 1. Business Overview EverCommerce is simplifying and empowering the lives of business owners whose services support us every day.
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(“Jonas Software”) (see “ Note 3. Acquisitions and Dispositions” in the Notes to the Consolidated Financial Statements for additional details). The sale of American Service Finance LLC., ASF Payment Solutions ULC and Technique Fitness Inc. (collectively, “North American Fitness”), closed simultaneous with signing.
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We go to market with suites of solutions that are aligned to our three core verticals: (1) the EverPro suite of solutions in Home Services; (2) the EverHealth suite of solutions within Health Services; and (3) the EverWell suite of solutions in Fitness & Wellness Services.
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The sale of EverCommerce UK, including wholly-owned subsidiaries Fitii UK (MyPTHub and MyPTHub LLC) and ClubWise UK and its wholly-owned subsidiary ClubWise Australia (collectively, “UK Fitness” and together with North American Fitness, “Fitness Solutions”), closed on July 1, 2024. Small- and medium-sized businesses (“SMBs”) are an important engine for economic growth.
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For example, software for instructional dance and martial arts centers has emerged within the Fitness & Wellness industry in recent years to better service the specialized educational training needs of these end-customers. • Digital payments. Digital payment processing solution adoption continues to expand within our core SMB customer base.
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In the last couple of years, this has increased to nearly 80%, a trend that we expect to continue in the future.
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In addition, adjacent solutions in relationship management, inventory management, personal training scheduling and fitness tracking are increasingly needed to support a seamless, value-add consumer experience.
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During 2023, we introduced EverPro Edge, which allows customers to save, learn and grow, and creates a universal channel and trusted brand for engagement, Edge is an expansion opportunity enabling customers to receive targeted business growth and education content, as well as cash-back rebates on supplies they purchase at leading vendors.
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A primary focus for ARPU expansion focuses on cross-selling payments solutions to customers in an effort to prioritize margin growth.
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We are currently tracking over 13,000 businesses around the world, primarily across our core verticals, as potential acquisition opportunities. In addition, from time to time, we evaluate our positioning with respect to our existing verticals and may determine to dispose of offerings that do not align with our growth initiatives.
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Our centralized, highly-trained team members are organized into several targeted and coordinated groups to address specific service SMB market’s highly varied audiences, while aligning priorities through Centers of Excellence to ensure the broader set of unified EverCommerce growth and scale objectives are met.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFurther, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was enacted. There are significant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas such as “say on pay” and proxy access.
Biggest changeFurther, the Dodd-Frank Act contains significant corporate governance and executive compensation related provisions that require the SEC to adopt additional rules and regulations in these areas such as “say on pay” and proxy access. Emerging growth companies are permitted to implement many of these requirements over a longer period and up to five years from the IPO.
In particular, we may make statements or actions based on various frameworks, methodologies, or data that we believe to be reasonable but which may ultimately determined to be erroneous or inconsistent with future regulatory requirements or best practices.
In particular, we may make statements or actions based on various frameworks, methodologies, or data that we believe to be reasonable but which may ultimately be determined to be erroneous or inconsistent with future regulatory requirements or best practices.
The actions that will require prior written consent include: (i) change in control transactions, (ii) acquiring or disposing of assets or any business enterprise or division thereof for consideration in excess of $500.0 million in any single transaction or series of transactions, (iii) increasing or decreasing the size of our board of directors, (iv) terminating the employment of our chief executive officer or hiring a new chief executive officer, (v) initiating any liquidation, dissolution, bankruptcy or other insolvency proceeding involving us or any of our significant subsidiaries and (vi) any transfer, issue, issuance, sale or disposition of any shares of common stock, other equity securities, equity-linked securities or securities that are convertible into equity securities of us or our subsidiaries to any person or entity that is a non-strategic financial investor in a private placement transaction or series of transactions.
The actions that require prior written consent include: (i) change in control transactions, (ii) acquiring or disposing of assets or any business enterprise or division thereof for consideration in excess of $500.0 million in any single transaction or series of transactions, (iii) increasing or decreasing the size of our board of directors, (iv) terminating the employment of our chief executive officer or hiring a new chief executive officer, (v) initiating any liquidation, dissolution, bankruptcy or other insolvency proceeding involving us or any of our significant subsidiaries and (vi) any transfer, issue, issuance, sale or disposition of any shares of common stock, other equity securities, equity-linked securities or securities that are convertible into equity securities of us or our subsidiaries to any person or entity that is a non-strategic financial investor in a private placement transaction or series of transactions.
This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting, as well as a statement that our independent registered public accounting firm has issued an opinion on the effectiveness of our internal control over financial reporting, provided that our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC following the date (i) we are either an “accelerated filer” or a “large accelerated filer,” each as defined in the Exchange Act, and (ii) we are no longer an emerging growth company, as defined in the JOBS Act.
This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting, as well as a statement that our independent registered public accounting firm has issued an opinion on the effectiveness of I-27 our internal control over financial reporting, provided that our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC following the date (i) we are either an “accelerated filer” or a “large accelerated filer,” each as defined in the Exchange Act, and (ii) we are no longer an emerging growth company, as defined in the JOBS Act.
Although we expect to continue to acquire companies and other assets in the future, such acquisitions pose a number of challenges and risks, including the following: I-23 • the ability to identify suitable acquisition candidates or acquire additional assets at attractive valuations and on favorable terms; • the availability of suitable acquisition candidates; • the ability to compete successfully for identified acquisition candidates, complete acquisitions or accurately estimate the financial effect of acquisitions on our business; • higher than expected or unanticipated acquisition costs; • effective integration and management of acquired businesses in a manner that permits the combined company to achieve the full revenue and cost synergies and other benefits anticipated to result from the acquisition, due to difficulties such as incompatible accounting, information management or other control systems; • retention of an acquired company’s key employees or customers; • contingent or undisclosed liabilities, incompatibilities and/or other obstacles to successful integration not discovered during the pre-acquisition due diligence process; • the availability of management resources to evaluate acquisition candidates and oversee the integration and operation of the acquired businesses; • the ability to obtain the necessary debt or equity financing, on favorable terms or at all, to finance any of our potential acquisitions; • increased interest expense, restructuring charges and amortization expenses related to intangible assets; • significant dilution to our stockholders for acquisitions made utilizing our securities; and • the ability to generate cash necessary to execute our acquisition strategy and/or the reduction of cash that would otherwise be available to fund operations or for other purposes.
Although we expect to continue to acquire companies and other assets in the future, such acquisitions pose a number of challenges and risks, including the following: • the ability to identify suitable acquisition candidates or acquire additional assets at attractive valuations and on favorable terms; • the availability of suitable acquisition candidates; • the ability to compete successfully for identified acquisition candidates, complete acquisitions or accurately estimate the financial effect of acquisitions on our business; • higher than expected or unanticipated acquisition costs; • effective integration and management of acquired businesses in a manner that permits the combined company to achieve the full revenue and cost synergies and other benefits anticipated to result from the acquisition, due to difficulties such as incompatible accounting, information management or other control systems; • retention of an acquired company’s key employees or customers; • contingent or undisclosed liabilities, incompatibilities and/or other obstacles to successful integration not discovered during the pre-acquisition due diligence process; • the availability of management resources to evaluate acquisition candidates and oversee the integration and operation of the acquired businesses; • the ability to obtain the necessary debt or equity financing, on favorable terms or at all, to finance any of our potential acquisitions; • increased interest expense, restructuring charges and amortization expenses related to intangible assets; • significant dilution to our stockholders for acquisitions made utilizing our securities; and • the ability to generate cash necessary to execute our acquisition strategy and/or the reduction of cash that would otherwise be available to fund operations or for other purposes.
Certain provisions in our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • amendments to certain provisions of our amended and restated certificate of incorporation or amendments to our amended and restated bylaws generally require the approval of at least 66 2/3% of the voting power of our outstanding capital stock; • our staggered board; • at any time when the parties to our sponsor stockholders agreement beneficially own, in the aggregate, at least a majority of the voting power of our outstanding capital stock, our stockholders may take action by consent without a meeting, and at any time when the parties to our sponsor stockholders agreement beneficially own, in the aggregate, less than the majority of the voting power of our outstanding capital stock, our stockholders may not take action by written consent, but may only take action at a meeting of stockholders; • our amended and restated certificate of incorporation does not provide for cumulative voting; • vacancies on our board of directors may be filled only by our board of directors and not by stockholders, subject to the rights granted pursuant to the stockholders agreements; • a special meeting of our stockholders may only be called by the chairperson of our board of directors, our Chief Executive Officer or a majority of our board of directors; • unless we otherwise consent in writing, restrict the forum for certain litigation against us to Delaware or the federal courts, as applicable; • our board of directors has the authority to issue shares of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and I-37 • advance notice procedures apply for stockholders (other than the parties to our stockholders agreements for nominations made pursuant to the terms of the stockholders agreements) to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
Certain provisions in our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • amendments to certain provisions of our amended and restated certificate of incorporation or amendments to our amended and restated bylaws generally require the approval of at least 66 2/3% of the voting power of our outstanding capital stock; • our staggered board; • at any time when the parties to our sponsor stockholders agreement beneficially own, in the aggregate, at least a majority of the voting power of our outstanding capital stock, our stockholders may take action by consent without a meeting, and at any time when the parties to our sponsor stockholders agreement beneficially own, in the aggregate, less than the majority of the voting power of our outstanding capital stock, our stockholders may not take action by written consent, but may only take action at a meeting of stockholders; • our amended and restated certificate of incorporation does not provide for cumulative voting; • vacancies on our board of directors may be filled only by our board of directors and not by stockholders, subject to the rights granted pursuant to the stockholders agreements; • a special meeting of our stockholders may only be called by the chairperson of our board of directors, our Chief Executive Officer or a majority of our board of directors; • unless we otherwise consent in writing, restrict the forum for certain litigation against us to Delaware or the federal courts, as applicable; • our board of directors has the authority to issue shares of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and I-39 • advance notice procedures apply for stockholders (other than the parties to our stockholders agreements for nominations made pursuant to the terms of the stockholders agreements) to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
Factors that may affect our operating results and the ability to predict our future results and trajectory include: • our ability to increase sales to existing customers and to renew agreements with our existing customers at comparable prices; • our ability to attract new customers with greater needs for our services; • changes in our pricing policies or those of our competitors, or pricing pressure on our software and related services; • periodic fluctuations in demand for our software and services and volatility in the sales of our solutions and services; • the success or failure of our acquisition or divestiture strategy; • our ability to timely develop and implement new solutions and services, as well as improve and enhance existing solutions and services, in a manner that meets customer requirements; • our ability to hire, train and retain key personnel; • any significant changes in the competitive dynamics of our market, including new entrants or substantial discounting of products or services; • our ability to control costs, including our operating expenses; • any significant change in our facilities-related costs; • the timing of hiring personnel and of large expenses such as those for third-party professional services; • technological developments, including new uses for generative AI; • general economic conditions; • our ability to appropriately resolve any disputes relating to our intellectual property; and • the impact of a recession, pandemic or any other adverse global economic conditions on our business.
