Q3 2021 EverCommerce Inc Earnings Call
Good day, Thank you for standing by and welcome to ever Commerce incorporated third quarter 2021 earnings conference call. At this time, all participants are in a listen only mode.
After the Speakers' presentation there'll be a question and answer session to ask a question. During this session you will need to press star one on your telephone keypad.
Please be advised that this conference is being recorded if you require any party assistance. Please press star zero.
I'd now like to hand, the conference over to your Speaker today Ryan Daniels.
Please begin sir.
Good afternoon, and welcome to ever Commerce as earnings conference call for the third quarter of fiscal year, 2020, one which ended on September 30th.
On the call with me today is Eric Reamer, Eric <unk>, Chief Executive Officer, Mark Thompson ever Congresses, Chief Financial Officer, and Brad <unk> ever Congresses, New SVP and head of Investor Relations.
Please disclosure of our results can be found in our press release issued today.
It's available on the Investor Relations section of our website and our quarterly report on Form 10-Q to be filed with the SEC.
Today's call is being recorded and a replay will be available from the conclusion of the call.
Statements made in this call may include forward looking statements regarding our financial results products customer demand operations the impact of COVID-19 on our business and other matters.
The statements are subject to risks uncertainties and assumptions that are based on management's current expectations as of today and may not be updated in the future. Therefore, these statements should not be relied upon as representing our views as of any subsequent date.
In addition to any risks that we highlight during the call important factors that may affect our future results are described in our most recent SEC reports and today's earnings press release.
We will also refer to certain non-GAAP financial measures to provide additional information to investors.
A reconciliation of non-GAAP to GAAP historical measures is provided in our press release and Investor presentation, which are posted on our Investor Relations website at investors don't ever Commerce Dotcom.
Mary differences being depreciation and amortization stock based compensation acquisition related costs and other nonrecurring costs.
In terms of the agenda for today's call Eric will provide a quick overview of our third quarter results.
As well as our market opportunity for our strategy and an overview of our recently announced acquisition Dr. Ricardo.
Mark will provide a detailed review of our third quarter results as well as our guidance for the fourth quarter and full year 2021.
With that let me turn the call over to Eric.
Thank you, Brian and welcome everyone to ever Commerce as third quarter financial results call. Let me start by welcoming Brett course, they ever Commerce team Brad joins us from Denver based their group with some of you may recall with publicly traded until they were taken private and a $14 3 billion dollar valuation.
I'm excited to share some updates since our last call, including a strong third quarter and some additional color on our recently announced acquisition of Doctor Cornell, which is a great strategic fit and meaningful expands our footprint in health services.
I'd like to begin with a few highlights of our Q3 financial results, which exceeded our guidance for both revenue and adjusted EBITDA.
We reported total revenue of $128 $5 million up 44% year over year and up 20% year over year on a pro forma basis.
Just your EBITDA of $29 million, representing a 23% margin.
We are pleased with this very strong performance, which underscores the power of our suite of software solutions.
It's built for the service economy, we offer our customers differentiated modern SaaS applications integrated with other value added solutions, such as payments customer engagement and marketing applications and its combined these with best in class digitally driven customer acquisition model.
This drives unique value proposition, enabling ever commerce to efficiently sell its scale and its fragmented trillion dollar market.
We are just at the beginning stages of helping small service businesses digitally transform how they work and interact with their customers.
To drill down into our approach a little more a key element of our strategy is deliberate vertically and micro vertically tailored solutions that solve specific business problems for F&B service providers in the home services health services, and fitness and wellness vertical markets.
This sounds straightforward a theory, but as unique and practice as you have to have the right solution for each customer.
A physician practice roofer petition, Jim owner and Palmer, all need software to help run the operations, but their needs are different and unique to the market to be successful in these markets you have to provide solutions that solve these unique pinpoints and are ready to use out of the box with immediate time to value.
Our system, a batch of business management solutions, the core solutions for SMB service providers to manage the business or how we attract new customers.
