EverCommerce Inc

Previous wording

EverCommerce is a leading provider of integrated, vertically-tailored software-as-a-service (“SaaS”) solutions for service-based small- and medium-sized businesses (“service SMBs”). Our platform spans across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications. Today, we serve more than 708,000 customers across three core verticals: Home Services; Health Services; and Fitness & Wellness Services. Within our core verticals, our customers operate within numerous micro-verticals, ranging from home service professionals, such as home improvement contractors and home maintenance technicians, to physician practices and therapists within Health Services, to personal trainers and salon owners within Fitness & Wellness. Our platform provides vertically-tailored SaaS solutions that address service SMBs’ increasingly specialized demands, as well as highly complementary solutions that provide fully-integrated offerings, allowing service SMBs and EverCommerce to succeed in the market, and provide end consumers more convenient service experiences.

Current wording

EverCommerce is a leading provider of integrated, vertically-tailored software-as-a-service (“SaaS”) solutions for service-based small- and medium-sized businesses (“service SMBs”). Our platform spans across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications. Today, we serve more than 740,000 customers across three core verticals: EverPro for Home Services; EverHealth for Health Services; and EverWell for Wellness Services. Within our core verticals, our customers operate within numerous micro-verticals, ranging from home service professionals, such as home improvement contractors and home maintenance technicians, to physician practices and therapists within Health Services, to salon owners within Wellness. Our platform provides vertically-tailored SaaS solutions that address service SMBs’ increasingly specialized demands, as well as highly complementary solutions that provide fully-integrated offerings, allowing service SMBs and EverCommerce to succeed in the market, and provide end consumers more convenient service experiences.

Previous wording

•Marketing Technology Solutions: Our Marketing Technology Solutions work with our Customer Experience Solutions to help customers build their businesses by invigorating marketing operations and improving return on investment across the customer lifecycle. These solutions help businesses to manage campaigns, generate quality leads, increase conversion and repeat sales, improve customer loyalty and provide a polished brand experience. Our solutions include: custom website design, development and hosting, responsive web design, marketing campaign design and management, search engine optimization (“SEO”), paid search and display advertising, social media and blog automation, call tracking, review monitoring and marketplace lead generation, among others.

Current wording

•Marketing Technology Solutions: Our Marketing Technology Solutions work with our Customer Experience Solutions to help customers build their businesses by invigorating marketing operations and improving return on investment across the customer lifecycle. These solutions help businesses to manage campaigns, generate quality leads, increase conversion and repeat sales, improve customer loyalty and provide a polished brand experience. Our solutions include: custom website design, development and hosting, responsive web design, marketing campaign design and management, search engine optimization, paid search and display advertising, social media and blog automation, call tracking, review monitoring and marketplace lead generation, among others. In March 2025, the Company announced the evaluation of strategic alternatives for our Marketing Technology

Previous wording

We go to market with suites of solutions that are aligned to our three core verticals: (i) the EverPro suite of solutions in Home Services; (ii) the EverHealth suite of solutions within Health Services; and (iii) the EverWell suite of solutions in Fitness & Wellness Services. Within each suite, our Business Management Software – the system of action at the center of a service business’ operation – is typically the first solution adopted by a customer. This vertically-tailored point-of-entry provides us with an opportunity to cross-sell adjacent products, previously offered as fragmented and disjointed point solutions by other software providers. This “land and expand” strategy allows us to acquire customers with key foundational solutions and expand into offerings via product development and acquisitions that cover all workflows and power the full scope of our customers’ businesses. This results in a self-reinforcing flywheel effect, enabling us to drive value for our customers and, in turn, improve customer stickiness, increase our market share and fuel our growth.

Current wording

We go to market with suites of solutions that are aligned to our three core verticals. Within each suite, our Business Management Software – the system of action at the center of a service business’ operation – is typically the first solution adopted by a customer. This vertically-tailored point-of-entry provides us with an opportunity to cross-sell adjacent products, previously offered as fragmented and disjointed point solutions by other software providers. This “land and expand” strategy allows us to acquire customers with key foundational solutions and expand into offerings via product development and acquisitions that cover all workflows and power the full scope of our customers’ businesses. This results in a self-reinforcing flywheel effect, enabling us to drive value for our customers and, in turn, improve customer stickiness, increase our market share and fuel our growth.

Previous wording

Our business benefits from attractive unit economics. Approximately 97% of our revenue in the years ended December 31, 2023 and 2022 was recurring or re-occurring, and we maintained an annualized net pro forma revenue retention rate of approximately 95% for the quarter ended December 31, 2023. Excluding our marketing technology solutions, our annualized net revenue retention rate for our core software and payments solutions was approximately 100% for the quarter ended December 31, 2023. We believe the retention and growth of revenue from our existing customers is a helpful measure of the health of our business and our future growth prospects. Our ability to cross sell additional products and services to our existing customers can increase customer engagement with our suite of solutions and thus have a positive impact on our net pro forma revenue retention rate. For example, we have leveraged our land and expand strategy to cross sell solutions to our existing customers, which has supported our high net pro forma revenue retention rate by increasing customer utilization of our solutions, educating customers as to how our platform and synergies can support their businesses and, in turn, improving customer stickiness.

