Newswires
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless the context requires otherwise, references in this report to "EverCommerce Inc. ," the "Company," "we," "us" and "our" refer toEverCommerce Inc. and its consolidated subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and related notes included in our final prospectus for our initial public offering of our common stock ("IPO") dated as ofJune 30, 2021 and filed with theSEC pursuant to Rule 424(b)(4) onJuly 6, 2021 (the "Prospectus"). Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.
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"). Our platform spans across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications. Today, we serve over 500,000 customers across three core verticals: Home Services; Health Services; and Fitness & Wellness Services. 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 and wellness. Our platform provides vertically-tailored SaaS solutions that address service SMBs' increasingly specialized demands, as well as highly complementary solutions that complete end-to-end offerings, allowing service SMBs andEverCommerce to succeed in the market, and provide end consumers more convenient service experiences. We offer several vertically-tailored suites of solutions, each of which follows a similar and repeatable go-to-market playbook: offer a "system of action"Business Management Software that streamlines daily business workflows, integrate highly complementary, value-add adjacent solutions, and complete gaps in the value chain to create end-to-end solutions. These solutions focus on addressing how service SMBs market their services, streamline operations, and retain and engage their customers. •Business Management Software: Our vertically-tailoredBusiness Management Software is the system of action at the center of a service business' operation, and is typically the point-of-entry and first solution adopted by a customer. Our software, designed for 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 focus on growing their customers, improving their services and driving more efficient operations. •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 ("POS"), eCommerce, online bill payments, recurring billing, electronic invoicing, and mobile payments. Supported payment types include credit card, debit card and ACH processing. Our payments platform also provides a full suite of service commerce features, including customer management as well as cash flow reporting and analytics. These value-add features help SMBs to ensure more timely billing and payments collection and provide improved cash flow visibility. •Customer Engagement Applications: Our Customer Engagement Applications modernize how businesses engage and interact with customers by leveraging innovative, bespoke customer listening and communication solutions to improve the customer experience and increase retention. Our software provides customer listening capabilities with real-time customer surveying and analysis to allow standalone businesses and multi-location brands to receive voice-of-the-customer insights and manage the customer experience lifecycle. These applications include: customer health scoring, customer support systems, real-time alerts, 33 --------------------------------------------------------------------------------
NPS-based customer feedback collection, review generation and automation,
reputation management, customer satisfaction surveying, and a digital
communication suite, among others. These tools help our customers gain
actionable insights, increase customer loyalty and repeat purchases, and improve
customer experiences.
•Marketing Technology Solutions: Our Marketing Technology Solutions work with
our Customer Engagement Applications to help customers build their businesses by
invigorating marketing operations and improving return on investment across the
customer lifecycle. These solutions help businesses to manage campaigns,
generate quality leads, increase conversion and repeat sales, improve customer
loyalty and provide a polished brand experience. 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.
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. Within each suite, our Business
Management Software - the system of action at the center of a service business'
operation - is typically the first solution adopted by a customer. 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. This results in a self-reinforcing
flywheel effect, enabling us to drive value for our customers and, in turn,
improve customer stickiness, increase our market share, and fuel our growth.
We generate three types of revenue: (i) Subscription and Transaction Fees, which
are primarily recurring revenue streams, (ii) Marketing Technology Solutions,
which includes both recurring and re-occurring revenue streams and (iii) Other
revenue which consists primarily of one-time revenue streams. Our recurring
revenue generally consists of monthly, quarterly, and annual software and
maintenance subscriptions, transaction revenue associated with integrated
payments and billing solutions and monthly contracts for marketing technology
solutions. Additionally, our re-occurring revenue includes revenue related to
the sale of marketing campaigns and lead generation under contractual
arrangements with customers.
•Subscription and Transaction Fees revenue includes: (i) recurring monthly,
quarterly and annual SaaS subscriptions and software license and maintenance
fees from the sale of our Business Management, Customer Engagement, and Billing
and Payment solutions; (ii) payment processing fees based on the transaction
volumes processed through our integrated payment solutions and processing fees
based on transaction volumes for our revenue cycle management, chronic care
management and health insurance clearinghouse solutions; and (iii) membership
subscriptions and our share of rebates from suppliers generated though group
purchasing programs.
•Marketing Technology Solutions revenue includes: (i) recurring revenues for
managing digital advertising programs on behalf of our customers including
website hosting, search engine management and optimization, social media
management and blog automation; and (ii) re-occurring fees paid by service
professionals for consumer leads generated by our various platforms.
•Other revenue includes: (i) consulting, implementation, training and other professional services; (ii) website development; (iii) revenue from various business development partnerships; (iv) event income; and (v) hardware sales related to our business management or payment software solutions. Our business benefits from attractive unit economics. Approximately 95% of our revenue in the nine months endedSeptember 30, 2021 and the year endedDecember 31, 2020 was recurring or re-occurring, and we maintained a stable average monthly net pro forma revenue retention rate of 99% or more in each of the last 8 -quarters. We 34 -------------------------------------------------------------------------------- believe the retention and growth of revenue from our existing customers is a helpful measure of the health of our business and our future growth prospects. Our ability to cross sell additional products and services to our existing customers can increase customer engagement with our suite of solutions and thus have a positive impact on our net pro forma revenue retention rate. For example, we have leveraged our land and expand strategy to cross sell solutions to our existing customers, which has supported our high net pro forma revenue retention rate by increasing customer utilization of our solutions, educating customers as to how our platform and synergies can support their businesses and, in turn, improving customer stickiness. Our calculation of net pro forma revenue retention rate remains consistent with prior periods. 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 net pro forma 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 our ability to retain our customers. Our calculation of net pro forma revenue retention rate may differ from similarly titled metrics presented by other companies. We acquire companies to deepen our competitive moats in existing verticals, and enter new verticals and geographies. We have acquired 51 companies since our inception, including 9 in 2020 and 4 in 2021 as ofOctober 31, 2021 . We have an established framework for identification, execution, integration, and onboarding of targets, which leverages our significant acquisition experience and utilizes internal criteria for evaluating acquisition candidates and prospective businesses. We have developed and refined our internal criteria over time with our acquisitions, which has helped us to more readily identify attractive and complementary targets that can be efficiently onboarded. These acquired solutions can bring deep industry expertise and vertically-tailored software solutions that provide additional sources of growth. We believe that our methodology, track record, and reputation for sourcing, evaluating, and integrating acquisitions positions us as an "acquirer-of-choice" for potential targets. Initial Public Offering OnJuly 6, 2021 , we completed our IPO which resulted in the issuance and sale of 19,117,648 shares of common stock at the IPO price of$17.00 generating net proceeds of$303.9 million after deducting underwriting discounts. Additionally, we incurred other IPO related fees of$6.9 million . OnJuly 29, 2021 , the underwriters of our IPO fully exercised their over-allotment option, resulting in the sale of an additional 2.8 million shares at the IPO price of$17.00 per share and after underwriter discounts, net proceeds were$43.9 million .
