EverCommerce Inc.

Previous wording

Unless the context requires otherwise, references in this report to "EverCommerce Inc.," the “Company,” “we,” “us” and “our” refer to EverCommerce Inc. and its consolidated subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. An analysis of our results of operations and cash flows for the year ended December 31, 2022, including a discussion of the year ended December 31, 2023 as compared to the year ended December 31, 2022, has been reported previously in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) on March 14, 2024, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Current wording

Unless the context requires otherwise, references in this report to "EverCommerce Inc.," the “Company,” “we,” “us” and “our” refer to EverCommerce Inc. and its consolidated subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. Unless otherwise noted, disclosures within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations relate solely to the Company’s continuing operations, which excludes marketing technology solutions.

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 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.

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. As of December 31, 2025, we served more than 745,000 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

•Business Management Software: Our vertically-tailored Business Management Software is the system of action at the center of a service business’s operation, and is typically the point-of-entry and first solution adopted by a customer. Our software, designed to meet the day-to-day workflow needs of businesses in specific vertical end markets, streamlines front and back-office processes and provides polished customer-facing experiences. Using these offerings, service SMBs can focus on growing their customers, improving their services and driving more efficient operations.

Current wording

•Business Management Software: Our vertically-tailored Business Management Software is the system of action at the center of a service business’s operation, and is typically the point-of-entry and first solution adopted by a customer. Our software, designed to meet the day-to-day workflow needs of businesses in specific vertical end markets, streamlines front and back-office processes and provides polished customer-facing experiences. Using these offerings, service SMBs can deliver their services, streamline operations and focus on growing their customer base.

Previous wording

•Customer Experience Solutions: Our Customer Experience Solutions modernize how businesses engage and interact with customers by leveraging innovative, bespoke customer listening and communication solutions to improve the customer experience and increase retention. Our software provides customer listening capabilities with real-time customer surveying and analysis to allow standalone businesses and multi-location brands to receive VoC insights and manage the customer experience lifecycle. These applications include: customer health scoring, customer support systems, real-time alerts, NPS-based customer feedback collection, review generation and automation, reputation management, customer satisfaction surveying and a digital communication suite, among others. These tools help our customers gain actionable insights, increase customer loyalty and repeat purchases and improve customer experiences.

Current wording

•Customer Experience Solutions: Our Customer Experience Solutions modernize how businesses engage and interact with customers by leveraging innovative, bespoke customer listening and communication solutions to improve the customer experience and increase retention. Our software provides customer listening capabilities with real-time customer surveying and analysis to allow standalone businesses and multi-location brands to receive VoC insights and manage the customer experience lifecycle. These applications include: customer health scoring, customer support systems, real-time alerts, NPS-based customer feedback collection, review generation and automation, reputation management, customer satisfaction surveying and a digital communication suite, among others. Additionally, the recent acquisition of ZyraTalk (as defined below) provides virtual assistant capabilities with an agentic automation platform. ZyraTalk offers production-ready fully autonomous AI agents and field service management systems designed for seamless integration across our Home Services solutions and improving the overall prospect and customer experience. Collectively, these tools help our customers gain actionable insights, increase customer loyalty and repeat purchases and improve customer experiences.

Previous 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.

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, fuel growth, improve customer stickiness, and increase our market share.

Previous wording

We generate three types of revenue: (i) Subscription and Transaction Fees, which are primarily recurring revenue streams, (ii) Marketing Technology Solutions, which includes both recurring and re-occurring revenue streams and (iii) Other revenue which consists primarily of one-time revenue streams. Our recurring revenue generally consists of monthly, quarterly and annual software and maintenance subscriptions, transaction revenue associated with integrated payments and billing solutions and monthly contracts for Marketing Technology Solutions. Additionally, our re-occurring revenue includes revenue related to the sale of marketing campaigns and lead generation under contractual arrangements with customers.

Current wording

Our continuing operations generate two types of revenue: (i) Subscription and Transaction Fees, which are primarily recurring revenue streams, and (ii) Other revenue, which consists primarily of one-time revenue streams. Our recurring revenue generally consists of monthly, quarterly and annual software and maintenance subscriptions and transaction revenue associated with integrated payments and billing solutions.