Current wording

Our business benefits from attractive unit economics. Approximately 97% of our revenue was recurring or re-occurring in both of the years ended December 31, 2024 and 2023, and we maintained an annualized net revenue retention rate of approximately 91% and 93% for the quarters ended December 31, 2024 and 2023, respectively. Our annualized pro forma net revenue retention rate was equal to the annualized net revenue retention rate for the quarters ended December 31, 2024 and 2023, respectively. Excluding our marketing technology solutions, our annualized net revenue retention rate for our core software and payments solutions was approximately 96% and 98% for the quarters ended December 31, 2024 and 2023, respectively. We believe the retention and growth of revenue from our existing customers is a helpful measure of the health of our business and our future growth prospects. Our ability to cross sell additional products and services to our existing customers can increase customer engagement with our suite of solutions and thus have a positive impact on our net pro forma revenue retention rate. For example, we have leveraged our land and expand strategy to cross sell solutions to our existing customers, which has supported our high net pro forma revenue retention rate by increasing customer utilization of our solutions, educating customers as to how our platform and synergies can support their businesses and, in turn, improving customer stickiness.

Previous wording

We calculate our monthly net pro forma revenue retention rate for a particular month as the recurring or re-occurring revenue gained/lost from existing customers, less the recurring or re-occurring revenue lost from cancelled customers, as a percentage of total recurring or re-occurring revenue 12 months prior, divided by 12. For existing customers, we consider customers that existed 11 or more months prior to the current month and that do not have an end date (i.e., cancelled relationship) on or after the first day of the current month. For example, the recurring or re-occurring revenue gained/lost from existing customers in November 2023 is the difference between the recurring or re-occurring revenue generated in November 2023 and the same such revenue generated in November 2022, for customers with a start date prior to December 1, 2022 and no end date or cancelled relationship on or after November 1, 2023. For cancelled customers, we examine customers that cancelled their relationships on or after the first day of the month that is 12 months prior to the current month and before the first day of the current month. For example, the recurring or reoccurring revenue lost from cancelled customers in November 2023 is the difference between the recurring or re-occurring revenue generated in November 2023 and the same such revenue generated in November 2022, for customers that cancelled on or after November 1, 2022 and before November 1, 2023. Net pro forma revenue retention is calculated as if acquisitions that were closed during the prior period presented were closed on the first day of such period presented. Our calculation of net pro forma revenue retention rate for any fiscal period includes the positive recurring and re-occurring revenue impacts of selling new solutions to existing customers and the negative impacts of contraction and attrition among this set of customers. Our net pro forma revenue retention rate

Current wording

We calculate our annualized net revenue retention rate based on the average of the annualized net revenue retention rate calculated for each month during the twelve-month period as of the most recent quarter end. Our calculation of net revenue retention rate for any fiscal period includes the positive recurring and re-occurring revenue impacts of selling new solutions to existing customers and the negative impacts of contraction and attrition among this set of customers. The annualized net revenue retention rate for a particular month is calculated as the recurring or re-occurring revenue gained/lost from existing customers, less the recurring or re-occurring revenue lost from cancelled customers as a percentage of total recurring or re-occurring revenue during the corresponding month of the prior year. For existing customers, we consider customers that existed 11 or more months prior to the current month and that do not have an end date (i.e., cancelled relationship) on or after the first day of the current month. For example, the recurring or re-occurring revenue gained/lost from existing customers in November 2024 is the difference between the recurring or re-occurring revenue generated in November 2024 and the same such revenue generated in November 2023, for customers with a start date prior to December 1, 2023 and no end date or cancelled relationship on or after November 1, 2024. For cancelled customers, we examine customers that cancelled their relationships on or after the first day of the month that is 12 months prior to the current month and

Previous wording

The macroeconomic climate continues to see pressure from global developments such as international geopolitical conflicts, terrorism, a future pandemic, rising inflation, fluctuations in the value of the US Dollar, rising interest rates and supply chain disruptions. These developments have had and may continue to have an adverse effect on our revenues and demand for our products and services, as well as on our costs of doing business. We have taken and will continue to take actions to help mitigate the impact of these economic challenges, but there can be no assurance as to the effectiveness of our efforts going forward.

Current wording

The macroeconomic climate has seen in the recent years, and may continue to see, pressure from global developments such as international geopolitical conflicts, increased tariffs and proposed tariffs between the United States and other nations, terrorism, pandemics or health crises, rising inflation, fluctuations in the value of the US Dollar, rising interest rates and supply chain disruptions. These developments have had and may continue to have an adverse effect on our revenues and demand for our products and services, as well as on our costs of doing business. We have taken and will continue to take actions to help mitigate the impact of these economic challenges, but there can be no assurance as to the effectiveness of our efforts going forward.

Previous wording

Sustaining our growth requires continued adoption of our solutions by new customers. Through organic growth of our business and acquisitions, the number of customers on our platform increased from over 685,000 at the end of 2022 to approximately 708,000 at the end of 2023. We will continue to invest in our efficient go-to-market strategy as we further penetrate our addressable markets. Our financial performance will depend in large part on the overall demand for our solutions from service SMBs.

Current wording

Sustaining our growth requires continued adoption of our solutions by new customers. Through organic growth of our business, the number of customers on our platform increased to approximately 740,000 at the end of 2024. Excluding the customers associated with the sale of our fitness assets, we served more than 690,000 customers at the end of 2023 (see Note 3. Acquisitions and Dispositions included in this Annual Report on Form 10-K). We will continue to invest in our efficient go-to-market strategy as we further penetrate our addressable markets. Our financial performance will depend in large part on the overall demand for our solutions from service SMBs.

Previous wording

We believe we have the opportunity to drive incremental revenue growth from our existing customer base through increased cross-selling and up-selling adjacent solutions. Our integrated SaaS solutions allow us to offer customers additional capabilities across their entire customer engagement lifecycle including digital payments, customer engagement and marketing technology. As we continue to develop, acquire and transform our solutions, we aim to continue adding value to our customers by displacing point-solution competitors and legacy, manual methods with our integrated digital offerings, increasing our revenue and improving customer experience and retention. A primary focus for revenue expansion focuses on cross-selling payments solutions to customers in an effort to prioritize margin growth. We also generate subscription and marketing technology revenue from cross-selling our Customer Engagement and Marketing Technology Solutions across our customer base. These solutions increase customer loyalty, repeat purchases, improve customer experiences and help businesses to manage campaigns and generate quality leads.