Factors that may affect our operating results and the ability to predict our future results and trajectory include: • our ability to increase sales to existing customers and to renew agreements with our existing customers at comparable prices; • our ability to attract new customers with greater needs for our services; • changes in our pricing policies or those of our competitors, or pricing pressure on our software and related services; • periodic fluctuations in demand for our software and services and volatility in the sales of our solutions and services; • the success or failure of our acquisition or divestiture strategy; • our ability to timely develop and implement new solutions and services, as well as improve and enhance existing solutions and services, in a manner that meets customer requirements; • our ability to hire, train and retain key personnel; I-13 • any significant changes in the competitive dynamics of our market, including new entrants or substantial discounting of products or services; • our ability to control costs, including our operating expenses; • any significant change in our facilities-related costs; • the timing of hiring personnel and of large expenses such as those for third-party professional services; • technological developments, including new uses for generative AI; • general economic conditions; • our ability to appropriately resolve any disputes relating to our intellectual property; and • the impact of a recession, pandemic or any other adverse global economic conditions on our business.
For example, 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.
For example, 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., Providence Strategic Growth III L.P., SLA Eclipse Co-Invest, L.P., and SLA CM Eclipse Holdings, L.P.
In addition, for so long as Providence Strategic Growth and Silver Lake collectively beneficially own at least 30% of the aggregate number of shares of common stock outstanding, certain actions by us or any of our subsidiaries will require the prior written consent of each of Providence Strategic Growth and Silver Lake so long as such stockholder is entitled to designate at least two (2) directors for nomination to our board of directors.
In addition, for so long as Providence Strategic Growth and Silver Lake collectively beneficially own at least 30% of the aggregate number of shares of common stock outstanding, certain actions by us or any of our subsidiaries require the prior written consent of each of Providence Strategic Growth and Silver Lake so long as such stockholder is entitled to designate at least two (2) directors for nomination to our board of directors.
In addition, there may be a limited-time opportunity to achieve and maintain a significant share of these markets due in part to the rapidly evolving nature of the businesses within our Home Services, Health Services and Fitness & Wellness Services verticals, the technology industries that support these businesses and the substantial resources available to our existing and potential competitors.
In addition, there may be a limited-time opportunity to achieve and maintain a significant share of these markets due in part to the rapidly evolving nature of the businesses within our Home Services, Health Services and Wellness Services verticals, the technology industries that support these businesses and the substantial resources available to our existing and potential competitors.
However, we may not achieve anticipated revenue growth from expanding our sales force if we are unable to hire, develop, integrate and retain talented and effective sales personnel, if our new and existing sales personnel are unable to achieve desired productivity levels in a reasonable period of time. We also dedicate significant resources to sales and marketing programs.
However, we may not achieve anticipated revenue growth from expanding our sales force if we are unable to hire, develop, integrate and retain talented and effective sales personnel, or if our new and existing sales personnel are unable to achieve desired productivity levels in a reasonable period of time. We also dedicate significant resources to sales and marketing programs.
In addition, pursuant to the sponsor stockholder agreement, we are generally required to obtain the prior written consent of the parties to our sponsor stockholders agreement before we or our subsidiaries undertake certain actions. Accordingly, for such period of time, the parties to our sponsor stockholders agreement will have significant influence with respect to our management, business plans and policies.
In addition, pursuant to the sponsor stockholder agreement, we are generally required to obtain the prior written consent of the parties to our sponsor stockholders agreement before we or our subsidiaries undertake certain actions. Accordingly, for such period of time, the parties to our sponsor stockholders agreement have significant influence with respect to our management, business plans and policies.
These risks and challenges include our ability to: • attract new and digitally-inclined service SMBs to the EverCommerce platform; I-11 • retain existing customers and leverage cross-sell and upsell opportunities; • successfully update the EverCommerce platform, including expanding into new verticals and international markets and integrating additional solution capabilities to further benefit our service SMB customers and enhance the end-customer experience; • expand through future acquisitions and successfully identify and integrate acquired entities, services and technologies; • hire, integrate and retain talented people at all levels of our organization; • comply with existing and new laws and regulations applicable to our business and in the industries in which we participate; • anticipate and respond to macroeconomic changes, changes within the existing and future industries in which we participate, including the Home Services, Health Services and Fitness & Wellness industries, and changes in the markets in which we operate; • foresee and manage market volatility impacts on market value; • react to challenges from existing and new competitors; • improve and enhance the value of our reputation and brand; • effectively manage our growth; and • maintain and improve the infrastructure underlying the EverCommerce platform, including our software, websites, mobile applications and data centers, as well as our cybersecurity and data protection measures.
These risks and challenges include our ability to: • attract new and digitally-inclined service SMBs to the EverCommerce platform; • retain existing customers and leverage cross-sell and upsell opportunities; • successfully update the EverCommerce platform, including expanding into new verticals and international markets and integrating additional solution capabilities to further benefit our service SMB customers and enhance the end-customer experience; • expand through future acquisitions and successfully identify and integrate acquired entities, services and technologies; • hire, integrate and retain talented people at all levels of our organization; • comply with existing and new laws and regulations applicable to our business and in the industries in which we participate; • anticipate and respond to macroeconomic changes, changes within the existing and future industries in which we participate, including the Home Services, Health Services and Wellness industries, and changes in the markets in which we operate; • foresee and manage market volatility impacts on market value; • react to challenges from existing and new competitors; • improve and enhance the value of our reputation and brand; • effectively manage our growth; and • maintain and improve the infrastructure underlying the EverCommerce platform, including our software, websites, mobile applications and data centers, as well as our cybersecurity and data protection measures.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of The Nasdaq Stock Market and other applicable securities rules and regulations.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the listing requirements of The Nasdaq Stock Market and other applicable securities rules and regulations.
The parties to the sponsor stockholders agreement have agreed to vote, or cause to vote, all of their outstanding shares of our common stock at any annual or special meeting of stockholders in which directors are elected, so as to cause the election of the directors nominees designated by each party.
The parties to the sponsor stockholders agreement have agreed to vote, or cause to vote, all of their outstanding shares of our common stock at any annual or special meeting of stockholders in which directors are elected, so as to cause the election of the director nominees designated by each party.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our financial conditions and results of operations; • the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates or ratings by any securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; • announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, results of operations or capital commitments; • changes in stock market valuations and operating performance of other technology companies generally, or those in our industry in particular; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • changes in our board of directors or management; • sales of large blocks of our common stock, including sales by certain affiliates of Providence Strategic Growth, Silver Lake or our executive officers and directors; • lawsuits threatened or filed against us; • anticipated or actual changes in laws, regulations or government policies applicable to our business; • changes in our capital structure, such as future issuances of debt or equity securities; • short sales, hedging and other derivative transactions involving our capital stock; • general economic conditions in the United States; • other events or factors, including those resulting from war (including the ongoing war in Ukraine), pandemics (including COVID-19), incidents of terrorism or responses to these events; and • the other factors described in this “Risk Factors” section of this Annual Report on Form 10-K.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our financial conditions and results of operations; • the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates or ratings by any securities analysts who follow our company or our failure to meet these estimates or the expectations of investors; • announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, results of operations or capital commitments; • changes in stock market valuations and operating performance of other technology companies generally, or those in our industry in particular; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • changes in our board of directors or management; • sales of large blocks of our common stock, including sales by certain affiliates of Providence Strategic Growth, Silver Lake or our executive officers and directors; • lawsuits threatened or filed against us; • anticipated or actual changes in laws, regulations or government policies applicable to our business; • changes in our capital structure, such as future issuances of debt or equity securities; • short sales, hedging and other derivative transactions involving our capital stock; • general economic conditions in the United States; • other events or factors, including those resulting from war (including the ongoing war in Ukraine), pandemics or other public health crises, incidents of terrorism or responses to these events; and • the other factors described in this “Risk Factors” section of this Annual Report on Form 10-K.
Our partners, including our integration partners for our EHR and PM solutions within Health Services, our Business Management Software solutions within Home Services and our payment and CRM solutions within Fitness & Wellness Services, as well as our third-party payment processing partners, could become our competitors by offering similar services.
Our partners, including our integration partners for our EHR and PM solutions within Health Services, our Business Management Software solutions within Home Services and our payment and CRM solutions within Wellness Services, as well as our third-party payment processing partners, could become our competitors by offering similar services.
Providence Strategic Growth and Silver Lake will each retain the right to designate directors for so long as they beneficially own at least 5% of the aggregate number of shares of common stock outstanding.
Providence Strategic Growth and Silver Lake each retain the right to designate directors for so long as they beneficially own at least 5% of the aggregate number of shares of common stock outstanding.
Our future capital requirements may be significantly different from our current estimates and will depend on many factors, including the need to: • finance unanticipated working capital requirements; • acquire complementary businesses, technologies, solutions or services; I-13 • develop or enhance our technological infrastructure and our existing solutions and services; • fund strategic relationships, including joint ventures and co-investments; • respond to competitive pressures; and • manage costs associated with any adverse market conditions or other macroeconomic factors.
Our future capital requirements may be significantly different from our current estimates and will depend on many factors, including the need to: • finance unanticipated working capital requirements; • acquire complementary businesses, technologies, solutions or services; • develop or enhance our technological infrastructure and our existing solutions and services; • fund strategic relationships, including joint ventures and co-investments; • respond to competitive pressures; and • manage costs associated with any adverse market conditions or other macroeconomic factors.
Our information technology systems and operations or those of our third-party technology vendors could be exposed to damage or interruption from, among other things, fire, extreme weather events (including floods, storms, droughts and extreme temperatures) and other natural disasters, power loss, telecommunications failure, unauthorized entry, computer viruses, denial-of-service attacks, acts of terrorism, human error, vandalism or sabotage, financial insolvency and similar events.
Our information technology systems and operations or those of our third-party technology vendors could be exposed to damage or interruption from, among other things, fire, extreme weather events (including floods, storms, droughts and extreme temperatures) and other natural disasters, power loss, telecommunications failure, unauthorized entry, computer viruses, denial-of-service attacks, acts of I-22 terrorism, human error, vandalism or sabotage, financial insolvency and similar events.
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, and other declaratory and equitable relief for the class and/or the Company including attorneys’ and experts’ witness fees and other costs and expenses.
Our recent growth rates may not be sustainable or indicative of future growth. Since our founding, we have generated significant revenue growth through acquisitions and by driving organic growth of our business.
Our recent growth rates may not be sustainable or indicative of future growth. Since our founding, we have generated revenue growth through acquisitions and by driving organic growth of our business.
If we cannot keep pace with rapid developments and changes in the electronic payments market or are unable to introduce, develop and market new and enhanced versions of our software solutions, we may be put at a competitive disadvantage with respect to our services that incorporated payment technology. Payment-related transactions comprised approximately 17% of our revenue in 2023.
If we cannot keep pace with rapid developments and changes in the electronic payments market or are unable to introduce, develop and market new and enhanced versions of our software solutions, we may be put at a competitive disadvantage with respect to our services that incorporated payment technology. Payment-related transactions comprised approximately 17% of our revenue in 2024.
Further, contractual obligations related to confidentiality and assignment of intellectual property rights may be ineffective or unenforceable, and departing employees may share our proprietary information with competitors in ways that could adversely impact us. In addition, certain senior management personnel are substantially vested in their stock option grants or other equity compensation.
Further, contractual I-24 obligations related to confidentiality and assignment of intellectual property rights may be ineffective or unenforceable, and departing employees may share our proprietary information with competitors in ways that could adversely impact us. In addition, certain senior management personnel are substantially vested in their stock option grants or other equity compensation.
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 complaint generally alleges violations of Section 141(a) of the Delaware General Corporation Law (“DGCL”) by providing the Sponsor Stockholders with an approval 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.