<unk> is a huge opportunity to cross sell horizontal solutions integrated payment processing customer engagement lead generation and marketing technologies that are broadly applicable to all of our customers.
<unk> seen great success cross selling our integrated payment solutions to give you a sense of the scale of our payment business at the end of Q3, our estimated annualized run rate of total payment value or PPV was over $8 $6 billion. This.
This represents a 50% increase since the end of 2020.
As exciting as the successes, we've only scratched the surface of our opportunity integrated payments, which we estimate exceeds $77 billion just among our current customers.
To further enhance our cross sell progress in integrated payments and other horizontal solutions earlier. This year, we hired stone just use that as a chief operating officer.
In this role stone is spearheading our efforts to take advantage of this huge integrated payment opportunity as well as drive additional product integrations and go to market campaigns similar to his experience at both Intuit and Sage.
Refining and optimizing our up sell cross sell strategy is a key priority in our long term revenue growth driver for the business.
A component of the strategy will be to create consistent branding of our solutions that we believe will raise awareness and simplify the process over time.
For example, we recently simplified and consolidated the branding of our performance marketing solutions.
Under the ever connect brand, which connects businesses with consumers shopping for surfaces. The local area. We've consolidated three of our existing digital marketing businesses.
Lead generation and branding campaigns simple to tailored to our customers' needs.
Yeah.
Looking at the performance of our three verticals during the quarter, we saw positive results of our strategy effort.
<unk> Pro which focuses on home services continues to be our largest and fastest growing segment.
Historically, these micro verticals like plumbing landscaping and general contracting has seen some of the lowest technology adoption or any market, but in recent years as demand for services has grown and consumers have gotten used to digital engagement in all other areas of their lives.
Small business have come to recognize they must deploy technology to increase efficiency and meet customer preferences.
The changes that were thrust upon many of these businesses due to the pandemic restrictions over the past 18 months underscore the value proposition of our solutions, which includes a variety of contactless digital solutions.
Our SMB customers recognize going back to the old way of doing business is not an option.
Which we believe will accelerate digitization. It years ahead, and we feel we are well positioned to take advantage of this increasing demand for solutions to help Smbs service providers better grow their business manage our operation and retain their customers.
Ever well, our fitness and wellness vertical experienced sequential improvement despite pandemic related headwinds due to restrictions in certain micro verticals like gyms and fitness boutiques.
Few select geographies as is the UK, New Zealand and Australia.
Well fitness and wellness is our smallest vertical we are pursuing a number of exciting growth initiatives, leveraging the breadth and depth of our vertically tailored solutions.
A good example is expansion of our relationship with Royal Gym International which has selected ever commerce solutions speed at designated supplier of crop management billing and CRM software at the North American locations.
An existing user of our CRM solution provider World GM viewed the combination of the strengths that each of our individual solution and our ability to offer them an integrated complete offering as a critical differentiator.
Ever health.
Service vertical had a strong quarter and it's benefiting the growing demand for patient engagement solutions due to patients' desire for more personalized consumer like experience.
In today's world patients don't want to wait on the phone to schedule or reschedule, an appointment or get test results. They.
They wanted the tip of their fingers.
Most of the value received through our billing and practice management solutions physicians and practitioners recognize the positive impact of introducing patient engagement solutions to improve their experience, which ultimately drives higher revenue and operating efficiencies for the practice.
We also recently announced a significant acquisition that will further build out our capability, it's never held by adding important system of action Dr.
Dr. Chrono is an all in one cloud based practice management EHR and billing solution that serves more than 4600 independent practices and 13000 providers across periods medical specialties.
Dr. Chrono is at the forefront of digitizing the patient experience of leveraging mobile technologies to streamline engagement to create a true consumer experience.
Doctor Kronos, a terrific example of a strategic approach to M&A and meets all of our key criteria.
We're extending our reach in key vertical market with a very robust just sort of action.
With its large customer base Dr. Krone also expands our market showed the health services.
With the acquisition, we are also increasing our opportunities to cross sell embedded payments and other ever commerce customer engagement solutions.