Current wording

We believe we have the opportunity to drive incremental revenue growth from our existing customer base through increased cross-selling and up-selling adjacent solutions. Our integrated SaaS solutions allow us to offer customers additional capabilities across their entire customer engagement lifecycle including digital payments, customer engagement and marketing technology. As we continue to develop, acquire and transform our solutions, we aim to continue adding value to our customers by displacing point-solution competitors and legacy, manual methods with our integrated digital offerings, increasing our revenue and improving customer experience and retention. A primary focus for revenue expansion focuses on cross-selling payments solutions to customers in an effort to prioritize margin growth. We also generate subscription and marketing technology revenue from cross-selling our Customer

Previous wording

Expanding into New Products and Verticals

Current wording

Expanding into New Products and Micro-Verticals

Previous wording

II-5 market our solutions directly to SMBs through online digital marketing, raising brand awareness at conferences and events, and other marketing channels. We believe this investment, coupled with our attractive unit economics, will enable us to grow our customer base and continue our strategy of profitable growth.

Current wording

We continue to drive awareness and generate demand for our solutions in order to acquire new customers and develop new service SMB relationships, as we believe that we still have a significant market opportunity ahead of us. We will continue to expand efforts to market our solutions directly to SMBs through online digital marketing, raising brand awareness at conferences and events, and other marketing channels. We believe this investment, coupled with our attractive unit economics, will enable us to grow our customer base and continue our strategy of profitable growth.

Previous wording

In 2023, we continued to invest in scalable operations and necessary functions to support operating as a public company, including Sarbanes-Oxley compliance. In 2024 and beyond, incremental investments will be needed to support the ongoing transformation of our business and infrastructure, including Sarbanes-Oxley compliance.

Current wording

In 2024, we continued to invest in scalable operations, including vertical market leadership, and necessary functions to support operating as a public company, including Sarbanes-Oxley compliance. Additionally, we continued to evaluate our suite of solutions and strategic options to drive investment in our highest growth solutions while simplifying our business to align with our transformation initiatives, including the divestiture of Fitness Solutions. In 2025 and beyond, incremental investments will be needed to support the ongoing transformation of our business and infrastructure, including Sarbanes-Oxley compliance. As part of our transformation initiatives, we expect to continue to evaluate our suite of solutions and may pursue dispositions of non-core assets and other strategic transactions. In March 2025, the Company announced the evaluation of strategic alternatives for our Marketing Technology Solutions with an expectation of a probable disposition by sale in 2025. The Company expects to reflect Marketing Technology Solutions as discontinued operations beginning with its first quarter 2025 financial reporting.

Previous wording

Although we expect to continue to acquire companies and other assets in the future, such acquisitions pose a number of challenges and risks. For additional information, see Part I. Item 1A.“Risk Factors—Risks Related to Our Business—Our recent growth rates may not be sustainable or indicative of future growth,” “—We may reduce our rate of acquisitions and may be unsuccessful in achieving our objectives through acquisitions, dispositions or other strategic transactions” and “—Revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets through the due diligence process prior to an acquisition, resulting in unanticipated costs, losses or a decline in profits, as well as potential impairment charges. Claims against us relating to any acquisition may necessitate our seeking claims against the seller for which the seller may not indemnify us or that may exceed the seller’s indemnification obligations.”

Current wording

Although we expect to continue to acquire companies and other assets in the future, such acquisitions pose a number of challenges and risks. For additional information, see Part I. Item 1A.“Risk Factors—Risks Related to Our Business—Our recent growth rates may not be sustainable or indicative of future growth,” “—We may be unsuccessful in achieving our objectives through acquisitions, dispositions or other strategic transactions” and “—Revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets through the due diligence process prior to an acquisition, resulting in unanticipated costs, losses or a decline in profits, as well as potential impairment charges. Claims against us relating to any acquisition may necessitate our seeking claims against the seller for which the seller may not indemnify us or that may exceed the seller’s indemnification obligations.”

Previous wording

In addition to our results and measures of performance determined in accordance with Generally Accepted Accounting Principles (”GAAP”), we believe the following key business and non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions.

Current wording

In addition to our results and measures of performance determined in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), we believe the following key business and non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions.

Previous wording

Pro Forma Revenue Growth Rate is a key performance measure that our management uses to assess our consolidated operating performance over time. Management also uses this metric for planning and forecasting purposes.

Current wording

Pro Forma Revenue Growth Rate is a key performance measure that our management uses to assess our consolidated operating performance from continuing operations over time. Management also uses this metric for planning and forecasting purposes.

Previous wording

Our year-over-year Pro Forma Revenue Growth Rate is calculated as though all acquisitions completed as of the end of the latest period were closed as of the first day of the prior year period presented. In calculating Pro Forma Revenue Growth Rate, we add the revenue from acquisitions for the reporting periods prior to the date of acquisition (including estimated purchase accounting adjustments), and then calculate our revenue growth rate between the two reported periods. As a result, Pro Forma Revenue Growth Rate includes pro forma revenue from businesses acquired during the period, including revenue generated during periods when we did not yet own the acquired businesses. In including such pre-acquisition revenue, Pro Forma Revenue Growth Rate allows us to measure the underlying revenue growth of our business as it stands as of the end of the respective period, which we believe provides insight into our then-current operations. Pro Forma Revenue Growth Rate does not represent organic revenue generated by our business as it stood at the beginning of the respective period. Pro Forma Revenue Growth Rates are not necessarily indicative of either future results of operations or actual results that might have been achieved had the acquisitions been consummated on the first day of the prior year period presented. We believe that this metric is useful to investors in analyzing our financial and operational performance period over period and evaluating the growth of our business, normalizing for the impact of acquisitions. This metric is particularly useful to management due to the number of acquired entities.