To the extent we are required to use our cash flow from operations or the proceeds of any future financing to service our debt instead of funding working capital, capital expenditures, acquisition activity or other general corporate purposes, we will be less able to plan for, or react to, changes in our business, industry and in the economy generally.
To the extent we are required to use our cash flow from operations or the proceeds of any future financing to service our debt instead of funding working capital, capital I-26 expenditures, acquisition activity or other general corporate purposes, we will be less able to plan for, or react to, changes in our business, industry and in the economy generally.
We are also subject to the operating rules of the National Automated Clearing House Association (“NACHA”), a self-regulatory organization which administers and facilitates private-sector operating rules for ACH payments and defines the roles and responsibilities of financial institutions and other ACH network participants. The NACHA Rules and Operating Guidelines impose obligations on us and our partner financial institutions.
We are also subject to the operating rules of the National Automated Clearing House Association (“NACHA”), a self-regulatory organization which administers and facilitates private-sector operating rules for ACH payments and defines the roles and I-16 responsibilities of financial institutions and other ACH network participants. The NACHA Rules and Operating Guidelines impose obligations on us and our partner financial institutions.
Our ability to sell additional functionality to our existing customers may require more sophisticated and costly sales efforts, especially for our larger customers with more senior management and established procurement functions. Similarly, the rate at which our customers purchase additional solutions from us depends on several factors, including general economic conditions and the pricing of additional functionality.
Our ability to sell additional functionality to our existing customers may require more sophisticated and costly sales efforts, especially for our larger customers with more experienced management and established procurement functions. Similarly, the rate at which our customers purchase additional solutions from us depends on several factors, including general economic conditions and the pricing of additional functionality.
The effectiveness and cost of our online advertising has varied over time and may vary in the future due to competition for key search terms, changes in search engine use and changes in the search algorithms and rules used by major search engines. These efforts will require us to invest significant financial and other resources.
The effectiveness and cost of our online advertising has varied over time and may vary in the future due to competition for key search terms, changes in search engine use and changes in the I-20 search algorithms and rules used by major search engines. These efforts will require us to invest significant financial and other resources.
Our renewal and expansion rates may decline or fluctuate as a result of several factors, including consumer spending levels, client satisfaction with our solutions and services, decreases in the number of users, changes in the type and size of our customers, pricing changes, competitive conditions, the acquisition of our customers by other companies and general economic conditions.
Our renewal and expansion rates may decline or fluctuate as a result of several factors, including consumer spending levels, client satisfaction with our solutions and services, decreases in the number of users, changes in the type and I-21 size of our customers, pricing changes, competitive conditions, the acquisition of our customers by other companies and general economic conditions.
Any similar litigation against us could result in substantial costs, divert management’s attention and resources, and harm our business, financial condition and results of operations. I-34 The parties to our sponsor stockholders agreement hold a substantial portion of our outstanding common stock, and such parties interests may conflict with our interests and the interests of other stockholders.
Any similar litigation against us could result in substantial costs, divert management’s attention and resources, and harm our business, financial condition and results of operations. I-36 The parties to our sponsor stockholders agreement hold a substantial portion of our outstanding common stock, and such parties interests may conflict with our interests and the interests of other stockholders.
Numerous and evolving I-17 cybersecurity threats, including advanced and persisting cyber-attacks, cyber-extortion, ransomware attacks, spear phishing and social engineering schemes, the introduction of computer viruses or other malware and the physical destruction of all or portions of our information technology and infrastructure could compromise the confidentiality, availability and integrity of the data in our systems.
Numerous and evolving cybersecurity threats, including advanced and persisting cyber-attacks, cyber-extortion, ransomware attacks, spear phishing and social engineering schemes, the introduction of computer viruses or other malware and the physical destruction of all or portions of our information technology and infrastructure could compromise the confidentiality, availability and integrity of the data in our systems.
We are subject to economic and political risk, the business cycles of our clients and changes in the overall level of consumer and commercial spending, which could negatively impact our business, financial condition and results of operations. We are exposed to general economic conditions that affect consumer confidence, consumer spending, consumer discretionary income and changes in consumer purchasing habits.
I-23 We are subject to economic and political risk, the business cycles of our clients and changes in the overall level of consumer and commercial spending, which could negatively impact our business, financial condition and results of operations. We are exposed to general economic conditions that affect consumer confidence, consumer spending, consumer discretionary income and changes in consumer purchasing habits.
I-24 Revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets through the due diligence process prior to an acquisition, resulting in unanticipated costs, losses or a decline in profits, as well as potential impairment charges.
Revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets through the due diligence process prior to an acquisition, resulting in unanticipated costs, losses or a decline in profits, as well as potential impairment charges.
I-25 In addition, under certain circumstances, we will be required to satisfy and maintain a specified financial ratio under the terms of our Credit Facilities. While we have not previously breached and are not in breach of any of these covenants, there can be no guarantee that we will not breach these covenants in the future.
In addition, under certain circumstances, we will be required to satisfy and maintain a specified financial ratio under the terms of our Credit Facilities. While we have not previously breached and are not in breach of any of these covenants, there can be no guarantee that we will not breach these covenants in the future.
For these and other reasons, we may not be able to realize a tax benefit from the use of our NOLs. Government healthcare regulation, healthcare industry standards and other requirements create risks and challenges with respect to our compliance efforts and our business strategies within Health Services.
For these and other reasons, we may not be able to realize a tax benefit from the use of our NOLs. I-28 Government healthcare regulation, healthcare industry standards and other requirements create risks and challenges with respect to our compliance efforts and our business strategies within Health Services.
Federal rules implementing the 21st Century Cures Act require developers of certified EHRs and health IT products to adopt standardized application programming interfaces, which will help allow individuals to securely and easily access structured and unstructured electronic health information formats using smartphones and other mobile devices.
Federal rules implementing the 21st Century Cures Act require developers of certified EHRs and health IT products to adopt standardized application programming interfaces, which help individuals to securely and easily access structured and unstructured electronic health information formats using smartphones and other mobile devices.
For example, the United States government may enact significant changes to the taxation of business entities (such as the 2022 United States Inflation Reduction Act which, among other changes, introduced a 15% corporate minimum tax on certain United States corporations and a 1% excise tax on certain stock redemptions by I-40 United States corporations).
For example, the United States government may enact significant changes to the taxation of business entities (such as the 2022 United States Inflation Reduction Act which, among other changes, introduced a 15% corporate minimum tax on certain United States corporations and a 1% excise tax on certain stock redemptions by United States corporations).
While we may, from time to time, engage in certain voluntary initiatives (which may include disclosures, policies, and targets, among others) to improve the ESG profile of our operations and/or products or respond to stakeholder considers, such initiatives may be I-27 costly and may not have the desired effect.
While we may, from time to time, engage in certain voluntary initiatives (which may include disclosures, policies, and targets, among others) to improve the ESG profile of our operations and/or products or respond to stakeholder considers, such initiatives may be costly and may not have the desired effect.
I-30 Privacy, security and data protection laws and regulations, and any other such changes or new laws or regulations, could impose significant limitations, require changes to our business, or restrict our use or storage of personal information, which may increase our compliance expenses and make our business more costly or less efficient to conduct.
Privacy, security and data protection laws and regulations, and any other such changes or new laws or regulations, could impose significant limitations, require changes to our business, or restrict our use or storage of personal information, which may increase our compliance expenses and make our business more costly or less efficient to conduct.
We may incur increased development I-33 costs and delays in delivering solutions if we need to upgrade our software or healthcare devices to be in compliance with these varying and evolving standards. In addition, further delays in interpreting these standards may result in postponement or cancellation of our clients’ decisions to purchase our software solutions.
We may incur increased development I-35 costs and delays in delivering solutions if we need to upgrade our software or healthcare devices to be in compliance with these varying and evolving standards. In addition, further delays in interpreting these standards may result in postponement or cancellation of our clients’ decisions to purchase our software solutions.
I-39 Changes in accounting rules, assumptions and/or judgments could materially and adversely affect us. Accounting rules and interpretations for certain aspects of our operations are highly complex and involve significant assumptions and judgment. These complexities could lead to a delay in the preparation and dissemination of our financial statements.
I-41 Changes in accounting rules, assumptions and/or judgments could materially and adversely affect us. Accounting rules and interpretations for certain aspects of our operations are highly complex and involve significant assumptions and judgment. These complexities could lead to a delay in the preparation and dissemination of our financial statements.
If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations would be adversely affected.
If our assumptions regarding I-12 these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations would be adversely affected.
Pursuant to these agreements with payment processors, we are registered with the card networks as an independent sales organization (“ISO”) of our I-15 sponsor bank(s) or as a payment facilitator(s), and are subject to the requirements of our bank sponsors, payment processors, as well as the card network rules and certain other obligations.
Pursuant to these agreements with payment processors, we are registered with the card networks as an independent sales organization (“ISO”) of our sponsor bank(s) or as a payment facilitator(s), and are subject to the requirements of our bank sponsors, payment processors, as well as the card network rules and certain other obligations.
I-26 The material weakness will not be considered remediated until our remediation plan has been fully implemented, the applicable controls operate for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls are operating effectively.
The material weakness will not be considered remediated until our remediation plan has been fully implemented, the applicable controls operate for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls are operating effectively.
In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. I-32 The healthcare industry is heavily regulated at the local, state and federal levels.
In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. I-34 The healthcare industry is heavily regulated at the local, state and federal levels.
Even if we are able to complete acquisitions and other investments, such activities may not ultimately strengthen our competitive position or achieve our strategic goals and could be viewed negatively by existing or prospective customers, investors or other stakeholders.
Even if we are able to complete acquisitions and other investments, such activities may not ultimately strengthen our competitive position or achieve our strategic goals and could be viewed negatively by existing or prospective customers, investors or other I-25 stakeholders.
Our intellectual property may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain service offerings or other competitive harm.
Our intellectual property may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain service offerings or other I-29 competitive harm.
I-20 Further, we have key customers and a more pronounced customer concentration in certain markets. Consequently, the loss of any of our key customers or any significant reduction in their usage of our solutions and services may reduce our sales revenue and net profit.
Further, we have key customers and a more pronounced customer concentration in certain markets. Consequently, the loss of any of our key customers or any significant reduction in their usage of our solutions and services may reduce our sales revenue and net profit.
I-36 We incur significant increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives. As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company.
I-38 We incur significant increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives. As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company.
While we have experienced significant revenue growth across our offering of solutions and services, certain solutions and services, such as our Marketing Technology Solutions, have lower margins as compared to our subscription and transaction fee services, such I-21 as our vertical Business Management Software and integrated payment solutions.
While we have experienced significant revenue growth across our offering of solutions and services, certain solutions and services, such as our Marketing Technology Solutions, have lower margins as compared to our subscription and transaction fee services, such as our vertical Business Management Software and integrated payment solutions.
Our business and operating results will be harmed if our sales and marketing efforts do not generate significant increases in revenue. I-19 If we are not able to maintain and enhance our reputation and brand recognition, our business and results of operations may be harmed.
Our business and operating results will be harmed if our sales and marketing efforts do not generate significant increases in revenue. If we are not able to maintain and enhance our reputation and brand recognition, our business and results of operations may be harmed.
If we fail to comply with these contracts, laws and regulations, we may also suffer harm to our reputation, which could impair our ability to win awards of contracts in the future or receive renewals of existing contracts.
