EngageSmart Reports Fourth Quarter and Full Year 2021 Results|||

Record Quarterly and Almanac Results in First Year as Public Company

  • Almanac Full Revenue
    increased 48% year-over-twelvemonth to $216.iii million
  • Annual SMB Revenue
    increased 74% year-over-yr to $108.7 million
  • Almanac Enterprise Acquirement
    increased 28% year-over-year to $107.5 million

BRAINTREE, Mass.–(BUSINESS WIRE)–EngageSmart, Inc. (NYSE: ESMT), a leading provider of vertically tailored customer engagement software and integrated payments solutions, today reported fiscal results for the fourth quarter and full year ended Dec 31, 2021.

“EngageSmart delivered outstanding results in 2021, with total annual revenue increasing 48% year-over-year,” stated Bob Bennett, EngageSmart CEO. “Momentum across our SMB and Enterprise segments drove another quarter of record revenue performance, highlighted by strong customer growth and exceptional customer retention. Our position is compelling as nosotros accost a huge market opportunity accompanied by high customer analogousness for our solutions.”

“In the SMB segment, practitioners rely on the SimplePractice platform to schedule appointments, certificate cases, deploy telehealth, and neb and collect payments from their customers,” said Cassandra Hudson, Chief Financial Officer. “We are now in ten vertical markets, including the mental health market where nosotros have a strong leadership position and look frontward to building on this foundation in 2022. In the Enterprise segment, we are empowering our customers to create more modern experiences for their payers by migrating legacy processes, like mailing payments, to online adoption across our solutions. Throughout the fourth quarter, we saw potent revenue growth through the onboarding of new customers and continued adoption of our solutions with existing billers. As we look ahead, we intend to build on our SaaS solutions to farther extend our leadership as a provider of vertically tailored customer appointment software and integrated payments solutions.”

Fourth Quarter 2021 Financial and Business organisation Functioning

  • Total Revenue
    increased 37% to $61.vi million compared to $45.0 million in the 4th quarter of 2020.
  • SMB Acquirement
    increased 55% to $31.i million compared to $xx.i 1000000 in the 4th quarter of 2020.
  • Enterprise Acquirement
    increased 23% to $thirty.6 meg compared to $24.9 million in the fourth quarter of 2020.
  • Gross Turn a profit
    was $46.2 million, representing 75.0% gross margin, compared to $33.8 million, or 75.1% gross margin, for the 4th quarter of 2020. Adjusted Gross Profit was $48.0 million, representing 77.eight% Adapted Gross Profit Margin compared to $35.five million, or 78.7% Adjusted Gross Turn a profit Margin, for the fourth quarter of 2020.1
  • Net Loss
    was $0.9 meg, representing 1.5% net loss margin, in the fourth quarter of 2021, compared to net income of $0.two million, or 0.four% cyberspace income margin, in the fourth quarter of 2020.
  • Adjusted EBITDA
    was $half dozen.iii million, representing ten.ii% Adjusted EBITDA Margin, compared to $7.8 meg, or 17.four% Adjusted EBITDA Margin, for the fourth quarter of 2020.1
  • Total Transactions Candy
    increased 41% to 31.2 million compared to the 22.ane 1000000 in the fourth quarter of 2020.

Total Yr 2021 Financial and Concern Performance

  • Total Revenue
    increased 48% to $216.three million compared to $146.half-dozen meg in the prior year.
  • SMB Revenue
    increased 74% to $108.vii 1000000 compared to $62.half dozen million in the prior year.
  • Enterprise Acquirement
    increased 28% to $107.5 million compared to $83.9 million in the prior yr.
  • Gross Profit
    was $161.2 meg, representing 74.v% gross margin, compared to $109.0 million, or 74.3% gross margin, in the prior twelvemonth. Adjusted Gross Turn a profit was $167.9 million, representing 77.6% Adjusted Gross Profit Margin compared to $115.viii meg, or 78.7% Adjusted Gross Profit Margin, in the prior year.1
  • Net Loss
    was $9.0 meg, representing 4.i% net loss margin, compared to $six.7 million, or four.half dozen% net loss margin, in the prior year.
  • Adapted EBITDA
    was $xxx.6 meg, representing 14.2% Adjusted EBITDA Margin, compared to $22.0 million, or 15.0% Adapted EBITDA Margin, in the prior twelvemonth.1
  • Total Transactions Processed
    increased 40% to 111.four meg compared to the 79.4 meg in the prior year.
  • Full Number of Customers
    increased by 37% to 83.0 thousand as of December 31, 2021, compared to 60.4 thousand as of December 31, 2020.
  • Cash and Cash Equivalents
    were $254.3 million as of December 31, 2021, compared to $29.4 one thousand thousand as of December 31, 2020.