From a financial or operational perspective, gotcha, Kronos growth prospects are quite attractive and onboarding solutions through a centralized platform will drive significant efficiencies.
Once we close the acquisition expected to be mid November we intend to quickly onboard doctor kroner solutions and our plan to cross sell embedded payments patient engagement and marketing technology solutions to the more than 4600 physician practices.
We continue to execute well and centralize operations integrating a cross selling solutions, which are core components of our growth strategy.
A great example is sort of institution, a leading provider of software for field service customers, including HVAC refrigeration.
Plumbing, electrical appliance repair garage door equipment and security businesses.
Required distribution October 2020, and immediately began the process of integrating payments marketing customer engagement solutions.
The results have been impressive in a very short period of time.
We've increased our monetization of payment volume by 38% and attachment rates by 11%.
In Q3, we launched integrated customer marketing module are powered by our customer lobby software and approximately 80 service suite customers have adopted it with my first 90 days.
Finally, leveraging our centralized services quickly optimized service fusions marketing tactics and keep our utilization, resulting in a 24% increase in customers acquired through digital channels.
The net result has been a 15% increase to the short time since acquisition.
These results are an excellent example of how it can quickly optimize newly quite solution.
Before I turn it over to Mark I want to finish by reinforcing how pleased we are with our performance we have momentum across our business and are tracking well against our near and long term objectives, we were delivering on organic growth targets and acquisition of Doctor Chrono is a great example of our M&A strategy in action.
We are rapidly approaching the half a billion dollars in annual revenue.
Confident in our ability to grow to many times that size will also generated significant profitability.
Our results show our strategy is successful and we believe we are in a great position to drive incredible value for our customers and shareholders over time.
I'll now turn it over to our CFO Mark Thompson Mark over to you.
Thanks, Eric Today, I'll review, our third quarter fiscal 2021 results in detail and provide our outlook for the fourth quarter and full year fiscal 2021.
Total revenue in the third quarter was $128 5 million up 44% from the prior year period and above the high end of our Q3 guidance and within total revenue subscription and transaction fees were $91 8 million up 53% from the prior year period, and marketing technology solutions were $31 6 million of third.
Percent from the prior year period Q.
Q3 includes revenue from timely NMD Tech, which were the acquisitions, we closed during the quarter and please recall that our guidance for the third quarter was inclusive of timely which is a large majority of the acquired revenue in the quarter.
M&A is a core part of our growth strategy and as a result, we believe it's important for investors to evaluate our business growth, but a pro forma basis, which is how we measure and manage the business internally, we calculate our pro forma revenue growth as well all acquisitions closed as of the end of the latest period were closed as of the first day of the prior year period.
Including before the time, we completed the acquisition, we believe the pro forma growth rate provides the best insight into the underlying growth dynamics of our business. We're very pleased with our pro forma growth rate for Q3, which was 20% year over year and 21% for the year to date period compared to the same period in 2020.
We experienced strong growth across all three of our core verticals and our various products.
Now, let's review the income statement in more detail as a reminder, unless otherwise noted all metrics are non-GAAP. We've provided a reconciliation of GAAP to non-GAAP metrics in our press release adjusted.
Adjusted gross profit in the quarter was $85 6 million, representing an adjusted gross margin of 67% in line with the third quarter of fiscal 2020.
Now turning to operating expenses sales and marketing expenses were $24 3 million or 19% of revenue up from 13% of revenue in the prior year period.
This increase was primarily driven by continued investments in growth for our various marketing channels and personnel.
Product development costs were $12 4 million or 10% of revenue up from 9% of revenue in the prior year period. This increase was due to investments. In addition to our technology teams to support our various solutions as well as our centralized security operations information technology and cloud engineering.
G&A expense was $20 million or 16% of revenue up from 13% of revenue in the prior year period. The year over year increase was driven primarily by investments in scalable operations and incremental costs associated with being a public company.