Private Placement
On
affiliated with
the IPO price of
35 --------------------------------------------------------------------------------
Impact of COVID-19
The COVID-19 pandemic has caused economies, businesses, markets and communities around the globe to be disrupted, and in many cases, shut-down. In the interest of public health, many governments closed physical stores and business locations deemed to be non-essential, which has caused increasing unemployment levels and businesses to permanently close. Many SMBs have been adversely impacted by the COVID-19 pandemic, and as a result, certain of our business operations were negatively impacted, while others have benefited from customers shifting to technology-focused, digital-first business models. A McKinsey survey fromOctober 2020 revealed that global business executives have accelerated the digitization of their customer and supply-chain interactions by as much as three to four years. Although we cannot predict whenthe United States and global economy will fully recover from the COVID-19 pandemic, we believe that our business is well positioned to be a partner-of-choice for new customers, to capitalize on the growing trend of digital transformation, and to benefit from the revival of the SMB economy. Nevertheless, we do not have certainty that a full economic recovery will happen in the near future, and it is possible that the prolonging of the COVID-19 pandemic will adversely affect our business, financial condition, and results of operations. For more information regarding the potential impact of the COVID-19 pandemic on our business, refer to Part II. Item 1A. "Risk Factors-Risks Related to our Business-The outbreak of the novel strain of coronavirus disease has impacted, and a future pandemic, epidemic or outbreak of an infectious disease inthe United States could impact, our business, financial condition and results of operations, as well as the business or operations of third parties with whom we conduct business."
Impact on Operations
InMarch 2020 , in compliance with the local, state and federal government regulations, we transitioned our worldwide workforce and operations to a remote, work-from-home setting, with the exception of certain customer support personnel. We quickly developed a plan of action, supplied our employees with the necessary equipment and tools, and while we have started to return a portion of our workforce to physical locations, we have retained functionality and practices to be able to work remotely as needed. Additionally, in the second quarter of 2020 we completed a reduction in our workforce. We do not believe remote operations or the impact from our reduction in workforce have significantly impacted productivity of our workforce.
Impact on Financial Performance
The COVID-19 pandemic negatively impacted our financial performance in first half of 2020 due to the adverse impact the pandemic had on certain service SMBs. However, given the diversification of our business, the financial impact was primarily limited to declines in revenue attributable to customers in the fitness and wellness and health services verticals. In the three months endedJune 30, 2020 , our revenue declined 4.7% sequentially from the three months endedMarch 31, 2020 , excluding the impact of acquisitions closed in the first and second quarters of 2020. As our customers resumed operations throughout the second half of 2020, our revenue increased. In the three months endedSeptember 30, 2020 , our revenue grew 11.9% sequentially from the three months endedJune 30, 2020 , excluding the impact of acquisitions closing in the second and third quarters of 2020. Our revenue growth has continued as the impact of the pandemic has lessened and many service SMBs have resumed operations. Our sequential revenue growth was 3.4% in the three months endedSeptember 30, 2021 compared to the three months endedJune 30, 2021 , excluding the impact of acquisitions closed during the third quarter of 2021. In the three months endedSeptember 30, 2021 , our revenue increased 17.7% compared to the three months endedSeptember 30, 2020 , excluding the impact of all acquisitions closed subsequent toJune 30, 2020 . In the second quarter of 2020 we proactively responded to the significant uncertainty around the severity and duration of the COVID-19 pandemic, including a reduction in workforce. Additionally, we reduced other operating expenses to maintain current levels of profitability and cash flow. As restrictions started to lift throughout 2020 and 2021 we have seen slight improvements in the sale of our solutions to health service professionals, but we have continued to see impacts from COVID-19 on sales to our customers in the fitness and wellness vertical. Given the impacts of COVID-19 continue to rapidly evolve, the extent to which COVID-19 may further impact our financial condition, results of operations, or liquidity continues to be uncertain and difficult to predict. Growth 36 -------------------------------------------------------------------------------- trends continue to vary by vertical and specific solutions, depending primarily on differences in the timing and phases of re-openings. Our priority remains the safety of our employees, customers and the communities in which we live and operate. We continue to remain in close and regular contact with our employees, customers, business partners and communities to help navigate these challenging times.
Key Factors Affecting Our Performance
We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges. For discussion of these factors, please see "Key Factors Affecting Our Performance" in the Management's Discussion and Analysis section of our Prospectus.
Key Business and Financial Metrics
In addition to our results and measures of performance determined in accordance with GAAP, we believe the following key business and non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions.
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.
Our year-over-year Pro Forma Revenue Growth Rate is calculated as though all
acquisitions closed as of the end of the latest period were closed as of the
first day of the prior year period presented. 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) to our results of operations, and then calculate our revenue growth
rate between the two reported periods. 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. 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. Pro Forma Revenue Growth Rate does not
represent organic revenue generated by our business as it stood at the beginning
of the respective period. 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. 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.
As the economy has continued to reopen and additional local, state and federal
restrictions have been scaled back, our Pro Forma Revenue Growth Rate has
continued to increase.
Three Months Ended Nine Months Ended
September 30, September 30,
2021
Pro Forma Revenue Growth Rate 20.0 % 20.6 %
37
--------------------------------------------------------------------------------
Non-GAAP Financial Measures
Adjusted Gross Profit
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. We believe that this
non-GAAP financial measure is useful to investors and other interested parties
in analyzing our financial performance because it reflects the gross
profitability of our operations, and excludes the indirect costs associated with
our sales and marketing, product development, general and administrative
activities, and depreciation and amortization, and the impact of our financing
methods and income taxes.
