Q3 2023 EverCommerce Inc Earnings Call
Okay.
Thanks for standing by and welcome to ever Commerce's third quarter 2023 earnings Conference call. My name is Norman and I'll be your.
Today after the speaker's presentation there'll be a question and answer session to ask a question. During this session you'll need to press star one on your telephone you will then hear an automated message advising your hand is race to withdraw your question. Please press star one again as a reminder, this conference is being recorded today Monday November six 2023, I would now.
I'd like to turn the conference over to Brad <unk> Senior Vice President and head of Investor Relations for Evercore. Please go ahead.
Yeah.
Good afternoon, and thank you for joining today's call will be led by Eric Reamer ever Congress is chairman and Chief Executive Officer, and Mark Thompson ever Commerce, as Chief Financial Officer, joining them for the Q&A portion of the call is ever Commerce as President Matt Firestone.
This call is being webcast with a slide presentation that reviews, the key financial and operating results for the three months ended September 32023.
For a link to a live or replay webcast. Please visit the Investor Relations section of the ever Commerce website, www dot ever Commerce Dot com.
The slide presentation and earnings release are also directly available on the site.
Please turn to page two of our earnings call presentation, while I review, our Safe Harbor statement.
Statements made on this call and contained in the earnings materials are available on our website that are not historical in nature may constitute forward looking statements.
Such statements are based on the current expectations and beliefs of management.
<unk> results may differ materially from these forward looking statements due to risks and uncertainties that are described in more detail in our filings with the SEC.
We undertake no obligation to publicly update or revise these forward looking statements except as required by law.
We will also refer to certain non-GAAP financial measures provide additional information to you our investors a reconciliation of non-GAAP to GAAP historical measures is provided in both our earnings press release and earnings call presentation.
I will now turn it over to our CEO Eric Kramer. Please continue.
Thank you Brad on today's call I will highlight third quarter results and discuss key customer trends and metrics before turning the call remarks dive deeper into our financials.
Commerce continues to advance its goal of being the leading provider of vertical software for service Smbs.
With our business management software, which refer to assist with fashion. We're simplifying the lives of those service providers that support us everyday.
Core software platforms are critical to our customers' businesses and have proven to be resilient revenue streams.
As you've highlighted in the past, we have seen modest macroeconomic pressures and more transactional aspects of our business.
And this was true in the third quarter as well.
Despite this ever commerce is year over year revenue growth expanded over 200 basis points when compared to the growth rate reported last quarter.
Given the more uncertain macroeconomic environment, we continue to actively manage our cost and double down on the mantra of balancing growth with profitability.
This quarter, we once again exceeded the top end of our guidance range of adjusted EBITDA, which grew 39% year over year and equated to a 24% margin.
Year over year. This represents over 485 basis points of margin expansion.
With upside to profitability, we are creating the opportunity to incrementally invest in areas that can accelerate growth in 2024 and beyond.
The payments adoption continues to be a key element of our growth strategy. After the third quarter, we increased our payment revenue by 28%.
Finally, I am pleased to announce that last week, our board of directors authorized an upsize and extension to our share repurchase authorization.
Increased by an additional $50 million our authorization that runs through year end 2024.
However, Congress provides vertically tailored end to end SaaS solutions that support the highly diverse workflows and customer interaction that professionals in home services.
Health services.
Fitness wellness services used to automate manual processes.
Generating new business and create more loyal customers.
As a leading service commerce platform, we provide system of action software across our many micro verticals, which in turn tried to workflows to help our customers generate new business.
Field services banners day to day operations and engage with their customers.
We continue to execute our land and expand strategy, we land with our core business management software.
The upsell and cross sell our existing customers additional features service and products.
This enhances the value our customers receive from their relationship with Evercore.
It drives additional revenue.
As we've shown in various examples of previous earning calls this translates to lower churn and higher retention.
Last quarter, we introduced a new metric that we feel best reflects current cross sell progress.
Number of customers that have contracted and on boarded for more than one solution.
This metric is hiring the funnel that are traditional disclosure of customers actively utilizing more than one solution.
For payments, specifically this metric tracks, our customers payments enablement progress, which is a good milestone in that journey.