If we fail to comply with these contracts, laws and I-33 regulations, we may also suffer harm to our reputation, which could impair our ability to win awards of contracts in the future or receive renewals of existing contracts.
I-31 Our sending of commercial emails and text messages and certain other telephonic services must comply with the Telephone Consumer Protection Act, and future legislation, regulatory actions, or litigation could adversely affect our business.
Our sending of commercial emails and text messages and certain other telephonic services must comply with the Telephone Consumer Protection Act, and future legislation, regulatory actions, or litigation could adversely affect our business.
Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created I-38 by the Securities Act or the rules and regulations thereunder.
Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created I-40 by the Securities Act or the rules and regulations thereunder.
We may not compete effectively and competitive pressures might prevent us from acquiring and maintaining the customer base necessary for us to be successful. I-14 We may also potentially face competition from our current partners.
We may not compete effectively, and competitive pressures might prevent us from acquiring and maintaining the customer base necessary for us to be successful. We may also potentially face competition from our current partners.
These projects carry risks, such as cost overruns, delays in delivery, performance problems and lack of acceptance by our clients, which could adversely impact our business, results of operations and financial condition.
These projects I-15 carry risks, such as cost overruns, delays in delivery, performance problems and lack of acceptance by our clients, which could adversely impact our business, results of operations and financial condition.
A misuse of such data or a cybersecurity breach could harm our reputation and deter our clients and potential clients from using electronic payments generally and our solutions and services specifically, thus reducing our revenue.
A misuse of such data or a I-18 cybersecurity breach could harm our reputation and deter our clients and potential clients from using electronic payments generally and our solutions and services specifically, thus reducing our revenue.
I-28 We may be subject to patent, trademark and other intellectual property infringement claims, which may be time-consuming, and cause us to incur significant liability and increase our costs of doing business.
We may be subject to patent, trademark and other intellectual property infringement claims, which may be time-consuming, and cause us to incur significant liability and increase our costs of doing business.
We may not be able to successfully identify suitable acquisition or partnership candidates in the future, and if we do, they may not provide us with the benefits we anticipated.
We may not be able to successfully I-14 identify suitable acquisition or partnership candidates in the future, and if we do, they may not provide us with the benefits we anticipated.
I-16 The solutions and services we deliver are designed to process complex transactions and provide reports and other information on those transactions, all at very high volumes and processing speeds.
The solutions and services we deliver are designed to process complex transactions and provide reports and other information on those transactions, all at very high volumes and processing speeds.
Each of our executive officers and other key employees may terminate his or her relationship with us at any time and the loss of the services of one or a combination of our senior executives or members of our senior management team, including our Chief Executive Officer, Eric Remer, our President, Matthew Feierstein and our Chief Financial Officer, Marc Thompson, may significantly delay or prevent the achievement of our business or development objectives and could materially harm our business.
Each of our executive officers and other key employees may terminate his or her relationship with us at any time and the loss of the services of one or a combination of our senior executives or members of our senior management team, including our Chief Executive Officer, Eric Remer, our President, Matthew Feierstein and our Chief Financial Officer, Ryan Siurek, may significantly delay or prevent the achievement of our business or development objectives and could materially harm our business.
Although we believe our tax practices and provisions are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical tax practices, provisions and accruals.
I-42 Although we believe our tax practices and provisions are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical tax practices, provisions and accruals.
Unauthorized disclosure, destruction or modification of data, disruption of our software or services or cyber breaches could expose us to liability, protracted and costly litigation and damage our reputation.
I-17 Unauthorized disclosure, destruction or modification of data, disruption of our software or services or cyber breaches could expose us to liability, protracted and costly litigation and damage our reputation.
As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software or claiming noncompliance with open source licensing terms.
As a I-30 result, we could be subject to suits by parties claiming ownership of what we believe to be open source software or claiming noncompliance with open source licensing terms.
This and other stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor. Such ESG matters may also impact our suppliers, customers, and business partners, which may compound or cause new impacts on our business, financial condition, or results of operations.
This and other stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor. Such ESG matters may also impact our suppliers, customers, capital providers, and other stakeholders, which may compound or cause new impacts on our business, financial condition, or results of operations.
These conditions and factors may reduce I-22 the demand for our services and solutions, and more generally may adversely affect our business, results of operations and financial condition.
These conditions and factors may reduce the demand for our services and solutions, and more generally may adversely affect our business, results of operations and financial condition.
We estimate the T AM, defined above, for our current solutions for service SMBs was approximately $1.6 trillion globally in 2023, of which approximately $662 billion was in North America, which refers to the United States and Canada.
We estimate the TAM, defined above, for our current solutions for service SMBs was approximately $1.6 trillion globally in 2023, of which approximately $662 billion was in North America, which refers to the United States and Canada.
Failure to comply with these laws could result fines of up to the greater of €20 million ($24 million / £17.5 million) or 4% of global turnover, stop processing orders, or civil litigation.
Failure to comply with these laws could result fines of up to the greater of €20 million ($22 million / £17 million) or 4% of global turnover, stop processing orders, or civil litigation.
There can be no assurance that our business or operations will not be challenged or impacted by enforcement initiatives. The increasing focus on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results.
There can be no assurance that our business or operations will not be challenged or impacted by enforcement initiatives. Scrutiny on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results.
The parties to our sponsor stockholders agreement own approximately 81.6% of our common stock. We have agreed to nominate to our board of directors individuals designated by Providence Strategic Growth and Silver Lake in accordance with the sponsor stockholders agreement.
The parties to our sponsor stockholders agreement own approximately 83.0% of our common stock. We have agreed to nominate to our board of directors individuals designated by Providence Strategic Growth and Silver Lake in accordance with the sponsor stockholders agreement.
To the extent a pandemic, epidemic or outbreak of an infectious disease adversely affects our business, financial condition and results of operations, it may also have the effect of heightening many of the other risks described in this “ Risk Factors ” section.
To the extent a pandemic, epidemic or outbreak of an infectious disease adversely affects our business, financial condition and results of operations, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.
“Management’s Discussion and Analysis of Results of Operation and Financial Condition - Liquidity and Capital Resources”) and $537.6 million outstanding under our Credit Facilities (as defined in Part II. Item 7. “Management’s Discussion and Analysis of Results of Operation and Financial Condition - Liquidity and Capital Resources”) .
“Management’s Discussion and Analysis of Results of Operation and Financial Condition - Liquidity and Capital Resources”) and $532.1 million outstanding under our Credit Facilities (as defined in Part II. Item 7. “Management’s Discussion and Analysis of Results of Operation and Financial Condition - Liquidity and Capital Resources”) .
Certain affiliates of Providence Strategic Growth and Silver Lake own approximately 81.6% of our common stock and are parties, among others, to the sponsor stockholders agreement.
Certain affiliates of Providence Strategic Growth and Silver Lake own approximately 83.0% of our common stock and are parties, among others, to the sponsor stockholders agreement.
Vertically-specialized competitors include mobile sales applications and field service management platforms in Home Services, EHR / EMR and practice management platforms in Health Services and facility and employee management and member management and programming platforms in Fitness & Wellness Services. Horizontal competitors include Salesforce for CRM, Intuit for financial products, Square for payments and HubSpot for marketing related solutions.
Vertically-specialized competitors include mobile sales applications and field service management platforms in Home Services, EHR / EMR and practice management platforms in Health Services and scheduling and management in Wellness Services. Horizontal competitors include Salesforce for CRM, Intuit for financial products, Square for payments and HubSpot for marketing-related solutions.
(collectively, the “Sponsor Stockholders”), captioned Vladimir Gusinsky Revocable Trust v. [Eric Remer, Penny Balwdin, et. al.], Case No. 2024-0077 (Del Ch.).
(collectively, the “Sponsor Stockholders”), captioned Vladimir Gusinsky Revocable Trust v. Remer et. al , Case No. 2024-0077-PAF (Del Ch.).
For the year ended December 31, 2023, subscription and transaction fees and Marketing Technology Solutions generated 77.0% and 19.7%, respectively, of our total revenues. To the extent our lower margin solutions and services grow as a portion of our overall business, there is an adverse impact on our aggregate profitability and margins.
For the year ended December 31, 2024, subscription and transaction fees and Marketing Technology Solutions generated 78.5% and 18.5%, respectively, of our total revenues. To the extent our lower margin solutions and services grow as a portion of our overall business, there is an adverse impact on our aggregate profitability and margins.
As of December 31, 2023, we had cash, cash equivalents and restricted cash of $96.2 million, $190.0 million of available borrowing capacity under our New Revolver (as defined in Part II. Item 7.
As of December 31, 2024, we had cash, cash equivalents and restricted cash of $135.8 million, $190.0 million of available borrowing capacity under our New Revolver (as defined in Part II. Item 7.
I-12 We have experienced net losses in the past and we may not achieve profitability in the future. We have incurred significant operating losses since our inception. Our net loss was $45.6 million and $59.8 million for the years ended December 31, 2023 and 2022, respectively.
We have experienced net losses in the past and we may not achieve profitability in the future. We have incurred significant operating losses since our inception. Our net loss was $41.1 million and $45.6 million for the years ended December 31, 2024 and 2023, respectively.
For example, various policymakers, such as the SEC and State of California, have adopted (or are considering adopting) requirements for companies to provide significantly expanded disclosures on climate, and in some instances other ESG topics.
For example, various policymakers, such as the SEC, European Union and State of California, have adopted (or are considering adopting) requirements for companies to provide significantly expanded disclosures on, or take other actions regarding climate and/or other ESG topics.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Security Operations team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants and contractors.
Biggest changeThe Security team has primary responsibility for our overall cybersecurity risk management program and supervises both internal cybersecurity personnel and external cybersecurity consultants and contractors. The Security team members have diverse experience in security strategy, architecture, and operations. Additionally, the CISO/SVP has more than 30 years’ experience leading transformative security and technology.
Our cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for certain service providers, suppliers, and vendors that have access to our critical systems and information.
Our cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; I-43 • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for certain service providers, suppliers, and vendors that have access to our critical systems and information.
I-41 Cybersecurity Governance Our board of directors (the “Board”) considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (“Committee”) oversight of cybersecurity and other information technology risks. The Committee oversees management’s implementation of our cybersecurity risk management program. The Committee receives quarterly reports from management on our cybersecurity risks.
Cybersecurity Governance Our board of directors (the “Board”) considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (“Committee”) oversight of cybersecurity and other information technology risks. The Committee oversees management’s implementation of our cybersecurity risk management program. The Committee receives quarterly reports from management on our cybersecurity risks.
Board members receive presentations on relevant cybersecurity topics from our Senior Vice President of Security Operations and internal security staff. Our management team, including our Senior Vice President of Security Operations and the Security Operations team, is responsible for assessing and managing our material risks from cybersecurity threats.
Board members receive presentations on relevant cybersecurity topics from our Senior Vice President of Security Operations and internal security staff. Our management team, including our Chief Information Security Officer (CISO)/Senior Vice President of Information Technology and Security (SVP), is responsible for assessing and managing, and mitigating cyber risk and security threats.
The Senior Vice President of Security Operations holds Certified Information Systems Security Professional and Certified Identity and Access Manager certifications, while the penetration testing team leader holds Offensive Security Certified Professional and Certified Red Team Operator certifications and the additional Security Operations team members hold a Security + certification.
