EverCommerce (NASDAQ: EVCM) grows 2025 revenue and posts net income
Filing Impact
Filing Sentiment
Form Type
10-K
Rhea-AI Filing Summary
EverCommerce Inc. is a vertically focused SaaS provider serving more than 745,000 small and mid-sized service businesses across home, health and wellness as of December 31, 2025. The company’s platform spans business management, integrated payments and customer experience tools.
Revenue from continuing operations reached $588.9 million in 2025, up 4.8% from $562.2 million in 2024, a 7.1% CAGR from 2022 to 2025. Net income from continuing operations was $18.2 million in 2025 versus a $15.2 million loss in 2024, while Adjusted EBITDA rose to $180.5 million.
EverCommerce refined its portfolio by selling its marketing technology solutions and earlier divesting its fitness solutions, and expanded AI capabilities with the acquisition of ZyraTalk in October 2025. Management highlights a large global TAM, growing digital payments volume and significant competitive, regulatory, cybersecurity and AI-related risks.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the fiscal year ended December 31 , 2025
OR
For the transition period from to
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
Commission file number 001-40575
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
(720 ) 647-4948
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | ☒ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of June 30, 2025, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the last reported sales price for the registrant’s common stock, par value $0.00001 per share, on the Nasdaq Stock Market on such date, was $200.1 million.
The registrant had outstanding 177,566,869 shares of common stock as of March 9, 2026.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement relating to its 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2025 are incorporated herein by reference in Part III.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Annual Report on Form 10-K may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to statements regarding our future results of operations and financial position, industry and business trends, macroeconomic and market conditions, equity compensation, business strategy, plans, market growth, future acquisitions and other capital expenditures, progress towards remediation of our material weakness and our objectives for future operations.
The forward-looking statements in this Annual Report on Form 10-K are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part I, Item 1A. “Risk Factors” in this Annual Report on Form 10-K for the year ended December 31, 2025. The forward-looking statements in this Annual Report on Form 10-K are based upon information available to us as of the date of this Annual Report on Form 10-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should read this Annual Report on Form 10-K and the documents that we reference in this Annual Report on Form 10-K and have filed as exhibits to this Annual Report on Form 10-K with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Annual Report on Form 10-K. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Annual Report on Form 10-K, whether as a result of any new information, future events or otherwise.
SUMMARY RISK FACTORS
Our business is subject to numerous risks and uncertainties, including those described in Part II. Item 1A. “Risk Factors” in this Annual Report on Form 10-K. You should carefully consider these risks and uncertainties when investing in our common stock. The principal risks and uncertainties affecting our business include the following:
•Our limited operating history and our evolving business make it difficult to evaluate our future prospects and the risks and challenges we may encounter.
•Our historical growth rates may not be sustainable or indicative of future growth.
•We have experienced net losses in the past and we may not achieve profitability in the future.
•We may continue to experience significant quarterly and annual fluctuations in our operating results due to a number of factors, which makes our future operating results difficult to predict.
•In order to support the growth of our business and our acquisition strategy, we may need to incur additional indebtedness or seek capital through new equity or debt financings.
•We may not be able to continue to expand our share of our existing vertical markets or expand into new vertical markets, which would inhibit our ability to grow and increase our profitability.
•We face intense competition in each of the industries in which we operate, which could negatively impact our business, results of operations and financial condition and cause our market share to decline.
•The industries in which we operate are rapidly evolving and subject to consolidation and the market for technology-enabled services that empower SMBs (defined below) is relatively immature and unproven.
•We are dependent on payment card networks, such as Visa and MasterCard, and payment processors, such as Worldpay and PayPal, and if we fail to comply with the applicable requirements of the payment networks or our payment processors, they can seek to fine us, suspend us, terminate our agreements and/or terminate our registrations through our bank sponsors.
•If we cannot keep pace with rapid developments and changes in the electronic payments market or are unable to introduce, develop and market new and enhanced versions of our software solutions, we may be put at a competitive disadvantage with respect to our services that incorporated payment technology.
•Real or perceived errors, failures or bugs in our solutions could adversely affect our business, results of operations, financial condition and growth prospects.
•We and our third-party providers are exposed to cybersecurity risks and incidents which may result in damage to our brand and reputation, material financial penalties, and legal liability, which could in turn materially adversely affect our business, results of operations, and financial condition.
•Our use of AI technologies may not be beneficial to our business, and may cause the performance of our products, services and business, as well as our reputation and the reputations of our customers, to suffer or cause us to incur liability resulting from the violation of laws or contracts to which we are a party.
•Our estimated total addressable market is subject to inherent challenges and uncertainties.
•Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance and utilization of our solutions.
•Impairment in the value of our goodwill or intangible assets has adversely impacted and may in the future have a material adverse effect on our operating results and financial condition.
•Our information technology systems and our third-party providers’ information technology systems, including Worldpay, PayPal and other payment processing partners, may fail, or our third-party providers may discontinue providing their services or technology generally or to us specifically, which in either case could interrupt our business, cause us to lose business and increase our costs.
•A future pandemic, epidemic or outbreak of an infectious disease could impact, our business, financial condition and results of operations, as well as the business or operations of third parties with whom we conduct business.
•We are subject to economic and political risk, the business cycles of our clients and changes in the overall level of consumer and commercial spending, which could negatively impact our business, financial condition and results of operations.
•We may be unsuccessful in achieving our objectives through acquisitions, dispositions or other strategic transactions.
•Revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets.
•Scrutiny on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results.
•We may be unable to adequately protect or enforce, and we may incur significant costs in enforcing or defending, our intellectual property and other proprietary rights.
•We may be subject to patent, trademark and other intellectual property infringement claims, which may be time-consuming, and cause us to incur significant liability and increase our costs of doing business.
•We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security and our actual or perceived failure to comply with such obligations could materially harm our business. Compliance with such laws could also impair our efforts to maintain and expand our customer and user bases, and thereby decrease our revenue.
•The parties to our sponsor stockholders’ agreement, who also hold a significant portion of our common stock, control the direction of our business and such parties’ ownership of our common stock prevent you and other stockholders from influencing significant decisions.
•We are a “controlled company” under the corporate governance rules of The Nasdaq Stock Market and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. You do not have the same protections afforded to stockholders of companies that are subject to such requirements.
•We incur significant increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives.
TABLE OF CONTENTS
| Page | ||||||||
PART I | ||||||||
Item 1. | Business | I-1 | ||||||
Item 1A. | Risk Factors | I-11 | ||||||
Item 1B. | Unresolved Staff Comments | I-43 | ||||||
Item 1C. | Cybersecurity | I-43 | ||||||
Item 2. | Properties | I-44 | ||||||
Item 3. | Legal Proceedings | I-44 | ||||||
Item 4. | Mine Safety Disclosures | I-44 | ||||||
PART II | ||||||||
Item 5. | Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities | II-1 | ||||||
| Item 6. | [Reserved] | II-2 | ||||||
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | II-3 | ||||||
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | II-22 | ||||||
Item 8. | Financial Statements and Supplementary Data | II-23 | ||||||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | II-57 | ||||||
Item 9A. | Controls and Procedures | II-58 | ||||||
Item 9B. | Other Information | II-59 | ||||||
| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | II-59 | ||||||
PART III | ||||||||
Item 10. | Directors, Executive Officers and Corporate Governance | III-1 | ||||||
Item 11. | Executive Compensation | III-1 | ||||||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters | III-1 | ||||||
Item 13. | Certain Relationships and Related Transactions, and Director Independence | III-2 | ||||||
Item 14. | Principal Accountant Fees and Services | III-2 | ||||||
PART IV | ||||||||
Item 15. | Exhibits, Financial Statement Schedules | IV-IV-1 | ||||||
Item 16. | Form 10-K Summary | IV-IV-2 | ||||||
| Signatures | ||||||||
PART I
Item 1. Business
Overview
EverCommerce is simplifying and empowering the lives of business owners whose services support us every day. We provide tailored, integrated Software-as-a-Service (“SaaS”) solutions that support the highly diverse workflows and customer interactions that professionals in home services, health services, and wellness services need to automate manual processes, generate new business, and create more loyal customers.
EverCommerce is a leading provider of integrated, vertically-tailored 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, and 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. For the year ended December 31, 2025, we estimate that approximately 93% of our customers contributed less than $2 thousand in revenue and approximately 3% contributed more than $5 thousand in revenue.
On October 31, 2025, we completed the sale of our marketing technology solutions business to Ignite Visibility as part of our previously announced strategic review (see “Note 3. Acquisition and Dispositions” in the Notes to the Consolidated Financial Statements for additional details). Marketing technology solutions qualified as discontinued operations and is presented accordingly in the consolidated financial statements for all periods presented through the applicable date of the sale.
On September 15, 2025, we acquired 100% of the interest of Joblyt LLC, dba ZyraTalk (“ZyraTalk”), an AI-powered customer engagement solution that combines virtual assistant capabilities with an agentic automation platform (see “Note 3. Acquisition and Dispositions” in the Notes to the Consolidated Financial Statements for additional details). The acquisition helps to establish EverCommerce as an AI-driven innovator, beginning with near-term application in its Home Services vertical, EverPro, and we plan to extend ZyraTalk into broader opportunities across our other verticals.
On March 13, 2024, the Company entered into definitive sale and purchase agreements to sell our fitness solutions to Jonas Fitness Portfolio Holdco Inc. (“Jonas Software”) (see “Note 3. Acquisition and Dispositions” in the Notes to the Consolidated Financial Statements for additional details). The sale of American Service Finance LLC., ASF Payment Solutions ULC and Technique Fitness Inc. (collectively, “North American Fitness”), closed simultaneous with signing. The sale of EverCommerce UK, including wholly-owned subsidiaries Fitii UK (MyPTHub and MyPTHub LLC) and ClubWise UK and its wholly-owned subsidiary ClubWise Australia (collectively, “UK Fitness” and together with North American Fitness, “Fitness Solutions”), closed on July 1, 2024.
Small- and medium-sized businesses (“SMBs”) are an important engine for economic growth. Collectively, in 2025 SMBs represented the single largest employer and employee category in the U.S. economy, accounting for 99.9% of businesses in the United States, 46% of the U.S. private workforce and over 44% of U.S. GDP. The services sector is the backbone of the U.S. economy, representing approximately 78% of U.S. GDP and 79% of U.S. employment. Service businesses are the largest segment of the SMB market, employing approximately 60 million people in the U.S. alone.
Today, service SMBs are accelerating their adoption of digital technologies to increase growth, drive efficiencies and enhance customer engagement. At the same time, their technology needs are becoming increasingly specialized as they adapt their businesses to better compete and align with evolving consumer preferences. However, service SMBs typically lack available resources to invest in and support expensive enterprise technology solutions and often rely on little-to-no technology. When technology is used, it is often a fragmented set of point solutions with insufficient integrated capabilities to support the complete service lifecycle.
Since inception, we have taken a differentiated approach from other software providers. We recognize that all service SMBs require solutions that enable them to perform three key functions: (i) acquire new customers and generate new business opportunities; (ii) manage and scale business operations; and (iii) improve and expand on customer relationships. However, services SMBs require functionality specific to their vertical market because the workflows vary by vertical. For example, the business management requirements of home services contractors are different than the business management requirements of small physician practices. As a result, we have built a comprehensive platform designed specifically to meet the unique integrated workflow needs of service SMBs. Our integrated solutions include Business Management Software (such as route-based dispatching and medical practice management), Billing & Payment Solutions (such as e-invoicing, mobile payments and integrated payment processing), and Customer Experience
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Solutions (such as reputation management and messaging solutions). These solutions help our customers address the challenges posed by legacy solutions by providing software that addresses the complete customer engagement workflow, streamlining front- and back-office processes, driving new sales and retention, enabling deeper performance insights and improving customer experiences with digital, mobile-friendly engagement.
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, expand into offerings via product development (“build”) and acquisitions (“buy”) that integrate their workflows, fill gaps in the solutions value chain and power the full scope of our customers’ businesses. This results in a self-reinforcing flywheel effect, enabling us to drive more value for our customers and, in turn, fuel our growth by increasing Average Revenue per Unit (“ARPU”), improving customer stickiness and increasing our market share.
Our revenue from continuing operations has grown at a compound annual growth rate (“CAGR”) of 7.1% from 2022 to 2025, and reached $588.9 million for the year ended December 31, 2025, up from $562.2 million for the year ended December 31, 2024, which represents revenue growth of 4.8% from 2024 to 2025. Our net income from continuing operations was $18.2 million for the year ended December 31, 2025 compared to a net loss from continuing operations of $15.2 million for the year ended December 31, 2024. Our Adjusted EBITDA from continuing operations reached $180.5 million for the year ended December 31, 2025, up from $164.4 million for the year ended December 31, 2024. Moreover, our business benefits from attractive unit economics; we estimate the lifetime value of our customers to be approximately six times the cost of acquiring them. For a reconciliation of Adjusted EBITDA to the most directly comparable United States Generally Accepted Accounting Principles (“U.S. GAAP”) financial measure, information about why we consider Adjusted EBITDA useful and a discussion of the material risks and limitations of this measure, please see Part II. Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business and Financial Metrics—Non-GAAP Financial Measures.”
Key trends impacting our industry
Service SMBs are still in the early innings of transforming their businesses for the digital age. While most SMBs are using some digital tools to run their business, we estimate the penetration of fully-integrated, end-to-end software solutions like ours to be in the early innings. However, we believe that small businesses now generally view digitization as critical to long-term success. Similar to other industries that are going through major digital transformations – including education, life sciences, public sector, real estate and banking – we believe a number of trends are contributing to the adoption of modern, vertically-tailored software solutions for service SMBs. EverCommerce is operating at the center of many of these trends, including:
•Accelerating adoption of digital technologies. Consumers’ preferences for digital experiences have accelerated in recent years. At the same time, new digital solutions are emerging to enable businesses to increase growth, drive efficiencies and enhance customer engagement. Together, these trends are contributing to the accelerating adoption of digital technologies.
•Increasingly vertical- and micro vertical-specific software needs. SMBs across verticals are specializing in order to better compete and align with end-customer preferences, which has resulted in a greater need for vertically-tailored software solutions to address micro-vertical specific workflows.
•Digital payments. Digital payment processing solution adoption continues to expand within our core SMB customer base. Eight years ago, we estimated that less than 50% of SMBs in the United States had adopted digital payment processing solutions, and instead relied on paper invoices for payment. In the last couple of years, this has increased to nearly 80%, a trend that we expect to continue in the future. Integrated payments (e.g., digital payment acceptance that is embedded into the software that companies use to manage their businesses) have driven operating efficiencies for businesses and have improved payment security and tracking as compared to traditional paper methods.
•Mobile enablement. Due in large part to consumer demand and purchasing habits, a substantial amount of commerce is now conducted via a mobile device, whether through a standalone mobile application or as an integrated, companion application to a broader web-based software. Mobile commerce is estimated to represent approximately 60% of dollars spent online, with growth rapidly outpacing other forms of eCommerce. Within the service economy in particular, home service, wellness and other professionals are often on-the-go, making mobile functionality of paramount importance.
•Artificial Intelligence. The adoption of artificial intelligence (“AI”) is accelerating at an unprecedented rate. It has shifted from emerging technology to an essential tool for SMBs helping support strategic initiatives to fuel growth and drive operational efficiency while delivering a positive customer experience. SMBs are interested in leveraging the power of AI to automate customer tasks and drive additional insight-based actions to stay competitive and drive value for their customers.