Accepting payments and contributing to our TPG growth.
At the end of the third quarter and while we continue to see expansion of customer utilizing more than one solution to approximately 82000, the number of customers. The contracted on boarded for two or more products grew 28% year over year to approximately 173000.
And with over 685000 total ever conference customers as at the beginning of 2023, we continue to have a very large a better opportunity to continue to grow at this pace of multi solution customers.
Finally, when we look back over the trailing 12 months.
Net revenue retention or <unk> for our core software and payment solutions remained above 100%.
Embedded payments is the most accretive cross sell solution and stands to be a long term driver for ever commerce revenue growth and margin expansion.
Year over year, our payments revenue grew 28%.
County for approximately 70% of overall revenue.
We report our payments revenue on a net basis and as a result payments revenue contributes approximately 95% gross margin that's a meaningful contributor to overall adjusted EBITDA margin expansion.
Third quarter annualized total payment volume or TPG was approximately $11 7 billion.
Presenting a 11% year over year growth.
We expect GPC overall payments revenue to grow as we continue to embed our payment solutions into our core system of action.
Accelerating payments catchment and utilization are key elements of our long term growth plan and we continue to see success. There of course is for vascular solutions.
Last quarter, we mentioned that we are actively implementing new strategic initiatives designed to increase the attachment David capabilities.
More payment able customers into after processing and further increase the wallet share of the customers that are already processes.
Lastly, I want to highlight a small but important acquisition that we made in the quarter kick surf.
<unk> is a cloud based web mobile system of action, enabling field service providers, such as plumbers and HVAC technicians.
Manage all aspects of the business, including job of customer management payments reporting our business operations.
We actively pursued kick serve as part of our overall ever pro product strategy because it fills the gap we had to appropriately serve customers that are too large for our joist product get too small for a service fusion products.
Sure. It does offer payments integration today, but the solution is both underpenetrated underutilized, creating a meaningful cross sell opportunity with our payment engine.
I also expect that our go to market and Jim can help accelerate growth with this product.
Now I will pass it over to Mark who will review our financial results in more detail as well as provide fourth quarter and updated full year 2023 guidance.
Thanks, Eric total revenue in the third quarter was $174 7 million up 10, 5% from the prior year period.
Within total revenues subscription and transaction revenue was $132 6 million up 10, 5% from the prior year period and revenue for marketing technology solutions was $36 8 million up one 5% from the prior year period.
The solid performance in subscription and transaction revenue was largely due to continued execution of our growth strategy to provide customers. Our core system of action software solutions and driving expansion by promoting cross sell and upsell opportunities leading with payments.
As Eric noted in Q3, we experienced some softness in the more transactional portions of our business, which negatively impacted revenue and has extended into Q4.
Specifically in the third quarter, we saw a decline in contractor equipment spend.
Pro rebates rewards program in which we share a portion of the vendor rebate. Additionally, while payments revenue grew 28% in the third quarter. We also started to see some modest headwinds in certain pockets of our payments business. We continue.
To experience demand driven headwinds in our marketing technology solutions underscoring growth of one 5% from the prior year period.
We have also experienced slower growth in our fitness solutions as that industry remains challenged from the lingering effects of Covid.
Excluding marketing technology, and fitness solutions year over year revenue growth was approximately 13%.
At the end of the third quarter LTM revenue was $667 7 million up 12, 3% year over year on a reported basis.
Third quarter, adjusted EBITDA was $41 8 billion, representing a 23, 9% margin versus 19, 1% in the third quarter of 2022, and 38, 6% growth year over year.
Additionally, LTM adjusted EBITDA was 147 7 million, representing a 22, 1% margin and an 18, 8% increase year over year.
In the third quarter, we're continuing to deliver on our full year 2023 objectives by exceeding EBITDA guidance and achieving record EBITDA margins adjusted EBITDA performance in the quarter was underscored by our focus on actively managing our operating expenses.
Driving operating leverage and focusing on cash flow generation.
That and we've made a reduction in force last week. This action better positions us to manage through continuing headwinds expected for the balance of the year and into 2024 and enables us to drive growth investments as appropriate for example, one area of incremental investment as resources to accelerate payments adoption among our systems of action software.