We calculate Adjusted Gross Profit as gross profit (as defined below) adjusted
to exclude depreciation and amortization allocated to cost of revenues. Adjusted
Gross Profit should be viewed as a measure of operating performance that is a
supplement to, and not a substitute for, operating income or loss, net earnings
or loss and other GAAP measures of income (loss) or profitability. The following
table presents a reconciliation of gross profit, the most directly comparable
financial measure calculated in accordance with GAAP, to Adjusted Gross Profit
on a consolidated basis.
Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
(in thousands)
Gross profit(1) $ 80,327 (2) $ 56,062 (3) $ 220,493 (4) $ 148,641 (5)
Depreciation and amortization 5,249 3,609 14,509 10,508
Adjusted gross profit $ 85,576 $ 59,671 $ 235,002 $ 159,149
(1)Gross profit is calculated as total revenues less cost of revenues (exclusive
of depreciation and amortization), amortization of developed technology,
amortization of capitalized software and depreciation expense (allocated to cost
of revenues).
(2)For the three months ended September 30, 2021 , gross profit represents total
revenues of $128.5 million less cost of revenues (exclusive of depreciation and
amortization) of $43.0 million , amortization of developed technology of $4.0
million , amortization of capitalized software of $0.8 million and depreciation
expense (allocated to cost of revenues) of $0.4 million .
(3)For the three months ended September 30, 2020 , gross profit represents total
revenues of $89.2 million less cost of revenues (exclusive of depreciation and
amortization) of $29.5 million , amortization of developed technology of $2.6
million , amortization of capitalized software of $0.6 million and depreciation
expense (allocated to cost of revenues) of $0.4 million .
(4)For the nine months ended September 30, 2021 , gross profit represents total
revenues of $354.5 million less cost of revenues (exclusive of depreciation and
amortization) of $119.5 million , amortization of developed technology of $10.9
million , amortization of capitalized software of $2.4 million and depreciation
expense (allocated to cost of revenues) of $1.2 million .
(5)For the nine months ended September 30, 2020 , gross profit represents total
revenues of $245.5 million less cost of revenues (exclusive of depreciation and
amortization) of $86.4 million , amortization of developed technology of $7.8
million , amortization of capitalized software of $1.7 million and depreciation
expense (allocated to cost of revenues) of $1.0 million .
38
--------------------------------------------------------------------------------
Adjusted EBITDA
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. In
addition, we believe that providing Adjusted EBITDA, together with a
reconciliation of net income (loss) to Adjusted EBITDA, helps investors make
comparisons between our company and other companies that may have different
capital structures, different tax rates, and/or different forms of employee
compensation.
Adjusted EBITDA is used by our management team as an additional measure of our
performance for purposes of business decision-making, including managing
expenditures, and evaluating potential acquisitions. Period-to-period
comparisons of Adjusted EBITDA help our management identify additional trends in
our financial results that may not be shown solely by period-to-period
comparisons of net income or income from continuing operations. In addition, we
may use Adjusted EBITDA in the incentive compensation programs applicable to
some of our employees. Our Management recognizes that Adjusted EBITDA has
inherent limitations because of the excluded items, and may not be directly
comparable to similarly titled metrics used by other companies.
We calculate Adjusted EBITDA as net income (loss) adjusted to exclude interest
and other expense, net, income tax benefit, loss on debt extinguishment,
depreciation and amortization, other amortization, acquisition related costs,
stock-based compensation, and other non-recurring costs. Other amortization
includes amortization for capitalized contract acquisition costs. Acquisition
related costs are specific deal-related costs such as legal fees, financial and
tax due diligence, consulting and escrow fees. Other non-recurring costs are
expenses such as system implementation costs and severance related to planned
restructuring activities. Acquisition related costs and other non-recurring
costs are excluded as they are not representative of our underlying operating
performance. Adjusted EBITDA should be viewed as a measure of operating
performance that is a supplement to, and not a substitute for, operating income
or loss, net earnings or loss and other GAAP measures of income (loss). 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.
Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
(in thousands)
Net loss $ (36,906) $ (5,444) $ (77,235) $ (39,031)
Adjusted to exclude the following:
Interest and other expense, net 5,148 9,756 31,262 30,653
Income tax benefit (1,022) (574) (4,182) (2,748)
Loss on debt extinguishment 28,714 - 28,714 -
Depreciation and amortization 25,996 19,152 73,917 55,300
Other amortization 679 477 1,956 1,271
Acquisition related costs 746 2,249 2,986 4,522
Stock-based compensation 4,745 3,470 16,849 5,297
Other non-recurring costs 938 40 3,654 1,501
Adjusted EBITDA $ 29,038 $ 29,126 $ 77,921 $ 56,765
39
--------------------------------------------------------------------------------
Description of Certain Components of Financial Data
Revenues
We derive our revenue from three primary sources which are described in detail below: (i) Subscription and Transaction Fees, which are primarily recurring revenue streams, (ii) Marketing Technology Solutions, which includes both recurring and re-occurring revenue streams, and (iii) Other revenue, which consists primarily from the sale of distinct professional services and hardware. Our revenue recognition policies are discussed in more detail under "Critical Accounting Policies and Significant Judgments and Estimates." Subscription and Transaction Fees: Revenue includes (i) recurring monthly, quarterly and annual SaaS subscriptions and software license and maintenance fees from the sale of our Business Management, Customer Engagement, and Billing and Payment solutions; (ii) payment processing fees based on the transaction volumes processed through our integrated payment solutions and processing fees based on transaction volumes for our revenue cycle management, chronic care management and health insurance clearinghouse solutions; and (iii) membership subscriptions and our share of rebates from suppliers generated though group purchasing programs. Our revenue from payment processing fees is recorded net of credit card and ACH processing and interchange charges in the month the services are performed.
Marketing Technology Solutions: Revenue includes (i) recurring revenues for
managing digital advertising programs on behalf of our customers including
website hosting, search engine management and optimization, social media
management and blog automation; and (ii) re-occurring fees paid by service
professionals for consumer leads generated by our various platforms.