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The AI landscape for SMBs will continue to shift its focus from simple chat prompts to agentic AI that provide autonomous workflows that can plan, reason and take action with limited supervision.
•Customer experience. With the confluence of changing consumer preferences towards digital and a younger, more tech-savvy generation of business owners taking seat, businesses are increasingly looking to upgrade and streamline how they engage with their customers.
•Decreasing barriers to software adoption. Given their size and resource capabilities, SMBs generally require lower priced and easier-to-implement technology solutions than larger-scale enterprise businesses. As a result of the innovations in cloud technology and the proliferation of SaaS, today’s solutions are more affordable and easier for SMBs to implement than ever before. According to Cisco, cloud solutions are one of the top three areas for near-term technology investment for small businesses.
Limitations of existing approaches
Historically, service SMBs have not heavily relied on technology to manage key workflows, but they are increasingly turning to software solutions to streamline operations and boost efficiency. However, the offerings available in the market often fail to meet the needs of today’s service SMBs, and have some or all of the following limitations:
•Lacking vertical-specific functionality. Traditional technology companies offer broad, horizontal solutions that apply a “one-size-fits-all” approach and aim to solve functional challenges across different verticals. For service SMBs, these solutions have an excess of broad functionality but lack the vertical specialization required in specific verticals.
•Sold as point solutions. Existing solutions typically address a single application, use case or stage of a broader customer engagement workflow. These solutions lack the necessary integration of business data and operational workflows that service SMBs need to execute integrated processes. Moreover, they limit visibility into business performance and businesses’ ability to optimize data gathered across various processes.
•Built on inflexible, legacy technology infrastructure. Existing solutions are often built on legacy, on-premise infrastructure. These technologies lack the flexibility and scalability required by today’s service SMBs, and are not customizable to meet individual customers’ needs.
•Cost and resource-intensive. Service SMBs are generally price-sensitive and have limited resources. Existing software solutions often require significant capital, time and technical resources to implement, inhibiting faster adoption. Moreover, it is difficult for service SMBs to maintain these solutions and roll out new versions and add-on features without significant time and resources.
Our market opportunity
We believe our solutions address a massive market opportunity today. We estimate the total number of service SMBs, which represent service-based businesses with 500 or fewer employees, was approximately 456 million globally in 2023, of which 35 million were in North America.
We estimate the total addressable market (“TAM”) for our current solutions was approximately $1.6 trillion globally in 2023, of which approximately $662 billion was in North America, which refers to the United States and Canada. Of the $662 billion, we estimate a $69 billion opportunity in Home Services, a $115 billion opportunity in Health Services, a $22 billion opportunity in Wellness Services and a $456 billion opportunity in other services categories. We believe there is considerable runway for long-term growth given we believe the vast majority of our market opportunity is untapped.
We arrive at the TAM by estimating the number of service SMBs, multiplying by the list price of the solutions we provide, and making regional adjustments for the number of firms that could pay the listed price.
Our TAM also includes our payments opportunity, which we arrive at by estimating total revenue across our vertical segments and multiplying by both pricing and penetration estimates.
We believe there are multiple sources of upside to our current TAM. As the number of service SMBs grow, as we develop or acquire complementary solutions, and as we enter new geographies, our market opportunity will expand.
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Our solutions
We offer several vertically-tailored suites of solutions, each of which follows a similar and repeatable go-to-market playbook: offer a “system of action” Business Management Software that streamlines daily business workflows, integrate highly complementary, value-add adjacent solutions and complete gaps in the value chain to create integrated solutions. These solutions provide value to service SMBs by improving their ability to market their services, streamline operations and retain and engage their customers.
•Business Management Software: Our vertically-tailored Business Management Software is the system of action at the center of a service business’ 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 customers.
•Billing & Payment Solutions: Our Billing & Payment Solutions provide integrated payments, billing and invoicing automation and business intelligence and analytics. Our omni-channel payments capabilities include point-of-sale, eCommerce, online bill payments, recurring billing, electronic invoicing and mobile payments. Supported payment types include credit card, debit card and Automated Clearing House (“ACH”) processing. Based on the monthly average processing volume for the quarter ended December 31, 2025, we estimate that we process annualized total volume of $13.0 billion. We
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further estimate that, based on our current customers and payment volumes, we have an aggregate annualized payment processing opportunity in excess of $100 billion. Our payments platform also provides a full suite of service commerce features, including customer management as well as cash flow reporting and analytics. These value-add features help SMBs to ensure more timely billing and payments collection and provide improved cash flow visibility.
•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 Voice of Customer (“VoC”) insights and manage the customer experience lifecycle. These applications include: customer health scoring, customer support systems, real-time alerts, Net Promoter Score (“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 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.
Our verticals
Our solutions, many of which we believe are market leaders in their industries, are deployed in verticals that are comprised of numerous micro-verticals, which through product development and new solution acquisition, offer natural growth opportunities for EverCommerce. We currently go to market with three distinct, vertically-tailored, integrated SaaS solution suites:
•EverPro – Home Services: Our EverPro solutions are purpose-built for home service professionals, with varying specialized functionality for micro-verticals. For home improvement and field service professionals, project management and field service management applications serve as their business systems of action, respectively. Professionals in this market rely significantly on driving business from residential homeowners, and thus value tailored solutions that capture and manage lead generation from those end consumers. Ranging from professionals across residential home improvement and remodeling, and field services, to security and alarm professionals across residential installation and monitoring, central stations, corporate and campus planning and government, our EverPro solutions are designed to serve the specific needs of the professionals in these home improvement and field services sub-markets.
•EverHealth – Health Services: Our EverHealth solutions are purpose-built for health service professionals. The Health Services market is rooted in a group of core solutions, including practice management and electronic health record (“EHR”) / electronic medical record (“EMR”) software. We offer different types and scales of solutions for micro-verticals, including small group and specialty practices, behavioral health professionals, specialty branches of hospital systems, ambulatory services, urgent care and EMT and physical, occupational and speech therapists, among others. We believe that our patient and provider engagement solutions position us well to benefit from major industry trends such as the digitalization of front-office operations and patient engagement.
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•EverWell – Wellness: Our EverWell solutions are purpose-built for Wellness service professionals. The Wellness market includes tech-savvy businesses which generally require integrated solutions that provide modern, convenient experiences for end consumers. Consumer-facing scheduling and facility access solutions are “must-have” software capabilities for spas and salons. In addition, adjacent solutions in relationship management and inventory management are increasingly needed to support a seamless, value-add consumer experience. Our EverWell solutions are built specifically for wellness professionals, which include salons, spas and massage therapists.
We offer select solutions to customers in other services verticals, including education, non-profit, pet care and automotive repair, among many others.
Why we win
We believe that our offerings deliver tremendous value to our customers and are differentiated by the following qualities:
•Tailored, vertical-specific approach. We are exclusively focused on providing service SMBs with tailored solutions to help meet their specific needs. Our vertical and micro-vertical approach enables us to provide tailored solutions featuring critical
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vertical-specific functionality that better serves our customers when compared to industry-agnostic solutions offered by other businesses.
•Integrated solutions. Our business management software integrates solutions across the full range of our customers’ workflows (including internal and back-office functions and customer-facing services such as integrated payments and billing and invoicing automation), simplifying their operations and providing a frictionless experience when compared to disjointed point solutions offered by other software businesses.
•SaaS-based solutions. Our scalable and flexible SaaS solutions alleviate resource needs associated with implementing and managing costly on-premise infrastructure, which simplifies the management of distributed workforces, enhances operational simplicity, and provides continuous delivery of updates and upgrades to our solutions.
•Mobile capabilities. Our SaaS, web-based and mobile solutions enable business owners, administrators and in-the-field service professionals to access schedules, customer accounts and business performance analytics, among other critical features, wherever they are. In addition, our native mobile applications provide in-depth service delivery functionality for technicians and service professionals in-the-field, even out of cellular or wireless network areas.
•Exceptional digital experiences. Our customers’ use of our offerings allows them to deliver exceptional digital experiences to consumers across multiple channels, enhancing engagement, retention and loyalty. For example, our customers can use our technology to develop modern touchpoints for consumers such as online scheduling, appointment reminders, online customer portals, online and mobile payments, SMS text updates, email updates and consumer-facing mobile applications.
•Cost- and resource-efficient. SMBs are generally price-sensitive and resource-constrained, however legacy software solutions are often too expensive to adopt. Our solutions are affordable and easy to implement, and our customers benefit from our strong customer service capabilities, enabling them to optimize their use of digital solutions without significant financial or resource burden.
•Customer-driven innovation. The insight we gain into our approximately 745,000 customers’ use of our offerings informs our product pipeline, allowing us to constantly refine existing solutions and deliver new solutions that are most valuable to them.
Our growth strategies
We are focused on growing and scaling our business in a rapid, yet sustainable and disciplined fashion. We intend to drive significant growth by executing the following key strategies:
•Attract new customers: We believe that there is a significant opportunity to attract new customers with our current offerings and within the market segments in which we currently operate. We estimate that there are over 35 million service SMBs in North America alone, and 456 million globally. Our current verticals and adjacent markets in the service economy are highly fragmented. By improving the awareness of our brands and solutions, we believe that we can increase penetration and sell our complete value chain of solutions to service SMB customers. Through acquisitions and organic growth of our business, the number of customers on our platform increased from approximately 110,000 at the end of 2018 to approximately 745,000 at the end of 2025.
•Expand ARPU and margin: Today, we serve approximately 745,000 customers, which represent a significant opportunity for growth. As we become more embedded in our customers’ daily business operations, we are better positioned to add value by cross-selling and up-selling adjacent solutions. 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 ARPU and improving customer experience and retention. A primary focus for ARPU expansion focuses on cross-selling payments solutions to customers in an effort to prioritize margin growth. 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. These AI capabilities are intended to provide full end-to-end automation, enhancing the value of our products to our customers.
•Expand into new products: Given our position in the service SMB ecosystem, as well as our relationships and level of entrenchment with our customers, we use insights gained through our customer lifecycle to identify additional solutions that are value-additive for our customers. These insights allow us to continually assess opportunities to develop or acquire solutions to further expand market share, drive customer stickiness and fuel growth for our business. During 2023, we introduced EverPro Edge, which allows customers to save, learn and grow, and creates a universal channel and trusted brand
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for engagement, Edge is an expansion opportunity enabling customers to receive targeted business growth and education content, as well as cash-back rebates on supplies they purchase at leading vendors.
In conjunction with the strategies cited above, we also acquire solutions 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 an established framework for identification, execution, integration and onboarding of targets. These acquired solutions 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. We have acquired 54 companies since our inception and will continue to opportunistically look at potential acquisitions, primarily across our core verticals. In addition, from time to time, we evaluate our positioning with respect to our existing verticals and may determine to dispose of offerings that do not align with our growth initiatives. For example, in the years ended December 31, 2025 and 2024, we sold marketing technology solutions and Fitness Solutions, respectively, as described above.
Our customers
We define a customer as an individual or entity that utilized or was capable of utilizing an EverCommerce solution or service for which they paid any one or combination of recurring, re-occurring or transactional fees in a given period. For solutions contracting with entities that service groups of customers, for example franchises or other multi-location businesses, the customer is counted at the level of the individual business utilizing the solution.
We serve a wide range of customers across various verticals, micro-verticals, geographies and sizes. We believe the customers that we serve are representative of the highly diverse and varied nature of the SMB service economy. Our customers provide expert services which, in turn, play a critical role in supporting the everyday lives of millions of end consumers – for their homes, their health and their well-being.
| Our Verticals | Vertical Brands | Micro-vertical Examples | ||||||||||||
| Home Services | EverPro | HVAC/plumbing, electrical professionals, remodeling and home improvement contractors, window and door replacement specialties, landscaping design services, security and alarm installation and monitoring businesses, pest control | ||||||||||||
| Health Services | EverHealth | Specialty private medical practices, mental health therapists, chronic care specialists, general practitioners, specialty branches of hospital systems | ||||||||||||
Wellness Services | EverWell | Salons and spas, massage therapists, medi-aesthetics, wellness specialists | ||||||||||||
| Other | Non-profits, veterinary care facilities, small accounting and tax firms, educational facilities, social services, pet/veterinary care, professional services, consumer services | |||||||||||||
As of December 31, 2025, we served approximately 745,000 customers. Of these customers, approximately 68% were based in the United States and approximately 32% were international.
Competition
While we have built a scaled, differentiated platform, we compete in a variety of highly fragmented markets and face competition from a variety of sources:
•Manual processes, basic PC tools, standalone payment terminals and homegrown solutions, utilized by many service SMBs;
•Vertically-specialized competitors, including mobile sales applications and field service management platforms in Home Services, EHR/EMR and practice management platforms in Health Services and scheduling and customer management in Wellness Services; and
•Horizontal competitors, including Salesforce for customer relationship management (“CRM”), Intuit for financial products, and Square for payments.
The principal competitive factors affecting our market include:
•Breadth and depth of vertical solutions;
•Quality of products and features;
•Seamless integration and ease-of-use;
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•Customer support capabilities;
•Offerings using generative AI;
•Pricing and costs;
•Product strategy and pace of innovation;
•Name recognition and brand reputation;
•Sales and marketing execution; and
•Platform security.
See Part I. Item 1A. “Risk Factors” for a more comprehensive description of risks related to competition.
Our product strategy
Our product strategy and management organization develops an in-depth understanding of the customer and their varied workflow needs across our target industries and focuses on strategies to deliver an integrated value chain to our customers. The product strategy and management organization partners closely with our marketing, sales and customer teams to hear market insights and VoC feedback to improve retention and wallet expansion, build stronger integrations between solutions and pursue adjacent market penetration opportunities.
Our go-to-market
Our go-to-market organization includes our vertically-focused marketing, business development, sales and customer success functions who align to build positive customer experiences across the business. These teams drive scalable and efficient organic growth in three key areas: new customer acquisition, wallet share expansion and go-to-market of acquired or built products. Our teams relentlessly test and measure results to expand channels, optimize go-to-market, increase sales conversion, identify customer upsell opportunities and explore adjacent expansion verticals. Through this targeted, coordinated approach, we maximize expert resource allocation and allow for growth programs of scale with attractive customer unit economics across our business.
Our people, culture and values
We consider our people and culture to be vital to our success. We place a high level of emphasis on the relationships we have with our people, their engagement and commitment to the organization. Our fundamental belief is that when a company has a strong relationship with its employees, they in turn deliver exceptional customer service and in turn that delivers strong business performance. We have seen and believe our inclusive and innovative workforce is and will continue to be a competitive advantage. We plan to continue to make investment in our human capital a priority.
We believe in and prioritize inclusivity and employee engagement in our workplace and aim to behave in a manner where these values are the underpinnings of how we build programs and support the growth and development of our people. We aggressively manage and measure our identification, selection, retention, growth and development of our current and future employees. We have a robust methodology that enables us to successfully and with a high level of engagement, integrate individuals into our organization. While we believe inclusivity is important to our long-term value and performance, we recognize the importance of pursuing so in legally sound manners. Inclusivity efforts are part of our legal compliance considerations, and we are committed to only rewarding legally compliant methods for advancing such efforts. We are committed to not making employment (including hiring, promotion, and compensation) or other contracting decisions on the basis of legally protected characteristics, except to the extent required or permitted by law.
Our human-first culture has been built upon our values and they are a critical part of how we behave, lead and engage with our people. Our values reflect who EverCommerce is and serve as our guiding force on how we plan to achieve our organizational objectives.