<unk>.
Adjusted gross profit in the quarter was $113 3 million, representing an adjusted gross margin at 64, 8% versus 63, 5% in Q3 2022.
LTM adjusted gross profit was $438 3 million, representing an adjusted gross margin of 65, 6% increase in gross margin is partially attributable to an increasing mix of higher margin payments revenue.
Now turning to operating expenses adjusted sales and marketing expense was $28 2 million or 16, 2% of revenue down from 17, 7% of revenue reported in the prior year period.
Absolute adjusted sales and marketing expenses were approximately flat year over year due to timing of spend and we expect a modest sequential increase in sales and marketing expenses in the fourth quarter.
As we continue to invest in our products adjusted product development expense increased approximately $500000 to $18 6 million or 10, 6% of revenue down from 11, 4% of revenue reported in the prior year periods.
Adjusted G&A expense was $24 7 million or 14, 1% of revenue down from 15, 4% of revenue in the prior year period.
As we anniversary the investments made in 2021 and 2022 to support our public company infrastructure, we're beginning to see meaningful operating leverage.
We continue to generate significant free cash flow as we invest to grow our business. Our adjusted Unlevered free cash flow for the quarter was $31 3 billion, representing 42% year over year growth and a 17, 9% margin.
So the last 12 months, our adjusted Unlevered free cash flow was $106 8 million.
Levered free cash flow, which accounts not only for debt service, but also various working capital adjustments was $21 3 million in the quarter. This was up approximately $12 2 million or 134% year over year due to both broken operating income and changes in working capital.
For the trailing 12 months leverage free cash flow was $74 4 million or 69% increase over the prior year continuing to underscore our balance sheet flexibility.
Strong free cash flow generation allows us to continue to invest in our growing business and deliver strong returns to our shareholders. It also allows us to efficiently allocate capital across the spectrum of opportunities, including the outstanding buyback authorization and M&A prospects.
In the third quarter, we repurchased approximately 160000 shares for a total cash consideration of approximately $1 6 million at an average of $9 83 per share as.
As Eric mentioned, our board of Directors has authorized an extension of our repurchase program through year end 2024, and an increase in the size of the program by $50 million. This.
This increase in our program handily fits into our free cash flow generation profile.
We ended the quarter with $87 3 million in cash and cash equivalents and we maintain a $190 million of undrawn capacity on our revolver. Our debt is a combination of floating and fixed rate and total net leverage as calculated per our credit facility at the end of the quarter was approximately two five times consistent with our financial policy.
We have no material maturities until 2028.
I would now like to finish by providing our outlook for the remainder of 2023, beginning with the fourth quarter.
As previously described we are experiencing some softness in certain transactional revenue streams and we continue to experience headwinds in our marketing technology and fitness solutions. These trends are contemplated in our updated updated guidance.
For Q4, we expect total revenue of $170 million to $174 million and we expect adjusted EBITDA 35, 5% to $39 5 million.
We have adjusted our full year 2023 revenue guidance to 600 $676 million to $680 million and we are raising our adjusted EBITDA guidance again by an additional $5 million to a 148% to $152 million.
Driving profitability and cash flow remain top priorities for us and as such our revised adjusted EBITDA guidance represents a $12 million increase at the midpoint and 210 basis points of margin expansion as compared to our initial full year guidance and approximately 300 basis points margin expansion over 2022 results.
Our Q4 2023 outlook does not include any potential impact of unannounced M&A activity that could take place.
Before we begin the question and answer portion of the call I want to thank the entire ever commerce team for their efforts in delivering these solid results in a challenging environment.
Our focus continues to be optimizing our operations managing costs effectively and delivering on our strategic priorities. Operator, we're now ready to begin the question and answer section of the call. Thank you.
A reminder to ask a question you will need to press star one on your telephone to withdraw.
Your question. Please press Star one again, please wait for your name to be announced.
One moment, while we compile the Q&A roster.
One moment for your first question.
Our first question comes from the line of Kirk <unk> with Evercore ISI. Your line is now open.
Yeah, Hi, guys. This is actually Peter breakdown per character I appreciate you taking the questions.