Current wording

Our year-over-year Pro Forma Revenue Growth Rate is calculated as though all acquisitions and divestitures completed as of the end of the latest period were closed as of the first day of the prior year period presented. In calculating Pro Forma Revenue Growth Rate, we add the revenue from acquisitions for the reporting periods prior to the date of acquisition (including estimated purchase accounting adjustments) and exclude revenue from divestitures for the reporting periods prior to the date of divestiture, and then calculate our revenue growth rate between the two reported periods. As a result, Pro Forma Revenue Growth Rate includes pro forma revenue from businesses acquired and excludes revenue from businesses divested during the period, including revenue generated during periods when we did not yet own the acquired businesses and excludes revenue prior to the divestiture of the business. In including such pre-acquisition revenue and excluding pre-divestiture revenue, Pro Forma Revenue Growth Rate allows us to measure the underlying revenue growth of our business as it stands as of the end of the respective period, which we believe provides insight into our then-current operations. Pro Forma Revenue Growth Rate does not represent organic revenue generated by our business as it stood at the beginning of the respective period. Pro Forma Revenue Growth Rates are not necessarily indicative of either future results of operations or actual results that might have been achieved had the acquisitions and divestitures been consummated on the first day of the prior year period presented. We believe that this metric is useful to investors in analyzing our financial and operational performance period over period and evaluating the growth of our business, normalizing for the impact of acquisitions and divestitures. This metric is particularly useful to management due to the number of acquired entities.

Previous wording

Our Pro Forma Revenue Growth rate was 8.6% for the year ended December 31, 2023 reflective of the underlying growth in our business including new customers and providing more solutions to existing customers.

Current wording

Our Revenue Growth Rate was 3.5% for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Total revenues include post-acquisition revenue from Kickserv, which was acquired August 10, 2023 (see Note 3. Acquisitions and Dispositions in this Annual Report on Form 10-K), of $3.0 million and $1.0 million during the years ended December 31, 2024 and 2023, respectively. Additionally, total revenues include pre-divestiture revenue from Fitness Solutions, which was divested in 2024 (see Note 3. Acquisitions and Dispositions in this Annual Report on Form 10-K), of $8.1 million and $23.7 million during the years ended December 31, 2024 and 2023, respectively. Our Pro Forma Revenue Growth rate was 5.7% for the year ended December 31, 2024, reflective of the underlying growth in our business as a result of new customers and providing more solutions to existing customers.

Previous wording

Adjusted EBITDA is calculated as net loss adjusted to exclude interest and other expense, net, income tax expense (benefit), depreciation and amortization, other amortization, stock-based compensation and transaction-related and other non-recurring costs. Other amortization includes amortization for capitalized contract acquisition costs. Transaction-related costs are specific deal-related costs such as legal fees, financial and tax due diligence, consulting and escrow fees. Other non-recurring costs are expenses such as impairment charges, system implementation costs, severance expense related to planned restructuring activities, and costs associated with integration and transformational improvements. Transaction-related and other non-recurring costs are excluded as they are not representative of our underlying operating performance.

Current wording

Adjusted EBITDA is calculated as net loss adjusted to exclude interest and other expense, net, income tax expense (benefit), depreciation and amortization, other amortization, stock-based compensation expense and transaction-related and other non-recurring or unusual costs. Other amortization includes amortization for capitalized contract acquisition costs. Transaction-related costs are specific deal-related costs such as legal fees, financial and tax due diligence, consulting and escrow fees. Other non-recurring or unusual costs are expenses such as impairment charges, (gains) losses from divestitures, system implementation costs, executive separation costs, severance expense related to planned restructuring activities, and costs associated with integration and transformational improvements. Transaction-related and other non-recurring or unusual costs are excluded as they are not representative of our underlying operating performance.

Previous wording

We expect that cost of revenue as a percentage of revenue will fluctuate from period to period based on a variety of factors, including the mix of revenue between Subscription and Transaction Fees and Marketing Technology Solutions, labor costs, third-party expenses and acquisitions. In particular, Marketing Technology Solutions revenue generally has a higher cost of revenue as a percentage of revenue than our subscription and transaction fee revenue. For the year ended December 31, 2023, revenue from subscription and transaction fees increased 11.8% compared to the year ended December 31, 2022, whereas Marketing Technology Solutions revenue decreased 1.1%. To the extent our Marketing Technology Solutions revenue grows at a faster rate, whether by acquisition or otherwise, than our Subscription and Transaction Fees revenue, it could negatively impact our cost of revenues as a percentage of revenue.

Current wording

We expect that cost of revenue as a percentage of revenue will fluctuate from period to period based on a variety of factors, including the mix of revenue between Subscription and Transaction Fees and Marketing Technology Solutions, labor costs, third-party expenses and acquisitions. In particular, Marketing Technology Solutions revenue generally has a higher cost of revenue as a percentage of revenue than our subscription and transaction fee revenue. For the year ended December 31, 2024, revenue from subscription and transaction fees increased 5.4% compared to the year ended December 31, 2023, whereas Marketing Technology Solutions revenue decreased 2.9%. To the extent our Marketing Technology Solutions revenue grows at a faster rate, whether by acquisition or otherwise, than our Subscription and Transaction Fees revenue, it could negatively impact our cost of revenues as a percentage of revenue.