In addition to providing continuous learning, autonomy and engaging work, we provide a series of competitive benefits, including health insurance for employees and dependents, a 401k match, paid parental leave and flexible time off. We allot over 14,000 hours per year for our employees to volunteer for causes that are important to them. Within the tight-knit culture we have built and sustained, we celebrate our people and their successes with company events, team building activities and other important benefits. We invest in continuous growth and development with training and education and we provide career opportunities for people to continue to stretch their strengths and capabilities. None of our employees are represented by labor unions or covered by collective bargaining agreements.
As of December 31, 2025, we had approximately 1,800 employees operating across five countries, including approximately 1,400 employees located in the United States.
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Our technology
Our SaaS solutions are strategically integrated to best serve our service SMB customers and ensure they have all the tools to help them grow and scale. We leverage a common set of best practices, IT infrastructure and architectures that serve as a foundation for highly scalable and secure software solutions.
Key areas and features of our strategy and operations that serve as a foundation to our technology approach include:
•Software development: Our software teams use best-in-class technologies and practices to develop our SaaS, mobile and (in selected situations) on-premise solutions. Our software is purpose-built to meet the specific needs of the industries we serve.
•Tech and IT shared services: Our technology platforms provides a consistent approach to software development, as well as cloud engineering and data center migration. Our IT administration allows for 24-hour support for all our people and platforms worldwide.
•Shared infrastructure: We systematically upgrade our data centers, centralize our collaboration platforms onto Office 365 and deploy a variety of standardized third-party software products sourced through EverCommerce.
•Cybersecurity: Our Security Operations team uses industry best practices and functional expertise to perform regular risk assessments, audits and remediation across our IT infrastructure and the data we maintain therein. Our security efforts also include incident prevention, incident response, monitoring, scanning and alerting.
•Offshore development team: Our software is primarily developed utilizing both internal and independent firms; including contractors in the United States and internationally to perform some of our product development activities.
Data privacy and security
Regulators around the world have adopted or proposed laws, regulations, standards and requirements regarding the collection, use, transfer, security, storage, destruction and other processing of personal data. These laws are increasing in number and complexity, resulting in higher risk of enforcement, fines and other penalties. Our privacy and legal teams are committed to processing and fulfilling any requests regarding the exercise of an individual’s privacy rights with respect to personal information.
In the United States, numerous federal and state laws and regulations, including data breach notification laws and consumer protection laws govern the collection, use, disclosure, and protection of personal information. Our consumer transactions business is now, or may in the future be, subject to certain financial services laws, regulations and rules, such as the Payment Card Industry Data Security Standards, the Gramm-Leach-Bliley Act and the National Automated Clearing House Association ACH Rules, and our healthcare services businesses are subject to certain healthcare security and privacy laws, such as the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and regulations promulgated thereunder (collectively, “HIPAA”) in the United States. Certain foreign laws also govern the privacy and security of personal data. For example, we may be subject to the Personal Information Protection and Electronic Documents Act (“PIPEDA”) and Personal Health Information Protection Act (“PHIPA”) in Canada. Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.
Healthcare regulatory matters
Our business operates in the healthcare space, and as such is affected by changes in healthcare laws, regulations and industry standards. The healthcare industry is highly regulated and subject to frequently changing political, legislative, regulatory and other influences. We are subject, either directly or through our customers, to a number of federal, state and local healthcare laws and regulations that involve matters central to our Health Services business. Failure to satisfy those legal and regulatory requirements, or the adoption of new laws or regulations that impact our business or our customers, could have a significant negative impact on our results of operations, financial condition or liquidity. For additional information regarding potential risks relating to compliance with healthcare laws and regulations, see Part I, Item 1A, “Risk Factors – The healthcare industry is heavily regulated at the local, state and federal levels. Our failure to comply with regulatory requirements could create liability for us or our customers, result in adverse publicity and negatively affect our business.”
In addition to the potential for evolving laws and regulations, the application and interpretation of these laws and regulations are often uncertain. These laws are enforced by federal, state and local regulatory agencies in the jurisdictions where we operate, and in some instances also through private civil litigation. Violation of any of such laws or any other governmental regulations that apply may result in penalties, including, without limitation, significant administrative, civil and criminal penalties, damages, fines, disgorgement, additional reporting and/or compliance obligations to settle allegations of non-compliance, contractual damages, the curtailment or restructuring of operations, exclusion from participation in governmental healthcare programs and imprisonment.
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Intellectual property
Protecting our intellectual property and proprietary technology is an important aspect of our business and continued growth. We rely on a combination of trademark, copyright, patent, trade secret and other intellectual property laws in the United States and other jurisdictions, as well as written agreements and other contractual provisions, to protect our proprietary technology, processes and other intellectual property.
As of December 31, 2025, we had 115 registered trademarks in the United States (including EverCommerce), three registered trademarks in the EU (including the EverCommerce logo), two registered trademarks in Puerto Rico, four registered trademarks in Canada, 15 registered trademarks in New Zealand, six registered trademarks in Australia and four registered trademarks in the United Kingdom (including the EverCommerce logo); one trademark application in process in the United States and one trademark application in process in Canada; 37 registered copyrights in the United States and one registered copyright in Canada; and seven issued patents in the United States. We also have a portfolio of approximately 3,200 registered domain names for websites that we use in our business or that are registered defensively to protect our brands.
In addition, we generally enter into confidentiality agreements and assignment of invention agreements with employees and contractors throughout our business, including those involved in the development of our proprietary intellectual property. We also enter into confidentiality agreements with our customers, partners and third parties who have access to our confidential information.
While much of the intellectual property we use is owned by us, we have obtained rights to use intellectual property of third parties through licenses and service agreements with those third parties. Although we believe these licenses are sufficient for the operation of our business, these licenses typically limit our use of the third parties’ intellectual property to specific uses and for specific time periods.
We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost-effective. See “Risk Factors—Risks Related to Intellectual Property—We may be unable to adequately protect or enforce, and we may incur significant costs in enforcing or defending, our intellectual property and other proprietary rights.”
Corporate Information
We were initially formed under the laws of the state of Delaware in September 2016 under the name PaySimple Holdings, Inc., with “EverCommerce” being our “doing business as” name. In December 2020, we changed our name to EverCommerce Inc. Our website address is www.evercommerce.com. We file or furnish electronically with the Securities and Exchange Commission (“SEC”) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information, as well as amendments to those reports. These and other SEC filings are available to the public over the Internet at the SEC’s website at http://www.sec.gov. We make available on our website at www.evercommerce.com, under “Investor Relations,” free of charge, copies of these reports as soon as reasonably practicable after filing or furnishing these reports with the SEC. The information contained on our website is not incorporated by reference into this Annual Report on Form 10-K.
Item 1A. Risk Factors
Our business involves significant risks, some of which are described below. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K. The risks and uncertainties described below are not the only ones we face. Additional risk and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. The realization of any of these risks and uncertainties could have a material adverse effect on our reputation, business, financial condition, results of operations, growth and future prospects as well as our ability to accomplish our strategic objectives. In that event, the market price of our common stock could decline and you could lose part or all of your investment.
Risks Related to Our Business
Our limited operating history and our evolving business make it difficult to evaluate our future prospects and the risks and challenges we may encounter.
Our limited operating history and evolving business make it difficult to evaluate and assess the success of our business to date, our future prospects and the risks and challenges that we may encounter. These risks and challenges include our ability to:
•attract new and digitally-inclined service SMBs to the EverCommerce platform;
•retain existing customers and leverage cross-sell and upsell opportunities;
•successfully update the EverCommerce platform, including expanding into new verticals and international markets and integrating additional solution capabilities to further benefit our service SMB customers and enhance the end-customer experience;
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•expand through future acquisitions and successfully identify and integrate acquired entities, services and technologies;
•hire, integrate and retain talented people at all levels of our organization;
•comply with existing and new laws and regulations applicable to our business and in the industries in which we participate;
•anticipate and respond to macroeconomic changes, changes within the existing and future industries in which we participate, including the Home Services, Health Services and Wellness industries, and changes in the markets in which we operate;
•foresee and manage market volatility impacts on market value;
•react to challenges from existing and new competitors;
•improve and enhance the value of our reputation and brand;
•effectively manage our growth; and
•maintain and improve the infrastructure underlying the EverCommerce platform, including our software, websites, mobile applications and data centers, as well as our cybersecurity and data protection measures.
If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above and those described elsewhere in this “Risk Factors” section, our business, financial condition and results of operations could be adversely affected. Further, because we have limited historical financial data and our business continues to evolve and expand within the industries in which we operate, any predictions about our future revenue and expenses may not be as accurate as they would be if we had a longer operating history, operated a more predictable business or operated in a single or unregulated industry. We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories and evolving businesses that operate in regulated and competitive industries. If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations would be adversely affected.
Our historical growth rates may not be sustainable or indicative of future growth.
Since our founding, we have generated revenue growth through acquisitions and by driving organic growth of our business. Our revenue has grown at a CAGR of 7.1% from 2022 to 2025, and reached $588.9 million for the year ended December 31, 2025, up from $562.2 million for the year ended December 31, 2024, which represents revenue growth of 4.8% from 2024 to 2025. Our historical rate of growth may not be sustainable or indicative of our future rate of growth. For example, while acquisitions have significantly contributed to our growth to date, we may make fewer or no acquisitions in the future. We believe that our continued growth in revenue, as well as our ability to improve or maintain margins and profitability, will depend upon, among other factors, our ability to address the challenges, risks and difficulties described elsewhere in this “Risk Factors” section and the extent to which our various offerings grow and contribute to our results of operations. We cannot provide assurance that we will be able to successfully manage any such challenges or risks to our future growth. In addition, our base of customers may not continue to grow or may decline due to a variety of possible risks, including changes in macroeconomic conditions, such as inflation, interest rates and tariffs, increased competition, changes in the regulatory landscape and the maturation of our business. Any of these factors could cause our revenue growth to decline and may adversely affect our margins and profitability. Failure to continue our revenue growth or improve margins would have a material adverse effect on our business, financial condition and results of operations. You should not rely on our historical rate of revenue growth as an indication of our future performance.
To manage our current and anticipated future growth effectively, we must continue to maintain and enhance our technology infrastructure, financial and accounting systems and controls. We must also attract, train and retain a significant number of qualified sales and marketing personnel, client support personnel, professional services personnel, software engineers, technical personnel and management personnel, and the availability of such personnel, in particular software engineers, may be constrained.
A key element of how we manage our growth is our ability to scale our capabilities and satisfactorily implement our solutions for our customers’ needs. Failure to effectively manage our growth could also lead us to over-invest or under-invest in development and operations, result in weaknesses in our infrastructure, systems or controls, give rise to operational mistakes, financial losses, loss of productivity or business opportunities and result in loss of employees and reduced productivity of remaining employees.
We have experienced net losses in the past and we may not achieve profitability in the future.
We have incurred significant operating losses since our inception. Our net income from continuing operations was $18.2 million and a net loss from continuing operations of $15.2 million for the years ended December 31, 2025 and 2024, respectively. Our operating expenses may increase substantially in the foreseeable future as we continue to invest to grow our business and build relationships
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with or clients and partners, develop new solutions and comply with requirements of being a public company. These efforts may prove to be more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. If we are unable to effectively manage the risks and difficulties of investing to grow our business, building relationships and developing new solutions as we encounter them, our business, financial condition and results of operations may suffer.
We may continue to experience significant quarterly and annual fluctuations in our operating results due to a number of factors, which makes our future operating results difficult to predict.
Historically, we have experienced fluctuations in period-to-period operating results, with stronger results and higher revenue in the second and third quarters of the year, and our quarterly and annual operating results may continue to fluctuate significantly due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Our past results may not be a predictor of our future performance.
Factors that may affect our operating results and the ability to predict our future results and trajectory include:
•our ability to increase sales to existing customers and to renew agreements with our existing customers at comparable prices;
•our ability to attract new customers with greater needs for our services;
•changes in our pricing policies or those of our competitors, or pricing pressure on our software and related services;
•periodic fluctuations in demand for our software and services and volatility in the sales of our solutions and services;
•the success or failure of our acquisition or divestiture strategy;
•our ability to timely develop and implement new solutions and services, as well as improve and enhance existing solutions and services, in a manner that meets customer requirements;
•our ability to hire, train and retain key personnel;
•any significant changes in the competitive dynamics of our market, including new entrants or substantial discounting of products or services;
•our ability to control costs, including our operating expenses;
•any significant change in our facilities-related costs;
•the timing of hiring personnel and of large expenses such as those for third-party professional services;
•technological developments, including new uses for generative AI;
•general economic conditions;
•our ability to appropriately resolve any disputes relating to our intellectual property; and
•the impact of a recession, pandemic or any other adverse global economic conditions on our business.
We have in the past experienced, and we may experience in the future, significant variations in our level of sales. Such variations in our sales have led and may lead to significant fluctuations in our cash flows, revenue and deferred revenue on a quarterly and annual basis. Failure to achieve our quarterly goals will decrease our value and, accordingly, the value of our securities.
In order to support the growth of our business and our acquisition strategy, we may need to incur additional indebtedness or seek capital through new equity or debt financings, which sources of additional capital may not be available to us on acceptable terms or at all and may result in substantial dilution to our stockholders.
Our operations have consumed substantial amounts of cash since inception and we intend to continue to make significant investments to support our business growth, acquire complementary businesses and technologies, respond to business challenges or opportunities, develop new solutions and services and enhance our existing solutions and services and operating infrastructure. Our net cash provided by operating activities was $111.5 million in 2025 and $113.2 million in 2024. We had cash and cash equivalents of $129.7 million and no restricted cash as of December 31, 2025.
Our future capital requirements may be significantly different from our current estimates and will depend on many factors, including the need to:
•finance unanticipated working capital requirements;
•acquire complementary businesses, technologies, solutions or services;
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•develop or enhance our technological infrastructure and our existing solutions and services;
•fund strategic relationships, including joint ventures and co-investments;
•respond to competitive pressures; and
•manage costs associated with any adverse market conditions or other macroeconomic factors.
Accordingly, we may need to engage in equity or debt financings or collaborative arrangements to secure additional funds. Additional financing may not be available on terms favorable to us, or at all. If we raise additional funds through further issuances of equity or convertible securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares. Any debt financing secured by us in the future could involve additional restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, during times of economic instability, it has been difficult for many companies to obtain financing in the public markets or to obtain debt financing, and we may not be able to obtain additional financing on commercially reasonable terms, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, it could have a material adverse effect on our business, financial condition and results of operations. Further, we maintain the majority of our cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions exceed insured limits. Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we will be able to access uninsured funds in a timely manner or at all.
We may not be able to continue to expand our share of our existing vertical markets or expand into new vertical markets, which would inhibit our ability to grow and increase our profitability.
Our future growth and profitability depend, in part, upon our continued expansion within the vertical markets in which we currently operate, the emergence of other vertical markets for our solutions and our ability to penetrate new vertical markets. As part of our strategy to expand into new vertical markets, we look for acquisition opportunities and partnerships that will allow us to increase our market penetration, technological capabilities, offering of solutions and distribution capabilities. We may not be able to successfully identify suitable acquisition or partnership candidates in the future, and if we do, they may not provide us with the benefits we anticipated.