So maybe the first one it sounds like the fitness vertical on a little bit of marketing belting, some weakness, but just curious in terms of auto vertical varies and micro verticals are there any areas where you're seeing.
Any any strength from a new logo standpoint, and then as a follow up to that I'm. Just curious if theres any change in thinking and you guys are starting to see some success on payments.
Growth going forward the balance between that growth coming from new logos versus cross sell of other solutions payments being top of mind.
I'll start out and thanks for the question.
Great question, a lot of pieces, there, but I'll answer all of it.
And bad well affiliates and thank you for that but I think I'll start with you and kind of question with regard to the opportunity we see in front of us with regard to payments. So we are doubling tripling down on the payment opportunity.
We look at our kind of our top four hema penetrated opportunities represent about 84% of our onboard payment merchants that cohort of customers grew about 86% overall in terms of the payment.
Year over year, so huge opportunity within the kind of core system of action integrated payment penetration that we're already seeing a lot of growth and we expect to continue to see that now the second part of it yes. We continue to grow new logos is that as part of that the core of every software business. So we continue to grow the logos and then.
Beyond that expand that by up selling them additional services and solutions with a real primary focus on payments.
No other than to say I mean to your point about.
I think you're directionally headed towards investing in growth like payments I mean, the purpose, obviously continuing to actively manage our expense base.
Is to really provide the opportunity to drive investment dollars, where we see those opportunities.
And managed through these exogenous impacts from the macro climate.
I would just add to the first part of your question Peter.
From a vertical standpoint, we are seeing that new logo acquisition and that really remains in line with our customer base, obviously with the majority or a large portion of our customer base and home and field services New logo acquisition.
Definitely weights towards him and field services.
Very helpful. Thanks, guys.
Thank you one moment for our next question.
Question comes from the line of DJ Hynes with Canaccord Genuity. Your line is now open.
Hey, good evening guys.
Nice job on the margins in the quarter.
Good work controlling what you can.
Maybe you could double click on some of the comments around kind.
Kind of increasing headwinds in pockets of the payment business.
A little bit more specifically like what are you seeing and how are you thinking this kind of plays out as we look over the next couple of quarters.
Sure Matt.
I'll start I think the first part of your question was.
A little more detail on where we're seeing that softness specifically and transactions from merchants in areas and discrete areas of wellness, we have seen a little bit of softness in late Q3, and early Q4, along with some ticket size declines in certain areas of home and field services.
Again observed in late Q3, and early Q4, but overall again I think you built.
Believes we are not.
Believe I know we are quite excited about the payments opportunity. When you look at our top four solutions TPB growth in our top four payment solutions year over year at 28% so.
As Eric mentioned in his talk track earlier on payments is incredibly important there is a large growth opportunity. We are executing on a lot of that opportunity and while we see some discrete areas of softness.
We're quite confident about the opportunity in front of us.
Okay makes sense.
And then Mark maybe a follow up for you I'm just wondering as I look at the Q4 guide.
Any changes in kind of your philosophy, there I mean do you feel like you're taking a more conservative cut at Q4, then you may have in the past just given some of the uncertainty kind of the below midpoint revenue outcome. In Q3, just any high level thoughts on kind of a setup for guidance for Q4.
Well I like to think we are always prudent in the way, we set guidance and Thats certainly been the same ones that we put out at this time clear.
Clearly this quarter, we saw softness as we alluded to on some of those things that are not as much in our control and a continuation of something that we've been managing through for the first half of the year.
So vijay probably kind of leave it at that sure.
Sure sounds good thank you guys.
Thank you one moment for our next question. Please.
Our next question comes from the line of Brad Reback with Stifel. Your line is now open.
Great. Thanks.
Take rate increase in the quarter on the payments business can you give us some more color there.
Yes, again, Brad I think that goes back to a lot of things that we've talked to in prior quarters relative to take rating obviously there.
The pricing front to the end merchant that we have been evacuated change across the course of multiple years, but really pick that up last year. Obviously, there is mix shift so as payment volume moves to a higher take rate programs that does have an impact on the overall take rate that we published and then lastly, we continue to be focused on optum.