Previous wording

Sales and marketing expense consists primarily of employee costs for our sales and marketing personnel, including salaries, benefits, bonuses, stock-based compensation and sales commissions. Sales and marketing expenses also include advertising costs, travel-related expenses and costs to market and promote our products, direct customer acquisition costs, costs related to conferences and events and partner/broker commissions. Software and subscription services dedicated for use by our sales and marketing organization, and outside services contracted for sales and marketing purposes are also included in sales and marketing expense. Sales commissions that are incremental to obtaining a customer contract are deferred and amortized ratably over the estimated period of our relationship with that customer. We expect our sales and marketing expenses will increase in absolute dollars and may increase as a percentage of revenue for the foreseeable future as we continue to increase investments to support our growth.

Current wording

Sales and marketing expense consists primarily of employee costs for our sales and marketing personnel, including salaries, benefits, bonuses, stock-based compensation and sales commissions. Sales and marketing expenses also include advertising costs, travel-related expenses and costs to market and promote our products, direct customer acquisition costs, costs related to conferences and events and partner/broker commissions. Software and subscription services dedicated for use by our sales and marketing organization, and outside services contracted for sales and marketing purposes are also included in sales and marketing expense. Sales commissions that are incremental to obtaining a customer contract are deferred and amortized ratably over the estimated period of our relationship with that customer. We expect our sales and marketing expenses from continuing operations will increase in absolute dollars and may increase as a percentage of revenue for the foreseeable future as we continue to increase investments to support our growth.

Previous wording

Product development expense consists primarily of employee costs for our product development personnel, including salaries, benefits, stock-based compensation and bonuses. Product development expenses also include third-party outsourced technology costs incurred in developing our platforms, and computer equipment, software and subscription services dedicated for use by our product development organization. We expect our product development expenses to increase in absolute dollars and remain generally consistent as a percentage of revenue for the foreseeable future as we continue to dedicate substantial resources to develop, improve and expand the functionality of our solutions.

Current wording

Product development expense consists primarily of employee costs for our product development personnel, including salaries, benefits, stock-based compensation and bonuses. Product development expenses also include third-party outsourced technology costs incurred in developing our platforms, and computer equipment, software and subscription services dedicated for use by our product development organization. We expect our product development expenses from continuing operations to increase in absolute dollars and increase as a percentage of revenue during 2025 as we continue to dedicate substantial resources to develop, improve and expand the functionality of our solutions.

Previous wording

General and administrative expense consists of employee costs for our executive leadership, accounting, finance, legal, human resources and other administrative personnel, including salaries, benefits, bonuses and stock-based compensation. General and administrative expenses also include external legal, accounting and other professional services fees, rent, software and subscription services dedicated for use by our general and administrative employees and other general corporate expenses. We expect general and administrative expense to increase on an absolute dollar basis for the foreseeable future as we continue to increase investments to support our growth and due to increased costs as a result of being a public company. As we are able to further scale our operations in the future, we would expect that general and administrative expenses would decrease as a percentage of revenue.

Current wording

General and administrative expense consists of employee costs for our executive leadership, accounting, finance, legal, human resources and other administrative personnel, including salaries, benefits, bonuses and stock-based compensation. General and administrative expenses also include external legal, accounting and other professional services fees, rent, software and subscription services dedicated for use by our general and administrative employees and other general corporate expenses. We expect general and administrative expense from continuing operations to increase on an absolute dollar basis for the foreseeable future due to costs as a result of being a public company. As we are able to further scale our operations in the future, we would expect that general and administrative expenses would decrease as a percentage of revenue.

Previous wording

While revenue growth remains a key focus, we remain committed to continued expansion of gross margin, net income and Adjusted EBITDA through ongoing transformation initiatives. As a percentage of revenue, cost of revenues declined from 35.0% to 34.2%, an improvement of approximately 80 basis points resulting in higher gross margin. Additionally, the combination of cost of revenue, sales and marketing, product development and general and administrative costs declined from 87.1% to 83.3%, an improvement of approximately 380 basis points. A discussion on primary drivers of cost reductions resulting in improved margin follows in the subsequent sections.

Current wording

While revenue growth remains a key focus, we remain committed to continued expansion of gross margin, net income and Adjusted EBITDA through ongoing transformation initiatives. As a percentage of revenue, cost of revenues declined from 34.2% for the year ended December 31, 2023 to 32.7% for the year ended December 31, 2024, an improvement of approximately 150 basis points resulting in higher gross margin. Additionally, the combination of cost of revenue, sales and marketing, product development and general and administrative costs declined from 83.3% for the year ended December 31, 2023 to 81.6% for the year ended December 31, 2024, an improvement of approximately 170 basis points. A discussion on primary drivers of cost reductions resulting in improved margin follows in the subsequent sections.

Previous wording

Revenues increased $54.6 million, or 8.8%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022, which primarily represents the organic growth of the business as there were no material acquisitions during 2023 or 2022. This increase was driven primarily by a $29.4 million increase from subscription and transaction revenues due to our expansion in our number of customers and certain price increases across our portfolio. Additionally, there was a $25.5 million increase due to higher transaction volumes processed through our payment platforms. The decline in marketing technology solutions revenues of 1.1% resulted primarily from a reduction in demand driven by decreases in consumer spending during 2023. The majority of our revenue growth is attributable to the successful delivery of system of action capabilities to our SMBs in our verticals of home services, health and wellness as well as the ancillary revenue included in “other” associated with these services. The combined growth of revenue from the categories of subscription and transaction fees and other was 11.5% partially offset by a reduction in marketing technology solutions, which has experienced more volatility in revenue generation than the delivery of services through system of actions.