Our business is built around our centralized operating model, which aggregates many of the G&A functions of our various operating units, which we believe will drive operating leverage over time. This has also been a key component of our ability to scale as quickly as we had we have been and will continue to invest in the infrastructure required to support our rapid growth scalable.
Operations and being a public company, we expect that these investments will accelerate in Q4 and into 2022. Following a recent IPO in July.
Q3, adjusted EBITDA was $29 million above the high end of our Q3 guidance adjusted EBITDA margin was 23% down 10 percentage points versus the year ago quarter reflective of our investments in growth and scalable operations and the impact of public company costs.
On a GAAP basis, our Q3 loss from operations was $4 1 million compared to operating income of $3 7 million in Q3 2020.
Now turning to the balance sheet and cash flow, we ended the quarter with $98 3 million in cash cash equivalents and restricted cash total debt at the end of the quarter was $385 1 million total net leverage as calculated per our credit facility at the end of the quarter was approximately two two times the purchase price with Dr. Chrono is 100.
$82 5 million and we intend to fund the acquisition with $155 million of availability on our revolving credit facility and cash off our balance sheet pro forma net leverage is approximately three seven times consistent with our financial policy.
I'd now like to finish by providing our outlook beginning with the fourth quarter for Q4 revenue. We expect total revenue of $129 5 million to $131 million and we expect adjusted EBITDA of 27 to 28.
For the full year fiscal 2021, we are increasing our outlook for total revenue to $484 million to $485 5 million and we expect adjusted EBITDA of $105 million to $106 million.
Please note that our outlook for Q4 and the full year 2021 includes approximately one half a quarter of contribution from Dr. Kronos, We expect that Dr. <unk> will contribute approximately $4 million to revenue in the fourth quarter and lose approximately $1 5 million in adjusted EBITDA.
For 2022, we expect that Dr. Krone will contribute approximately $40 million of revenue for the full year.
To wrap up ever Commerce delivered strong third quarter results that were continuing indication of our ability to generate high levels of organic revenue growth and effectively execute on our M&A strategy.
At the very early stages of digital technology adoption.
Service SMB companies that will transform how they manage all aspects of their business. We believe ever commerce is in a great position to power of this transformation and continue to deliver strong top line growth and substantial profitability for the foreseeable future.
Operator, we're now ready to begin the question and answer section with Paul.
Thank you.
A reminder, SASSA question, you will need to press star one on your telephone to withdraw.
A question just press the pound key.
Please limit yourself to one question and one follow up.
Your first question comes from the line of Brad Reback from Stifel. Your line is open.
Great. Thanks very much.
Eric remark I'm not sure who this is best for but can you just remind us of the seasonal aspect of your business in <unk>. If there is any.
Sure Brad Thanks for the question, it's Mark and I'll take that.
Are you referring to.
Seasonality that we might experience in Q4 forward or you're talking about in Q3.
In Q4 going forward are there seasonal aspects of.
Usage.
Engagement.
Thanks for clarifying so.
Across the verticals.
We do have seasonality in it it's sort of between products and verticals. If you think about the verticals home and field services or certain micro verticals.
For example were.
Geographically you might not have as much of that activity.
Certainly landscaping and things like that so within home services. There are categories that experienced seasonality and then within payments in general across the board. There is a reduction in service commerce activity actually around the holidays and that could be the end of the year that could be specific holidays in Q4, and that would really apply frankly to health services as well as <unk>.
<unk> field services, and even to a certain extent some of the fitness and wellness categories as well.
And then certainly within home field services, it's not just usage based revenue that might be experienced a little bit of seasonality. In Q4, you would also get a little bit of seasonality around marketing technology. For example, lead Gen and things like that.
That's great thanks very much.
Your next question comes from the line of Matt Hedberg from RBC capital markets. Your line is now open.
Hey, great. Thanks for taking my question guys.
Eric.
Exposed to obviously wide swaths of domestic SMB markets and I'm. Just curious I mean, you gave a great overview of the various categories.
That you guys.
We go after.
From a high level can you.
Level set us on how you feel about your overall for SMB demand market I know again, it's different by vertical and I guess I'm wondering specifically are you seeing churn rates start to improve.