Our relationships with our back end providers. We've made some continued meaningful changes with those providers and the economics that we get through negotiation based on scale. So all of those three things together really have driven our continued focus on net take rate and our improvement in that metric.
And any risk as you lap those next year that they'll become a bit of a growth headwind.
Listen I think.
Ultimately there are certain things that we will be able to repeat from an action standpoint, and other things that we won't be able to repeat at that same level. Obviously, we know this is a lever from a revenue growth standpoint, and it's one that we're going to continue to pay attention to and pull where we can get certain certain things like I said we.
No we have room to.
Continue to expand that margin in other things.
No.
Either for the time being we hit that as hard as we can or again, we just won't be able to repeat that.
And Brian one thing to add to that as Matt talked about before one of our when you look at the.
The largest growth within that the payment section is coming from some of our system of action.
Softwares that were not penetrating more effectively and you look at the GDP growth that growth is almost 30% just about thus far and we think those are going to accelerate into next year. So even if you have some pullback.
Some of the take rate.
And they expect the expectation is we will continue to grow through that through TPG grass and to Eric's point those actually happened to be some of the larger margin program. So their growth will help us continue to drive the overall net take rate growth because those programs over index.
Yeah.
Excellent thanks very much.
Thank you one number our next question.
The next question comes from the line of Bob <unk> Shah with Deutsche Bank. Your line is now open.
Great. Thanks for taking my questions just kind of back to that the macro question. It sounds like it's still mostly on the marketing side with kind of lingering into the payments.
What impact if at all are you seeing on the core system of action side can you just talk about renewal rates. There new logo growth has remained healthier or any changes youre seeing just given the softness in the market.
Yes. Thank you. Thanks for the question Robin I think the best.
I think you bought it you started out quite got regular path with market technology, there's been a lag.
<unk> talked about the growth rate being just over 1%, which brings down the overall growth of the business. The one area that we continue to see some.
Logo slower growth.
Fitness side, which has been several quarters I'm actually wanted to say really post COVID-19 has not reached kind of pre COVID-19 levels and so that's the one area kind of the system of action that is just the logging and we're seeing it stabilized lagging, but just not accelerating into.
Pre COVID-19 expectations.
To your point Eric.
Outside of the fitness, where the fitness sub vertical in core home services and core health services surrounding systems of action, where we really do have strong product strong footholds in those sub vertical.
No no no real change from that perspective, we continue to see.
<unk> strengthened our customer acquisition efforts and strength as Eric talked about in those core payment programs within that space from a cross sell standpoint.
That's good to hear and just one follow up just on the <unk> side I know youre starting to think more of the market with a more integrated kind of brand can you just.
Inform us of how thats going how those customer conversations.
<unk> and any benefit in that sorry.
That's going really well again, it's definitely a journey.
So were.
We have started that journey I'm not going to say, we're midway through our X percentage through but there's a lot of work to continue that journey I will say customer receptivity has been incredibly strong where.
Where we meet them in the market, where we surveyed.
This is what they're looking for is the unified platform.
And so.
We're excited about getting to that spot. We believe that's going to help us drive more efficient go to market motions, greater new customer acquisition and the ability to cross sell at a greater rate. So very excited to get there. It is a process and a journey to get there, but again along the way the validation we're getting from our customers.
And prospects is really strong.
Great. Thanks for taking my questions.
Thank you one moment for our next question. Please.
Our next question comes from Alex Skylar with Raymond James Your line is now open.
Great. Thank you I just want to follow up on your answer to that last question can you just talk about the digital demand gone effort in particular here through the third quarter and specifically on the new logos that how that performance for the digital channel.
Relative to kind of the start of the year either in both in pipeline generation or either in conversion as well.
Yes.
I would say relative to the start of the year and how that has gone through the year. Obviously, you have ebbs and flows based on different market dynamics, but quarter over quarter significantly from a demand Gen demand Gen standpoint, we really haven't seen a massive change there our LTV, obviously through our efforts on focusing on the right customers focusing on expansion.
And of those customers has continued to.
To improve nicely.
CAC has remained where we have expected to remained and ultimately LTV to CAC again looking back at the beginning of the year is in a very very healthy place very very linear to where it was at the beginning of the year and an area that again, when we look at the strength of that metric overall vis vis digital demand Gen. We have opportunities to continue to.