Our expansion into new vertical markets also depends upon our ability to adapt our existing technology or to develop new technologies to meet the particular needs of each new vertical market. We may not have adequate financial or technological resources to develop effective and secure services or distribution channels that will satisfy the demands of these new vertical markets. Penetrating these new vertical markets may also prove to be more challenging or costly or take longer than we may anticipate. Further, as positive references from existing customers are vital to expanding into new vertical and geographic markets within the service economy, any dissatisfaction on the part of existing customers may harm our brand and reputation and inhibit market acceptance of our services. If we fail to expand into new vertical markets and increase our penetration into existing vertical markets, we may not be able to continue to grow our revenues and earnings.
We face intense competition in each of the industries in which we operate, which could negatively impact our business, results of operations and financial condition and cause our market share to decline.
The market for our solutions and services is highly competitive and subject to rapidly changing technology, shifting customer needs and frequent introductions of new products and services. As our platform is utilized across industries, we compete in a variety of highly fragmented markets and face competition from a variety of sources, including manual processes, basic PC tools, homegrown solutions, as well as from vertically-specialized and horizontal competitors. Vertically-specialized competitors include mobile sales applications and field service management platforms in Home Services, EHR / EMR and practice management platforms in Health Services and scheduling and management in Wellness Services. Horizontal competitors include Salesforce for CRM, Intuit for financial products, and Square for payments.
We expect the intensity of competition to increase in the future as new companies enter our markets and existing competitors develop stronger capabilities. Our competitors may be able to devote greater resources to the development, promotion and sale of their offerings than we can to ours, which could allow them to respond more quickly than we can to new technologies and changes in customer needs and achieve wider market acceptance. Because the barriers to entry into our industry are generally low, we expect to continue to face competition from new entrants. We also encounter competition from a broad range of firms which possess greater resources than we do, and small independent firms that compete primarily on the basis of price. We may not compete effectively, and competitive pressures might prevent us from acquiring and maintaining the customer base necessary for us to be successful.
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We may also potentially face competition from our current partners. Our partners, including our integration partners for our EHR and PM solutions within Health Services, our Business Management Software solutions within Home Services and our payment and CRM solutions within Wellness Services, as well as our third-party payment processing partners, could become our competitors by offering similar services. Some of our partners offer, or may begin to offer, services in the same or similar manner as we do. Although there are many potential opportunities for, and applications of, these services, our partners may seek opportunities or target new clients in areas that may overlap with those that we have chosen to pursue.
We may face competition from companies that we do not yet know about. If existing or new companies develop or market products or services that are similar to ours, develop entirely new solutions, acquire one of our existing competitors or form a strategic alliance with one of our competitors or other industry participants, our ability to compete effectively could be significantly impacted, which would have a material adverse effect on our business, results of operations and financial condition.
The industries in which we operate are rapidly evolving and the market for technology-enabled services that empower SMBs is relatively immature and unproven. If we are not successful in promoting the benefits of or maintaining the competitiveness of our solutions and services, our growth may be limited.
Our three current verticals represent markets for our solutions and services that are subject to rapid and significant change. The market for software and technology-enabled services that empower SMBs is characterized by rapid technological change, new product and service introductions, consumerism and engagement and the entrance of non-traditional competitors. In addition, there may be a limited-time opportunity to achieve and maintain a significant share of these markets due in part to the rapidly evolving nature of the businesses within our Home Services, Health Services and Wellness Services verticals, the technology industries that support these businesses and the substantial resources available to our existing and potential competitors. The market for technology-enabled services within these verticals is relatively new and unproven, and it is uncertain whether this market will achieve and sustain high levels of demand and market adoption.
In order to remain competitive, we are continually involved in a number of projects to compete with these new market entrants by developing new services, growing our client base and penetrating new markets. Some of these projects include the expansion of our integration capabilities around our vertical markets, such as field service management, EHR, PM and other solutions. These projects carry risks, such as cost overruns, delays in delivery, performance problems and lack of acceptance by our clients, which could adversely impact our business, results of operations and financial condition.
Moreover, our ability to grow organically may be limited by, among other things, extensive saturation in the verticals in which we operate or a change or reduction in demand from SMBs due to changing economic conditions, strategic priorities, or otherwise. For many of our businesses, organic growth depends on product innovation, new product development, and timely responses to changing SMB demands and preferences. Consequently, failure to develop new or improved products in response to changing SMB preferences in a timely manner may hinder our growth potential, affect our competitive position, and adversely affect our business and results of operations.
Consolidation in the industries in which we operate could decrease demand for our solutions and services by existing and potential clients in such industries.
Participants and businesses in the industries in which we operate may consolidate and merge to create larger or more integrated entities with greater market power. We expect regulatory, economic and other conditions to result in additional consolidation in the future. As consolidation accelerates, the economies of scale of our clients’ organizations may grow. If a client experiences sizable growth following consolidation, it may determine that it no longer needs to rely on us and may reduce its demand for our solutions and services. In addition, if an existing independent client elects to become a part of a franchise group, or if an existing franchise client opts to change to a different franchise group, such clients may be required by the terms of their respective franchise group to use different solutions and services, which would have an adverse impact on our operations and demand for our solutions. Furthermore, as companies consolidate to create larger and more integrated entities with greater market power, these new entities may try to use their market power to negotiate fee reductions for our solutions and services. Finally, consolidation may also result in the acquisition or future development by our customers of products and services that compete with our solutions and services. Any of these potential results of consolidation could have a material adverse effect on our business, financial condition and results of operations.
We are dependent on payment card networks, such as Visa and MasterCard, and payment processors, such as Worldpay and PayPal, and if we fail to comply with the applicable requirements of the payment networks or our payment processors, they can seek to fine us, suspend us, terminate our agreements and/or terminate our registrations through our bank sponsors.
We have entered into agreements with certain payment processors, including Worldpay and PayPal, in order to enable our clients’ processing of credit, debit and prepaid card transactions through the card networks, such as Visa and MasterCard. Pursuant to these agreements with payment processors, we are registered with the card networks as an independent sales organization (“ISO”) of our
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sponsor bank(s) or as a payment facilitator(s), and are subject to the requirements of our bank sponsors, payment processors, as well as the card network rules and certain other obligations. The payment networks routinely update and modify requirements applicable to merchant acquirers (i.e., sponsor banks) which are passed through to third parties such as ISOs or payment facilitators like us, including rules regarding data integrity, third-party relationships (such as those with respect to bank sponsors and ISOs), merchant chargeback standards and the Payment Card Industry Data Security Standards (“PCI DSS”).
If we fail to comply with the applicable rules and requirements of the payment card networks, bank sponsors or payment processors, they could suspend or terminate our registration (with the payment networks) and/or terminate our ISO and/or payment facilitator agreements, which would make it impossible for us to conduct our business on its current scale. Further, our transaction processing abilities, including with respect to settlement processes, could be delayed or otherwise disrupted. As required by the PCI DSS (and the payment network rules), we may be required to submit to periodic third-party audits, self-assessments or other assurances of our compliance with the PCI DSS. Such reviews and audits may reveal that we have failed to comply with the PCI DSS (which could subject us to fines and penalties by the payment card networks). In addition, even if we comply with the PCI DSS, there is no assurance that we will be protected from a security breach. Our contracts with payment processors, including Worldpay and PayPal, include standard confidentiality, indemnification and data protection obligations, among others. Our contracts with Worldpay and PayPal provide for certain termination events, such as material breach, and are subject to automatic annual renewal unless terminated by either party upon prior notice or for cause. The termination of our registration with the payment networks or our agreements with the payment processors, or any changes in payment network, payment processor or issuer rules that limit our ability to provide merchant services, could have an adverse effect on our payment processing volumes, revenues and operating costs. If we are unable to comply with the requirements applicable to our obligations under the payment networks rules or payment processor agreements, the payment networks or payment processors may no longer allow us to provide these services, which would require us to spend additional resources to obtain settlement services from a third-party provider. In addition, if we were precluded from allowing our clients to process Visa and MasterCard transactions, which we access through our payment processor arrangements, we would lose substantially all of our revenue.
We are also subject to the operating rules of the National Automated Clearing House Association (“NACHA”), a self-regulatory organization which administers and facilitates private-sector operating rules for ACH payments and defines the roles and responsibilities of financial institutions and other ACH network participants. The NACHA Rules and Operating Guidelines impose obligations on us and our partner financial institutions. These obligations include audit and oversight by the financial institutions and the imposition of mandatory corrective action, including termination, for serious violations. If an audit or self-assessment under NACHA identifies any deficiencies that we need to remediate, the remediation efforts may distract our management team and be expensive and time consuming.
If we cannot keep pace with rapid developments and changes in the electronic payments market or are unable to introduce, develop and market new and enhanced versions of our software solutions, we may be put at a competitive disadvantage with respect to our services that incorporated payment technology.
Payment-related transactions comprised approximately 20% of our revenue in 2025. The electronic payments market is subject to constant and significant changes. This market is characterized by rapid technological evolution, new product and service introductions, evolving industry standards, changing client needs and the entrance of non-traditional competitors, including products and services that enable card networks and banks to transact with consumers directly. To remain competitive, we continually pursue initiatives to develop new solutions and services to compete with these new market entrants. These projects carry risks, such as cost overruns, delays in delivery, performance problems and lack of client acceptance. In addition, new solutions and offerings may not perform as intended or generate the business or revenue growth expected. Any delay in the delivery of new solutions and services or the failure to differentiate our solutions and services or to accurately predict and address market demand could render our solutions and services less desirable, or even obsolete, to our clients and to our distribution partners. Furthermore, even though the market for integrated payment processing solutions and services is evolving, it may develop too rapidly or not rapidly enough for us to recover the costs we have incurred in developing new solutions and services targeted at this market. Any of the foregoing could have a material and adverse effect on our operating results and financial condition.
The continued growth and development of our payment processing activities will depend on our ability to anticipate and adapt to changes in consumer behavior. For example, consumer behavior may change regarding the use of payment card transactions, including the relative increased use of crypto-currencies, other emerging or alternative payment methods and payment card systems that we or our processing partners do not adequately support or that do not provide adequate revenue to parties like us. Any failure to timely integrate emerging payment methods into our software, to anticipate consumer behavior changes or to contract with processing partners that support such emerging payment technologies could cause us to lose traction among our customers or referral sources, resulting in a corresponding loss of revenue, if those methods become popular among end-users of their services.
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The solutions and services we deliver are designed to process complex transactions and provide reports and other information on those transactions, all at very high volumes and processing speeds. Our technology offerings must also integrate with a variety of network, hardware, mobile and software platforms and technologies, and we need to continuously modify and enhance our solutions and services to adapt to changes and innovation in these technologies. Any failure to deliver an effective, reliable and secure service or any performance issue that arises with a new solution or service could result in significant processing or reporting errors or other losses. If we do not deliver a promised new solution or service to our clients or distribution partners in a timely manner or the solution or service does not perform as anticipated, our development efforts could result in increased costs and a loss in business that could reduce our earnings and cause a loss of revenue. We also rely in part on third parties, including some of our competitors and potential competitors, for the development of and access to new technologies, including software and hardware. Our future success will depend in part on our ability to develop or adapt to technological changes and evolving industry standards. If we are unable to develop, adapt to or access technological changes or evolving industry standards on a timely and cost-effective basis, our business, financial condition and results of operations would be materially adversely affected.
Real or perceived errors, failures or bugs in our solutions could adversely affect our business, results of operations, financial condition and growth prospects.
Our customers expect a consistent level of quality in the provision of our solutions and services. The support services that we provide are also a key element of the value proposition to our customers. However, complex technological solutions such as ours often contain errors or defects, particularly when first introduced or when new versions or enhancements are released. Errors will affect the implementation, as well as the performance, of our solutions and software and could delay the development or release of new solutions or new versions of solutions, adversely affect our reputation and our customers’ willingness to buy solutions from us, and adversely affect market acceptance or perception of our solutions. We may also experience technical or other difficulties in the integration of acquired technologies and software solutions into our existing platforms and applications. Any such errors or delays in introducing or implementing new or enhanced solutions or allegations of unsatisfactory performance could cause us to lose revenue or market share, increase our service costs, cause us to incur substantial costs, cause us to lose significant customers, negatively affect our ability to attract new clients, subject us to liability for damages and divert our resources from other tasks, any one of which could materially and adversely affect our business, results of operations and financial condition.
We and our third-party providers are exposed to cybersecurity risks and incidents which may result in damage to our brand and reputation, material financial penalties, and legal liability, which could in turn materially adversely affect our business, results of operations, and financial condition.
We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, “IT Systems”). We own and manage some of these IT Systems but also rely on third parties for a range of IT Systems and related products and services. We and certain of our third-party providers collect, maintain and process data about customers, employees, business partners and others, including information about individuals such as payment card information, as well as proprietary information belonging to our business such as trade secrets (collectively, “Confidential Information”).
Our IT Systems, Confidential Information, products and services have been and will continue to be targets of cyber-attacks aimed at sabotage, disruption and/or compromise. Threats come from diverse sources, including criminal hackers, hacktivists, state-sponsored groups, industrial espionage actors and insiders. These actors leverage numerous tactics, such as cyber-extortion, ransomware, social engineering (e.g., phishing), the introduction of computer viruses or other malware and even the physical intrusion and/or destruction of IT and infrastructure assets.
The techniques used to gain unauthorized, improper, or illegal access to systems and information (including personal data), disable or degrade services, or sabotage systems are constantly evolving and have become increasingly complex and sophisticated. These techniques are difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools, such as artificial intelligence (“AI”), that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence. In addition, we identify and track known security vulnerabilities in our (and third-party) software and services that are deployed in our business, and we cannot guarantee that patches or other measures will be comprehensively applied before such vulnerabilities can be exploited by a threat actor. Because certain of our products are integrated with our customers’ systems, the circumvention or failure of our protective measures could compromise the confidentiality, integrity, and availability of our customers’ own systems and/or information. In addition, there can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our IT systems and Confidential Information.
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We have experienced cyber-attacks and other security incidents involving access to IT Systems and Confidential Information, and will continue to experience such attacks and incidents to varying degrees. To date, no attacks or incidents either individually or in the aggregate has materially impacted our operations, financial condition or business. Although we and our service providers deploy security measures in relation to our IT Systems and Confidential Information, no measures can guarantee protection against all cyber-attacks and security incidents. A serious breach of our IT Systems, Confidential Information, or a third-party system upon which we rely may subject us to material losses or liability, including, for example, as a result of the following: payment network fines; assessments and claims for unauthorized purchases with misappropriated credit, debit or card information; impersonation or other similar fraud claims; regulatory investigations, fines and penalties; litigation (including class action) costs, damages and injunctive relief; significant harm to our brand and reputation; loss of existing clients and potential clients from using electronic payments generally and our solutions and services specifically, thus reducing our revenue; costs to correct any breaches or failures; and significant uninsured liabilities and costs.
Although we generally require that our agreements with our distribution partners and service providers who have access to our IT Systems and/or Confidential Information include confidentiality obligations that restrict these parties from using such access or disclosing such information except as necessary to perform their services under the applicable agreements, there can be no assurance that these contractual measures will prevent the unauthorized use or disclosure of Confidential Information, nor can we be sure that such third parties would be willing or able to satisfy liabilities arising from their breach of these agreements. Any failure by such third parties to adequately take these protective measures could result in protracted or costly litigation.
In addition, our agreements with our bank sponsors (as well as payment network requirements) require us to take certain protective measures to ensure the confidentiality of Confidential Information. Any failure to adequately comply with these protective measures could result in fees, penalties, litigation or termination of our bank sponsor agreements, and/or registration with the payment card networks.