Previous wording

•Subscription and Transaction Fees revenue includes: (i) recurring monthly, quarterly and annual SaaS subscriptions and software license and maintenance fees from the sale of our Business Management, Customer Engagement and Billing and Payment solutions; (ii) payment processing fees based on the transaction volumes processed through our integrated payment solutions and processing fees based on transaction volumes for our revenue cycle management, chronic care management and health insurance clearinghouse solutions; and (iii) membership subscriptions and our share of rebates from suppliers generated though group purchasing programs.

Current wording

•Subscription and Transaction Fees revenue includes: (i) recurring monthly, quarterly and annual SaaS subscriptions and software license and maintenance fees from the sale of our Business Management and Customer Engagement solutions; (ii) Billing and Payment solutions - payment processing fees based on the transaction volumes processed through our integrated payment solutions and processing fees based on transaction volumes for our revenue cycle management, chronic care management and health insurance clearinghouse solutions; and (iii) membership subscriptions and our share of rebates from suppliers generated though group purchasing programs.

Previous 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.

Current wording

Our business benefits from attractive unit economics. Approximately 96%, 97% and 96% of our revenue was recurring or re-occurring in the years ended December 31, 2025, 2024 and 2023, respectively, and we maintained an annualized net revenue retention rate of approximately 96%, 91% and 93% for the quarters ended December 31, 2025, 2024 and 2023, respectively. Our annualized pro forma net revenue retention rate was equal to the annualized net revenue retention rate for all periods presented. Excluding 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 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

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 2025 is the difference between the recurring or re-occurring revenue generated in November 2025 and the same such revenue generated in November 2024, for customers with a start date prior to December 1, 2024 and no end date or cancelled relationship on or after November 1, 2025. 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 2025 is the difference between the recurring or re-occurring revenue generated in November 2025 and the same such revenue generated in November 2024, for customers that cancelled on or after November 1, 2024 and before November 1, 2025. The annualized pro forma net revenue retention is calculated as the annualized net revenue retention rate adjusted as though acquisitions and dispositions that were closed during the prior period presented were closed on the first day of such period presented. Our annualized net revenue retention rate and pro forma net revenue retention rate may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of solutions, new acquisitions and dispositions and our ability to retain our customers. Our calculation of annualized net revenue retention rate and annualized pro forma net revenue retention rate may differ from similarly titled metrics presented by other companies.

Previous 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.

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 as well as uncertainty as to future tariffs, 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

On March 13, 2024, we entered into definitive sale and purchase agreements to sell our fitness solutions, comprised of North American Fitness and UK Fitness (“Fitness Solutions”), to Jonas Software (see Note 3. Acquisitions and Dispositions included in this Annual Report on Form 10-K). The sale of North American Fitness closed simultaneously with signing and the sale of UK Fitness closed July 1, 2024. The divestiture did not qualify for reporting as a discontinued operation and therefore, its results were included in our unaudited condensed consolidated financial statements included in this Annual Report on Form 10-K through the applicable date of sale. During the year ended December 31, 2024, we recognized losses of $4.9 million related to the sale of Fitness Solutions, which are included in loss on sale and impairments on our consolidated statements of operations and comprehensive loss included in this Annual Report on Form 10-K. During the year ended December 31, 2024, we recognized $6.4 million of goodwill impairment charges representing the allocated goodwill to Fitness Solutions, which is included in loss on sale and impairments on the consolidated statements of operations and comprehensive loss included in this Annual Report on Form 10-K.

Current wording

On March 13, 2024, we entered into definitive sale and purchase agreements to sell our fitness solutions, comprised of North American Fitness and UK Fitness (“Fitness Solutions”), to Jonas Software (see Note 3. Acquisition and Dispositions included in this Annual Report on Form 10-K). The sale of North American Fitness closed simultaneously with signing and the sale of UK Fitness closed July 1, 2024. The divestiture did not qualify for reporting as a discontinued operation and therefore, its results were included in our consolidated financial statements included in this Annual Report on Form 10-K through the applicable date of sale. During the year ended December 31, 2024, we recognized losses of $4.9 million related to the sale of Fitness Solutions, which are included in loss on sale and impairments on our consolidated statements of operations and comprehensive income (loss) included in this Annual Report on Form 10-K. During the year ended December 31, 2024, we recognized $6.4 million of goodwill impairment charges representing the allocated goodwill to Fitness Solutions, which is included in loss on sale and impairments on the consolidated statements of operations and comprehensive income (loss) included in this Annual Report on Form 10-K.