The CISO/SVP has earned the following certifications: Certified Information Systems Manager, Department of Homeland Security, Certified Incident Command, Certified Technical Emergency Response Training, Certified Incident Response, and the penetration testing team leader holds Offensive Security Certified Professional and Certified Red Team Operator certifications and the additional Security Operations team members hold a Security + certification.
Removed
Our Security Operations team includes members with a variety and depth of experience in cybersecurity matters, with more than 80 years of combined cybersecurity experience amongst the team members and the Senior Vice President of Security Operations with more than 30 years of information technology and cybersecurity experience throughout his career.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed3 unchanged
Biggest changeWe also lease 16 additional office locations throughout the United States, three offices in Canada, two offices in the United Kingdom, and one office in Jordan, several of which include office spaces that are subleased to third parties. We do not own any real property.
Biggest changeWe also lease 12 additional office locations throughout the United States, two offices in Canada, and one office in Jordan, several of which include office spaces that are subleased to third parties. We do not own any real property.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−1 removed7 unchanged
Biggest changeThe comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. 7/1/21 9/30/21 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 EverCommerce Common Stock $ 100.00 $ 93.69 $ 89.49 $ 75.00 $ 51.36 $ 62.10 $ 42.27 $ 60.11 $ 67.27 $ 56.99 $ 62.67 Nasdaq Composite Index $ 100.00 $ 99.49 $ 107.73 $ 97.92 $ 75.94 $ 72.82 $ 72.07 $ 84.16 $ 94.94 $ 91.03 $ 103.37 Nasdaq US Small Cap Software Index $ 100.00 $ 98.17 $ 93.88 $ 81.86 $ 60.33 $ 57.95 $ 57.85 $ 68.60 $ 73.99 $ 70.25 $ 84.36 Recent Sales of Unregistered Securities The Company did not sell any equity securities during the year ended December 31, 2023 that were not registered under the Securities Act.
Biggest changeThe comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. 7/1/21 12/31/21 12/31/22 12/31/23 12/31/24 EverCommerce Common Stock $ 100.00 $ 89.49 $ 42.27 $ 62.67 $ 62.56 Nasdaq Composite Index $ 100.00 $ 107.73 $ 72.07 $ 103.37 $ 132.97 Nasdaq US Small Cap Software Index $ 100.00 $ 93.88 $ 57.85 $ 84.36 $ 105.33 Recent Sales of Unregistered Securities The Company did not sell any equity securities during the year ended December 31, 2024 that were not registered under the Securities Act.
The following graph and related information shows a comparison of the cumulative total return for our common stock, Nasdaq Composite Index and Nasdaq US Small Cap Software Index between July 1, 2021 (the date our common stock commenced trading on the Nasdaq) through December 31, 2023. All values assume an initial investment of $100 and reinvestment of any dividends.
The following graph and related information shows a comparison of the cumulative total return for our common stock, Nasdaq Composite Index and Nasdaq US Small Cap Software Index between July 1, 2021 (the date our common stock commenced trading on the Nasdaq) through December 31, 2024. All values assume an initial investment of $100 and reinvestment of any dividends.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades on the Nasdaq Global Select Market under the symbol “EVCM.” Holders As of March 8, 2024, there were 66 registered holders of record of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades on the Nasdaq Global Select Market under the symbol “EVCM.” Holders As of March 7, 2025, there were 60 registered holders of record of our common stock.
Purchases of Equity Securities by the Issuer or Affiliated Purchaser During the quarter ended December 31, 2023, we repurchased $26.0 million in shares of our common stock under our stock repurchase program, including transaction fees.
Purchases of Equity Securities by the Issuer or Affiliated Purchaser During the quarter ended December 31, 2024, we repurchased $7.0 million in shares of our common stock under our stock repurchase program, including transaction fees and taxes.
The stock repurchase activity under our stock repurchase program during the quarter ended December 31, 2023 was as follows: Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs (1) Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands, except per share and share amounts) October 1, 2023 - October 31, 2023 246,723 $ 9.91 246,723 $ 63,516 November 1, 2023 - November 30, 2023 515,268 $ 8.74 515,268 $ 59,012 December 1, 2023 - December 31, 2023 1,930,756 $ 9.86 1,930,756 $ 39,973 Total 2,692,747 2,692,747 (1) 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.
The stock repurchase activity under our stock repurchase program during the quarter ended December 31, 2024 was as follows: Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs (1) Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands, except per share and share amounts) October 1, 2024 - October 31, 2024 318,818 $ 10.37 318,818 $ 36,132 November 1, 2024 - November 30, 2024 158,062 $ 11.29 158,062 $ 34,348 December 1, 2024 - December 31, 2024 146,191 $ 11.57 146,191 $ 32,656 Total 623,071 623,071 (1) 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 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.
Removed
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 our common stock (from $100.0 million to $150.0 million in total) and extended the expiration of the Repurchase Program through December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

116 edited+34 added−16 removed92 unchanged
Biggest changeComparison of the years ended December 31, 2023 and 2022 Year Ended December 31, 2023 2022 (in thousands) Revenues: Subscription and transaction fees $ 520,234 $ 465,345 Marketing technology solutions 133,162 134,596 Other 21,973 20,805 Total revenues 675,369 620,746 Operating expenses: Cost of revenues (1) (exclusive of depreciation and amortization presented separately below) 231,007 217,375 Sales and marketing (1) 123,561 119,059 Product development (1) 75,614 71,622 General and administrative (1) 132,235 132,483 Depreciation and amortization 104,201 110,801 Impairment 6,325 — Total operating expenses 672,943 651,340 Operating income (loss) 2,426 (30,594) Interest and other expense, net (46,407) (33,902) Net loss before income tax (expense) benefit (43,981) (64,496) Income tax (expense) benefit (1,639) 4,680 Net loss $ (45,620) $ (59,816) (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2023 2022 (in thousands) Cost of revenues $ 464 $ 373 Sales and marketing 1,672 1,503 Product development 2,273 1,854 General and administrative 21,150 23,088 Total stock-based compensation expense $ 25,559 $ 26,818 II-10 Comparison of the years ended December 31, 2023 and 2022 (percentage of revenue) The following table provides the key components of operating costs within our results of operations as a percentage of revenue for the year ended December 31, 2023 compared to the same period in 2022.
Biggest changeComparison of the years ended December 31, 2024 and 2023 Year Ended December 31, 2024 2023 (in thousands) Revenues: Subscription and transaction fees $ 548,344 $ 520,234 Marketing technology solutions 129,271 133,162 Other 21,150 21,973 Total revenues 698,765 675,369 Operating expenses: Cost of revenues (1) (exclusive of depreciation and amortization presented separately below) 228,379 231,007 Sales and marketing (1) 122,505 123,561 Product development (1) 79,673 75,614 General and administrative (1) 139,423 132,235 Depreciation and amortization 88,824 104,201 Loss on sale and impairments 39,709 6,325 Total operating expenses 698,513 672,943 Operating income 252 2,426 Interest and other expense, net (35,559) (46,407) Net loss before income tax expense (35,307) (43,981) Income tax expense (5,782) (1,639) Net loss $ (41,089) $ (45,620) (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2024 2023 (in thousands) Cost of revenues $ 461 $ 464 Sales and marketing 1,184 1,672 Product development 2,055 2,273 General and administrative 22,791 21,150 Total stock-based compensation expense $ 26,491 $ 25,559 II-11 Comparison of the years ended December 31, 2024 and 2023 (percentage of revenue) The following table provides the key components of operating costs within our results of operations as a percentage of revenue for the year ended December 31, 2024 compared to the same period in 2023.
Commitments and Contingencies in the notes to the consolidated financial statements included in this Annual Report on Form 10-K for a discussion of our debt, operating lease and contractual obligations, respectively. Critical Accounting Estimates Our financial statements are prepared in accordance with U.S. GAAP. The preparation of our financial statements in conformity with U.S.
Commitments and Contingencies in the notes to the consolidated financial statements included in this Annual Report on Form 10-K for a discussion of our operating lease, debt and contractual obligations, respectively. Critical Accounting Estimates Our financial statements are prepared in accordance with U.S. GAAP. The preparation of our financial statements in conformity with U.S.
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.
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, 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.
Our calculation of net pro forma revenue retention rate may differ from similarly titled metrics presented by other companies. This rate for any fiscal period includes the positive recurring and re-occurring revenue impacts of selling new solutions to existing customers and the negative impacts of contraction and attrition among this set of customers.
Our calculation of annualized net revenue retention rate and annualized pro forma net revenue retention rate may differ from similarly titled metrics presented by other companies. This rate for any fiscal period includes the positive recurring and re-occurring revenue impacts of selling new solutions to existing customers and the negative impacts of contraction and attrition among this set of customers.
Expanding into New Products and Verticals Given our position in the service SMB ecosystem, as well as our relationships and level of engagement with our customers, we use insights gained through our customer relationships and lifecycle to identify additional solutions that are value-additive for our customers.
Expanding into New Products and Micro-Verticals Given our position in the service SMB ecosystem, as well as our relationships and level of engagement with our customers, we use insights gained through our customer relationships and lifecycle to identify additional solutions that are value-additive for our customers.
This Repurchase Program does not obligate the Company to acquire any particular amount of common stock and may be modified, suspended or terminated at any time at the discretion of the Board. The Company expects to fund repurchases with existing cash on hand.
The Repurchase Program does not obligate the Company to acquire any particular amount of common stock and may be modified, suspended or terminated at any time at the discretion of the Board. The Company expects to fund repurchases with existing cash on hand.
Our solutions include: custom website design, development and hosting, responsive web design, marketing campaign design and management, search engine optimization (“SEO”), paid search and display advertising, social media and blog automation, call tracking, review monitoring and marketplace lead generation, among others.
Our solutions include: custom website design, development and hosting, responsive web design, marketing campaign design and management, search engine optimization, paid search and display advertising, social media and blog automation, call tracking, review monitoring and marketplace lead generation, among others.
We believe that this metric is useful to investors in analyzing our financial and operational performance period over period and evaluating the growth of our business, normalizing for the impact of acquisitions. This metric is particularly useful to management due to the number of acquired entities.
We believe that this metric is useful to investors in analyzing our financial and operational performance period over period and evaluating the growth of our business, normalizing for the impact of acquisitions and divestitures. This metric is particularly useful to management due to the number of acquired entities.
“Risk Factors—Risks Related to Our Business—Our recent growth rates may not be sustainable or indicative of future growth,” “—We may reduce our rate of acquisitions and may be unsuccessful in achieving our objectives through acquisitions, dispositions or other strategic transactions” and “—Revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets through the due diligence process prior to an acquisition, resulting in unanticipated costs, losses or a decline in profits, as well as potential impairment charges.
“Risk Factors—Risks Related to Our Business—Our recent growth rates may not be sustainable or indicative of future growth,” “—We may be unsuccessful in achieving our objectives through acquisitions, dispositions or other strategic transactions” and “—Revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets through the due diligence process prior to an acquisition, resulting in unanticipated costs, losses or a decline in profits, as well as potential impairment charges.
We will continue to expand efforts to II-5 market our solutions directly to SMBs through online digital marketing, raising brand awareness at conferences and events, and other marketing channels. We believe this investment, coupled with our attractive unit economics, will enable us to grow our customer base and continue our strategy of profitable growth.
We will continue to expand efforts to market our solutions directly to SMBs through online digital marketing, raising brand awareness at conferences and events, and other marketing channels. We believe this investment, coupled with our attractive unit economics, will enable us to grow our customer base and continue our strategy of profitable growth.