Current wording

Revenues increased $23.4 million, or 3.5%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The growth of revenue from subscription and transaction fees was 5.4% during the year ended December 31, 2024 as compared to the prior year period, while the changes in marketing technology solutions and other revenues experienced more volatility in revenue generation than the delivery of services through our system of actions. The majority of our revenue growth is attributable to the successful delivery of system of action capabilities to our SMBs in our verticals of home services, health and wellness. The subscription and transaction revenue increases during the year ended December 31, 2024 consist primarily of increases from (a) business management software and (b) billing and payment solutions. Business management software revenues drove a $24.8 million increase in subscription and transaction revenues due to an expansion in our number of customers, certain price increases across our portfolio, and an increase in rebate revenue from contracted suppliers due to growth of membership subscriptions in group purchasing programs. Billing and payment solutions revenues drove an increase of $3.3 million, which was primarily due to higher transaction volumes processed through our payment platforms, partially offset by lower revenue in 2024 due to the Fitness Solutions divestiture. Subscription and transaction revenues also include $3.0 million and $1.0 million of post-acquisition revenue from Kickserv for the years ended December 31, 2024 and 2023, respectively, and pre-divestiture revenue from Fitness Solutions of $8.0 million and $23.3 million for the years ended December 31, 2024 and 2023, respectively (see Note 3. Acquisitions and Dispositions in this Annual Report on Form 10-K). Marketing technology solutions revenues decreased $3.9 million during the year ended December 31, 2024,

Previous wording

Cost of revenues increased by $13.6 million, or 6.3%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. This increase is primarily comprised of an additional $5.4 million of lead generation and ad spend subject to resale to customers, $3.3 million of email and SMS expense, $2.6 million of campaign mail expense, and $2.1 million of application programming interface fees.

Current wording

Cost of revenues decreased by $2.6 million, or 1.1%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The decrease is primarily comprised of a $5.7 million decrease in personnel and compensation expense, a $1.7 million reduction in outsourced services, and a $0.8 million reduction in lead generation and ad spend subject to resale to customers, partially offset by a $2.1 million increase in software hosting expense, a $1.9 million increase in application programming interface fees, and a $0.9 million increase in campaign mail expense.

Previous wording

Product development expenses increased by $4.0 million, or 5.6%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was a result of investments in our technology and teams to support our various solutions as well as centralized security operations, information technology and cloud engineering, driven by an additional $1.5 million of personnel and compensation expense, $1.3 million of software and tools, and $1.3 million of technology spend.

Current wording

Product development expenses increased by $4.1 million, or 5.4%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The increase was a result of an additional $2.2 million of personnel and compensation expense, $2.0 million of outsourced services, and $1.6 million of software and tools, driven by investments in our technology and teams to support our various solutions as well as centralized security operations, information technology and cloud engineering. The increase was partially offset by a $1.5 million decrease in professional fees and consulting expenses.

Previous wording

Depreciation and amortization expenses decreased by $6.6 million, or 6.0%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The reduction in depreciation and amortization was driven primarily by the reduced rate of replacement assets resulting from a slowdown in business acquisitions. Specifically, these decreases were driven primarily by a decrease of $9.7 million in intangible assets’ amortization, partially offset by $2.7 million of additional capitalized software amortization and an increase of $0.5 million of property and equipment depreciation.

Current wording

Depreciation and amortization expenses decreased by $15.4 million, or 14.8%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The reduction in depreciation and amortization was driven primarily by the reduced rate of replacement assets resulting from a slowdown in business acquisitions. Specifically, the decrease was driven primarily by $16.3 million in lower intangible assets’ amortization and a decrease of $0.8 million of property and equipment depreciation, partially offset by $1.8 million of additional capitalized software amortization.

Previous wording

During the fourth quarter 2023, we determined that the estimated fair value of our fitness asset group was insufficient to recover the net carrying value of the asset group resulting in an impairment of long-lived assets of approximately $5.1 million(see Note 19. Subsequent Event included in this Annual Report on Form 10-K). Additionally, during the year ended December 31, 2023, we ceased use of certain leased premises and subleased certain facilities resulting in an impairment charge of $1.2 million to impair the right-of-use lease assets to their fair value. We did not have similar expenses for the year ended December 31, 2022.

Current wording

During the fourth quarter 2024, in conjunction with our review of strategic alternatives for our Marketing Technology Solutions, we evaluated the recoverability of our marketing technology reporting unit and determined that the estimated fair value was insufficient to recover the net carrying value of the reporting unit resulting in an impairment of goodwill of approximately $28.1 million (see Note 20. Subsequent Event in this Annual Report on Form 10-K). In March 2024, we entered into definitive sale and purchase agreements to sell our Fitness Solutions (see Note 3. Acquisitions and Dispositions included in this Annual Report on Form 10-K). During the year ended December 31, 2024, we recognized losses of $4.9 million related to the sale of Fitness Solutions and $6.4 million of goodwill impairment charges representing the allocated goodwill to Fitness Solutions. During the fourth quarter 2023, we determined that the estimated fair value of our fitness asset group was insufficient to recover the net carrying value of the asset group resulting in an impairment of long-lived assets of approximately $5.1 million. Additionally, we ceased use of certain leased premises and subleased certain facilities resulting in an impairment charge of $0.4 million and $1.2 million to impair the right-of-use lease assets to their fair value during the years ended December 31, 2024 and 2023, respectively.

Previous wording

Interest and other expense, net, increased by $12.5 million, or 36.9%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was driven primarily by higher interest expense as a result of increased variable base interest rates during 2023 on the Company’s Credit Facilities of $14.9 million, partially offset by a decrease of $0.9 million in unrealized losses recorded on the interest rate swaps and a $0.8 million increase in interest income.