Previous 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.

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 745,000 at the end of 2025. Excluding the customers associated with the sale of our marketing technology solutions, we served more than 725,000 customers at the end of 2024 (see Note 3. Acquisition 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

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 and customer engagement. 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 revenue from cross-selling our Customer Engagement solutions across our customer base. The acquisition of ZyraTalk helps to establish our position as an AI-driven innovator with many in-production features that are being sold to third-party customers. We plan to add more innovative features and offerings to support our customers, beginning with integration into many EverPro systems of action with additional use cases across our other verticals. Collectively, these solutions increase customer loyalty, repeat purchases, improve customer experiences and help businesses to manage campaigns and generate quality leads.

Previous 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.

Current wording

In 2025, 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 our marketing technology solutions. The recent acquisition of ZyraTalk was a strategic investment to advance the deployment of AI capabilities to our customers. In 2026 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 divestitures of non-core assets and other strategic transactions.

Previous wording

We acquire companies to accelerate our position as a market leader, fill gaps within our vertically tailored solutions, deepen our competitive moats in existing verticals and enter new verticals and geographies. We have acquired 53 companies since our inception, the majority of which were completed prior to 2022. While our pace of acquisition has slowed, we continue to pursue growth through a mix of organic revenue expansion and acquisitions. We have an established framework for identification, execution, integration and onboarding of targets, which leverages our significant acquisition experience and utilizes internal criteria for evaluating acquisition candidates and prospective businesses. These acquired solutions can bring deep industry expertise and vertically-tailored software solutions that provide additional sources of growth. We believe that our methodology, track record and reputation for sourcing, evaluating and integrating acquisitions positions us as an “acquirer-of-choice” for potential targets.

Current wording

We acquire companies to accelerate our position as a market leader, fill gaps within our vertically tailored solutions, deepen our competitive moats in existing verticals and enter new verticals and geographies. We have acquired 54 companies since our inception, the majority of which were completed prior to 2022. While our pace of acquisition has slowed, we continue to pursue growth through a mix of organic revenue expansion and acquisitions. We have an established framework for identification, execution, integration and onboarding of targets, which leverages our significant acquisition experience and utilizes internal criteria for evaluating acquisition candidates and prospective businesses. These acquired solutions can bring deep industry expertise and vertically-tailored software solutions that provide additional sources of growth. We believe that our methodology, track record and reputation for sourcing, evaluating and integrating acquisitions positions us as an “acquirer-of-choice” for potential targets.

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 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

Previous 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.

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. The information presented in the following sections within Key Business and Financial Metrics is calculated on the basis of US GAAP results from continuing operations for all periods presented, which excludes discontinued operations, if any.

Previous wording

II-4 before the first day of the current month. For example, the recurring or reoccurring revenue lost from cancelled 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 that cancelled on or after November 1, 2023 and before November 1, 2024. The annualized pro forma net revenue retention is calculated as the annualized net revenue retention rate adjusted as though acquisitions and dispositions that were closed during the prior period presented were closed on the first day of such period presented. Our annualized net revenue retention rate and pro forma net revenue retention rate may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of solutions, new acquisitions and dispositions and our ability to retain our customers. Our calculation of annualized net revenue retention rate and annualized pro forma net revenue retention rate may differ from similarly titled metrics presented by other companies.

Current wording

Revenue and Pro Forma Revenue Growth Rate

Previous 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.

Current wording

Our Revenue Growth Rate was 4.8% and 5.1% for the years ended December 31, 2025 and 2024 as compared to the prior year periods. Total revenues include post-acquisition revenue from ZyraTalk, which was acquired September 15, 2025 (see Note 3. Acquisition and Dispositions in this Annual Report on Form 10-K), of $1.2 million during the year ended December 31, 2025. Additionally, total revenues include pre-divestiture revenue from Fitness Solutions, which was divested in 2024 (see Note 3. Acquisition and Dispositions in this Annual Report on Form 10-K), of $8.1 and $23.7 million during the years ended December 31, 2024 and 2023, respectively. Total revenues also include post-acquisition revenue from Kickserv, which was acquired on August 10, 2023, of $3.0 million and $1.0 million during the years ended December 31, 2024 and 2023, respectively. Our Pro Forma Revenue Growth rate was 6.4% and 8.5% for the years ended December 31, 2025 and 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 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.