____________________

1Reconciliations of GAAP to not-GAAP financial measures, including Adapted Gross Turn a profit, Adjusted Gross Profit Margin, Adapted EBITDA, and Adapted EBITDA Margin, also every bit definitions for the non-GAAP financial measures included in this printing release and the reasons for their utilise, are presented below.

2021 Business organization Highlights

  • EngageSmart and its vertically tailored solutions achieved industry recognition:

    • EngageSmart ranked on Deloitte 2021 Technology Fast 500
    • EngageSmart ranked amid highest scoring businesses on Inc. Mag’due south Best Workplaces for 2021
    • EngageSmart named a 2021 Superlative Workplace in Massachusetts by The Boston Globe
    • SimplePractice named in Capterra Shortlist Written report for Massage Therapy Software
    • InvoiceCloud named a finalist in the 2021-2022 Cloud Awards in the category of Best Cloud Payment, Finance or Billing Solution
    • HealthPay24 named in Blackness Volume’s Pinnacle 10 Patient Payment Technology and Software list for 2021
  • Product innovation in EngageSmart’s vertical solutions drives market leadership:

    • SimplePractice launched Monarch, a national therapist network integrated into our EHR platform
    • InvoiceCloud launched new products including Outbound Campaigns, as well equally 42 new integrations in 2021
    • DonorDrive launched a new mobile app to further simplify the way people fundraise
    • HealthPay24 launched a Retail solution offering a transparent fiscal payment and reconciliation process
  • EngageSmart successfully completed its initial public offering in September 2021
  • EngageSmart added Kevin O’Brien, President, Enterprise Solutions, and Alan Canzano, EVP Corporate Development and Strategy to the Leadership Team
  • EngageSmart welcomed Debbie Dunnam and Diego Rodriguez to the Lath of Directors
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Financial Outlook

Q1’22

FY’22

Guidance

Guidance

Revenue (in millions)

$61.0 – $62.5

$280.0 – $285.0

Adapted EBITDA (in millions)

$five.4 – $6.ii

$29.0 – $31.0

A reconciliation of Adjusted EBITDA guidance to net (loss) income on a forward-looking basis cannot be provided without unreasonable efforts, every bit we are unable to provide reconciling data with respect to involvement expense, net, provision for (do good from) income taxes, depreciation, acquittal of intangible avails, transaction-related expenses, off-white value adjustment of acquired deferred revenue, stock-based bounty, and restructuring charges, all of which are adjustments to Adjusted EBITDA.

Webcast and Conference Call Information

EngageSmart, Inc. (NYSE: ESMT), a leading provider of vertically tailored customer engagement software and integrated payments solutions, will report fourth quarter and full yr 2021 financial results after the close of the market on Tuesday, February 15, 2022. Management will host a conference call to discuss the results at v:00 p.k. ET.

The conference telephone call will exist webcast live on EngageSmart’s investor relations website at
https://investors.engagesmart.com/events-and-presentations/events/. A replay will exist bachelor on the investor relations website for 365 days following the call. For investors and analysts wishing to participate in the telephone call, the dial-in numbers are (844) 200-6205 for domestic callers and (929) 526-1599 for international callers. The conference telephone call admission code is 642527.

About EngageSmart

EngageSmart (NYSE: ESMT) is a leading provider of vertically tailored customer date software and integrated payments solutions. At EngageSmart, our mission is to simplify client and customer engagement to let our customers to focus resource on initiatives that improve their businesses and ameliorate serve their communities. Headquartered in Braintree, Massachusetts, EngageSmart offers single instance, multi-tenant, true Software-as-a-Service (“SaaS”) vertical solutions, including SimplePractice, InvoiceCloud, HealthPay24 and DonorDrive, that are designed to simplify our customers’ appointment with their clients by driving digital adoption and self-service. EngageSmart serves more than 79,000 customers in the SMB Solutions segment and more than three,100 customers in the Enterprise Solutions segment across five cadre verticals: Health & Wellness, Government, Utilities, Financial Services, and Giving. For more information, visit https://engagesmart.com/ and follow u.s.a. on LinkedIn.