As we come out of that.
Okay.
Well thanks for the thanks for the question I'm actually going to introduce.
As far as being a president joined us as well that you want to take that one yeah, absolutely I think Matt I think he got to the meat of it at your last part of the question, which was basically surrounding churn in the S&P market.
Absolutely Q3 was a strong quarter from from a retention standpoint R. R.
Our annualized net revenue retention is now approximately around 98% in past, we've let you know that our monthly net revenue retention was plus 99%. We did continue to see nice strong performance there in Q3 so.
We are certainly seeing that metric is an indicator of continued health of our ability to allow our merchants to utilize our solutions and continue to grow in those solutions.
That's super helpful. Thanks, Matt and then maybe one for Mark.
To be clear I think you said in your original Q3 guidance you've included timely but you didn't include Endy Tech if I think I heard if I think I heard you right. So I guess I'm wondering if you guys came in I don't know, maybe five and a half million above your midpoint of your guidance.
Can you help us with how much of that was empty tech versus just sort of organic upside in the business.
Could you repeat that you broke up there at the end.
How much of that was that kind of five <unk>.
Within the quarter, Indeed, tactical small tuck in I mean, not a huge component of it.
And frankly, it was timely wasn't the guidance youre correct about that not so let's level set on there.
But what I would say small tuck in I think less than a million bucks.
That's great so effectively what you're saying.
Is that most of the upside that you guys produced was sort of organic.
Or something you previously called out.
Inorganic components.
Correct that's right.
Great guys.
Guys.
Your next question comes from the line of <unk> Shah from Deutsche Bank. Your line is now open.
Great. Thanks for taking my question I guess, just following up on that just given the strong performance in pro forma growth continues to impress can you maybe just provide any additional insight into what's driving some of that strength versus your expectations and anything specific to call out from any of the verticals or from a cross sell perspective on some of your horizontal solutions.
Sure. Thanks for the question, Bob and I'll start and then I'll turn it over to Matt, but just generally across the verticals I mean, we saw Greg goods.
Good solid performance across Q2 or excuse me across all the verticals in Q2, that's really continued into Q3 and the drivers are certainly.
The sort of overall economy, and the macro dynamics within each of those and we've talked about before nothing really specific to call out other than fitness and wellness continues to improve sequentially through the year, but why don't I turn it to Matt for more around the nuts and bolts and thanks again for your question, Bob and from an execution standpoint, certainly like than in quarters past.
New customer acquisition continued to be a strong pillar of that growth.
And you mentioned that the embedded growth opportunity from cross sell into our 500000 plus customer base.
We mentioned the growth in the TPB statistic now north of $8 6 billion.
When you look at that over a year over year basis, plus 20%. We are absolutely continuing to see strong inroads in that cross sell growth for payments.
And as you heard from the materials as well the customer engagement applications that we're integrating into our system of action solutions are beginning to see really although in the early innings nice uptake and cross sell there as well.
One thing I'll, just add and this is just a general theme that goes across many of our answers, but we are we are experienced in the digitization of the service economy is happening that tailwind is is picking up and we are obviously kind of forefront in leading edge of enabling that digitization.
Super Insightful just a quick follow up I mean, you noted on your call that you recently integrated and branded some of your performance marketing solutions into ever connect is given the strong product enhancements you've made there how should we think about the strategy for accelerating adoption of some of these marketing solution from a go to market perspective like is there anything specific you need to do from a go to market perspective.
<unk>.
To drive more cross sell adoption here.
Yeah.
Again I think.
Have you ever connect example is really a great example of where we are looking at taking this consolidated approach to branding.
And the consolidated approach of kind of the underlying operations of what previously were kind of discrete solutions operations, bringing them together and really what's that going to do what's going to enable a better customer experience, it's going to allow us to cross sell more effectively and to your point, it's going to create a more efficient go to market expansion in the markets.
Serve an ever connect today that is largely focused on home services.
So I think that was.
The heart of your question.