To invest in some of our core products some of our core systems of action.
Sure.
Return metrics are really strong.
Okay. That's great color and then just a follow up.
Eric remark just on the workforce restructuring efforts last week can you just provide some more color on what percentage of the business was impacted and was this across all lines of the business or any particular departments with maybe an outsized or less of an impact.
Yes, so about 7% all in and it was really kind of across the board.
Okay. Thanks for that.
Thank you.
Our next question please.
Our next question comes from the line of Ryan Macwilliams with Barclays. Your line is now open.
Hey, Thanks for taking the question. This is Pete new non for Ryan Macwilliams pretty pleased to see the continued operating execution in the quarter.
I got to ask what are you seeing on the SMB front as customer demand remained in line with prior quarters are you seeing things trend differently.
From the S&P standpoint, as we've talked about our pipelines remain.
Barry.
As Matt talked about <unk>, we haven't seen much shift in that I think the areas that we've talked about that we are seeing some softness that really focus on consumer demand, which affects our marketing technology more lead generation business, our rebates, which are.
Okay.
What are our customers are selling or buying HVAC things of that nature for their customers and so the consumer demand is the puzzle is really the area. We're seeing the softness much much less so than the business. The business core software is that we're selling in the marketplace.
Okay. That's very helpful. And then just as you mentioned the <unk> acquisition any updated view on near term M&A from here.
We continue to look.
Things that we think are going to be helped the overall.
Ecosystem grow more effectively or provide more value to our customers. We look at a lot of things as you can imagine on a daily basis, I think we're going to be very prudent and we have a lot of things going on internally and a lot of opportunity.
The utilization of cash on hand make mixture, we put that those dollars towards the best use whether that is buyback stock or via M&A. All of those are kind of looked at independently based on the best opportunities for the shareholders.
Awesome. Thanks, guys.
Thank you one moment for our next question. Please.
Our next question comes from the line of Alexia <unk> with JP Morgan. Your line is now open.
Hi. Thank you. This is the lease cantor on for Alexia <unk>. So one of my questions have to do with the payment strategy implemented recently I was wondering if there was any feedback on the strategy that increased software prices for customers that were not willing to adopt payment functionality.
In hospice.
Prompted any churn or attrition and customer.
Yes, thanks for the question please.
Now, we're obviously continuing to effectuate that strategy.
Churn has actually been below expectations from the implementation of that mandate. So certainly quite happy it's early going but this strategy has been successful and obviously one we will consider in the appropriate places looking at repeating as well.
Great. Thank you and then a quick follow up so after talking about the upper house consolidation I was wondering what potential consolidation in other verticals could look like in the quarters to come.
Yes, I mean, we look at that as certainly an opportunity.
The.
All of our verticals will look a little bit different in terms of the core itt's that we're going after our solution set so one won't look exactly identical to the other.
As ever health experience, it's certainly a road map for US. We are ahead of that roadmap thinking about how it might look different in other verticals that ever health for example ever well as well as you know in whereas you may know we've done some of this in some of our horizontals as well so ever connect was a consolidation that came together from.
<unk>.
<unk> set of <unk>.
Solutions that we acquired historically, so we've been down the path of consolidation actually for some time, we're certainly in the midst of ever health right now ever connect has been in our rearview mirror and we're using all of those learnings to think about what that consolidation will continue to look like really for the end customer because it's all about creating a customer set.
<unk> journey for that end customer and we believe that opportunity exists in verticals, we haven't been as active in yet.
Yes.
Got it thank you so much.
Thank you.
Remainder to ask a question you will need to press star one one and wait for your name to be announced.
Our next question comes from the line of Mason Marin with Jefferies. Your line is now open.
Hi, Thanks for taking the question.
Nice job controlling operating expenses, including the announced risks.
Think about the macro continues to soften and can you help frame for us how you.
Thinking about margin progression going forward.
Should we expect more modest expansion in 'twenty four if the macro doesn't improve or are there. Other further initiatives that you could take as a management team.