Current wording

Adjusted EBITDA is calculated as net income (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 including amortization of cloud-based software 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 derive our revenue from three primary sources which are described in detail below: (i) Subscription and Transaction Fees, which are primarily recurring revenue streams, (ii) Marketing Technology Solutions, which includes both recurring and re-occurring revenue streams and (iii) Other revenue, which consists primarily of the sale of distinct professional services and hardware. Our revenue recognition policies are discussed in more detail under“Critical Accounting Estimates.”

Current wording

We derive our revenue from two primary sources which are described in detail below: (i) Subscription and Transaction Fees, which are primarily recurring revenue streams and (ii) Other revenue, which consists primarily of the sale of distinct professional services and hardware. Our revenue recognition policies are discussed in more detail under“Critical Accounting Estimates.”

Previous wording

Subscription and Transaction Fees: Revenue includes (i) recurring monthly, quarterly and annual SaaS subscriptions and software license and maintenance fees from the sale of our Business Management, Customer Engagement and Billing and Payment solutions; (ii) payment processing fees based on the transaction volumes processed through our integrated payment solutions, and processing fees based on transaction volumes for our revenue cycle management, chronic care management and health insurance clearinghouse solutions; and (iii) membership subscriptions and our share of rebates from suppliers generated though group purchasing programs. Our revenue from payment processing fees is recorded net of credit card and ACH processing and interchange charges in the month the services are performed.

Current wording

Subscription and Transaction Fees: Revenue includes (i) recurring monthly, quarterly and annual SaaS subscriptions and software license and maintenance fees from the sale of our Business Management and Customer Engagement solutions; (ii) Billing and payment solutions - payment processing fees based on the transaction volumes processed through our integrated payment solutions, and processing fees based on transaction volumes for our revenue cycle management, chronic care management and health insurance clearinghouse solutions; and (iii) membership subscriptions and our share of rebates from suppliers generated though group purchasing programs. Our revenue from payment processing fees is recorded net of credit card and ACH processing and interchange charges in the month the services are performed.

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, 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.

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 rate of growth of subscription and transaction fees, labor costs, third-party expenses and acquisitions and dispositions. Revenue from subscription and transaction fees increased 4.4%, 5.4% and 11.9% for the years ended December 31, 2025, 2024 and 2023, respectively, compared to the prior year periods.

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 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.

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 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 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.

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 to increase in absolute dollars and increase as a percentage of revenue during 2026 as we continue to dedicate substantial resources to develop, improve and expand the functionality of our solutions.

Previous wording

Loss on sale relates to the divestiture of Fitness Solutions. Impairments include goodwill impairment charges and operating lease impairments related to the Company’s decision to cease use of certain leased premises and sublease certain facilities.

Current wording

Loss on sale relates to the divestiture of marketing technology solutions and Fitness Solutions. Impairments include goodwill impairment charges and operating lease impairments related to the Company’s decision to cease use of certain leased premises and sublease certain facilities.

Previous wording

Interest and other expense, net, primarily consists of interest expense on long-term debt, net of interest income. It also includes amortization expense of financing costs and discounts, as well as realized and unrealized gains and losses related to interest rate swap agreements.

Current wording

Interest and other income (expense), net, primarily consists of interest expense on long-term debt, net of interest income. It also includes amortization expense of financing costs and discounts, income from the TSA, as well as realized and unrealized gains and losses related to interest rate swap agreements.

Previous wording

The following tables summarize key components of our results of operations for the year ended December 31, 2024 compared to the same period in 2023.

Current wording

The following tables summarize key components of our results of operations for the years ended December 31, 2025, 2024 and 2023. The period-to-period comparison of our historical results are not necessarily indicative of our results of operations that may be expected in the future. The following comparative information for results of operations for all periods presented have been adjusted to reflect discontinued operations related to marketing technology solutions and includes the operating results of Fitness Solutions for all periods through the applicable date of sale.