Current wording

Interest and other expense, net, decreased by $10.8 million, or 23.4%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023 with the changes primarily driven by volatility of interest rates and the associated impact on the fair value of interest rate swaps. The decrease for the year ended December 31, 2024 was driven primarily by an unrealized gain of $6.4 million on interest rate swaps, as compared to an unrealized loss of $2.0 million in the comparative period, a $2.1 million increase in interest income, and a decrease of $1.9 million in interest expense as a result of lower variable base interest rates on the Company’s Credit Facilities.

Previous wording

To date, our primary sources of liquidity have been net cash provided by operating activities, proceeds from equity issuances and long-term debt.

Current wording

To date, our primary sources of liquidity have been net cash provided by operating activities, proceeds from equity issuances and proceeds from long-term debt.

Previous wording

Our primary use of liquidity through 2021 was primarily associated with acquisitions of businesses. Subsequent to 2021, we have utilized liquidity for items such as strategic investments in the ongoing transformation of our business and infrastructure, our recent business acquisition of Kickserv and share repurchases authorized through our Repurchase Program. For a description of our recent acquisitions, see Note 3. Acquisitions in the notes to the consolidated financial statements included in this Annual Report on Form 10-K. Absent significant deterioration of market conditions, we expect that working capital requirements, capital expenditures,

Current wording

We utilize liquidity for items such as strategic investments in the ongoing transformation of our business and infrastructure, our business acquisitions (such as Kickserv) and share repurchases authorized through our Repurchase Program. For a description of our recent acquisitions, see Note 3. Acquisitions and Dispositions in the notes to the consolidated financial statements included in this Annual Report on Form 10-K. Absent significant deterioration of market conditions, we expect that working capital requirements, capital expenditures, acquisitions, the Company’s Repurchase Program (as defined below), debt servicing and lease obligations will be our principal needs for liquidity going forward.

Previous wording

As of December 31, 2023, we had cash, cash equivalents and restricted cash of $96.2 million, $190.0 million of available borrowing capacity under our Revolver (as defined below) and $537.6 million outstanding under our Term Loans (as defined below). We believe that our existing cash, cash equivalents and restricted cash, availability under our Credit Facilities, and our cash flows from operations will be sufficient to fund our working capital requirements and planned capital expenditures, and to service our debt obligations for at least the next twelve months. However, our future working capital requirements will depend on many factors, including our rate of revenue growth, the timing and size of future acquisitions, and the timing of introductions of new products and services. We expect to consummate acquisitions of complementary businesses in the future that could require us to seek additional equity or debt financing. Additional funds may not be available on terms favorable to us, or at all. If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected. See Part I, Item 1A.“Risk Factors.”

Current wording

As of December 31, 2024, we had cash, cash equivalents and restricted cash of $135.8 million, $190.0 million of available borrowing capacity under our Revolver (as defined below) and $532.1 million outstanding under our Term Loan (as defined below). We believe that our existing cash, cash equivalents and restricted cash, availability under our Credit Facilities, and our cash flows from operations will be sufficient to fund our working capital requirements and planned capital expenditures, and to service our debt obligations for at least the next twelve months. However, our future working capital requirements will depend on many factors, including our rate of revenue growth, the timing and size of future acquisitions, and the timing of introductions of new products and services. If needed, additional funds may not be available on terms favorable to us, or at all. If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected. See Part I, Item 1A.“Risk Factors.”

Previous wording

Net cash provided by operating activities was $104.6 million for the year ended December 31, 2023, compared to $64.8 million for the year ended December 31, 2022. Changes in net cash provided by operating activities result primarily from cash received from net sales within our subscription and transaction fees and marketing technology solutions. Other drivers of the changes in net cash provided by operating activities include payments for personnel expenses for our employees, costs related to delivering our services and products, partner commissions, advertising and interest on our long-term debt.

Current wording

Net cash provided by operating activities was $113.2 million for the year ended December 31, 2024, compared to $104.6 million for the year ended December 31, 2023. Changes in net cash provided by operating activities resulted primarily from cash received from net sales within our subscription and transaction fees and marketing technology solutions. Other drivers of the changes in net cash provided by operating activities include payments for personnel expenses for our employees, costs related to delivering our services and products, partner commissions, advertising and interest on our long-term debt.

Previous wording

The increase in cash provided for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to higher cash collections from our subscription and transaction fees and marketing technology solutions, which includes revenues from payment processing of approximately $62.3 million, partially offset by higher interest payments of $15.1 million, costs directly related to the delivery of our services and products of $12.4 million, and higher investments made to support the growth of our business including personnel expenses of $2.7 million.

Current wording

The increase in cash provided for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to an increase in cash collections from our subscription and transaction fees and marketing technology solutions, which includes revenues from payment processing of approximately $28.0 million and higher interest income of $2.0 million, partially offset by

Previous wording

During the year ended December 31, 2022, net cash used in investing activities of $18.1 million was related primarily to costs to develop software of $15.5 million and $2.6 million for purchases of property and equipment.

Current wording

During the year ended December 31, 2024, net cash used in investing activities of $12.3 million was related primarily to costs to develop software of $17.4 million and $1.5 million for purchases of property and equipment, partially offset by proceeds from the sale of Fitness Solutions, net of transaction costs, cash and restricted cash sold for approximately $6.6 million.

Previous wording

During the year ended December 31, 2022, net cash used in financing activities of $47.3 million was related primarily to the repurchase and retirement of shares of our common stock of $43.0 million and $9.5 million for payments on long-term debt, partially offset by net proceeds from common stock issuances of $5.2 million.