I'll start and I'll, let Marco and thank you very much for the question about the way it is and I think we will as an organization to kind of show. This over the last several years as a public company.
Obviously continually focused on how we can expand the top of funnel and grub more effectively.
In addition to that increase in our margins is incredibly important to US we gave kind of long term both of that 25% to 30% range EBITDA margins were 24% today in terms of Q3 and slightly lower than that for the year and our expectation is that we'll continue to March down that path to continue to expand those margins and 24 and 25% so.
It's both combined with slightly slower growth rate than we want but even as growth rates improve our expectation is we have a lot of leverage as the business as we continue to scale to drive even.
Even wider operating margins in the organization.
I mean, obviously, we'll be talking about next year's guidance next quarter.
But to Eric's point, there are a number of initiatives.
Which we think will have continuing.
Positive impact on margin expansion really in the short to mid and even long term. Obviously one of those continues to be investments in the higher margin areas of our business like payments, which we will continue to focus on as well as just continuing to drive efficiency in the operation through <unk>.
A variety of initiatives not the least of which youre seeing in things like our ever health brand and product consolidation, which naturally drives cost the right direction and efficiency of spend and things like that so.
I think we expect as Eric said as we have talked about really from the beginning.
From the time, we went public to continuing expansion of margins.
For the short mid and long term.
Understood. Thank you.
Thank you one moment for our next question. Please.
Our next question comes from the line of Wayne <unk> with Piper Sandler Your line is now open.
Hi, This is Wayne turn on for Clarke Jeffries I noticed there are 11000 added enabled customers and of those 7000 are using more than one solution.
So about 63% over the $50 dollar store last year is that a function of the payments Mandy and should we expect this to tick up over time.
Thanks for the question Wayne I appreciate it I think the payments mandate is obviously just one tactic when we think about the overall strategy of payment enablement, obviously, when we think about cross sell payments is where we are furthest along.
And there are a variety of strategies and tactics in place to continue to drive payment enablement and did all the down funnel metrics in the payments fall.
Again mandate, one, but we're obviously thinking about a lot of other things product expansion et cetera to drive increased payment take.
And then there is obviously cross sell of other products.
Whether it be in customer experience solutions marketing technology, we have the opportunity to continue to grow the expansion of utilization of more than one product I think <unk> seen nice progress as we split those metrics into to try to give you a little bit more transparency, but a lot of opportunity for us to continue to grow both the payments cross sell is.
Well as other cross sell.
Got it that makes sense and then you guys mentioned price increases last quarter do you anticipate maintaining that into 2024 and maybe continuing yet thank you.
So price increases will be a continuing phenomenon.
We always.
Look at those and think a lot about price to value as we've mentioned before I think this year we became.
More aggressive than we were the prior year in terms of rolling out price increases across the continuum of our solutions and we'll continue to do that really for the foreseeable future. It's a it's obviously a great lever.
And as we continue to invest in our products and continue to find new ways to create value for our customers. So I think it's a great opportunity.
Got it thank you.
Thank you one moment for our next question. Please.
Our next question comes from the line of Pat <unk> with JMP Securities. Your line is now open.
Hi, This is Aaron on.
Is there any additional color you can give on revenue based customer count growth expectations, we kicked sort of going forward.
Quick serve added.
There have been minimal customers. It was a very small tuck in acquisitions really focused on.
Providing real technology into the base of customers, we had a solid market solution called choice.
More of a little bit up market for Smbs and philosophies I'll start with fusion.
Really sits right in the middle of that so nominal from Bob kind of revenue and profitability.
And customer standpoint.
That's helpful. And then maybe just as a follow up Mark you mentioned, Rick was about 7% when we think about modeling opex going forward, what signs should see the most benefit.
It's really across the board.
Literally across the board.
People are represented through support and success in our Cogs line right on through the Opex categories.
Got it.
Thank you.
I'm currently showing no further questions at this time I would like to hand, the conference back over to Mr. Eric <unk> for closing remarks.
Well. Thank you so much ever commerce team continues to work extremely hard to achieve key short and long term objectives for the company. We remain extremely excited about the opportunities and growth prospects in front of us. Thank you joining the call today.
This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.
Okay.
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Okay.
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