Our existing general liability and cyber liability insurance policies may not cover, or may cover only a portion of, any potential claims related to security breaches to which we are exposed or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed. We also cannot be certain that our existing insurance coverage will continue to be available on acceptable terms or in amounts sufficient to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage of any future claim. We attempt to limit by contract our liability, however, the limitations of liability set forth in the contracts may not be enforceable or otherwise protect us from liability, and we may also be subject to claims that are not covered by contract.
Additionally, we are responsible both for our own business and to a significant degree for acts and omissions by certain of our distribution partners and third-party vendors under the rules and regulations established by the payment networks, such as Visa, MasterCard, Discover and American Express and the debit networks. We and other third parties collect, process, store and transmit Confidential Information, including financial and payment card information, and we have ultimate liability to the payment networks and member financial institutions that register us with the payment networks for our failure, or the failure of certain distribution partners and third parties with whom we contract, to protect this Confidential Information, in accordance with payment network requirements. Additionally, certain of our software and technology-enabled services are intended for use in collecting, storing and displaying clinical and health care-related information used in the diagnosis and treatment of patients and in related health care settings such as registration, scheduling and billing. The loss, destruction or unauthorized modification of Confidential Information could result in significant fines, sanctions and proceedings or actions against us by the payment networks, payment processors, sponsor banks, governmental bodies, our customers, our clients’ customers or others, which could have a material adverse effect on our business, financial condition and results of operations. Any such sanction, fine, proceeding or action could result in significant damage to our reputation or the reputation of our customers, negatively impact our ability to attract or retain customers, force us to incur significant expenses in defense of these proceedings, disrupt our operations, distract our management, increase our costs of doing business and may result in the imposition of monetary liability. A significant cybersecurity breach could also result in payment networks prohibiting us from processing transactions on their networks or the loss of our financial institution sponsorship that facilitates our participation in the payment networks, either of which could materially impede our ability to conduct business.
Moreover, we rely on third parties, such as Worldpay, PayPal and other payment processing partners, for specific services, software and hardware used in providing our solutions and services. Some of these organizations and service providers are our competitors or provide similar services and technology to our competitors, and we may not have long-term contracts with them. If these contracts are canceled or we are unable to renew them on commercially reasonable terms, or at all, our business, financial condition and results of operation could be adversely impacted. The termination by our service or technology providers of their agreements with us or their failure to perform their services efficiently and effectively may adversely affect our relationships with our clients and, if we cannot find alternate providers quickly, may cause those clients to terminate their processing agreements with us.
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Our use of AI technologies may not be beneficial to our business, and may cause the performance of our products, services and business, as well as our reputation and the reputations of our customers, to suffer or cause us to incur liability resulting from the violation of laws or contracts to which we are a party.
We are developing and/or implementing artificial intelligence, machine learning, and automated decision-making technologies (collectively, “AI Technologies”) throughout our business, and are making significant investments in this area.
We expect that increased investment will be required in the future to continuously improve our use of AI Technologies. As with many technological innovations, there are significant risks involved in developing, maintaining and deploying these technologies and there can be no assurance that the usage of or our investments in such technologies will always enhance our products or services or be beneficial to our business, including our efficiency or profitability.
In particular, if the models underlying the AI Technologies we use are: incorrectly designed or implemented; trained or reliant on incomplete, inadequate, inaccurate, biased or otherwise poor quality data, or on data to which we do not have sufficient rights or in relation to which we and/or the providers of such data have not implemented sufficient legal compliance measures; used without sufficient oversight and governance to ensure their responsible use; and/or adversely impacted by unforeseen defects, technical challenges, cybersecurity threats or material performance issues, the performance of our products, services and business, as well as our reputation and the reputations of our customers, could suffer or we could incur liability resulting from the violation of laws or contracts to which we are a party or civil claims.
With respect to our products or services that incorporate AI Technology, the market for such products and services is rapidly evolving and unproven in many industries, including our own, and important assumptions about the characteristics of targeted markets, pricing, sales cycles, cost, performance, and perceived value associated with our services or products may be inaccurate. We cannot be sure that the market will continue to grow or that it will grow in ways we anticipate. In addition, market acceptance of products and services that incorporate AI Technology is uncertain. Our failure to successfully develop and commercialize our products or services involving AI Technologies could depress the market price of our stock and impair our ability to: raise capital; expand our business; provide, improve and diversify our product offerings; continue our operations and efficiently manage our operating expenses; and compete effectively in the marketplace.
We use AI Technologies licensed from third parties in our technologies and our ability to continue to use such technologies at the scale we need may be dependent on access to specific third-party software and infrastructure. We cannot control the availability or pricing of such third-party AI Technologies, especially in a highly competitive environment, and we may be unable to negotiate favorable economic terms with the applicable providers. If any such third-party AI Technologies become incompatible with our solutions or unavailable for use, or if the providers of such models unfavorably change the terms on which their AI Technologies are offered or terminate their relationship with us, our solutions may become less appealing to our customers and our business will be harmed. In addition, to the extent any AI Technologies are used as a hosted service, the service may be subject to disruption, outage, or loss of information. Moreover, our own and third-party AI Technologies may have bugs or errors, which could also lead to disruption, outage, or loss of information, unexpected, unreliable or unsatisfactory results, or degradation of our customers’ user experience with our services. In relation to third-party technologies, we may have limited ability to fix any bugs or errors ourselves, and we may not be able to rely on the corresponding providers or others to fix bug and errors in a timely manner or at all. Any of the foregoing could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in our solutions, or result in legal claims or proceedings, for which we may be unable to recover damages from the AI Technology, software, or infrastructure provider.
The regulatory framework for AI Technologies is rapidly evolving as many federal, state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations. Additionally, existing laws and regulations may be interpreted in ways that would affect the operation of our AI Technologies. As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations.
Our estimated total addressable market is subject to inherent challenges and uncertainties. If we have overestimated the size of our total addressable market or the various markets in which we operate, our future growth opportunities may be limited.
We estimate the TAM, defined above, for our current solutions for service SMBs was approximately $1.6 trillion globally in 2023, of which approximately $662 billion was in North America, which refers to the United States and Canada. Of the $662 billion, we estimate a $69 billion opportunity in Home Services, a $115 billion opportunity in Health Services, a $22 billion opportunity in Wellness Services and a $456 billion opportunity in other services categories. We have based our estimates on a number of internal and third-party estimates and resources, including, without limitation, third party reports and the experience of our management team across these industries. While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and
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estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors. As a result, our estimates of the annual total addressable market for our current solutions and services may prove to be incorrect. If third-party or internally generated data prove to be inaccurate or we make errors in our assumptions based on that data, the annual total addressable market for our solutions and services may be smaller than we have estimated, our future growth opportunities and sales growth may be impaired, any of which could have a material adverse effect on our business, financial condition and results of operations.
We calculate certain operational metrics using internal systems and tools and do not independently verify such metrics. Certain metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
We refer to a number of operational metrics in our public disclosures, including Pro Forma Revenue Growth Rate, Adjusted Gross Profit, Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”), monthly net pro forma revenue retention rate, lifetime value of a customer, customer acquisition costs and other metrics. We calculate these metrics using internal systems and tools that are not independently verified by any third party. These metrics may differ from estimates or similar metrics published by third parties or other companies due to differences in sources, methodologies or the assumptions on which we rely. Our internal systems and tools have a number of limitations, and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including the metrics we publicly disclose on an ongoing basis. If the internal systems and tools we use to track these metrics under count or over count performance or contain algorithmic or other technical errors, the data we present may not be accurate. While these numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring savings, the use of our solutions, services and offerings and other metrics. In addition, limitations or errors with respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details of our business, which would affect our long-term strategies. If our operating metrics or our estimates are not accurate representations of our business, or if investors do not perceive our operating metrics to be accurate, or if we discover material inaccuracies with respect to these figures, our reputation may be significantly harmed, and our operating and financial results could be adversely affected.
Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance and utilization of our solutions.
Our ability to increase our customer base and achieve broader market acceptance of our solutions and services will depend to a significant extent on our ability to expand our sales and marketing organizations, and to deploy our sales and marketing resources efficiently. An important component of our growth strategy is to increase the cross-selling of our solutions and services to current and future SMB customers. However, if we are not successful in doing so, or our existing and potential customers find our additional solutions and services to be unnecessary or unattractive, we may not be able to increase our customer base. We have invested, and plan to continue to invest, significant resources in expanding our sales initiatives as well as our sales force focused on identifying new strategic partners. However, we may not achieve anticipated revenue growth from expanding our sales force if we are unable to hire, develop, integrate and retain talented and effective sales personnel, or if our new and existing sales personnel are unable to achieve desired productivity levels in a reasonable period of time.
We also dedicate significant resources to sales and marketing programs. The effectiveness and cost of our online advertising has varied over time and may vary in the future due to competition for key search terms, changes in search engine use and changes in the search algorithms and rules used by major search engines. These efforts will require us to invest significant financial and other resources. Our business and operating results will be harmed if our sales and marketing efforts do not generate significant increases in revenue.
If we are not able to maintain and enhance our reputation and brand recognition, our business and results of operations may be harmed.
We believe that maintaining and enhancing our reputation and brand recognition is critical to our relationships with existing clients and the customers or patients that they serve and to our ability to attract new clients. As our marketing efforts depend significantly on positive recommendations and referrals from our current and past SMB customers, a failure to maintain and provide high-quality solutions and services, or a market perception that we do not maintain or provide high-quality solutions and services, may harm our reputation and impair our ability to secure new customers. Any decisions we make regarding regulatory compliance, user privacy, payments and other issues, and any media, legislative or regulatory scrutiny of our business, or our current or former directors, employees, contractors, or vendors, could negatively affect our brands. If we do not successfully maintain and enhance the integrity, quality, efficiency and scalability of our software and systems, as well as our reputation and brand recognition among our customers and the end customers they serve, our business may not grow and we could lose existing customers, which would harm our business, results of operations and financial condition. For example, the success of our digital lead generation capabilities within our EverPro platform depends, in part, on our ability to establish and maintain relationships with quality and trustworthy home service
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professionals and home improvement contractors, such as home maintenance technicians and security alarm professionals operating in both residential and commercial settings. We provide our home service professionals with solutions to capture and manage lead generations to residential homeowners and business owners, who in turn want to work with home service professionals whom they can trust to provide quality workmanship. Unsatisfactory work performed by any of our recommended home service professionals could result in bad publicity and related damage to our reputation and/or litigation, which in turn may adversely affect our business, financial condition and results of operations.
Further, the promotion of our platforms and services may require us to make substantial investments and we anticipate that, as our market becomes increasingly competitive, these marketing initiatives may become increasingly difficult and expensive. Our marketing activities may not be successful or yield increased revenue, and to the extent that these activities yield increased revenue, the increased revenue may not offset the expenses we incur and our results of operations could be harmed. In addition, any factor that diminishes our reputation or that of our management, including failing to meet the expectations of our customers, could make it substantially more difficult for us to attract new customers.
If we are unable to retain our current customers, which are primarily SMBs, or sell additional functionality and services to them, our revenue growth may be adversely affected.
To increase our revenue, in addition to acquiring new customers, we must continue to retain existing clients and convince them to expand their use of our solutions and services by increasing the number of users and incenting them to pay for additional functionality. Many of our clients are SMBs, which can be more difficult to retain than large enterprises as SMBs often have higher rates of business failures and more limited resources, particularly in weaker economic environments, and are typically less able to make technology-related decisions based on factors other than price. Further, SMBs are fragmented in terms of size, geography, sophistication and nature of business and, consequently, are more challenging to serve at scale and in a cost-effective manner. As a result, we may be unable to retain existing clients or increase the usage of our solutions and services by them, which would have an adverse effect on our business, revenue and other operating results, and accordingly, on the trading price of our common stock.
Our ability to sell additional functionality to our existing customers may require more sophisticated and costly sales efforts, especially for our larger customers with more experienced management and established procurement functions. Similarly, the rate at which our customers purchase additional solutions from us depends on several factors, including general economic conditions and the pricing of additional functionality. SMBs are typically more susceptible to such factors and any adverse changes in the economic environment or business failures of our SMB customers may have a greater impact on us than on our competitors who do not focus on SMBs to the extent that we do. If our efforts to sell additional functionality to our clients are not successful, our business and growth prospects would suffer.
While some of our contracts are non-cancelable annual subscription contracts, most of our contracts with clients primarily consist of open-ended arrangements that can be terminated by either party without penalty, generally upon providing 30-day notice. Our clients have no obligation to renew their subscriptions for our solutions and services after the expiration of their subscription period. For us to maintain or improve our operating results, it is important that our customers continue to maintain their subscriptions on the same or more favorable terms. We cannot accurately predict renewal or expansion rates given the diversity of our customer base in terms of size, industry and geography. Our renewal and expansion rates may decline or fluctuate as a result of several factors, including consumer spending levels, client satisfaction with our solutions and services, decreases in the number of users, changes in the type and size of our customers, pricing changes, competitive conditions, the acquisition of our customers by other companies and general economic conditions. If our customers do not renew their subscriptions, our revenue and other operating results will decline and our business will suffer. If our renewal or expansion rates fall significantly below the expectations of the public market, securities analysts, or investors, the trading price of our common stock would likely decline.
Further, we have key customers and a more pronounced customer concentration in certain markets. Consequently, the loss of any of our key customers or any significant reduction in their usage of our solutions and services may reduce our sales revenue and net profit. There can be no guarantee that our key customers will not in the future seek to source some or all of their solutions and services from competitors or begin to develop such solutions or services in-house. Any loss, change or other adverse event related to our key customer relationships could have an adverse effect on our business, results of operations and financial condition.
Impairment in the value of our goodwill or intangible assets has adversely impacted and may in the future have a material adverse effect on our operating results and financial condition.
We record goodwill and intangible assets at fair value upon the acquisition of a business. Goodwill represents the excess of amounts paid for acquiring businesses over the fair value of the net assets acquired. The carrying value of goodwill is evaluated for impairment at least annually, or more frequently if conditions warrant, by comparing the carrying value of a reporting unit to its estimated fair value. Intangible assets with definite lives are reviewed for impairment whenever events or circumstances indicate that their carrying value may not be recoverable. Declines in operating results, divestitures, sustained market declines and other factors that impact the fair value of our reporting unit has and may in the future result in an impairment of goodwill or intangible assets and, in turn, a charge
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to net income (loss). These charges in the years ended December 31, 2025 and 2024 have adversely impacted and any future charges may have a material adverse effect on our results of operations and financial condition.
During the fourth quarter 2024, in conjunction with our review of strategic alternatives for our marketing technology solutions, and as a result of lower than expected financial performance and future forecasted growth rates we determined that the estimated fair value of our marketing technology solutions reporting unit was insufficient to recover the net carrying value of the reporting unit resulting in an impairment of goodwill of approximately $28.1 million. Additionally, during the year ended December 31, 2025, we recognized a goodwill impairment charge of $6.9 million, related to the sale of marketing technology solutions. In connection with the definitive sale and purchase agreements to sell our Fitness Solutions, we tested the goodwill balance for impairment as of March 31, 2024. During the year ended December 31, 2024, we recognized $6.4 million of goodwill impairment charges representing the allocated goodwill to Fitness Solutions.
Our information technology systems and our third-party providers’ information technology systems, including Worldpay, PayPal and other payment processing partners, may fail, or our third-party providers may discontinue providing their services or technology generally or to us specifically, which in either case could interrupt our business, cause us to lose business and increase our costs.