Other: Revenue includes (i) consulting, implementation, training and other
professional services; (ii) website development; (iii) revenue from various
business development partnerships; (iv) event income; and (v) hardware sales
related to our business management or payment software solutions.
Cost of Revenues
Cost of revenue (exclusive of depreciation and amortization) consists primarily of employee costs for our customer success teams, media expense related to our lead generation solutions, campaign mail expense, contract services, hosting costs, partnership costs and promotional costs. We expect that cost of revenue as a percentage of revenue will fluctuate from period to period based on a variety of factors, including the mix of revenue between subscription and transaction fees and marketing technology solutions, labor costs, third-party expenses and acquisitions. 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 three and nine months endedSeptember 30, 2021 , revenue from subscription and transaction fees increased 52.9% and 49.7%, respectively, compared to the three and nine months endedSeptember 30, 2020 , whereas marketing technology solutions revenue increased 29.8% and 41.8%, respectively. To the extent our marketing technology solutions revenue grows at a faster rate, whether by acquisition or otherwise, than our subscription and transaction fees revenue, it could negatively impact our cost of revenues as a percentage of revenue.
Sales and Marketing
Sales and marketing expense consist primarily of employee costs for our sales
and marketing personnel, including salaries, benefits, bonuses, 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. Software and subscription services dedicated for use
by our sales and marketing organization, and outside services contracted for
sales and marketing purposes are also included in sales and marketing expense.
Sales commissions that are incremental to obtaining a customer contract are
deferred and amortized ratably over the estimated period of our relationship
with that customer. We expect our
40
--------------------------------------------------------------------------------
sales and marketing expenses will increase on an absolute dollar basis for the
foreseeable future as we continue to increase investments to support our growth.
We also anticipate that sales and marketing expenses will increase as a
percentage of revenue in the near and medium-term.
Product Development
Product development expense consists primarily of employee costs for our product development, including salaries, benefits, and bonuses. Product development expenses also include third-party outsourced technology costs incurred in developing our platforms, and computer equipment, software, and subscription services dedicated for use by our product development organization. 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.
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. General and administrative expenses also include external legal, accounting, and other professional services fees, rent, software and subscription services dedicated for use by our general and administrative employees, and other general corporate expenses. We expect general and administrative expense to increase on an absolute dollar basis for the foreseeable future as we continue to increase investments to support our growth and as a result of increased costs as a result of becoming a public company. We also anticipate that general and administrative expenses will increase as a percentage of revenue in the near and medium-term. As we are able to further scale our operations in the future, we would expect that general and administrative expenses would decrease as a percentage of revenue.
Depreciation and Amortization
Depreciation and amortization primarily relate to intangible assets, property
and equipment, and capitalized software.
Interest and Other Expense, net
Interest and other expense, net, primarily consists of interest expense on
long-term debt. It also includes amortization expense of financing costs and
discounts, as well as realized and unrealized gains and losses.
Loss on Debt Extinguishment
Loss on debt extinguishment represents the difference between the amount paid to
extinguish the debt and the carrying value of the debt, inclusive of the
write-off of previously deferred financing costs.
Income Tax Benefit
We account for income taxes in accordance with ASC 740, Income Taxes. ASC 740
requires deferred tax assets and liabilities to be recognized for temporary
differences between the tax basis and financial reporting basis of assets and
liabilities, computed at the expected tax rates for the periods in which the
assets or liabilities will be realized, as well as for the expected tax benefit
of net operating loss and tax credit carryforwards. Income taxes are recognized
for the amount of taxes payable by the Company's corporate subsidiaries for the
current year and for the impact of deferred tax assets and liabilities, which
represent future tax consequences of events that have been recognized
differently in the financial statements than for tax purposes.
41
--------------------------------------------------------------------------------
Results of Operations
The following tables summarize key components of our results of operations for
the periods presented. The period-to-period comparisons of our historical
results are not necessarily indicative of the results that may be expected in
the future. We operate as a single reportable segment to reflect the way our
chief operating decision maker ("CODM") reviews and assesses the performance of
our business. For additional information concerning our accounting policies, see
Note 2 to our consolidated financial statements for the year ended December 31,
2020 included in our Prospectus.
Impact of Acquisitions
The comparability of our operating results is impacted by our business combinations and acquisitions. In our discussion of changes in our results of operations for the three and nine months endedSeptember 30, 2021 compared to the three and nine months endedSeptember 30, 2020 , respectively, we quantitatively disclose the impact of the growth in certain of our revenues where such discussions would be meaningful. Expense contributions from our recent acquisitions for each of the respective period comparisons generally were not separately identifiable due to the integration of these businesses into our existing operations, and as such the discussion is focused on major changes in components of costs. Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (in thousands)
Revenues:
Subscription and transaction fees$ 91,788 $ 60,017 $ 252,119 $ 168,413 Marketing technology solutions 31,610 24,359 88,974 62,738 Other 5,136 4,775 13,397 14,370 Total revenues 128,534 89,151 354,490 245,521
Operating expenses:
Cost of revenues(1) (exclusive of depreciation and
amortization presented separately below)