That is something that last quarter, we talked about the progress we've made in ever health. This quarter, we made strong progress in ever connect as we go forward. We do expect not to continue to utilize the brand equity in those existing brands, but also to introduce more of this ever commerce brand to really make our go to market more efficient.
Got it congrats again.
Thank you.
Your next question comes from the line of semi Samana from Jefferies <unk> company.
Hi, good evening and thanks for taking my questions. Maybe first just one on the M&A front, but.
Now that you guys have established a solid track record.
The public eye, how does that helping your your own ability to acquire other companies and I'm. Just curious if we should see that flywheel either pickup in cadence or should be pretty consistent with what we've seen and then I have a follow up.
Yes from an M&A perspective, I think.
Five years, he built a reputation of being.
Great buyers of companies, we do what we said, we're going to do and I think being public and be more visible as the only enhance that.
I think in terms of what we've done historically this year will be very in line with what we did last year and I think in the future history, it's kind of a good representation, we continue to be very disciplined.
You kind of got some high level numbers of what we expect 22 of Kronos and the purchase prices in the.
In the press release as well so we will continue to be.
Thoughtful and strategic and find opportunities that we feel are going to help the overall ecosystem, but also be disciplined in finding those opportunities.
Great and then Mark you guys are obviously, helping to digitize the physical SMB economy I am just curious as you think about maybe whether it's the fourth quarter guidance itself or maybe even over let's say a more 12 month ish type of outlook. When you think about the growth of the business how much of it is.
<unk> of house at your existing customers.
As they continue to get back more and more after what's been an uneven recovery versus the new customer acquisition side, maybe how should we think about that algorithm.
Over the next kind of quarter in 12 months.
I'll take a shot at this and some.
And then let Eric and Matt chime in because I think we all might have a slightly different perspective, but to me. They are one and the same digitization is driving new customer acquisition.
Folks out there finding that in this world, they're strapped for time and need efficiency and we have the solutions they need to better grow their business manage their business and drive retention and then certainly within our existing customer base.
Motion around cross sell creates an incredibly long tail into an embedded opportunity that.
This is not something thats going to be a spike up it's just kind of gradually stack up as we go on and obviously as we cross sell more than one solution into those customers the longer tail of that is improving retention with those customers in general and so forth. So why don't I pause I think we discussed this and we talked last but we still feel like we're at the SEC.
Can any of the opportunity with the upsell cross sell I mentioned in the.
And the earnings call we brought on.
Ill start with user to really focus his energy. His main focus is taken advantage of that opportunity.
Cross sell integrated embedded payments marketing technologies as well as some of our engagement solutions and created a team around to make that happen. So I think over the next quarter.
Quarter year, and then years to come I think youll see even more improvement and even more cross sell and more penetration within those categories.
Yes, I mean, just to your question about recovery and where that is from a growth sector standpoint, I think we talked about this last quarter, but we've seen a lot of recovery in past quarters, specifically in the verticals of home and field services not is not certainly not as long standing impacted by the pandemic health services.
Has been recovering for several quarters and as we.
We look at at fitness and wellness.
Outside of certain vertical tank, sorry, certain geographies in Q3, very discrete geographies internationally, where there was still just a little bit of lockdown impact, we really are seeing that recovery.
We exited Q3 and into Q4 so.
We look at that recovery portion of growth is really in the rearview mirror.
Just one very last point on Matt mentioned.
Kind of a couple of micro areas.
We did acquire timely which was very excited about the opportunity.
Their main businesses in Australia, and New Zealand, and the fitness and wellness space and we definitely had some headwinds in Q3 based on the locked down so that was probably the only the only kind of headwinds we had but in spite of that we still have a really great quarter across all the verticals.
Great really appreciate the thoughtful and thorough answers thanks again.
Your next question comes from the line of Brent bracelet from Piper Sandler Your line is now open.
Hi, Ann this is Clarke Jeffries on for Brent.
First question is you know.
One thing that stood out in the materials were missed.