Frontwards-Looking Statements

Certain statements in this release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on current expectations and assumptions that are subject to risks and uncertainties. All statements contained in this news release that exercise not relate to matters of historical fact should be considered frontwards-looking statements, and are generally identified past words such as “expect,” “intend,” “anticipate,” “estimate,” “believe,” “hereafter,” “could,” “should,” “plan,” “aim,” and other similar expressions. These forrad-looking statements include, but are not limited to, statements regarding anticipated financial performance and financial position, including our fiscal outlook for the commencement quarter and full year 2022 and other statements that are non historical facts. These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause actual results to differ materially from those contained in the forrad-looking statements. Our bodily results could differ materially from those anticipated in these forward-looking statements for many reasons, including, but not limited to, the following: our inability to sustain our rapid growth; failure to manage our infrastructure to back up our future growth; our chance management efforts non beingness effective to prevent fraudulent activities; disability to attract new customers or convert trial customers into paying customers; inability to introduce new features or services successfully or to heighten our solutions; declines in client renewals or failure to convince customers to broaden their use of solutions; inability to achieve or sustain profitability; failure to adapt and respond effectively to rapidly irresolute technology, evolving manufacture standards and regulations and changing business needs, requirements or preferences; real or perceived errors, failures or bugs in our solutions; intense competition; lack of success in establishing, growing or maintaining strategic partnerships; fluctuations in quarterly operating results; hereafter acquisitions and investments diverting management’s attention and difficulties associated with integrating such caused businesses; concentration of revenue in our InvoiceCloud and SimplePractice solutions; COVID-nineteen pandemic and its impact on our employees, customers, partners, clients and other central stakeholders; legal and regulatory risks; and technology and intellectual holding-related risks, among others.

Other important risk factors that could affect the consequence of the events set along in these statements and that could affect the Company’s operating results and financial condition are discussed in Item 1A of our Quarterly Written report on Grade 10-Q for the quarter ended September thirty, 2021, as updated past our future filings with the Securities and Exchange Committee (“SEC”). Such statements are based on the Visitor’s beliefs and assumptions and on information currently available to the Visitor. The Company disclaims any obligation to publicly update or revise whatever such frontward-looking statements as a result of developments occurring after the date of this document except as required by law.

Non-GAAP Financial Measures

This press release includes certain performance metrics and financial measures not based on GAAP, including Adjusted EBITDA, Adapted EBITDA Margin, Adapted Gross Profit, Adjusted Gross Margin, Not-GAAP Operating Expenses, and Costless Greenbacks Flow, as well as key business metrics, including full Number of Customers and total Transactions Processed.

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Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Turn a profit, Adjusted Gross Margin, Non-GAAP Operating Expenses, and Free Cash Flow are supplemental measures of our performance that are not required past, or presented in accordance with, GAAP and should not be considered every bit an alternative to net (loss) income, gross turn a profit, operating expenses, net cash provided by operating activities or whatsoever other performance measure out derived in accordance with GAAP.

We define Adapted EBITDA as net (loss) income excluding involvement expense, cyberspace; provision for (benefit from) income taxes; depreciation; and amortization of intangible assets, as further adjusted for transaction-related expenses, fair value aligning of acquired deferred revenue, stock/equity-based compensation, and restructuring (reversal) charges. We ascertain Adjusted EBITDA Margin as Adjusted EBITDA divided past revenue plus the fair value aligning of acquired deferred revenue.

We define Adjusted Gross Profit every bit gross profit every bit adapted for the fair value adjustment of caused deferred acquirement, amortization of intangible assets, stock/equity-based bounty, and transaction-related expenses. Nosotros ascertain Adjusted Gross Margin as Adjusted Gross Profit divided by acquirement plus the fair value aligning of acquired deferred revenue.

We ascertain Non-GAAP Operating Expenses equally GAAP operating expenses excluding stock/equity-based compensation and transaction-related expenses. Nosotros define Non-GAAP Operating Expenses as a per centum of revenue as Not-GAAP Operating Expenses divided by acquirement plus the off-white value adjustment of acquired deferred acquirement.

We ascertain Complimentary Cash Flow as internet cash provided by operating activities less purchases of property and equipment, including costs capitalized for development of internal-use software.

We define Number of Customers as individuals or entities with whom we directly contract to use our solutions.

We ascertain Transactions Candy as the number of accepted payment transactions, such every bit credit card and debit card transactions, automated clearing house (“ACH”) payments, emerging electronic payments, other advice, text messaging and interactive vocalization response transactions, and other payment transaction types, which are facilitated through our platform during a given period. We believe Transactions Processed is a primal business metric for investors because it straight correlates with transaction and usage-based revenue. We use Transactions Processed to evaluate changes in transaction and usage-based acquirement over time.