We rely on our systems, technology and infrastructure to perform well on a consistent basis. From time to time in the past we have experienced (and in the future we may experience) occasional interruptions that make some or all of this framework and related information unavailable or that prevent us from providing solutions and services. Any such interruption could arise for any number of reasons. We also rely on third parties, such as Worldpay, PayPal and other payment processing partners, for specific services, software and hardware used in providing our solutions and services. Some of these organizations and service providers are our competitors or provide similar services and technology to our competitors, and we may not have long-term contracts with them. If these contracts are canceled or we are unable to renew them on commercially reasonable terms, or at all, our business, financial condition and results of operation could be adversely impacted. The termination by our service or technology providers of their agreements with us or their failure to perform their services efficiently and effectively may adversely affect our relationships with our clients and, if we cannot find alternate providers quickly, may cause those clients to terminate their processing agreements with us. We will continually work to expand and enhance the efficiency and scalability of our framework to improve the consumer and service professional experience, accommodate substantial increases in the number of visitors to our various platforms, ensure acceptable load times for our various solutions and services and keep up with changes in technology and user preferences. If we do not do so in a timely and cost-effective manner, the user experience and demand across our brands and businesses could be adversely affected, which could adversely affect our business, financial condition and results of operations.
Our information technology systems and operations or those of our third-party technology vendors could be exposed to damage or interruption from, among other things, fire, extreme weather events (including floods, storms, droughts and extreme temperatures) and other natural disasters, power loss, telecommunications failure, unauthorized entry, computer viruses, denial-of-service attacks, acts of terrorism, human error, vandalism or sabotage, financial insolvency and similar events. Certain of these events may become more frequent or severe as a result of climate change or other environmental or social pressures, which may also result in chronic changes (e.g. in meteorological or hydrological patterns) which may have similar effects. Our property and business interruption insurance may not be adequate to compensate us for all losses or failures that may occur, and the cost and availability of such insurance may be adversely impacted to the extent events become more frequent or severe. While we and the third parties upon whom we rely have certain backup systems in place for certain aspects of our respective frameworks, none of our frameworks are fully redundant and disaster recovery planning is not sufficient for all eventualities, particularly given some of the uncertainties associated with longer term projections, including those associated with climate change. Defects in our information technology systems or those of third parties, errors or delays in the processing of payment transactions, telecommunications failures or other difficulties could result in:
•loss of revenues;
•loss of clients;
•loss of client and cardholder data;
•fines imposed by payment networks or bank sponsors;
•harm to our business or reputation resulting from negative publicity;
•exposure to fraud losses or other liabilities;
•additional operating and development costs; or
•diversion of management, technical or other resources, among other consequences.
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To the extent that such disruptions result in delays or cancellations of customer orders, or adversely impact the deployment of our solutions, our business, operating results and financial condition would be adversely affected.
A future pandemic, epidemic or outbreak of an infectious disease could impact, our business, financial condition and results of operations, as well as the business or operations of third parties with whom we conduct business.
Potential future pandemics, epidemics or outbreaks of infectious disease may cause significant economic and financial market uncertainty and disruption and measures to contain infection may negatively impact SMBs and our operations. To the extent a pandemic, epidemic or outbreak of an infectious disease adversely affects our business, financial condition and results of operations, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.
Conversely, pandemics, epidemics and outbreaks may significantly and temporarily increase demand in certain industries and markets in which we operate. For example, COVID-19 generally increased demand for, and utilization of, telehealth services, and increased demand from customers shifting to technology-focused, digital-first business models. While such increases helped to offset the decline of business and demand in other industries, there can be no assurance that these levels of interest, demand and use will be similar in any future public health crisis. Federal and state budget shortfalls as a result of a public health crisis could lead to potential reductions in funding for Medicare and Medicaid. Further reductions in reimbursements from Medicare and Medicaid could lead to our Health Services customers postponing expenditures on information technology and related services.
It is possible that the increased prevalence of remote or hybrid work arrangements may also result in consumer and patient privacy, IT security and fraud risks.
We are subject to economic and political risk, the business cycles of our clients and changes in the overall level of consumer and commercial spending, which could negatively impact our business, financial condition and results of operations.
We are exposed to general economic conditions that affect consumer confidence, consumer spending, consumer discretionary income and changes in consumer purchasing habits. A sustained deterioration in general economic conditions, particularly in the United States, or increases in interest rates, could adversely affect our financial performance by reducing the number or aggregate volume of transactions made using electronic payments and increasing interest payments on our debt. A reduction in the amount of consumer or commercial spending could result in a decrease in our revenue and profits. If our customers make fewer purchases or sales of products and services using electronic payments, or consumers spend less money through electronic payments, we will have fewer transactions to process at lower dollar amounts, resulting in lower revenue.
While we attempt to minimize our exposure to economic or market fluctuations by serving a balanced mix of end markets and geographic regions, any significant or sustained downturn in a specific end market or geographic region can impact our business and that of our customers. These factors may make it difficult for our customers and us to accurately forecast and plan future business activities; neither we nor our customers can predict the timing, strength or duration of any economic downturn or subsequent recovery. Furthermore, if a significant portion of our customers are concentrated in a specific geographic area or industry, our business may be disproportionately affected by negative trends or economic downturns in those specific geographic areas or industries. These factors may also cause our customers to reduce their capital expenditures, alter the mix of services purchased and otherwise slow their spending on our services. In addition, due to these conditions, many of our competitors may be more inclined to take greater or unusual risks or accept terms and conditions in contracts that we might not deem acceptable. These conditions and factors may reduce the demand for our services and solutions, and more generally may adversely affect our business, results of operations and financial condition. Similarly, new and changing laws, regulations, executive orders and enforcement priorities can also create uncertainty about how such laws and regulations will be interpreted and applied, which may decrease customer spending and increase our costs.
A weakening in the economy could have a negative impact on our customers, as well as the customers they serve who purchase solutions and services using the payment processing systems to which we provide access, which could, in turn, negatively affect our business, financial condition and results of operations. Many of our clients are SMBs. To continue to grow our revenue, we must add new SMB customers, sell additional solutions and services to existing SMB customers and encourage existing SMB customers to continue doing business with us. However, a weakening in the economy could force SMBs to close at higher than historical rates in part because many of them are not as well capitalized as larger organizations and are typically less able to make technology-related decisions based on factors other than price, which could expose us to potential credit losses and future transaction declines. Further, credit card issuers may reduce credit limits and become more selective in their card issuance practices. We also have a certain amount of fixed and semi-fixed costs, including rent, debt service and salaries, which could limit our ability to quickly adjust costs and respond to changes in our business and the economy.
General inflation, including wage inflation, increases in interest rates, currency volatility as well as monetary, fiscal and policy interventions by national or regional governments in anticipation of or reaction to such events could have negative impacts on our business by increasing our operating costs and our borrowing costs as well as decreasing the capital available for our customers to
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purchase our solutions and services or the levels of cash we maintain for working capital. The policies of the United States presidential administration may result in economic volatility or other consequences that adversely impact SMBs or consumer spending and consequently negatively impact our business and results of operations.
We currently manage our exchange rate and interest rate risk using hedging instruments. We cannot be certain such practices will be available and/or effective at mitigating foreign currency and interest rate risk to which we are exposed. If we are unsuccessful in detecting material exposures in a timely manner, any hedging strategies we deploy are not effective, or there are no hedging strategies available for certain exposures that are prudent given the associated risks and the potential mitigation of the underlying exposure achieved, our operating results or financial position could be adversely affected in the future.
If we are unable to retain our personnel and hire additional skilled personnel, we may be unable to achieve our goals.
Our future success depends upon our ability to attract, train and retain highly skilled employees and contract workers, particularly our management team, sales and marketing personnel, professional services personnel and software engineers. Any of our key personnel have worked for us for a significant amount of time or were recruited by us specifically due to their experience. Our success depends in part upon the reputation and influence within the industry of our senior managers who have, over the years, developed long standing and favorable relationships with our vendors, card associations, bank sponsors and other payment processing and service providers. Each of our executive officers and other key employees may terminate his or her relationship with us at any time and the loss of the services of one or a combination of our senior executives or members of our senior management team, including our Chief Executive Officer, Eric Remer, our President, Matthew Feierstein and our Chief Financial Officer, Ryan Siurek, may significantly delay or prevent the achievement of our business or development objectives and could materially harm our business. Further, contractual obligations related to confidentiality and assignment of intellectual property rights may be ineffective or unenforceable, and departing employees may share our proprietary information with competitors in ways that could adversely impact us.
In addition, certain senior management personnel are substantially vested in their stock option grants or other equity compensation. While we periodically grant additional equity awards to management personnel and other key employees to provide additional incentives to remain employed by us, employees may be more likely to leave us if a significant portion of their equity compensation is fully vested.
We face intense competition for qualified individuals from numerous other technology companies. Often, significant amounts of time and resources are required to train technical personnel and we may lose new employees to our competitors or other technology companies before we realize the benefit of our investment in recruiting and training them. We may be unable to attract and retain suitably qualified individuals who are capable of meeting our growing technical, operational and managerial requirements, on a timely basis or at all, and we have paid and may in the future be required to pay increased compensation in order to do so, including as a result of wage inflation. Because of the technical nature of our solutions and services and the dynamic market in which we compete, any failure to attract and retain qualified personnel, as well as our contract workers, could have a material adverse effect on our ability to generate sales or successfully develop new solutions, client and consulting services and enhancements of existing solutions and services. Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or divulged proprietary or other confidential information.
We may be unsuccessful in achieving our objectives through acquisitions, dispositions or other strategic transactions.
Since April 2017, we have consummated 54 acquisitions and have generated significant growth through acquisitions. Although we expect to continue to acquire companies and other assets in the future, such acquisitions pose a number of challenges and risks, including the following:
•the ability to identify suitable acquisition candidates or acquire additional assets at attractive valuations and on favorable terms;
•the availability of suitable acquisition candidates;
•the ability to compete successfully for identified acquisition candidates, complete acquisitions or accurately estimate the financial effect of acquisitions on our business;
•higher than expected or unanticipated acquisition costs;
•effective integration and management of acquired businesses in a manner that permits the combined company to achieve the full revenue and cost synergies and other benefits anticipated to result from the acquisition, due to difficulties such as incompatible accounting, information management or other control systems;
•retention of an acquired company’s key employees or customers;
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•contingent or undisclosed liabilities, incompatibilities and/or other obstacles to successful integration not discovered during the pre-acquisition due diligence process;
•the availability of management resources to evaluate acquisition candidates and oversee the integration and operation of the acquired businesses;
•the ability to obtain the necessary debt or equity financing, on favorable terms or at all, to finance any of our potential acquisitions;
•increased interest expense, restructuring charges and amortization expenses related to intangible assets;
•significant dilution to our stockholders for acquisitions made utilizing our securities; and
•the ability to generate cash necessary to execute our acquisition strategy and/or the reduction of cash that would otherwise be available to fund operations or for other purposes.
While our acquisition strategy leverages our experience and utilizes internal criteria for evaluating acquisition candidates and prospective businesses, there can be no guarantee that each business will have all of the positive attributes we seek. If we complete an acquisition that does not meet some or all of our criteria, such acquisition may not be as successful as one involving a business that does meet most or all of our criteria. There can be no assurance that our criteria are accurate or helpful indicators of success, and we may fail or opt not to acquire successful businesses that do not otherwise satisfy our internal requirements and preferences. In addition, we may consider acquisitions outside of our existing vertical markets and in industries or services in which we have limited expertise or experience. While we will endeavor to evaluate the risks inherent in any particular acquisition candidate, there can be no assurance that we will adequately ascertain or assess all of the significant risk factors to such new markets, industries or services.
Even if we are able to complete acquisitions and other investments, such activities may not ultimately strengthen our competitive position or achieve our strategic goals and could be viewed negatively by existing or prospective customers, investors or other stakeholders. We may not realize the anticipated benefits of any or all of our acquisitions or other investments in the time frame expected or at all. For example, the process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of our combined businesses and the possible loss of key personnel. Further, acquisitions and consolidations may also disrupt our ongoing business, divert our resources and require significant management attention that would otherwise be available for ongoing development of our current business. Acquisitions can also result in a complex corporate structure with different systems and procedures in place across various acquired entities, particularly during periods in which acquired entities are being integrated or transitioned to our preferred systems and procedures. Initiatives to integrate these disparate systems and procedures can be challenging and costly, and the risk of failure high.
Moreover, there can be no assurance that we will be able to identify suitable acquisition targets in the future, or to complete such acquisitions on acceptable terms or at all. If we are unable to identify acquisition targets that meet our investment criteria and close such transactions on acceptable terms, our potential for growth by way of acquisition may be restricted, which could have an adverse effect on achievement of our strategy and the resulting expected financial benefits.
The occurrence of any of these factors may result in a decrease in any or all acquisition activity and otherwise adversely impact our operations, which may lead to less growth and a deterioration of our financial and operational condition.
In addition, we may pursue dispositions and other strategic transactions, which could be material. For example, we completed the sale of our Marketing Technology Solutions in the fourth quarter of 2025. Dispositions and other strategic transactions may not have the anticipated impact on our business, may negatively impact revenues and may make it difficult to generate cash flows to meet our cash requirements.
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.
In evaluating and determining the purchase price for a prospective acquisition, we estimate the future revenues and profits from that acquisition based largely on historical financial performance. Following an acquisition, we may experience some attrition in the number of clients serviced by an acquired provider of billing and payment solutions and marketing and customer retention services. Should the rate of post-acquisition client attrition exceed the rate we forecasted, the revenues and profits from the acquisition may be less than we estimated, which could result in losses or a decline in profits, as well as potential impairment charges. Moreover, the anticipated benefits of any acquisition, including our revenue or return on investment assumptions, may not be realized.
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We perform a due diligence review of each of our acquisition targets. This due diligence review, however, may not adequately uncover all of the contingent or undisclosed liabilities we may incur as a consequence of the proposed acquisition, exposing us to potentially significant, unanticipated costs, as well as potential impairment charges. Although a seller generally may have indemnification obligations to us under an acquisition or merger agreement, these obligations usually will be subject to financial limitations, such as general deductibles and maximum recovery amounts, as well as time limitations. Certain transactions are also subject to limitations of the scope of a Representation and Warranty Insurance policy. We cannot assure you that our right to indemnification from any seller will be enforceable, collectible or sufficient in amount, scope or duration to fully offset the amount of any undiscovered or underestimated liabilities that we may incur. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, results of operations and financial condition. In addition, our insurance does not cover all of our potential losses, and we are subject to various self-insured retentions and deductibles under our insurance. Although we believe we have sufficient reserves for contingencies, a judgment may be rendered against us in cases in which we could be uninsured or which exceed the amounts that we currently have reserved or anticipate incurring for such matters.
Our indebtedness could adversely affect our financial health and competitive position.