With the discussion of Dr. Chrono is an integrated payment opportunity I just wanted to understand.
The payment opportunities sit today forever health, how meaningful is it being the software billing solution cross selling payments and what are you seeing in terms of capturing the full volume of the practice versus.
Maybe volumes at the terminal versus the whole bill.
If that helps kind of clarify what I'm asking.
Now thanks for your question and I appreciate that I'll start this is Matt.
When we look at something like Dr. Chrono in health services in general from a payment opportunity perspective, we are absolutely excited and have been capturing from an embedded standpoint further and further more of the opportunities that exist within the ecosystem. So when you think of Dr. Krona, we think of our core system of <unk>.
Action EMR and PM, we're absolutely payment integration and patient engagement.
And the capture of those payments either in person.
And through non in person and methods is an absolute opportunity and we look at Dr. Krona much in that same sense some of our existing solutions as well from that EMR NPM standpoint, we have strong payment payment integrations.
That continue to grow in that space as well.
Great and then just a follow up I think we've been asking a lot of questions on what feels sustainable.
Just one quick housekeeping item can you maybe help us understand what is implied on a pro forma basis for Q4.
Feels like pro forma has been an accelerating trend, but given this commentary of Digitization and I just want to understand if it.
It feels different if it feels sustainable and what we could think about the durable growth rate from here.
Yes, I'll start Mark and we've kind of gave the guidance.
During the IPO roadshow and since that we believe will be growing.
15% to 20% organic growth rate for many years to come and we see that as a similar in Q4 2022, and I think for years to come after that market in Canada, yes.
Everything feels sustainable.
But as we've seen it come through Q2 and into Q3 and I think that's a big part of the excitement we're feeling about the business I mean.
And going forward, we see that as well, we absolutely will experience some Q4 seasonality and Thats just part of the business, but we expect to carry the momentum that we created this year into next year as well.
Alright, Thank you very much.
Yeah.
Your next question comes from Atlanta, Alex Sklar from Raymond James Your line is now open.
Thanks, Eric or Matt I wanted to follow up on network connect and just in terms of you're able to quantify the opportunity to kind of drive upsell on renewal for the broader solution now compared to your existing base that may have only had one or two of those products.
And your question was specifically Alex about ever connect.
Yes, that's right.
As you kind of combined solutions together, the kind of upsell opportunity now with a broader functionality. Some customers that may only have had one of those products, but whatever connect specifically I guess.
Yes witnessed certainly from an ever connect standpoint, we're absolutely in the early innings I would call it.
At the top of the first and that this just went to market.
In the end of October we took the brand too.
A very important industry Tradeshow and launched it there at the lease Count conference in late October So early innings, and we will certainly get back to you as we are able to give you more finite metrics on how the brand drives kind of multiple product sale.
But.
When we look back at some of our ever health.
Consolidated brand usage over the last several quarters.
Our trends that we actually can see real progress being made in terms of presenting a more consolidated set of solutions at the time of sale and actually driving multiple products at that sale at the point of sale and then then in follow up so we are seeing.
Again, very early innings that strategy of a consolidated brand approach paying off in terms of multiple products being taken at the point of sale.
Okay, Great and then just a follow up on the nice win with World. Jim can you just talk about new.
New deal sizes broadly and if youre seeing those kind of grow the opportunity to kind of grow with multi location type businesses increase within your pipeline.
Yes, absolutely.
Thanks for that follow up we're certainly excited about that obviously.
That's why we've put that out there in the press.
When you when you think about what we're doing from a micro vertical end to end to end integrated solution set. This is kind of core to our thesis. This is bringing two solutions together.
And being able to actually take that a bit upmarket. So you rightly point out world, Jim a little bit more upmarket, bringing together as we talked about our member management solution, our billing solution and our marketing automation solutions to really fulfill that kind of end to end integrated Mike.
Pro vertical solution set for a more upmarket customers. So we're excited about the world Jim win in North American fitness and we are excited about the wins that we believer are on the tail of that.
Alright, Thank you and Brad welcome and welcome to the team.