42,958 29,480 119,488 86,372 Sales and marketing(1) 25,156 12,072 67,647 36,305 Product development(1) 12,711 7,622 35,083 22,282 General and administrative(1) 25,779 17,087 79,796 56,388 Depreciation and amortization 25,996 19,152 73,917 55,300 Total operating expenses 132,600 85,413 375,931 256,647 Operating loss (4,066) 3,738 (21,441) (11,126) Interest and other expense, net (5,148) (9,756) (31,262) (30,653) Loss on debt extinguishment (28,714) - (28,714) - Net loss before income tax benefit (37,928) (6,018) (81,417) (41,779) Income tax benefit 1,022 574 4,182 2,748 Net loss$ (36,906) $ (5,444) $ (77,235) $ (39,031) 42
--------------------------------------------------------------------------------
(1)Includes stock-based compensation expense as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
(in thousands)
Cost of revenues $ 173 $ - $ 178 $ -
Sales and marketing 160 - 298 -
Product development 295 - 437 -
General and administrative 4,117 3,470 15,936 5,297
Total stock-based compensation expense $ 4,745 $ 3,470 $
16,849
Comparison of the three and nine months ended
Revenues
Three Months Ended
September 30, Change
2021 2020 Amount %
(dollars in thousands)
Revenues:
Subscription and transaction fees
52.9 % Marketing technology solutions 31,610 24,359 7,251 29.8 % Other 5,136 4,775 361 7.6 % Total revenues$ 128,534 $ 89,151 $ 39,383 44.2 % Nine Months Ended September 30, Change 2021 2020 Amount % (dollars in thousands) Revenues:
Subscription and transaction fees
49.7 % Marketing technology solutions 88,974 62,738 26,236 41.8 % Other 13,397 14,370 (973) (6.8) % Total revenues$ 354,490 $ 245,521 $ 108,969 44.4 % Revenues increased$39.4 million or 44.2% and$109.0 million or 44.4% for the three and nine months endedSeptember 30, 2021 , respectively, as compared to the corresponding periods in 2020. These increases were primarily driven by increases in subscription and transaction fees of$31.8 million and$83.7 million , respectively, and marketing technology solutions of$7.3 million and$26.2 million , respectively. The increases in subscription and transaction fees related to growth in our customer base, higher transaction volumes processed through our payments platform and revenue earned from acquisitions completed in 2021 and 2020. Included in revenues for the three and nine months endedSeptember 30, 2021 is$20.8 million and$57.5 million of revenue from acquisitions closed subsequent toSeptember 30, 2020 . 43 --------------------------------------------------------------------------------
Cost of Revenues
Three Months Ended
September 30, Change
2021 2020 Amount %
(dollars in thousands)
Cost of revenues (exclusive of depreciation and
amortization presented separately below) $ 42,958 $ 29,480 $ 13,478 45.7 %
Percentage of revenues 33.4 % 33.1 %
Nine Months Ended
September 30, Change
2021 2020 Amount %
(dollars in thousands)
Cost of revenues (exclusive of depreciation and
amortization presented separately below)
38.3 % Percentage of revenues 33.7 % 35.2 % Cost of revenues increased by$13.5 million or 45.7% and$33.1 million or 38.3% for the three and nine months endedSeptember 30, 2021 , respectively, as compared to the corresponding periods in 2020. Increases for the three and nine months endedSeptember 30, 2021 as compared to the corresponding periods in 2020 include$4.1 million and$9.9 million in personnel and compensation expense, respectively,$2.1 million and$6.2 million in outsourced services, respectively, and other miscellaneous increases including, but not limited to, promotional expense, campaign mail expense, hosting expense and product expense. As a percentage of revenue, cost of revenue was 33.4% and 33.1% for the three months endedSeptember 30, 2021 and 2020, respectively, and 33.7% and 35.2% for the nine months endedSeptember 30, 2021 and 2020, respectively. Sales and Marketing Three Months Ended September 30, Change 2021 2020 Amount % (dollars in thousands) Sales and marketing$ 25,156 $ 12,072 $ 13,084 108.4 % Percentage of revenues 19.6 % 13.5 % Nine Months Ended September 30, Change 2021 2020 Amount % (dollars in thousands) Sales and marketing$ 67,647 $ 36,305 $ 31,342 86.3 % Percentage of revenues 19.1 % 14.8 %
Sales and marketing expenses increased by
million
respectively, as compared to the corresponding periods in 2020. These
44 -------------------------------------------------------------------------------- increases were primarily driven by increases of$4.4 million and$11.4 million in personnel and compensation expense, respectively,$2.7 million and$8.3 million in advertising spend, respectively, and$2.6 million and$6.2 million in partner commission, respectively. As a percentage of revenue, sales and marketing was 19.6% and 13.5% for the three months endedSeptember 30, 2021 and 2020, respectively, and 19.1% and 14.8% for the nine months endedSeptember 30, 2021 and 2020, respectively. Product Development Three Months Ended September 30, Change 2021 2020 Amount % (dollars in thousands) Product development$ 12,711 $ 7,622 $ 5,089 66.8 % Percentage of revenues 9.9 % 8.5 % Nine Months Ended September 30, Change 2021 2020 Amount % (dollars in thousands) Product development$ 35,083 $ 22,282 $ 12,801 57.4 % Percentage of revenues 9.9 % 9.1 % Product development expenses increased by$5.1 million or 66.8% and$12.8 million or 57.4% for the three and nine months endedSeptember 30, 2021 , respectively, as compared to the corresponding periods in 2020. These increases were primarily driven by increases in product development related personnel expenses of$4.9 million and$8.8 million , respectively, due to investments in additions to our technology teams to support our various solutions as well as centralized security operations, information technology, and cloud engineering. As a percentage of revenue, product development expenses were 9.9% and 8.5% for the three months endedSeptember 30, 2021 and 2020, respectively, and 9.9% and 9.1% for the nine months endedSeptember 30, 2021 and 2020, respectively. General and Administrative Three Months Ended September 30, Change 2021 2020 Amount % (dollars in thousands) General and administrative$ 25,779 $ 17,087 $ 8,692 50.9 % Percentage of revenues 20.1 % 19.2 % 45
--------------------------------------------------------------------------------
Nine Months Ended
September 30, Change
2021 2020 Amount %
(dollars in thousands)
General and administrative $ 79,796 $ 56,388 $ 23,408 41.5 %
Percentage of revenues 22.5 % 23.0 %
General and administrative expenses increased by $8.7 million or 50.9% and $23.4
million or 41.5% for the three and nine months ended September 30, 2021 ,
respectively, as compared to the corresponding periods in 2020. These increases
were primarily driven by increases in stock-based compensation expense,
personnel and compensation expense resulting from increased headcount, and
professional fees. For additional details regarding our stock-based compensation
expense related to the vesting of certain restricted stock awards refer to Note
11 in the notes to the unaudited condensed consolidated financial statements
included in this Quarterly Report on Form 10-Q. As a percentage of revenue,
general and administrative expenses were 20.1% and 19.2% for the three months
ended September 30, 2021 and 2020, respectively, and 22.5% and 23.0% for the
nine months ended September 30, 2021 and 2020, respectively.