As of December 31, 2025, we had cash, cash equivalents and restricted cash of $129.7 million, $155.0 million of available borrowing capacity under our Revolver (as defined in Part II. Item 7. “Management’s Discussion and Analysis of Results of Operation and Financial Condition - Liquidity and Capital Resources”) and $526.6 million outstanding under our Credit Facilities (as defined in Part II. Item 7. “Management’s Discussion and Analysis of Results of Operation and Financial Condition - Liquidity and Capital Resources”). To service this debt and any additional debt we may incur in the future, we need to generate cash. Our ability to generate cash is subject, to a certain extent, to our ability to successfully execute our business strategy, including acquisition activity, as well as general economic, financial, competitive, regulatory and other factors beyond our control. There can be no assurance that our business will be able to generate sufficient cash flow from operations or that future borrowings or other financing will be available to us in an amount sufficient to enable us to service our debt and fund our other liquidity needs. To the extent we are required to use our cash flow from operations or the proceeds of any future financing to service our debt instead of funding working capital, capital expenditures, acquisition activity or other general corporate purposes, we will be less able to plan for, or react to, changes in our business, industry and in the economy generally. This will place us at a competitive disadvantage compared to our competitors that have less debt. There can be no assurance that we will be able to refinance any of our debt on commercially reasonable terms or at all, or that the terms of that debt will allow any of the above alternative measures or that these measures would satisfy our scheduled debt service obligations. If we are unable to generate sufficient cash flow to repay or refinance our debt on favorable terms, it could significantly adversely affect our financial condition and the value of our outstanding debt. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
In addition, the terms of our Credit Facilities contain, and any agreements evidencing or governing other future debt may contain, certain restrictive covenants that limit our ability, among other things, to engage in certain activities that are in our long-term best interests and align with our business strategies or operations, including our ability to:
•incur liens on property, assets or revenues;
•incur or assume additional debt or amend our debt and other material agreements;
•declare or make distributions and redeem or repurchase equity interests or issue preferred stock;
•prepay, redeem or repurchase debt;
•make investments;
•engage in certain business activities; and
•engage in certain mergers and asset sales.
In addition, under certain circumstances, we will be required to satisfy and maintain a specified financial ratio under the terms of our Credit Facilities. While we have not previously breached and are not in breach of any of these covenants, there can be no guarantee that we will not breach these covenants in the future. Our ability to comply with these covenants and restrictions may be affected by events and factors beyond our control. Our failure to comply with any of these covenants or restrictions could result in an event of default under the terms of our indebtedness. An event of default would permit the lending banks to take certain actions, including terminating all outstanding commitments and declaring all amounts outstanding to be immediately due and payable, including all outstanding borrowings, accrued and unpaid interest thereon and all other amounts owing or payable with respect to such borrowings and any terminated commitments. In addition, the lenders would have the right to proceed against the collateral we granted to them, which includes substantially all of our assets. If payment of outstanding amounts under our Credit Facilities accelerated, our assets
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may be insufficient to repay such amounts in full, and our common stockholders could experience a partial or total loss of their investment.
As a result of being a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting, and if we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the listing requirements of The Nasdaq Stock Market and other applicable securities rules and regulations. Compliance with these rules and regulations has increased and will continue to increase our legal and financial compliance costs, make some activities more difficult, time consuming, or costly, and increase demand on our systems and resources, particularly after we are no longer an emerging growth company. It may require significant resources and management oversight to maintain and, if necessary, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results. Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which would increase our costs and expenses.
As a public company, we are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.
This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting, as well as a statement that our independent registered public accounting firm has issued an opinion on the effectiveness of our internal control over financial reporting, provided that our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC following the date (i) we are either an “accelerated filer” or a “large accelerated filer,” each as defined in the Exchange Act, and (ii) we are no longer an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). We could be an emerging growth company for up to five years. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation. We are also required to disclose changes made in our internal control and procedures on a quarterly basis. To comply with the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff.
We identified a material weakness in our internal control over financial reporting as of December 31, 2023 that has not been remediated as of December 31, 2025, as described in Part II, Item 9A. The material weakness identified in this Annual Report on Form 10-K relates to the lack of properly designed controls over certain of our order to cash revenue accounting processes. Specifically, adequate controls are not in place primarily as a result of (a) the lack of full system integration for certain of our order to cash systems and (b) control deficiencies within the manual controls designed to mitigate that risk. We have also previously identified a material weakness over internal control over financial reporting in the past.
In addition to taking remediation measures in response to the current material weakness we identified, we may need to expend additional resources and provide additional management oversight in order to establish effective disclosure controls and procedures and internal control over financial reporting. Implementing any appropriate changes to our internal controls may require specific compliance training of our employees, entail substantial costs, take a significant period of time to complete or divert management’s attention from other business concerns.
The material weakness will not be considered remediated until our remediation plan has been fully implemented, the applicable controls operate for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls are operating effectively. At this time, we cannot predict the success of such efforts or the outcome of our assessment of the remediation efforts. We can give no assurance that our efforts will remediate this material weakness in our internal control over financial reporting, or that additional material weaknesses will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could result in errors in our consolidated financial statements that could result in a restatement of our financial statements, and could cause us to fail to meet our reporting obligations, any of which could diminish
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investor confidence in us and cause a decline in the price of our common stock. Additionally, ineffective internal control could expose us to an increased risk of financial reporting fraud and the misappropriation of assets and subject us to potential delisting from the stock exchange on which we list or to other regulatory investigations and civil or criminal sanctions.
In addition, as we continue to scale and improve our operations, including our internal systems and processes, we are currently implementing, and in the future may seek to implement, a variety of critical systems, such as billing, human resource information systems, financial reporting and accounting systems. We cannot assure you that new systems, including any increases in scale or related improvements, will be successfully implemented or that appropriate personnel will be available to facilitate and manage these processes. Failure to implement necessary systems and procedures, transition to new systems and processes or hire the necessary personnel could result in higher costs, compromised internal reporting and processes and system errors or failures. The implementation and transition to any new critical system may be disruptive to our business if they do not work as planned or if we experience issues related to such implementation or transition, which could have a material adverse effect on our operations.
Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.
In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-ownership change Net Operating Losses (“NOLs”) to offset future taxable income. For these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders or groups of stockholders who owns at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points over its lowest ownership percentage within a specified testing period. Similar rules may apply under state tax laws. Our existing NOLs may be subject to limitations arising from previous ownership changes, and if there is a future change in our stock ownership (which may be outside of our control) that results in an ownership change, our ability to utilize NOLs could be further limited by Section 382 of the Code. U.S. federal NOLs generated in taxable years beginning on or before December 31, 2017, or pre-2017 NOLs, are subject to expiration while U.S. federal and certain state NOLs generated in taxable years beginning after December 31, 2017, or post- 2017 NOLs, are not subject to expiration. Additionally, for taxable years beginning after December 31, 2020, the deductibility of federal post-2017 NOLs is limited to 80% of our taxable income in such year, where taxable income is determined without regard to the NOL for such post-2017 NOLs. For these and other reasons, we may not be able to realize a tax benefit from the use of our NOLs.
Government healthcare regulation, healthcare industry standards and other requirements create risks and challenges with respect to our compliance efforts and our business strategies within Health Services.
The healthcare industry is highly regulated and subject to frequently changing laws, regulations and industry standards. These laws and regulations may impact us directly or indirectly through our contracts with Health Services customers. Many healthcare laws and regulations are complex, and their application to specific solutions, services and relationships may not be clear. In particular, many existing healthcare laws and regulations, when enacted, did not anticipate the healthcare IT solutions and services that we provide, and these laws and regulations may be applied to our solutions and services in ways that we do not anticipate. In addition, federal and state efforts to reform or revise aspects of the healthcare industry or to revise or create additional legal or regulatory requirements could impact our operations, the use of our solutions and our ability to market new solutions, or could create unexpected liabilities for us. There can be no assurance that our business or operations will not be challenged or impacted by enforcement initiatives.
Scrutiny on environmental sustainability and social initiatives could increase our costs, harm our reputation and adversely impact our financial results.
Companies are subject to scrutiny by multiple stakeholders on climate change, human capital management, and a variety of other environmental, social and other sustainability (“ESG”) matters. Expectations regarding ESG initiatives and disclosures may result in increased costs, compliance or disclosure obligations, or other impacts to our business, financial condition, or results of operations.
While we may, from time to time, engage in certain voluntary initiatives (which may include disclosures, policies, and targets, among others) to improve the ESG profile of our operations and/or products or respond to stakeholder considerations, such initiatives may be costly and may not have the desired effect. For example, identification, assessment, management, and disclosure of such matters is complex and can require substantial discretion. As with other companies, our approach to ESG practices and disclosures is likely to evolve, and we cannot guarantee that our approach will align with the preferences or interpretations of any particular stakeholder. Expectations around companies’ management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control.
Various stakeholders have different, and at times conflicting, expectations regarding such matters. For example, various policymakers, such as the European Union and State of California, have adopted (or are considering adopting) requirements for companies to provide significantly expanded disclosures on, or take other actions regarding climate and/or other ESG topics. These requirements are not uniform across jurisdictions, and may be inconsistently applied, which can increase the complexity and cost of compliance, and
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increase the risk of enforcement or litigation relating to our ESG disclosures and initiatives. Moreover, some investors, financial institutions and customers use ESG or sustainability considerations (including scores or benchmarks) to inform their decision-making. Simultaneously, there are efforts by some stakeholders to reduce companies’ efforts relating to certain ESG-related matters. Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. Failure to successfully navigate such evolving expectations (including any new legal requirements or evolving expectations of existing laws) may result in reputational harm, employee disengagement, loss of customers or business partners, regulatory or investor engagement, or other adverse impacts to our business. This and other stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor. Such ESG matters may also impact our suppliers, customers, capital providers, and other stakeholders, which may compound or cause new impacts on our business, financial condition, or results of operations.
Risks Related to Intellectual Property
We may be unable to adequately protect or enforce, and we may incur significant costs in enforcing or defending, our intellectual property and other proprietary rights.
Our success depends in part on our ability to enforce and defend our intellectual property and other proprietary rights. We rely upon a combination of trademark, trade secret, copyright and other intellectual property laws, as well as license agreements and other contractual provisions, to protect our intellectual property and other proprietary rights. In addition, we attempt to protect our intellectual property and proprietary information by requiring our employees and consultants to enter into confidentiality, non-competition and assignment of inventions agreements. However, we cannot be certain that the steps we have taken or will take to protect and enforce our intellectual property and proprietary rights will be successful. Third parties may challenge, invalidate, circumvent, infringe, misappropriate or otherwise violate our intellectual property or the intellectual property of our third-party licensors, and any of these claims or actions may result in restrictions on our use of our intellectual property or the conduct of our business. Our intellectual property may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain service offerings or other competitive harm. Others, including our competitors, may independently develop similar technology, duplicate our solutions and services, design around or reverse engineer our intellectual property, and in such cases neither we nor our third-party licensors may be able to assert intellectual property rights against such parties. We also rely, and expect to continue to rely on, certain services and intellectual property that we license from third parties for use in our product offerings and services. We cannot be certain that our licensors are not infringing upon the intellectual property rights of others or that our suppliers and licensors have sufficient rights to the third-party technology incorporated into our platform in all jurisdictions in which we may operate. Further, our contractual license arrangements may be subject to termination or renegotiation with unfavorable terms to us, and our third-party licensors may be subject to bankruptcy, insolvency and other adverse business dynamics, any of which might affect our ability to use and exploit the products licensed to us by these third-party licensors. We may have to litigate to enforce or determine the scope and enforceability of our intellectual property rights (including litigation against our third-party licensors), which is expensive, could cause a diversion of resources and may not prove successful. The loss of intellectual property protection or the inability to obtain the right to use third-party intellectual property could harm our business and ability to compete.
Further, existing U.S. federal and state intellectual property laws offer only limited protection and the laws of other countries in which we market our software solutions and services may afford little or no effective protection of our intellectual property. Therefore, our intellectual property rights may not be as strong or as easily enforced outside of the U.S.
We may be subject to patent, trademark and other intellectual property infringement claims, which may be time-consuming, and cause us to incur significant liability and increase our costs of doing business.
We cannot be certain that our products and services and the operation of our business do not, or will not, infringe or otherwise violate the intellectual property rights of third parties. Third parties may assert infringement claims against us with respect to current or future solutions, including for patent infringement, breach of copyright, trademark, license usage or other intellectual property rights. There may be existing patents or patent applications of which we are unaware that could be pertinent to our business; many patent applications are filed confidentially in the United States and are not published until 18 months following the applicable filing date. Additionally, in recent years, individuals and groups have been purchasing intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from companies like ours. Even if we believe that intellectual property related claims are without merit, defending against such claims is time consuming and expensive and could result in the diversion of the time and attention of our management and employees. In addition, the outcome of litigation is uncertain, and any claim from third parties may result in a limitation on our ability to use the intellectual property subject to these claims. Claims of intellectual property infringement also might require us to redesign or reengineer our affected solutions or services, enter into costly settlement or license agreements, pay costly royalties, license fees or damage awards for which we may not have insurance, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our solutions or services. Even if we have an agreement for
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indemnification against such costs, the indemnifying party, if any in such circumstances, may be unable to uphold its contractual obligations. If we cannot or do not license the infringed technology on reasonable terms or substitute similar technology from another source, our revenue and earnings could be materially and adversely affected.
We may be subject to claims asserting that our employees or consultants have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property.
Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.
In addition, while it is our policy to require our employees and contractors who may be involved in the creation or development of intellectual property on our behalf to execute agreements assigning such intellectual property to us, we may be unsuccessful in having all such employees and contractors execute such an agreement. The assignment of intellectual property may not be self-executing or the assignment agreement may be breached, and we may be forced to bring claims against employees or third parties or defend claims that they may bring against us to determine the ownership of what we regard as our intellectual property. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.
Our use of “open source” software could adversely affect our ability to offer our services and subject us to possible litigation.
We may use open source software in connection with the development and deployment of our solutions and services, and we expect to continue to use open source software in the future. Companies that use open source software in connection with their products have, from time to time, faced claims challenging the use of open source software and/or compliance with open source license terms. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software or claiming noncompliance with open source licensing terms. Some open source software licenses require users who distribute software containing or linked to open source software to publicly disclose all or part of the source code to such software and/or make available any derivative works of the open source code, which could include valuable proprietary code of the user, on unfavorable terms or at no cost. While we monitor the use of open source software and try to ensure that none is used in a manner that would require us to disclose our proprietary source code or that would otherwise breach the terms of an open source agreement, such use could inadvertently occur, in part because open source license terms are often ambiguous and almost none of them have been interpreted by U.S. or foreign courts. Any requirement to disclose our proprietary source code or pay damages for breach of contract could have a material adverse effect on our business, financial condition and results of operations and could help our competitors develop products and services that are similar to or better than ours.
Further, in addition to risks related to license requirements, use of certain open source software carries greater technical and legal risks than does the use of third-party commercial software. For example, open source software is generally provided without any support or warranties or other contractual protections regarding infringement or the quality of the code, including the existence of security vulnerabilities. To the extent that our platform depends upon the successful operation of open source software, any undetected errors or defects in open source software that we use could prevent the deployment or impair the functionality of our systems and injure our reputation. In addition, the public availability of such software may make it easier for others to compromise our platform. Any of the foregoing risks could materially and adversely affect our business, financial condition and results of operations.
Our use of AI Technologies could adversely affect our ability to obtain intellectual property protection in our solutions.
We use generative AI tools provided by third parties to develop and assist in the development of our own software code. While use of these tools makes our development processes more efficient, generative AI tools have sometimes generated content that is similar to proprietary or open source code on which the tools were trained. We could be subject to intellectual property infringement claims if the generative AI tools we use generate source code that is too similar to other proprietary code, or to software-implemented processes that are patent protected. We may also not be able to anticipate and detect security vulnerabilities in AI generated source code. If our tools generate code that is too similar to open source software code, we risk losing intellectual property protection of our own proprietary code that is commingled with the generated code. Courts in the United States have denied copyright protection for content generated by AI Technologies, and denied patent protection for inventions created solely by AI Technologies. The law is unfavorable or uncertain in many jurisdictions as to whether content that is generated in whole or in part by AI tools is patentable or subject to copyright protection. If we fail to obtain intellectual property protection in our solutions, or later have our intellectual property rights invalidated or otherwise diminished, our competitors may be able to take advantage of our research and development efforts to develop competing products which could adversely affect our business, reputation and financial condition.