Current wording

During the year ended December 31, 2024, net cash used in financing activities of $59.6 million was related primarily to the repurchase and retirement of shares of our common stock of $57.7 million.

Previous wording

We are party to a credit agreement, as amended, that provides for two term loans for an aggregate principal amount of $550.0 million (“Term Loans”), a revolver with a capacity of $190.0 million (“Revolver”) and a sub-limit of the Revolver available for letters of credit up to an aggregate face amount of $20.0 million. These debt arrangements are collectively referred to herein as the “Credit Facilities”.

Current wording

We are party to a credit agreement, as amended, that provides for one term loan for an aggregate principal amount of $550.0 million (“Term Loan”), a revolver with a capacity of $190.0 million (“Revolver”) and a sub-limit of the Revolver available for letters of credit up to an aggregate face amount of $20.0 million. These debt arrangements are collectively referred to herein as the “Credit Facilities”.

Previous wording

Effective as of July 1, 2023, borrowings under the Credit Facilities bear interest at the Company’s option at ABR plus an applicable rate, or at a forward-looking term rate based upon the secured overnight financing rate (“SOFR”), plus (i) (a) with respect to Term Loans, credit spread adjustments of 0.11448%, 0.26161%, 0.42826% and 0.71513% for interest periods of one, three, six and twelve months, respectively, and (b) with respect to revolving loans, a credit spread adjustment of 0.0% (“Adjusted SOFR”) plus (ii) an applicable rate, in each case with such applicable rate based on the Company’s first lien net leverage ratio. The ABR represents the highest of the prime rate, Federal Reserve Bank of New York rate plus ½ of 1%, and the Adjusted SOFR for a one month interest period plus 1%. The applicable rate for the Term Loans and the Revolver was 3.0% for Adjusted SOFR borrowings and 2.0% for ABR borrowings, in each case subject to change based on our first lien net leverage ratio.

Current wording

Effective as of July 1, 2023, borrowings under the Credit Facilities bear interest at the Company’s option at ABR plus an applicable rate, or at a forward-looking term rate based upon the secured overnight financing rate (“SOFR”), plus (i) (a) with respect to the Term Loan, credit spread adjustments of 0.11448%, 0.26161%, 0.42826% and 0.71513% for interest periods of one, three, six and twelve months, respectively, and (b) with respect to revolving loans, a credit spread adjustment of 0.0% (“Adjusted SOFR”) plus (ii) an applicable rate, in each case with such applicable rate based on the Company’s first lien net leverage ratio. The ABR represents the highest of the prime rate, Federal Reserve Bank of New York rate plus ½ of 1%, and the Adjusted SOFR for a one month interest period plus 1%. The applicable rate for the Term Loan and the Revolver was 3.0% for Adjusted SOFR borrowings and 2.0% for ABR borrowings, in each case subject to change based on our first lien net leverage ratio.

Previous wording

Effective October 31, 2022, we entered into an interest rate swap agreement in connection with the Company’s Credit Facilities for a notional amount of $200.0 million to convert a portion of the floating rate component of the Term Loans from a floating rate to a fixed rate (the “Initial Swap”). The Initial Swap has a term of five years with a fixed rate in the agreement of 4.212% as amended in June 2023. Additionally, effective March 31, 2023, the Company entered into a second interest rate swap agreement in connection with our Credit Facilities for a notional amount of $100.0 million to convert a portion of the floating rate component of the Term Loans from a floating rate to a fixed rate (the “Second Swap”). The Second Swap has a term of approximately 4.5 years with a fixed rate in the agreement of 3.951%, as amended in June 2023.

Current wording

Beginning in late 2022, we executed a series of three interest rate swaps (for total notional amounts of $425 million) to convert a portion of the floating rate component of our Term Loan to a fixed rate. Effective October 31, 2022, we entered into an interest rate swap agreement in connection with the Company’s Credit Facilities for a notional amount of $200.0 million (the “Initial Swap”). The Initial Swap has a term of five years with a fixed rate in the agreement of 4.212% as amended in June 2023. Additionally, effective March 31, 2023, the Company entered into a second interest rate swap agreement in connection with our Credit Facilities for a notional amount of $100.0 million (the “Second Swap”). The Second Swap has a term of approximately 4.5 years with a fixed rate in the agreement of 3.951%, as amended in June 2023. Additionally, effective September 20, 2024, the Company entered into a third interest rate swap agreement in connection with our Credit Facilities for a notional amount of $125.0 million (the “Third Swap”). The Third Swap has a term of approximately 3.0 years with a fixed rate in the agreement of 3.395%.

Previous wording

Amounts borrowed under the Revolver may be repaid and re-borrowed through maturity of the Revolver in July 2026. The Term Loans mature in July 2028. The Term Loans may be repaid or prepaid but may not be re-borrowed.

Current wording

Amounts borrowed under the Revolver may be repaid and re-borrowed through maturity of the Revolver in July 2026. The Term Loans mature in July 2028. The Term Loan may be repaid or prepaid but may not be re-borrowed.

Previous wording

As of December 31, 2023, there was $537.6 million outstanding under our Credit Facilities, all of which was related to the Term Loans as no amounts were outstanding under the Revolver. The effective interest rate on the Term Loans was approximately 8.5% for the year ended December 31, 2023, excluding the effect of any interest rate swap agreements.

Current wording

As of December 31, 2024, there was $532.1 million outstanding under our Credit Facilities, all of which was related to the Term Loan as no amounts were outstanding under the Revolver. The effective interest rate on the Term Loan was approximately 8.6% for the year ended December 31, 2024, excluding the effect of any interest rate swap agreements.