In determining the total consideration that we expect to receive, we include variable consideration only to the extent that it is probable that a significant reversal of cumulative revenue will not occur when the uncertainty is resolved. There have not been any material changes during 2023 in the underlying estimates and assumptions in determining probability of variable consideration.
In determining the total consideration that we expect to receive, we include variable consideration only to the extent that it is probable that a significant reversal of cumulative revenue will not occur when the uncertainty is resolved. There have not been any material changes during 2024 in the underlying estimates and assumptions in determining probability of variable consideration.
Revenue Recognition Revenues are derived from subscription and transaction fees, marketing technology solutions, and other revenues. We recognize revenue when our customers obtain control of goods or services in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.
Revenue Recognition Revenues are derived from subscription and transaction fees, marketing technology solutions, and other revenues. We recognize revenue when our customers obtain control of goods or services in an amount that reflects the consideration that we expect to receive II-17 in exchange for those goods or services.
We have concluded that we do not possess the ability to control the underlying services provided by third parties in the fulfillment of our obligations to customers and therefore recognize revenue net of interchange fees retained by the card issuing financial institutions II-16 and fees charged by payment networks.
We have concluded that we do not possess the ability to control the underlying services provided by third parties in the fulfillment of our obligations to customers and therefore recognize revenue net of interchange fees retained by the card issuing financial institutions and fees charged by payment networks.
For example, the recurring or re-occurring revenue gained/lost from existing customers in November 2023 is the difference between the recurring or re-occurring revenue generated in November 2023 and the same such revenue generated in November 2022, for customers with a start date prior to December 1, 2022 and no end date or cancelled relationship on or after November 1, 2023.
For example, the recurring or re-occurring revenue gained/lost from existing customers in November 2024 is the difference between the recurring or re-occurring revenue generated in November 2024 and the same such revenue generated in November 2023, for customers with a start date prior to December 1, 2023 and no end date or cancelled relationship on or after November 1, 2024.
II-8 Sales and Marketing Sales and marketing expense consists primarily of employee costs for our sales and marketing personnel, including salaries, benefits, bonuses, stock-based compensation and sales commissions. Sales and marketing expenses also include advertising costs, travel-related expenses and costs to market and promote our products, direct customer acquisition costs, costs related to conferences and events and partner/broker commissions.
Sales and Marketing Sales and marketing expense consists primarily of employee costs for our sales and marketing personnel, including salaries, benefits, bonuses, stock-based compensation and sales commissions. Sales and marketing expenses also include advertising costs, travel-related expenses and costs to market and promote our products, direct customer acquisition costs, costs related to conferences and events and partner/broker commissions.
Cash Flow from Investing Activities During the year ended December 31, 2023, net cash used in investing activities of $38.0 million was related primarily to costs to develop software of $20.0 million, the acquisition of Kickserv, net of cash acquired, for approximately $15.0 million and $3.0 million for purchases of property and equipment.
During the year ended December 31, 2023, net cash used in investing activities of $38.0 million was related primarily to costs to develop software of $20.0 million, the acquisition of Kickserv, net of cash acquired, for approximately $15.0 million and $3.0 million for purchases of property and equipment.
We recognize the tax benefit from an uncertain tax position only when it is more likely than not, based on the technical merits of the position, that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation.
II-19 We recognize the tax benefit from an uncertain tax position only when it is more likely than not, based on the technical merits of the position, that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation.
II-15 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.
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.
At contract inception, we perform a review of each performance obligation’s selling price against the established stand-alone selling price range. If any performance obligations are priced outside of the established stand-alone selling price range, we reallocate the total transaction price to each performance obligation based on the relative stand-alone selling price for each performance.
II-18 At contract inception, we perform a review of each performance obligation’s selling price against the established stand-alone selling price range. If any performance obligations are priced outside of the established stand-alone selling price range, we reallocate the total transaction price to each performance obligation based on the relative stand-alone selling price for each performance.
An analysis of our results of operations and cash flows for the year ended December 31, 2021, including a discussion of the year ended December 31, 2022 as compared to the year ended December 31, 2021, has been reported previously in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on March 16, 2023, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Overview EverCommerce is a leading provider of integrated, vertically-tailored software-as-a-service (“SaaS”) solutions for service-based small- and medium-sized businesses (“service SMBs”).
An analysis of our results of operations and cash flows for the year ended December 31, 2022, including a discussion of the year ended December 31, 2023 as compared to the year ended December 31, 2022, has been reported previously in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) on March 14, 2024, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Overview EverCommerce is a leading provider of integrated, vertically-tailored software-as-a-service (“SaaS”) solutions for service-based small- and medium-sized businesses (“service SMBs”).
A primary focus for revenue expansion focuses on cross-selling payments solutions to customers in an effort to prioritize margin growth. We also generate subscription and marketing technology revenue from cross-selling our Customer Engagement and Marketing Technology Solutions across our customer base.
A primary focus for revenue expansion focuses on cross-selling payments solutions to customers in an effort to prioritize margin growth. We also generate subscription and marketing technology revenue from cross-selling our Customer II-5 Engagement and Marketing Technology Solutions across our customer base.
Pro Forma Revenue Growth Rates are not necessarily indicative of either future results of operations or actual results that might have been achieved had the acquisitions been consummated on the first day of the prior year period presented.
Pro Forma Revenue Growth Rates are not necessarily indicative of either future results of operations or actual results that might have been achieved had the acquisitions and divestitures been consummated on the first day of the prior year period presented.
Our calculation of net pro forma revenue retention rate for any fiscal period includes the positive recurring and re-occurring revenue impacts of selling new solutions to existing customers and the negative impacts of contraction and attrition among this set of customers.
Our calculation of net revenue retention rate for any fiscal period includes the positive recurring and re-occurring revenue impacts of selling new solutions to existing customers and the negative impacts of contraction and attrition among this set of customers.
Our utilization of these transition periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the transition periods afforded under the JOBS Act. II-18
Our utilization of these transition periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the transition periods afforded under the JOBS Act. II-20
The applicable rate for the Term Loans and the Revolver was 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.
The applicable rate for the Term Loan and the Revolver was 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.
For example, the recurring or reoccurring revenue lost from cancelled customers in November 2023 is the difference between the recurring or re-occurring revenue generated in November 2023 and the same such revenue generated in November 2022, for customers that cancelled on or after November 1, 2022 and before November 1, 2023.
For example, the recurring or reoccurring revenue lost from cancelled customers in November 2024 is the difference between the recurring or re-occurring revenue generated in November 2024 and the same such revenue generated in November 2023, for customers that cancelled on or after November 1, 2023 and before November 1, 2024.
We expect our sales and marketing expenses will increase in absolute dollars and may increase as a percentage of revenue for the foreseeable future as we continue to increase investments to support our growth. Product Development Product development expense consists primarily of employee costs for our product development personnel, including salaries, benefits, stock-based compensation and bonuses.
We expect our sales and marketing expenses from continuing operations will increase in absolute dollars and may increase as a percentage of revenue for the foreseeable future as we continue to increase investments to support our growth. Product Development Product development expense consists primarily of employee costs for our product development personnel, including salaries, benefits, stock-based compensation and bonuses.
Our year-over-year Pro Forma Revenue Growth Rate is calculated as though all acquisitions completed as of the end of the latest period were closed as of the first day of the prior year period presented.
Our year-over-year Pro Forma Revenue Growth Rate is calculated as though all acquisitions and divestitures completed as of the end of the latest period were closed as of the first day of the prior year period presented.
General and Administrative General and administrative expense consists of employee costs for our executive leadership, accounting, finance, legal, human resources and other administrative personnel, including salaries, benefits, bonuses and stock-based compensation.
II-9 General and Administrative General and administrative expense consists of employee costs for our executive leadership, accounting, finance, legal, human resources and other administrative personnel, including salaries, benefits, bonuses and stock-based compensation.
II-7 The following table presents a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA on a consolidated basis.
The following table presents a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA on a consolidated basis.
For cancelled customers, we examine customers that cancelled their relationships on or after the first day of the month that is 12 months prior to the current month and before the first day of the current month.
For cancelled customers, we examine customers that cancelled their relationships on or after the first day of the month that is 12 months prior to the current month and II-4 before the first day of the current month.
In including such pre-acquisition revenue, Pro Forma Revenue Growth Rate allows us to measure the underlying revenue growth of our business as it stands as of the end of the respective period, which we believe provides insight into our then-current operations.
In including such pre-acquisition revenue and excluding pre-divestiture revenue, Pro Forma Revenue Growth Rate allows us to measure the underlying revenue growth of our business as it stands as of the end of the respective period, which we believe provides insight into our then-current operations.
During the fourth quarter 2023, 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 of long-lived assets of approximately $5.1 million (see Note 19.
During the fourth quarter 2023, 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 of long-lived assets of approximately $5.1 million .
In calculating Pro Forma Revenue Growth Rate, we add the revenue from acquisitions for the reporting periods prior to the date of acquisition (including estimated purchase accounting adjustments), and then calculate our revenue growth rate between the two reported periods.
In calculating Pro Forma Revenue Growth Rate, we add the revenue from acquisitions for the reporting periods prior to the date of acquisition (including estimated purchase accounting adjustments) and exclude revenue from divestitures for the reporting periods prior to the date of divestiture, and then calculate our revenue growth rate between the two reported periods.
Changes in net cash provided by operating activities result primarily from cash received from net sales within our subscription and transaction fees and marketing technology solutions.
Changes in net cash provided by operating activities resulted primarily from cash received from net sales within our subscription and transaction fees and marketing technology solutions.
The Company recorded $0.2 million and $0.4 million in unrecognized tax benefits for the years ended December 31, 2023 and 2022, respectively. Valuation allowances are currently assessed based on scheduling the reversal of temporary differences, without consideration to future projections of income, given the Company’s history of losses.
The Company recorded $0.1 million and $0.2 million in unrecognized tax benefits for the years ended December 31, 2024 and 2023, respectively. Valuation allowances are currently assessed based on scheduling the reversal of temporary differences, without consideration to future projections of income, given the Company’s history of losses.
Within our core verticals, our customers operate within numerous micro-verticals, ranging from home service professionals, such as home improvement contractors and home maintenance technicians, to physician practices and therapists within Health Services, to personal trainers and salon owners within Fitness & Wellness.
Within our core verticals, our customers operate within numerous micro-verticals, ranging from home service professionals, such as home improvement contractors and home maintenance technicians, to physician practices and therapists within Health Services, to salon owners within Wellness.
The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company recorded an additional $4.1 million and $16.7 million in valuation allowance on our deferred tax assets in 2023 and 2022, respectively, using the aforementioned approach.
The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company recorded an additional $13.0 million and $4.1 million in valuation allowance on our deferred tax assets in 2024 and 2023, respectively, using the aforementioned approach.
Our net pro forma revenue retention rate II-4 may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of solutions, new acquisitions and our ability to retain our customers.
Our annualized net revenue retention rate and pro forma net revenue retention rate may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of solutions, new acquisitions and dispositions and our ability to retain our customers.
We believe that investment in technology development will contribute to our long-term growth, but may also negatively impact our short-term profitability. In 2023, we continued to invest in scalable operations and necessary functions to support operating as a public company, including Sarbanes-Oxley compliance.