Thank you next question comes from the line of P. J Hynes from Canaccord smelting.
Hey, guys. This is Luke on for DJ Thanks for taking the question.
So you guys have.
Of course just hired.
Paul I was wondering if.
Any incremental initiatives <unk> plans to implement are obviously still probably in the planning stages, but could you just give us an idea or a sneak peek into maybe some of the initiatives or strategies you might have.
As.
Our plan to drive additional cross sell.
I'll start with that and I'll, let Matt kind of thank you for the question I'll, let Matt kind of add onto that if you think about him joining right before our IPO, it's been with us for us.
Really a little over a quarter, it's still a focus for the remainder of 2021 with a lot of testing a lot of focus on building infrastructure focused on that one of the core things embedded payments integrated came in a lot of the upsell cross sell going into 2022, one of the initiatives. The most excited about is taking that test you can take it.
Learning and <unk>.
Taken any infrastructure, that's done is actually putting together and starting to see some real results and see additional penetration within that cross sell again focused primarily but.
And the top things on embedded payments is first and foremost as that is our lowest hanging fruit and we're really doing that for quite some time and then secondly, additional marketing technology and customer engagement solution that you want to add to that and you think about again his experience at bolt into it and say its doing very similar things.
Sure.
Really when you look at.
Effectuate that cross sell through the further integrations is as Eric talked about of embedded payments of customer engagement solutions into our business management system systems of action Don is really taking methodical test and learn approach utilizing data to create programs across those systems a vaccine solution.
Customer basis, and those value add products to really drive incremental cross sell success. So again, we're excited to talk about those results in coming quarters as we are able to further effectuate the programs.
Excellent. Thank you.
Okay and as a reminder to ask a question. Please press star one.
Your next question comes from the line of Kirk <unk> from Evercore ISI.
Yes, thanks, very much and congrats on the quarter, Eric I was wondering if you could talk a little bit more about the when you talked about cross sell and up sell how much are you seeing in terms of sort of Greenfield cross sell and upsell versus smaller businesses wanting to consolidate the number of vendors. They are working with it seems like there is everybody digitizing bond.
On the back end of that it seems like they also wanted to simplify and I was just wondering how much. The simplification narrative is playing out when you. When you look at some of your bigger deals that maybe have multi products.
Thank you for the question correctly I think you hit on something at the end, it's really a twofold answer at all.
I'll start and let that kind of go out on the front end, we deal with a lot of smaller smbs and for many of them. We are filling in both their initial kind of digital evolution and then also filling in that we call. The digital white space, which is that area around that that once they have taken that step and are utilizing it.
Core system of action that it just makes sense to be taking more solutions that we're providing as you go a little more upmarket as Mackie. If example on overall, Jim the consolidation of solutions and having one provider is actually a huge advantage in one of our kind of core thesis as we continue to kind of scale, both downmarket and kind of mid market.
The SMB in the SMB space.
Yes.
Thanks, I appreciate that I think Eric really did hit the nail on the head and we have seen we have seen this over the course of time.
In our embedded payments cross sell.
It just does not make sense for these smbs to have multiple vendors.
Certainly when they are using one of our system of action software, we have seen that.
The embedded payments and the take on our embedded payment offering and to Eric's point the world. Jim success that we had is absolutely attributable to the fact that they will.
The customer at the end of the day desired one vendor.
To be doing business with one partner to help them grow.
And as we've brought those integrated solutions sets to them they felt really confident going with us in that capacity.
Thank you all.
There are no further questions as of this time I would now like to turn the conference back over to Eric Cremers.
Yes, just to close I just want to thank everyone for joining the call today I also want to thank the entire ever commerce team for the great quarter, We had ever commerce is really at the leading edge of enabling the digitization of the service economy, but we are extremely happy with our Q3 results, but at this time really all of our focus in the collective energy has shifted to you previously.
A great Q4, and really setting the stage for an outstanding 2022. Thank you guys. All again for joining the call today and we look forward to additional follow up questions. Thanks, So much.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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