Previous wording

The following table provides the key components of operating costs within our results of operations as a percentage of revenue for the year ended December 31, 2024 compared to the same period in 2023.

Current wording

The following table provides the key components of operating costs within our results of operations as a percentage of revenue for the year ended December 31, 2025 compared to the same periods in 2024 and 2023.

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 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.

Current wording

As a percentage of revenue, cost of revenues declined from 23.8% for the year ended December 31, 2023 to 22.2% for the year ended December 31, 2024, an improvement of approximately 160 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 81.6% for the year ended December 31, 2023 to 78.9% for the year ended December 31, 2024, an improvement of approximately 270 basis points.

Previous 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,

Current wording

Revenues increased $27.3 million, or 5.1%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Revenues from subscription and transaction fees increased 5.4% and other revenue decreased 2.8% during the year ended December 31, 2024, respectively, as compared to the prior year period. The subscription and transaction revenue increases during the year ended December 31, 2024 consist primarily of increases from (a) business management software (b) billing and payment solutions and (c) revenues associated with our share of rebates from suppliers generated through group purchase programs. Business management software revenues drove a $20.7 million increase in subscription and transaction revenues due to an expansion in our number of customers and certain price increases across our portfolio. 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. Revenues associated with our share of rebates from suppliers generated through group purchasing programs increased $3.9 million due to growth of membership subscriptions in group purchasing programs. 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. Acquisition and Dispositions in this Annual Report on Form 10-K). Other revenues decreased $0.5 million during the year ended December 31, 2024 driven by revenue related to project implementation and customer development services which did not recur in the current year.

Previous 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.

Current wording

Cost of revenues decreased by $2.6 million, or 2.1%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The decrease is primarily comprised of a $4.2 million decrease in personnel and compensation expense, a $1.5 million reduction in clearinghouse fees, and $1.2 million in outsourced services, partially offset by a $3.7 million increase in API fees and software hosting expenses and $0.7 million in campaign mail and advertising expenses.

Previous 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.

Current wording

Product development expenses increased by $4.0 million, or 5.6%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The increase was a result of an additional $2.3 million of personnel and compensation expense, $1.8 million of outsourced services, and $1.7 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

General and administrative expenses increased by $7.2 million, or 5.4%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The increase was driven primarily by an additional $4.4 million of personnel and compensation expense, a $2.4 million increase in software and tools, a $2.1 million increase in outsourced services, and a $1.6 million increase in

Current wording

General and administrative expenses increased by $5.2 million, or 4.3%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The increase was driven primarily by an additional $3.8 million of personnel and compensation

Previous wording

II-13 stock-based compensation expense, partially offset by $2.5 million decrease in facility expense and $1.4 million decrease in bad debt expense.

Current wording

II-14 expense, a $2.4 million increase in software and tools, a $1.8 million increase in outsourced services, and a $1.4 million increase in stock-based compensation expense, partially offset by a $2.4 million decrease in facility expense and $1.9 million decrease in bad debt expense.

Previous 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.

Current wording

Depreciation and amortization expenses decreased by $14.2 million, or 15.0%, 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 $15.1 million in lower intangible assets’ amortization and a decrease of $0.9 million of property and equipment depreciation, partially offset by $1.7 million of additional capitalized software amortization.

Previous 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.

Current wording

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, 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.

Current wording

Interest and other income (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 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

Income tax expense increased by $4.1 million, or 252.8%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023, with the change driven primarily by an increase in U.S. federal and state income taxes and discrete items, including the sale of Fitness Solutions and the goodwill impairment of the marketing technology reporting unit.

Current wording

Income tax expense increased by $4.5 million, or 324.0%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023, with the change driven primarily by an increase in U.S. federal and state income taxes and discrete items, including the sale of Fitness Solutions and the goodwill impairment of the marketing technology reporting unit.

Previous 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.

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 our strategic acquisition of ZyraTalk in September 2025) and share repurchases authorized through our Repurchase Program. For a description of our recent acquisitions, see Note 3. Acquisition 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,