We believe that investment in technology development will contribute to our long-term growth, but may also negatively impact our short-term profitability. In 2024, we continued to invest in scalable operations, including vertical market leadership, and necessary functions to support operating as a public company, including Sarbanes-Oxley compliance.
As of December 31, 2023, we were in compliance with the covenants under the Credit Facilities.
As of December 31, 2024, we were in compliance with the covenants under the Credit Facilities.
Pro Forma Revenue Growth Rate Pro Forma Revenue Growth Rate is a key performance measure that our management uses to assess our consolidated operating performance over time. Management also uses this metric for planning and forecasting purposes.
II-6 Pro Forma Revenue Growth Rate Pro Forma Revenue Growth Rate is a key performance measure that our management uses to assess our consolidated operating performance from continuing operations over time. Management also uses this metric for planning and forecasting purposes.
II-9 Results of Operations The following tables summarize key components of our results of operations for the year ended December 31, 2023 compared to the same period in 2022.
II-10 Results of Operations The following tables summarize key components of our results of operations for the year ended December 31, 2024 compared to the same period in 2023.
Year Ended December 31, Change 2023 2022 % Total Revenues 100.0% 100.0% —% Operating expenses: Cost of revenues (exclusive of depreciation and amortization presented separately below) 34.2 % 35.0 % (0.8) % Sales and marketing 18.3 % 19.2 % (0.9) % Product development 11.2 % 11.5 % (0.3) % General and administrative 19.6 % 21.3 % (1.7) % Depreciation and amortization 15.4 % 17.8 % (2.4) % Impairment 0.9 % — % 0.9 % Total operating expenses 99.6 % 104.9 % (5.3) % While revenue growth remains a key focus, we remain committed to continued expansion of gross margin, net income and Adjusted EBITDA through ongoing transformation initiatives.
Year Ended December 31, Change 2024 2023 % Total Revenues 100.0% 100.0% —% Operating expenses: Cost of revenues (exclusive of depreciation and amortization presented separately below) 32.7 % 34.2 % (1.5) % Sales and marketing 17.5 % 18.3 % (0.8) % Product development 11.4 % 11.2 % 0.2 % General and administrative 20.0 % 19.6 % 0.4 % Depreciation and amortization 12.7 % 15.4 % (2.7) % Loss on sale and impairments 5.7 % 0.9 % 4.8 % Total operating expenses 100.0 % 99.6 % 0.4 % While revenue growth remains a key focus, we remain committed to continued expansion of gross margin, net income and Adjusted EBITDA through ongoing transformation initiatives.
II-14 Credit Facilities We are 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.
Credit Facilities We are party to a credit agreement, as amended, that provides for one term loan for an aggregate principal amount of $550.0 million (“Term Loan”), 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.
As of December 31, 2023, there was $537.6 million outstanding under our Credit Facilities, all of which was related to the Term Loans as no amounts were outstanding under the Revolver. The effective interest rate on the Term Loans was approximately 8.5% for the year ended December 31, 2023, excluding the effect of any interest rate swap agreements.
As of December 31, 2024, there was $532.1 million outstanding under our Credit Facilities, all of which was related to the Term Loan as no amounts were outstanding under the Revolver. The effective interest rate on the Term Loan was approximately 8.6% for the year ended December 31, 2024, excluding the effect of any interest rate swap agreements.
Our platform spans across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications. Today, we serve more than 708,000 customers across three core verticals: Home Services; Health Services; and Fitness & Wellness Services.
Our platform spans across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications. Today, we serve more than 740,000 customers across three core verticals: EverPro for Home Services; EverHealth for Health Services; and EverWell for Wellness Services.
The increase was a result of investments in our technology and teams to support our various solutions as well as centralized security operations, information technology and cloud engineering, driven by an additional $1.5 million of personnel and compensation expense, $1.3 million of software and tools, and $1.3 million of technology spend.
The increase was a result of an additional $2.2 million of personnel and compensation expense, $2.0 million of outsourced services, and $1.6 million of software and tools, driven by investments in our technology and teams to support our various solutions as well as centralized security operations, information technology and cloud engineering.
The increase in cash provided for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to higher cash collections from our subscription and transaction fees and marketing technology solutions, which includes revenues from payment processing of approximately $62.3 million, partially offset by higher interest payments of $15.1 million, costs directly related to the delivery of our services and products of $12.4 million, and higher investments made to support the growth of our business including personnel expenses of $2.7 million.
The increase in cash provided for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to an increase in cash collections from our subscription and transaction fees and marketing technology solutions, which includes revenues from payment processing of approximately $28.0 million and higher interest income of $2.0 million, partially offset by II-15 investments made to support the growth of our business including personnel expenses of $13.8 million, an increase in costs directly related to the delivery of our services and products of $7.0 million, and an increase in taxes of $1.4 million.
II-6 Non-GAAP Financial Measures Adjusted Gross Profit Gross profit is calculated as total revenue less cost of revenue (exclusive of depreciation and amortization), amortization of developed technology, amortization of capitalized software and depreciation expense (allocated to cost of revenues).
Non-GAAP Financial Measures Adjusted Gross Profit Gross profit is calculated as total revenue less cost of revenue (exclusive of depreciation and amortization), amortization of developed technology, amortization of capitalized software and depreciation expense (allocated to cost of revenues). We calculate Adjusted Gross Profit as gross profit adjusted to exclude non-cash charges of depreciation and amortization allocated to cost of revenues.
The Company repurchased and retired 6.9 million shares of common stock for $67.6 million, including transaction fees and taxes, during the year ended December 31, 2023. As of December 31, 2023, $40.0 million remains available under the Repurchase Program. Contractual Obligations Refer to Notes 9. Leases, 10. Long-Term Debt and 17.
The Company repurchased and retired 5.7 million shares of common stock for $57.7 million, including transaction fees and taxes, during the year ended December 31, 2024. As of December 31, 2024, $32.7 million remains available under the Repurchase Program. Contractual Obligations Refer to Notes 9. Leases, 10. Long-Term Debt and 17.
In particular, Marketing Technology Solutions revenue generally has a higher cost of revenue as a percentage of revenue than our subscription and transaction fee revenue. For the year ended December 31, 2023, revenue from subscription and transaction fees increased 11.8% compared to the year ended December 31, 2022, whereas Marketing Technology Solutions revenue decreased 1.1%.
In particular, Marketing Technology Solutions revenue generally has a higher cost of revenue as a percentage of revenue than our subscription and transaction fee revenue. For the year ended December 31, 2024, revenue from subscription and transaction fees increased 5.4% compared to the year ended December 31, 2023, whereas Marketing Technology Solutions revenue decreased 2.9%.
For each year end, we determined that it was more likely than not that the fair value of each of our reporting units was more than the respective related carrying amounts, including goodwill, and therefore did not record any goodwill impairment.
For the years ended December 31, 2023 and 2022, we determined that it was more likely than not that the fair value of each of our reporting units was more than the respective related carrying amounts, including goodwill, and therefore did not record any goodwill impairment.
Cash Flow from Financing Activities During the year ended December 31, 2023, net cash used in financing activities of $66.6 million was related primarily to the repurchase and retirement of shares of our common stock of $67.3 million.
Cash Flow from Financing Activities During the year ended December 31, 2024, net cash used in financing activities of $59.6 million was related primarily to the repurchase and retirement of shares of our common stock of $57.7 million.
Additionally, during the year ended December 31, 2023, t he 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.
Additionally, we ceased use of certain leased premises and subleased certain facilities resulting in an impairment charge of $0.4 million and $1.2 million to impair the right-of-use lease assets to their fair value during the years ended December 31, 2024 and 2023, respectively.
Net pro forma revenue retention is calculated as if acquisitions that were closed during the prior period presented were closed on the first day of such period presented.
The annualized pro forma net revenue retention is calculated as the annualized net revenue retention rate adjusted as though acquisitions and dispositions that were closed during the prior period presented were closed on the first day of such period presented.
As a result, Pro Forma Revenue Growth Rate includes pro forma revenue from businesses acquired during the period, including revenue generated during periods when we did not yet own the acquired businesses.
As a result, Pro Forma Revenue Growth Rate includes pro forma revenue from businesses acquired and excludes revenue from businesses divested during the period, including revenue generated during periods when we did not yet own the acquired businesses and excludes revenue prior to the divestiture of the business.
Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise.
Acquisitions and Dispositions included in this Annual Report on Form 10-K). Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise.
Our business benefits from attractive unit economics. Approximately 97% of our revenue in the years ended December 31, 2023 and 2022 was recurring or re-occurring, and we maintained an annualized net pro forma revenue retention rate of approximately 95% for the quarter ended December 31, 2023.
Our business benefits from attractive unit economics. Approximately 97% of our revenue was recurring or re-occurring in both of the years ended December 31, 2024 and 2023, and we maintained an annualized net revenue retention rate of approximately 91% and 93% for the quarters ended December 31, 2024 and 2023, respectively.
See Part I, Item 1A .“Risk Factors.” Cash Flows The following table sets forth cash flow data: Year ended December 31, 2023 2022 (in thousands) Net cash provided by operating activities $ 104,605 $ 64,802 Net cash used in investing activities (38,020) (18,080) Net cash used in financing activities (66,630) (47,309) Effect of foreign currency exchange rate changes on cash 400 (1,148) Net increase (decrease) in cash, cash equivalents and restricted cash $ 355 $ (1,735) Cash Flow from Operating Activities Net cash provided by operating activities was $104.6 million for the year ended December 31, 2023, compared to $64.8 million for the year ended December 31, 2022.
See Part I, Item 1A .“Risk Factors.” Cash Flows The following table sets forth cash flow data: Year ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 113,163 $ 104,605 Net cash used in investing activities (12,297) (38,020) Net cash used in financing activities (59,614) (66,630) Effect of foreign currency exchange rate changes on cash (1,649) 400 Net increase (decrease) in cash, cash equivalents and restricted cash $ 39,603 $ 355 Cash Flow from Operating Activities Net cash provided by operating activities was $113.2 million for the year ended December 31, 2024, compared to $104.6 million for the year ended December 31, 2023.
We calculate Adjusted Gross Profit as gross profit adjusted to exclude non-cash charges of depreciation and amortization allocated to cost of revenues. Adjusted Gross Profit is a key performance measure that our management uses to assess our operational performance, as it represents the results of revenues and direct costs, which are key components of our operations.
Adjusted Gross Profit is a key performance measure that our management uses to assess our operational performance, as it represents the results of revenues and direct costs, which are key components of our operations.
The Company performed a quantitative annual impairment assessment for the year ended December 31, 2023 and a qualitative assessment for the previously reported periods, each of which resulted in substantial excess of estimated fair value over net carrying value for each reporting unit.
For the year ended December 31, 2023 the Company performed a quantitative assessment, which resulted in substantial excess of estimated fair value over net carrying value for each reporting unit. The qualitative annual impairment assessment for the year ended December 31, 2024 excluded the marketing technology reporting unit as discussed below.
Our Pro Forma Revenue Growth rate was 8.6% for the year ended December 31, 2023 reflective of the underlying growth in our business including new customers and providing more solutions to existing customers.
Our Pro Forma Revenue Growth rate was 5.7% for the year ended December 31, 2024, reflective of the underlying growth in our business as a result of new customers and providing more solutions to existing customers.
We expect our product development expenses to increase in absolute dollars and remain generally consistent as a percentage of revenue for the foreseeable future as we continue to dedicate substantial resources to develop, improve and expand the functionality of our solutions.