Depreciation and Amortization
Three Months Ended
September 30, Change
2021 2020 Amount %
(dollars in thousands)
Depreciation and amortization
35.7 %
Percentage of revenues 20.2 % 21.5 %
Nine Months Ended
September 30, Change
2021 2020 Amount %
(dollars in thousands)
Depreciation and amortization
33.7 % Percentage of revenues 20.9 % 22.5 % Depreciation and amortization increased by$6.8 million or 35.7% and$18.6 million or 33.7% for the three and nine months endedSeptember 30, 2021 , respectively, as compared to the corresponding periods in 2020. These increases were primarily driven by increases of$6.4 million and$17.4 million in intangible assets amortization as a result of intangible asset additions from our 2020 and 2021 acquisitions, respectively. As a percentage of revenue, depreciation and amortization expenses were 20.2% and 21.5% for the three months endedSeptember 30, 2021 and 2020, respectively, and 20.9% and 22.5% for the nine months endedSeptember 30, 2021 and 2020, respectively. 46 --------------------------------------------------------------------------------
Interest and Other Expense, net
Three Months Ended
September 30, Change
2021 2020 Amount %
(dollars in thousands)
Interest and other expense, net
(47.2) %
Percentage of revenues 4.0 % 10.9 %
Nine Months Ended
September 30, Change
2021 2020 Amount %
(dollars in thousands)
Interest and other expense, net
2.0 % Percentage of revenues 8.8 % 12.5 % Interest and other expense, net, increased (decreased) by ($4.6 million ) or (47.2%) and$0.6 million or 2.0% for the three and nine months endedSeptember 30, 2021 , respectively, as compared to the corresponding periods in 2020. The decrease in interest expense for the three month period is due to a lower average outstanding debt balance and a lower interest rate due to the Refinance. The increase in interest expense for the nine month period is due to an overall higher outstanding debt balance prior to the Refinance, partially offset by a lower effective interest rate for the debt as a result of the Refinance. As a percentage of revenue, interest and other expense were 4.0% and 10.9% for the three months endedSeptember 30, 2021 and 2020, respectively, and 8.8% and 12.5% for the nine months endedSeptember 30, 2021 and 2020, respectively. Loss on Debt Extinguishment Three Months Ended September 30, Change 2021 2020 Amount % (dollars in thousands) Loss on debt extinguishment$ 28,714 $ -$ 28,714 N.M. Percentage of revenues 22.3 % - % 47
--------------------------------------------------------------------------------
Nine Months Ended
September 30, Change
2021 2020 Amount %
(dollars in thousands)
Loss on debt extinguishment $ 28,714 $ - $ 28,714 N.M.
Percentage of revenues 8.1 % - %
_______________
N.M. - Not Meaningful.
Loss on debt extinguishment increased by $28.7 million for both the three and
nine months ended September 30, 2021 as compared to the corresponding periods in
2020. As a result of the Refinance, the Company recorded a loss on debt
extinguishment of approximately $28.7 million . For additional information
concerning our loss on debt extinguishment, see Note 9 in the notes to the
unaudited condensed consolidated financial statements included in this Quarterly
Report on Form 10-Q.
Income Tax Benefit
Three Months Ended
September 30, Change
2021 2020 Amount %
(dollars in thousands)
Income tax benefit $ 1,022 $ 574 $ 448 78.0 %
Percentage of revenues 0.8 % 0.6 %
Nine Months Ended
September 30, Change
2021 2020 Amount %
(dollars in thousands)
Income tax benefit $ 4,182 $ 2,748 $ 1,434 52.2 %
Percentage of revenues 1.2 % 1.1 %
Income tax benefit increased by $0.4 million or 78.0% and $1.4 million or 52.2%
for the three and nine months ended September 30, 2021 , respectively, as
compared to the corresponding periods in 2020. These increases were primarily
driven by acquisition accounting, exclusion of loss companies from the quarterly
tax computation, a Jordanian tax holiday, the accrual of estimated current state
taxes and various other discrete items recorded in the three and nine months
ended September 30, 2021 .
48
--------------------------------------------------------------------------------
Liquidity and Capital Resources
To date, our primary sources of liquidity have been net cash provided by operating activities, proceeds from preferred stock issuances, proceeds from our recent IPO, and proceeds from long-term debt. Our primary use of liquidity has been acquisitions of businesses. Absent significant deterioration of market conditions, we expect that working capital requirements, capital expenditures, acquisitions, debt servicing, and lease obligations will be our principal needs for liquidity going forward. During the nine months endedSeptember 30, 2021 , we have completed four acquisitions for total consideration of$185.3 million . During the year endedDecember 31, 2020 , we completed nine acquisitions for total consideration of$415.3 million . As ofSeptember 30, 2021 , we had cash, cash equivalents and restricted cash of$98.3 million ,$155.0 million of available borrowing capacity under our New Revolver (as defined below) and$385.0 million outstanding under our New Credit Facilities (as defined below). We believe that our existing cash, cash equivalents and restricted cash, availability under our New Credit Facilities, and our cash flows from operations will be sufficient to fund our working capital requirements and planned capital expenditures, and to service our debt obligations for at least the next twelve months. However, our future working capital requirements will depend on many factors, including our rate of revenue growth, the timing and size of future acquisitions, and the timing of introductions of new products and services. We expect to consummate acquisitions of complementary businesses in the future that could require us to seek additional equity or debt financing. Additional funds may not be available on terms favorable to us, or at all. In particular, the widespread COVID-19 pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, reducing our ability to access capital. If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected. See Part II, Item 1A."Risk Factors."