We calculate our dollar-based net retentivity charge per unit at the end of a given period past using (a) the acquirement from all customers during the twelve months catastrophe 1 year prior to such period every bit the denominator and (b) the revenue from all remaining customers during the twelve months ending every bit of the end of such flow minus the revenue from all customers who are new customers during those twelve months as the numerator. Nosotros ascertain new customers as customers with whom we have generated less than twelve months of acquirement. Acquired businesses are reflected in our dollar-based net retentivity rate beginning one year following the engagement of acquisition.

We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Turn a profit, Adjusted Gross Margin, Non-GAAP Operating Expenses, and Free Cash Flow may not be comparable to similar measures disclosed past our competitors because not all companies and analysts calculate these non-GAAP financial measures in the same manner. We present these non-GAAP financial measures because we consider these metrics to exist important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors’ agreement of our performance is enhanced by including these non-GAAP financial measures equally a reasonable footing for comparing our ongoing results of operations.

Non-GAAP financial measures assistance direction in assessing operating functioning by removing the touch on of items not directly resulting from our core operations, to present operating results on a consequent basis. Management uses these non-GAAP fiscal measures for planning purposes, including the preparation of our internal almanac operating budget and fiscal projections; to evaluate the performance and effectiveness of our operational strategies; and to evaluate our capacity to expand our business organization. These not-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or every bit an alternative to, or a substitute for net (loss) income, gross profit, operating expenses, net cash provided by operating activities, or other financial argument data presented in accordance with GAAP in our consolidated financial statements.

EngageSmart, Inc.

Consolidated Statement of Operations

(Unaudited, in thousands, except share and per share amounts)

Three Months Concluded

December 31,

Twelve Months Ended

Dec 31,

2021

2020

2021

2020

Acquirement

$

61,616

$

44,997

$

216,280

$

146,557

Cost of revenue

xv,387

11,206

55,122

37,593

Gross profit

46,229

33,791

161,158

108,964

Operating expenses:

General and authoritative

13,543

viii,813

45,533

26,866

Selling and marketing

21,744

xiii,713

72,968

48,581

Research and development

ix,435

5,723

33,382

20,788

Contingent consideration expense

(67

)

257

1,303

257

Restructuring (reversal) charges

(241

)

ii,434

Acquittal of intangible assets

2,362

two,362

9,448

nine,390

Total operating expenses

47,017

30,868

162,393

108,316

(Loss) income from operations

(788

)

2,923

(1,235

)

648

Other income (expense), net:

Involvement expense, including related political party interest

(141

)

(ii,405

)

(8,228

)

(9,908

)

Other income (expense), net

(17

)

(46

)

(124

)

(44

)

Total other income (expense), net

(158

)

(2,451

)

(viii,352

)

(ix,952

)

(Loss) income before income taxes

(946

)

472

(9,587

)

(9,304

)

Provision for (benefit from) income taxes

1

292

(622

)

(2,626

)

Internet (loss) income and comprehensive (loss) income

$

(947

)

$

180

$

(8,965

)

$

(6,678

)

Net (loss) income per share:

Basic

$

(0.01

)

$

0.00

$

(0.06

)

$

(0.05

)

Diluted

$

(0.01

)

$

0.00

$

(0.06

)

$

(0.05

)

Weighted-average number of mutual shares outstanding:

Basic

161,724,835

147,110,425

151,609,440

145,647,226

Diluted

161,724,835

148,975,583

151,609,440

145,647,226

EngageSmart, Inc.

Consolidated Balance Sheets

(Unaudited, in thousands, except share amounts)

December 31,

2021

2020

Avails

Current assets:

Cash and cash equivalents

$

254,294

$

29,350

Accounts receivable, net of assart for doubtful accounts of $203 and $160 every bit of December 31, 2021 and Dec 31, 2020, respectively

10,266

8,100

Unbilled receivables

3,441

2,973

Prepaid expenses and other current avails

vii,617

iii,490

Full electric current assets

275,618

43,913

Property and equipment, net

10,968

6,211

Goodwill

425,677

425,677

Caused intangible assets, internet

87,920

103,520

Other assets

3,811

1,837

Total assets

$

803,994

$

581,158

Liabilities and stockholders’/ members’ equity

Current liabilities:

Accounts payable

$

2,090

$

3,137

Accrued expenses and other electric current liabilities

25,229

fifteen,966

Contingent consideration liability

2,800

1,867

Deferred revenue

vi,792

4,776

Notes payable to related parties

5,900

Total current liabilities

36,911

31,646

Long-term debt, net of issuance costs

110,200

Deferred income taxes

four,224

v,471

Contingent consideration liability, internet of current portion

ane,498

Deferred revenue, internet of current portion

232

201

Other long-term liabilities

5,528

3,482

Total liabilities

46,895

152,498

Commitments and contingencies

Stockholders’/ members’ equity:

Class A-1 mutual shares, no par value, no shares issued and outstanding every bit of December 31, 2021; 97,209,436 shares issued and outstanding equally of December 31, 2020

293,286

Class A-2 common shares, no par value, no shares issued and outstanding as of Dec 31, 2021; 45,262,340 shares issued and outstanding equally of Dec 31, 2020

136,559

Class A-3 common shares, no par value, no shares issued and outstanding as of December 31, 2021; 5,010,888 shares issued and outstanding as of December 31, 2020

19,956

Preferred stock, par value $0.001 per share, 10,000,000 shares authorized and no shares issued and outstanding as of December 31, 2021, and no shares authorized, issued and outstanding as of December 31, 2020

Common stock, par value $0.001 per share, 650,000,000 shares authorized and 161,860,980 shares issued and outstanding as of December 31, 2021, and no shares authorized, issued and outstanding every bit of December 31, 2020

162

Boosted paid-in capital

787,043

Accumulated stockholders’/members’ deficit

(30,106

)

(21,141

)

Total stockholders’/members’ equity

757,099

428,660

Total liabilities and stockholders’/members’ equity

$

803,994

$

581,158

EngageSmart, Inc.

Consolidated Statements of Cash Flows

(Unaudited, in thousands)

Year Ended December 31,

2021

2020

Cash flows from operating activities:

Net loss

$

(eight,965

)

$

(six,678

)

Adjustments to reconcile cyberspace loss to internet cash provided past operating activities:

Depreciation and acquittal expense

18,190

xvi,811

Stock/equity-based compensation expense

nine,468

641

Contingent consideration expense

i,303

257

Deferred income taxes

(1,247

)

(2,775

)

Loss on disposal of property and equipment

48

Non-cash interest expense, including loss on extinguishment of debt

four,125

4,017

Changes in operating avails and liabilities:

Prepaid expenses and other electric current assets

(iv,127

)

(617

)

Accounts receivable, net

(2,166

)

(2,190

)

Unbilled receivables

(468

)

(one,813

)

Other assets

(864

)

(346

)

Accounts payable

(one,072

)

i,385

Accrued expenses and other current liabilities

viii,856

7,309

Deferred revenue

2,047

526

Other long-term liabilities

(707

)

3,118

Cyberspace greenbacks provided by operating activities

24,421

19,645

Cash flows from investing activities:

Acquisition of businesses, internet of cash caused

(25,518

)

Purchases of belongings and equipment, including costs capitalized for evolution of internal-use software

(four,521

)

(five,392

)

Net cash used in investing activities

(four,521

)

(30,910

)

Cash flows from financing activities:

Proceeds from issuance of common stock upon initial public offering, internet of underwriting discounts and commissions

331,989

Proceeds from issuance of mutual stock to General Atlantic (IC), 50.P. in connection with the Corporate Conversion

43,236

Payment to settle fractional shares related to Course A-ii shareholders in connection with the Corporate Conversion

(43,236

)

Proceeds from issuance of long-term debt

31,250

Repayment of long-term debt

(114,174

)

Payment of debt issuance costs

(1,146

)

Payment of debt extinguishment costs

(90

)

Payments of related political party notes

(5,900

)

Payments of contingent consideration

(1,868

)

(one,500

)

Gain from exercise of stock/equity-based options

one,577

four,981

Repurchase and retirement of mutual shares

(51

)

Payment of initial public offering costs

(5,293

)

Net cash provided by financing activities

205,044

34,731

Internet increment in greenbacks, cash equivalents and restricted greenbacks

224,944

23,466

Greenbacks, cash equivalents and restricted cash at beginning of menstruum

29,650

6,184

Cash, greenbacks equivalents and restricted cash at end of catamenia

$

254,594

$

29,650

Reconciliation of cash, greenbacks equivalents, and restricted cash:

Cash and greenbacks equivalents

$

254,294

$

29,350

Restricted cash inside other avails

300

300

Total greenbacks, greenbacks equivalents, and restricted greenbacks

$

254,594

$

29,650

Contacts

Investor Relations:

Press:

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Source: https://www.dailyhostnews.com/engagesmart-reports-fourth-quarter-and-full-year-2021-results

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