We expect our product development expenses from continuing operations to increase in absolute dollars and increase as a percentage of revenue during 2025 as we continue to dedicate substantial resources to develop, improve and expand the functionality of our solutions.
In the future, if there are material changes in the underlying estimates and assumptions pertaining to the impairment assessment, the financial statements could be materially impacted.
There were no reasonable changes to the methods and assumptions that would have resulted in an impairment. In the future, if there are material changes in the underlying estimates and assumptions pertaining to the impairment assessment, the financial statements could be materially impacted.
The reduction in depreciation and amortization was driven primarily by the reduced rate of replacement assets resulting from a slowdown in business acquisitions. Specifically, these decreases were driven primarily by a decrease of $9.7 million in intangible assets’ amortization, partially offset by $2.7 million of additional capitalized software amortization and an increase of $0.5 million of property and equipment depreciation.
The reduction in depreciation and amortization was driven primarily by the reduced rate of replacement assets resulting from a slowdown in business acquisitions. Specifically, the decrease was driven primarily by $16.3 million in lower intangible assets’ amortization and a decrease of $0.8 million of property and equipment depreciation, partially offset by $1.8 million of additional capitalized software amortization.
We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods.
Adjusted EBITDA is a key performance measure that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods.
Additional funds may not be available on terms favorable to us, or at all. If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected.
If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected.
Acquisitions in the notes to the consolidated financial statements included in this Annual Report on Form 10-K. Absent significant deterioration of market conditions, we expect that working capital requirements, capital expenditures, II-13 acquisitions, the Company’s Repurchase Program (as defined below), debt servicing and lease obligations will be our principal needs for liquidity going forward.
Absent significant deterioration of market conditions, we expect that working capital requirements, capital expenditures, acquisitions, the Company’s Repurchase Program (as defined below), debt servicing and lease obligations will be our principal needs for liquidity going forward.
Product Development Year Ended December 31, Change 2023 2022 Amount % (dollars in thousands) Product development $ 75,614 $ 71,622 $ 3,992 5.6 % Product development expenses increased by $4.0 million, or 5.6%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Product Development Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Product development $ 79,673 $ 75,614 $ 4,059 5.4 % Product development expenses increased by $4.1 million, or 5.4%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
II-11 Cost of Revenues Year Ended December 31, Change 2023 2022 Amount % (dollars in thousands) Cost of revenues (exclusive of depreciation and amortization presented separately below) $ 231,007 $ 217,375 $ 13,632 6.3 % Cost of revenues increased by $13.6 million, or 6.3%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Cost of Revenues Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Cost of revenues (exclusive of depreciation and amortization presented separately below) $ 228,379 $ 231,007 $ (2,628) (1.1) % Cost of revenues decreased by $2.6 million, or 1.1%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
General and Administrative Year Ended December 31, Change 2023 2022 Amount % (dollars in thousands) General and administrative $ 132,235 $ 132,483 $ (248) (0.2) % General and administrative expenses decreased by $0.2 million, or 0.2%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
General and Administrative Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) General and administrative $ 139,423 $ 132,235 $ 7,188 5.4 % General and administrative expenses increased by $7.2 million, or 5.4%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
As of December 31, 2023, we had cash, cash equivalents and restricted cash of $96.2 million, $190.0 million of available borrowing capacity under our Revolver (as defined below) and $537.6 million outstanding under our Term Loans (as defined below).
As of December 31, 2024, we had cash, cash equivalents and restricted cash of $135.8 million, $190.0 million of available borrowing capacity under our Revolver (as defined below) and $532.1 million outstanding under our Term Loan (as defined below).
Year Ended December 31, 2023 2022 (in thousands) Net loss $ (45,620) $ (59,816) Adjusted to exclude the following: Interest and other expense, net 46,407 33,902 Income tax expense (benefit) 1,639 (4,680) Depreciation and amortization 104,201 110,801 Other amortization 5,738 4,261 Stock-based compensation 25,559 26,818 Transaction-related and other non-recurring costs 17,695 7,763 Adjusted EBITDA $ 155,619 $ 119,049 Description of Certain Components of Financial Data For additional information concerning our accounting policies, see Note 2.
Year Ended December 31, 2024 2023 (in thousands) Net loss $ (41,089) $ (45,620) Adjusted to exclude the following: Interest and other expense, net 35,559 46,407 Income tax expense 5,782 1,639 Depreciation and amortization 88,824 104,201 Other amortization 6,903 5,738 Stock-based compensation expense 26,491 25,559 Transaction-related and other non-recurring or unusual costs 54,531 17,695 Adjusted EBITDA $ 177,001 $ 155,619 II-8 Description of Certain Components of Financial Data For additional information concerning our accounting policies, see Note 2.
Additionally, effective March 31, 2023, the Company entered into a second interest rate swap agreement in connection with our Credit Facilities for a notional amount of $100.0 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”).
Additionally, effective March 31, 2023, the Company entered into a second interest rate swap agreement in connection with our Credit Facilities for a notional amount of $100.0 million (the “Second Swap”). The Second Swap has a term of approximately 4.5 years with a fixed rate in the agreement of 3.951%, as amended in June 2023.
Impairment During the fourth quarter of 2023, 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 of long-lived assets of approximately $5.1 million (s ee Note 19. Subsequent Event included in this Annual Report on Form 10-K ).
During the fourth quarter 2023, 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 of long-lived assets of approximately $5.1 million, of which $3.1 million was attributable to intangible assets.
In the future, if there are material changes in the underlying estimates and assumptions pertaining to the impairment assessment, the financial statements could be materially impacted.
The Company did not identify indicators of impairment for the year ended December 31, 2022. In the future, if there are material changes in the underlying estimates and assumptions pertaining to the impairment assessment, the financial statements could be materially impacted.
Effective October 31, 2022, we entered into an interest rate swap agreement in connection with the Company’s Credit Facilities for a notional amount of $200.0 million to convert a portion of the floating rate component of the Term Loans from a floating rate to a fixed rate (the “Initial Swap”).
Effective October 31, 2022, we entered into an interest rate swap agreement in connection with the Company’s Credit Facilities for a notional amount of $200.0 million (the “Initial Swap”). The Initial Swap has a term of five years with a fixed rate in the agreement of 4.212% as amended in June 2023.
Year Ended December 31, 2023 2022 (in thousands) Revenue $ 675,369 $ 620,746 Cost of revenues (exclusive of depreciation and amortization) 231,007 217,375 Amortization of developed technology 15,451 16,432 Amortization of capitalized software 8,412 5,728 Depreciation expense allocated to cost of revenue 1,177 1,089 Gross profit 419,322 380,122 Depreciation and amortization 25,040 23,249 Adjusted gross profit $ 444,362 $ 403,371 Adjusted EBITDA Adjusted EBITDA is calculated as net loss adjusted to exclude interest and other expense, net, income tax expense (benefit), depreciation and amortization, other amortization, stock-based compensation and transaction-related and other non-recurring costs.
II-7 Year Ended December 31, 2024 2023 (in thousands) Revenue $ 698,765 $ 675,369 Cost of revenues (exclusive of depreciation and amortization) 228,379 231,007 Amortization of developed technology 10,660 15,451 Amortization of capitalized software 10,258 8,412 Depreciation expense allocated to cost of revenue 867 1,177 Gross profit 448,601 419,322 Depreciation and amortization 21,785 25,040 Adjusted gross profit $ 470,386 $ 444,362 Adjusted EBITDA Adjusted EBITDA is calculated as net loss adjusted to exclude interest and other expense, net, income tax expense (benefit), depreciation and amortization, other amortization, stock-based compensation expense and transaction-related and other non-recurring or unusual costs.
This “land and expand” strategy allows us to acquire customers with key foundational solutions and expand into offerings via product development and acquisitions that cover all workflows and power the full scope of our customers’ businesses.
This vertically-tailored point-of-entry provides us with an opportunity to cross-sell adjacent products, previously offered as fragmented and disjointed point solutions by other software providers. This “land and expand” strategy allows us to acquire customers with key foundational solutions and expand into offerings via product development and acquisitions that cover all workflows and power the full scope of our customers’ businesses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+3 added−6 removed3 unchanged
Biggest changeWe are exposed to market risks related to fluctuations in interest rates on amounts borrowed under the Credit Facility.
Biggest changeWe have mitigated a majority of our market risks related to fluctuations in interest rates on amounts borrowed under the Credit Facility by entering into interest rate swap agreements, which cover $425.0 million of our $532.1 million outstanding under our Term Loan as of December 31, 2024.
Foreign currency exchange risk We have foreign currency risks related to certain of our foreign subsidiaries, primarily in Canada, Jordan, the United Kingdom, New Zealand and Australia. The functional currencies of our significant foreign operations include the Canadian dollar, Great British pound and the New Zealand dollar.
Foreign currency exchange risk We have foreign currency risks related to certain of our foreign subsidiaries, primarily in Canada, Jordan, the United Kingdom, New Zealand and Australia. The functional currencies of our significant foreign operations include the Canadian dollar, Great British pound, Australian dollar and the New Zealand dollar.
We may in the future hedge our foreign currency exposure and may use currency forward contracts, currency options or other common derivative financial instruments to reduce foreign currency risk. It is difficult to predict the effect that future hedging activities would have on our operating results. II-19
We may in the future hedge our foreign currency exposure and may use currency forward contracts, currency options or other common derivative financial instruments to reduce foreign currency risk. It is difficult to predict the effect that future hedging activities would have on our operating results. II-21
Based on the outstanding balance of the Credit Facilities as of December 31, 2023, for every 100 basis point increase in the Adjusted SOFR rate, we would incur approximately $2.4 million of additional annual interest expense.
Based on the outstanding balance of the Credit Facilities as of December 31, 2024, for every 100 basis point increase in the Adjusted SOFR rate, we would incur approximately $1.1 million of additional annual interest expense.
Effective October 31, 2022, the Company entered into 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 rate component of the Term Loans from a floating rate to a fixed rate.
Effective October 31, 2022, the Company entered into the Initial Swap in connection with the Company’s Credit Facilities for a notional amount of $200.0 million. The Initial Swap has a term of five years with a fixed rate in the agreement of 4.2120%, as amended in June 2023.
Additionally, effective March 31, 2023, the Company entered into a Second Swap 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.
Additionally, effective March 31, 2023, the Company entered into a Second Swap in connection with the Company’s Credit Facilities for a notional amount of $100.00 million. 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.
Removed
Following an amendment in June 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 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.
Added
Following an amendment in December 2024, 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.
Removed
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%.
Added
As of December 31, 2024, we had no amounts outstanding under our Revolving Loan. Beginning in late 2022, we executed a series of three interest rate swaps (for total notional amounts of $425 million) to convert a portion of the floating rate component of our Term Loan to a fixed rate.
Removed
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. For our Credit Facility, interest rate changes impact future earnings and cash flows, assuming other factors are held constant.
Added
On September 20, 2024, the Company entered into a Third Swap in connection with the Company’s Credit Facilities for a notional amount of $125.0 million. The Third Swap agreement has a term of approximately 3.0 years with a fixed rate in the agreement of 3.395%.
Removed
As of December 31, 2023, we had $537.6 million outstanding under our Term Loan and $— outstanding under our Revolving Loan.
Removed
The Initial Swap has a term of five years with a fixed rate in the agreement of 4.2120%, as amended in June 2023.
Removed
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.

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