Cash Flows
The following table sets forth cash flow data for the periods indicated therein:
Nine Months Ended
September 30,
2021 2020
(in thousands)
Net cash provided by operating activities $ 13,673 $ 32,069
Net cash used in investing activities (194,239)
(130,642)
Net cash provided by financing activities 180,514
138,276
Effect of foreign currency exchange rate changes on cash 59
37
Net increase in cash, cash equivalents and restricted cash
Cash Flow from Operating Activities
During the nine months endedSeptember 30, 2021 , net cash provided by operating activities consisted of net loss of$77.2 million , offset by net non-cash adjustments to net loss of$122.2 million and net changes in operating assets and liabilities of$31.3 million . Non-cash adjustments primarily consisted of depreciation and amortization of$73.9 million , loss on debt extinguishment of$28.7 million and stock-based compensation of$16.8 million . Changes in working capital during the nine months endedSeptember 30, 2021 primarily included cash outflows from other non-current assets of$11.5 million , prepaid expenses and other current assets of$11.4 million , accounts receivable, net of$7.0 million and accrued expenses and other of$6.8 million , partially offset by cash inflows of$7.9 million from deferred revenue. 49 -------------------------------------------------------------------------------- During the nine months endedSeptember 30, 2020 , net cash provided by operating activities consisted of net loss of$39.0 million , offset by net non-cash adjustments to net loss of$66.2 million , and net changes in operating assets and liabilities of$4.9 million . Non-cash adjustments primarily consisted of depreciation and amortization of$55.3 million . Changes in working capital during the nine months endedSeptember 30, 2020 primarily included cash inflows from customer deposits and other long-term liabilities of$8.3 million and accrued expenses and other of$4.3 million , partially offset by cash outflows from other non-current assets of$6.6 million .
Cash Flow from Investing Activities
During the nine months ended
activities was
acquisition of companies, net of cash acquired, of
During the nine months ended
activities was
acquisition of companies, net of cash acquired, of
Cash Flow from Financing Activities
During the nine months endedSeptember 30, 2021 , net cash provided by financing activities was$180.5 million . The cash flow provided was driven primarily by net proceeds from preferred and common stock issuances of$109.8 million and$415.9 million , respectively, and proceeds from long-term debt of$496.5 million , offset by payments on long-term debt of$837.1 million . The proceeds from these financings were primarily used, after payments on long-term debt, to fund acquisitions. During the nine months endedSeptember 30, 2020 , net cash provided by financing activities was$138.3 million . The cash flow provided was driven primarily by proceeds from long-term debt of$143.9 million . The proceeds from these financings were primarily used to fund acquisitions.
Equity Offerings
For information regarding our IPO, see Note 2 in the notes to the unaudited
condensed consolidated financial statements included in this Quarterly Report on
Form 10-Q.
Credit Facilities InAugust 2019 ,EverCommerce Solutions Inc. (formerlyPaySimple, Inc. ), as borrower, andEverCommerce Intermediate Inc. (formerlyPaySimple Intermediate, Inc. ) entered into a credit agreement with various agents and lenders (the "Credit Agreement"). The Credit Agreement provided for (i) a term loan in an aggregate principal amount of$415.0 million (the "term loan"), (ii) commitments for delayed draw term loans up to an aggregate principal amount of$135.0 million (the "Delayed Draw Term Loans"), (iii) commitments for revolving loans up to an aggregate principal amount of$50.0 million (the "Revolver"), and (iv) a sub-limit of the Revolver available for letters of credit up to an aggregate face amount of$10.0 million , or the letters of credit (the term loan, Delayed Draw Term Loans and Revolver are referred to herein as the "Credit Facilities"). InSeptember 2020 , the Credit Agreement was amended to provide for additional commitments of Delayed Draw Term Loans in an aggregate principal amount of$250.0 million on the same terms and conditions as the original Delayed Draw Term Loans under the Credit Agreement. Following this amendment, the aggregate principal amount of Delayed Draw Term Loans available under the Credit Agreement was$385.0 million . Simultaneously with the execution of the Credit Agreement, we and various of our subsidiaries entered into a collateral agreement and guarantee agreement. Pursuant to the guarantee agreement,EverCommerce Intermediate Inc. and various of our subsidiaries were guarantors under the Credit Agreement. Pursuant to the collateral agreement, the Credit Facilities were collateralized by substantially all our assets, including our intellectual property and the equity interests of our various subsidiaries, includingEverCommerce Solutions Inc. 50 -------------------------------------------------------------------------------- The Credit Agreement that governed the Credit Facilities contained certain affirmative and negative covenants, including, among other things, restrictions on indebtedness, issuance of preferred equity interests, liens, fundamental changes and asset sales, investments, negative pledges, repurchases of stock, dividends and other distributions, and transactions with affiliates and a passive holding company covenant applicable toEverCommerce Intermediate Inc. In addition, we were subject to a financial covenant with respect to the Revolver whereby, if the aggregate principal amount of revolving loans and letter of credit disbursements, together with the amount of all undrawn letters of credit (excluding undrawn letters of credit up to$5.0 million and letters of credit that are cash collateralized) outstanding on the last day of any fiscal quarter, exceeded 35% of the aggregate principal amount of the Revolver, then our First Lien Leverage Ratio (as defined in the Credit Agreement) as of the last day of such fiscal quarter was required to be 8.80 to 1.00 or less.
New Credit Facilities
In connection with our IPO, onJuly 6, 2021 we refinanced our existingCredit Facilities and EverCommerce Solutions Inc. , as borrower, andEverCommerce Intermediate Inc. entered into a new credit agreement (the "New Credit Agreement") in an aggregate principal amount of$540.0 million , consisting of (i) an aggregate principal amount of$350.0 million ("New Term Loans"), (ii) a revolver with a capacity of$190.0 million ("New Revolver"), and (iii) a sub-limit of the New Revolver available for letters of credit up to an aggregate face amount of$20.0 million (the New Term Loans and New Revolver are collectively referred to herein as the "New Credit Facilities"). We used the net proceeds of the New Term Loans and a portion of the funds available under our New Revolver, together with the net proceeds from the IPO, to repay all amounts outstanding under our Credit Facilities. These transactions are collectively referred to herein as the Refinancing. OnAugust 4, 2021 , the Company used the net proceeds from the sale of the additional shares of common stock following the exercise of the underwriters' over-allotment option granted in our IPO to repay$44.0 million of the amount outstanding under the New Revolver. Simultaneously with the execution of the New Credit Agreement, we and various of our subsidiaries entered into a collateral agreement and guarantee agreement. Pursuant to the guarantee agreement,EverCommerce Intermediate Inc. and various of our subsidiaries are guarantors of the obligations under the New Credit Agreement. Pursuant to the collateral agreement, the New Credit Facilities are secured by liens on substantially all of our assets, including our intellectual property and the equity interests of our various subsidiaries, includingEverCommerce Solutions Inc. The New Credit Agreement contains certain affirmative and negative covenants, including, among other things, restrictions on indebtedness, issuance of preferred equity interests, liens, fundamental changes and asset sales, investments, negative pledges, repurchases of stock, dividends and other distributions, and transactions with affiliates. In addition, we are subject to a financial covenant with respect to the New Revolver whereby, if the aggregate principal amount of revolving loans (excluding letters of credit) outstanding on the last day of any fiscal quarter exceeds 35% of the aggregate commitments available under the New Revolver, then our first lien leverage ratio as of the last day of such fiscal quarter must be 7.50 to 1.00 or less. Borrowings under the New Credit Agreement are available as ABR or Eurocurrency borrowings. ABR borrowings under the New Credit Agreement accrue interest at an alternate base rate plus an applicable rate, and Eurocurrency borrowings accrue interest at an adjusted LIBOR rate plus an applicable rate. The ABR rate represents the greater of the prime rate,Federal Reserve Bank of New York rate plus ½ of 1%, and an adjusted LIBOR rate for a one month interest period plus 1%. The applicable rate for the New Term Loans and the New Revolver loans is 3% for Eurocurrency borrowings and 2% for ABR Borrowings, in each case subject to change based on our first lien net leverage ratio. With respect to ABR borrowings, interest payments are due on a quarterly basis on the last business day of each March, June, September and December. With respect to Eurocurrency borrowings, interest payments are due on the last business day of the interest period applicable to the borrowing and, in the case of a Eurocurrency borrowing with an interest period of more than three months' duration, each day prior to the last day of such interest period that occurs at intervals of three months' duration after the first day of such interest period. 51 -------------------------------------------------------------------------------- The New Revolver has a variable commitment fee, which is based on our first lien leverage ratio. We expect the commitment fee to range from 0.25% to 0.375% per annum. We are obligated to pay a fixed fronting fee for letters of credit of 0.125% per annum. Amounts borrowed under the New Revolver may be repaid and re-borrowed through maturity of the New Revolver inJuly 2026 . The New Term Loans mature inJuly 2028 . New Term Loans may be repaid or prepaid but may not be re-borrowed. As ofSeptember 30, 2021 , there was$385.0 million outstanding under our New Credit Facilities, comprising$350.0 million related to the New Term Loans and$35.0 million related to the New Revolver. The effective interest rate on the New Term Loans was approximately 4.0% fromJuly 6, 2021 throughSeptember 30, 2021 .
As of
Credit Agreement.
Recent Acquisitions OnJuly 8, 2021 , the Company acquired 100% of the interest ofTimely LTD ("Timely"), aNew Zealand booking and business management software company for$99.7 million . OnJuly 8, 2021 , the Company acquired 100% of the interest ofPM Ventures, LLC dba MDTech ("MDTech"), a provider of electronic charge capture solutions to physicians via its SaaS-based MD Coder application, for$15.9 million .
Contractual Obligations
There have been no material changes to our contractual obligations as of
Refinancing with the New Credit Facilities (as defined above).
Refer to Notes 9 and 15 in the unaudited condensed consolidated financial
statements included in this Quarterly Report on Form 10-Q and notes thereto for
a discussion of our debt and operating lease obligations, respectively.
Off-Balance Sheet Arrangements
We do not have nor do we enter into off-balance sheet arrangements that had, or
which are reasonably likely to have, a material effect on our financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources.
Critical Accounting Policies and Significant Judgments and Estimates
Our financial statements are prepared in accordance with GAAP. The preparation of our financial statements in conformity with GAAP requires us to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Our critical accounting policies are described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies" in our Prospectus and the notes to the condensed consolidated financial statements. During the nine months endedSeptember 30, 2021 , there were no material changes to our critical accounting policies from those discussed in our Prospectus. 52 --------------------------------------------------------------------------------
Recent Accounting Pronouncements
See Note 2 in the notes to the unaudited condensed consolidated financial
statements included in this Quarterly Report on Form 10-Q for a discussion of
accounting pronouncements recently adopted and recently issued accounting
pronouncements not yet adopted and their potential impact to our financial
statements.
Election Under the Jumpstart Our Business Startups Act of 2012
The Company currently qualifies as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Accordingly, the Company is provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. The Company has elected to adopt new or revised accounting guidance within the same time period as private companies, unless management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. 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.
United Kingdom Clinical Negligence Market Data Report 2021 – ResearchAndMarkets.com
Zing Health Closes Lasso Healthcare Deal, Extends Rural Reach
Advisor News
- Nationwide Financial Services President John Carter to retire at year end
- FINRA, FBI warn about generative AI and finances
- Prudential study: Babies born today will likely need nearly $2M to retire
- Economy performing better than expected, Morningstar says
- Advisors have more optimism post-election
More Advisor NewsAnnuity News
- Prudential Financial to Reinsure $7B Japanese Whole Life Block with Prismic Life
- Nationwide Financial Services President John Carter to retire at year end
- Pension Rights Center: PRT deals could lead to ‘nationwide catastrophe’ regulated
- Allianz Life Retirement Solutions Now Available Through Morgan Stanley
- Midland Advisory Focused on Growing Registered Investment Advisor Channel Presence
More Annuity NewsHealth/Employee Benefits News
- Founding Banner|Aetna CEO Tom Grote Retires, Victoria Coley Appointed as New CEO
- Panelists discuss emerging trends, future of local healthcare
- 'We Have No Intention to Increase Premiums'
- UnitedHealth gave hackers easy access to Change data, new lawsuit claims
- Demand for ACA health insurance plans soars to record high in WA
More Health/Employee Benefits NewsLife Insurance News
- BetterLife, CSA merger brings organizations with Czech-Slovak roots together
- AM Best Affirms Credit Ratings of Nippon Life Insurance Company and Its Subsidiary
- Prudential Financial and Dai-ichi Life to Pursue Strategic Partnership
- AM Best Removes From Under Review With Positive Implications and Upgrades Credit Ratings of ShelterPoint Insurance Company and ShelterPoint Life Insurance Company
- Prudential inks $7 billion reinsurance deal with Bermuda-based reinsurer
More Life Insurance News