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Risks Related to Regulation
We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security and our actual or perceived failure to comply with such obligations could materially harm our business. Compliance with such laws could also impair our efforts to maintain and expand our customer and user bases, and thereby decrease our revenue.
In connection with running our business, we receive, store, use and otherwise process information that relates to individuals and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms under applicable data privacy laws (collectively, “Personal Information”). Our handling of Personal Information is subject to a variety of laws and regulations, including regulation by various government agencies, including the U.S. Federal Trade Commission (the “FTC”), and various state, local and foreign agencies. We collect Personal Information and other data from our customers and the end-customers they serve and use this Personal Information for various purposes, including to provide services to such customers and end-customers, as well as to support, expand and improve our business.
U.S. (including U.S. state) and foreign governments have adopted laws and regulations on the collection, distribution, use and storage of Personal Information of individuals. At the state level, lawmakers continue to enact new laws concerning privacy and data security. For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”) requires covered businesses that process the Personal Information of California residents to, among other things: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their Personal Information; (ii) receive and respond to requests from California residents to access, delete, and correct their Personal Information, or to opt out of certain disclosures of their Personal Information; and (iii) enter into specific contractual provisions with service providers that process California resident Personal Information on the business’s behalf.
Similar laws have been enacted in other states, and are continuing to be proposed at the state and federal level. Recent and new state and federal legislation relating to privacy may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment in resources to compliance programs, could impact strategies and availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies. Additionally, these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other requirements or other practices.
Certain of our software and technology-enabled services are intended for use in collecting, storing and displaying clinical and health care-related information used in the diagnosis and treatment of patients and in related health care settings such as registration, scheduling and billing. HIPAA imposes privacy, security and breach notification obligations on “covered entities,” including certain health care providers, health plans, and health care clearinghouses, and their respective “business associates” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information, as well as their covered subcontractors. Entities that are found to be in violation of HIPAA, whether as the result of a breach of unsecured protected health information (“PHI”), a complaint about privacy practices, or an audit by the U.S. Department of Health and Human Services (“HHS”), may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. Additionally, if we or our subcontractor business associates fail to comply with HIPAA or contractual requirements, or are otherwise involved in a HIPAA data breach, we may face significant fines and penalties, ongoing compliance requirements, reputational harm, contractual reimbursement, recoupment or other obligations, FTC enforcement actions and private litigation brought by impacted individuals.
Furthermore, the FTC and many state Attorneys General continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive. The FTC has authority to initiate enforcement actions against entities that make deceptive statements about privacy and data sharing in privacy policies, fail to limit third-party use of Personal Information, fail to implement policies to protect Personal Information or engage in other unfair practices that harm customers. For example, according to the FTC, failing to take appropriate steps to keep consumers’ Personal Information secure can constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of Personal Information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
Outside of the United States, many jurisdictions have laws or regulations dealing with the collection, use, sharing, or other processing of Personal Information, including laws in the European Economic Area (“EEA”), Canada, Middle East, Australia and South America. For example, the General Data Protection Regulation (“GDPR”), in the EEA and its equivalent in the United Kingdom (“UK”, and such equivalent, the “UK GDPR”), impose a strict data protection compliance regime (which will continue to be interpreted through
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guidance and decisions over the coming years. Failure to comply with these laws could result fines of up to the greater of €20 million ($22 million / £17 million) or 4% of global turnover, stop processing orders, or civil litigation.
Among other requirements, the GDPR regulates transfers of Personal Information subject to the GDPR to third countries that have not been found to provide adequate protection to such Personal Information, including the United States, and the efficacy and longevity of current transfer mechanisms between the EEA, and the United States remains uncertain. Case law from the Court of Justice of the European Union (“CJEU”) states that reliance on the standard contractual clauses - a standard form of contract approved by the European Commission as an adequate Personal Information transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis. We expect the existing legal complexity and uncertainty regarding international Personal Information transfers to continue. As a result, we may have to make certain operational changes and we will have to implement revised standard contractual clauses and other relevant documentation for existing data transfers within required time frames.
Privacy, security and data protection laws and regulations, and any other such changes or new laws or regulations, could impose significant limitations, require changes to our business, or restrict our use or storage of Personal Information, which may increase our compliance expenses and make our business more costly or less efficient to conduct. In addition, any such changes could compromise our ability to develop an adequate marketing strategy and pursue our growth strategy effectively, which, in turn, could adversely affect our business, financial condition, and results of operations. The interpretations and measures conducted by us in our efforts to comply with the applicable data protection laws may have been or may prove to be insufficient or incorrect. If our privacy or data security measures or practices fail to comply with current or future laws and regulations, we may be subject to claims (including class action litigation), legal proceedings or other actions by individuals or governmental authorities based on privacy or data protection regulations and our commitments to customers and users, as well as negative publicity and a potential loss of business. As we continue to expand into other foreign countries and jurisdictions, we may also be subject to additional laws and regulations that may affect how we conduct business. Moreover, if future laws and regulations limit our customers and users’ ability to use and share Personal Information or our ability to store, process and share Personal Information, demand for our solutions could decrease, our costs could increase, and our business, results of operations and financial condition could be harmed.
The regulatory framework governing the use of AI Technologies is rapidly evolving, and we cannot predict how future legislation and regulation will impact our ability to offer products or services that we develop which leverage AI Technologies.
We use AI Technologies throughout our business and are making significant investments in this area. The regulatory framework for AI Technologies is rapidly evolving as many federal, state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations. Additionally, existing laws and regulations may be interpreted in ways that would affect the operation of our AI Technologies. As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, or standards may have on our business and may not always be able to anticipate how to respond to these laws or regulations.
Already, certain existing legal regimes (e.g., relating to data privacy) regulate certain aspects of AI Technologies, and new laws regulating AI Technologies continue to enter into force in the United States and the EU. In the United States, the Trump administration has rescinded an executive order relating to the safe and secure development of AI Technologies that was previously implemented by the Biden administration. The Trump administration then issued a new executive order that, among other things, requires certain agencies to develop and submit to the president action plans to “sustain and enhance America’s global AI dominance,” and to specifically review and, if possible, rescind rulemaking taken pursuant to the rescinded Biden executive order. Thus, the Trump administration may continue to rescind other existing federal orders and/or administrative policies relating to AI Technologies, or may implement new executive orders and/or other rule making relating to AI Technologies in the future. Any such changes at the federal level could require us to expend significant resources to modify our products, services, or operations to ensure compliance or remain competitive. U.S. legislation related to AI technologies has also been enacted at the state level. For example, California enacted new laws in 2025 that regulate use of AI technologies and provide consumers with additional protections around companies’ use of AI technologies, such as requiring companies to address issues relating to companion chatbots, algorithmic pricing, and deepfakes and to disclose certain uses of generative AI and the California Privacy Protection Agency recently finalized regulations under the California Consumer Privacy Act regarding the use of automated decision making, which may apply to the AI technologies that we use. Other states have also passed AI focused legislation, such as Colorado’s Artificial Intelligence Act, which will require developers and deployers of “high risk” AI systems to implement certain safeguards against algorithmic discrimination, and Utah’s Artificial Intelligence Policy Act, which establishes disclosure requirements and accountability measures for the use of generative AI in certain consumer interactions. Such additional regulations may impact our ability to develop, use, and commercialize AI technologies in the future.
In Europe, on May 21, 2024, the European Union legislators approved the EU Artificial Intelligence Act (the “EU AI Act”), which establishes a comprehensive, risk-based governance framework for AI in the EU market. The majority of the substantive requirements
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of the EU AI Act will come into force in August 2026. The EU AI Act applies to companies that develop, use and/or provide AI in the EU and, depending on the AI use case, includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, general purpose AI and foundation models, and fines for breach of up to 7% of worldwide annual turnover. Once fully applicable, the EU AI Act will have a material impact on the way AI is regulated in the EU. The EU AI Act, as well as developing interpretation and application of the GDPR in respect of automated decision making, together with developing guidance and/or decisions in this area, may affect our use of AI Technologies and our ability to provide, improve or commercialize our services, require additional compliance measures and changes to our operations and processes, and result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition.
It is possible that further new laws and regulations will be adopted in the United States and in other non-U.S. jurisdictions, or that existing laws and regulations, including competition and antitrust laws, may be interpreted in ways that would limit our ability to use AI Technologies for our business, or require us to change the way we use AI Technologies in a manner that negatively affects the performance of our products, services, and business and the way in which we use AI Technologies. We may need to expend resources to adjust our products or services in certain jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions. Further, the cost to comply with such laws, regulations, or decisions and/or guidance interpreting existing laws could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI Technologies). Such an increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could adversely affect our business, financial condition and results of operations.
Through our relationships with third parties, including payment processors such as Worldpay, we must comply with certain laws. Our failure to comply could materially harm our business.
The local, state and federal laws, rules, regulations, licensing schemes and industry standards that govern our business include, or may in the future include, those relating to underwriting, foreign exchange, payments services (such as money transmission), anti-money laundering, combating terrorist financing, escheatment, international sanctions regimes and other applicable rules, regulations, and laws.
As we expand into new jurisdictions, the number of foreign laws, rules, regulations, licensing schemes and standards governing our business will expand as well. In addition, as our business and solutions continue to develop and expand, we may become subject to additional laws, rules, regulations, licensing schemes and standards. We may not always be able to accurately predict the scope or applicability of certain laws, rules, regulations, licensing schemes, or standards to our business, particularly as we expand into new areas of operations, which could have a significant negative effect on our existing business and our ability to pursue future plans.
Evaluation of our compliance efforts, as well as the questions of whether and to what extent our solutions and services could be considered money transmission, are matters of regulatory interpretation and could change over time. We have taken the position that in all cases where we do not participate in the authorization of transactions, flow of funds or settlement of funds, that a solution or service does not meet the definition of a “money service business” under the Bank Secrecy Act, 31 USC 5311 (and therefore we are not subject to the requirements set forth in the BSA and its implementing regulations). In the future, if regulators disagree with our position with respect to money transmission or other potentially applicable laws, including those related to money transmission, or if new guidance or interpretations thereof are issued, we could be subject to investigations and resulting liability, including governmental fines, restrictions on our business, or other sanctions, and we could be forced to cease conducting certain aspects of our business with residents of certain jurisdictions, be forced to change our business practices in certain jurisdictions, or be required to obtain licenses or regulatory approvals, including state money transmitter licenses. There can be no assurance that we will be able to obtain or maintain any such licenses, and, even if we were able to do so, there could be substantial costs and potential changes to our solutions or services involved in maintaining such licenses, which could have a material and adverse effect on our business. In addition, we could be subject to fines or other enforcement action if we are found to violate disclosure, reporting, anti-money laundering, capitalization, corporate governance, or other requirements of such licenses. These factors could impose substantial additional costs, involve considerable delay to the development or provision of our solutions or services, require significant and costly operational changes, or prevent us from providing our solutions or services in any given market.
If we fail to comply with complex procurement laws and regulations with respect to government contracts, we could lose business and be liable for various penalties.
We must comply with laws and regulations relating to the formation, administration and performance of government contracts, which affect how we conduct business with certain governmental entities. In complying with these laws and regulations, we may incur additional costs. Any non-compliance could result in the imposition of significant fines and penalties, including contractual damages, and impact our ability to obtain additional business in the future. Our governmental entity clients periodically review our compliance with their contracts and our performance under the terms of such contracts. If we fail to comply with these contracts, laws and
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regulations, we may also suffer harm to our reputation, which could impair our ability to win awards of contracts in the future or receive renewals of existing contracts.
Our sending of commercial emails and text messages and certain other telephonic services must comply with the Telephone Consumer Protection Act, and future legislation, regulatory actions, or litigation could adversely affect our business.
The United States regulates marketing by telephone and email and the laws and regulations governing the use of emails and telephone calls for marketing purposes continue to evolve, and changes in technology, the marketplace or consumer preferences may lead to the adoption of additional laws or regulations or changes in interpretation of existing laws or regulations. New laws or regulations, or changes to the manner in which existing laws and regulations or interpreted or enforced, may further restrict our ability to contact potential and existing customers by phone and email and could render us unable to communicate with consumers in a cost-effective fashion. For example, in the United States, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (the “CAN-SPAM Act”), among other things, obligates the sender of commercial emails to provide recipients with the ability to opt out of receiving future commercial emails from the sender.
In addition, the Telephone Consumer Protection Act (the “TCPA”) is a federal statute that protects consumers from unwanted telephone calls and faxes. Since its inception, the TCPA’s purview has extended to certain text messages sent to consumers. We must ensure that our services, including those that leverage text messaging, comply with the TCPA, including its implementing regulations and agency guidance. The scope and interpretation of the TCPA is continuously evolving and developing. While we strive to adhere to strict policies and procedures compliant with the TCPA, a court or the Federal Communications Commission (the “FCC”), as the agency that implements and enforces the TCPA, may disagree with our interpretation of the TCPA and subject us to penalties and other consequences for noncompliance.
Failure to comply with obligations and restrictions related to telephone, text message and email marketing could subject us to lawsuits, fines, statutory damages, consent decrees, injunctions, adverse publicity and other losses that could harm our business. In addition, we provide certain services to our customers that involve text messaging that could be deemed to be automated dialing systems subject to restrictions under the TCPA. Consumers may bring, and have in the past brought, suit against us under the TCPA based on our services or our customers’ use of our services.
In particular, determination by a court or regulatory agency that our services or our customers’ use of our services violate the TCPA could subject us to civil damages and penalties, could invalidate all or portions of some of our client contracts, could require us to change or terminate some portions of our business, could require us to refund portions of our services fees and could have an adverse effect on our business. Even an unsuccessful challenge by consumers or regulatory authorities to our services could result in adverse publicity and could require a costly response from us. In addition, any uncertainty regarding whether and how the TCPA applies to our business could increase our costs, limit our ability to grow, and have an adverse effect on our business.
We are subject to anti-corruption, anti-bribery and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business.
We are subject to the Foreign Corrupt Practices Act (“FCPA”), U.S. domestic bribery laws, and other anti-corruption laws. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees and their third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public sector. These laws also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions. As we increase our international cross-border business and expand operations abroad, we may engage with business partners and third-party intermediaries to market our services and to obtain necessary permits, licenses and other regulatory approvals. In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities. As we increase our international business, our risks under these laws may increase.
Detecting, investigating and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources and attention from senior management. In addition, noncompliance with anti-corruption or anti-bribery laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, other civil or criminal penalties, injunctions, suspension or debarment from contracting with certain persons, reputational harm, adverse media coverage and other collateral consequences. If any subpoenas are received or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal proceeding, our business, operating results and financial condition could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees.
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The healthcare industry is heavily regulated at the local, state and federal levels. Our failure to comply with regulatory requirements could create liability for us or our customers, result in adverse publicity and negatively affect our business.
As one of our three key verticals is Health Services, our operations and relationships, and those of our customers, are regulated by a number of federal, state and local governmental entities. The healthcare industry is heavily regulated and laws, regulations and industry standards are constantly evolving due to the changing political, legislative and regulatory landscapes. There are a significant number of wide-ranging healthcare laws and regulations, including but not limited to those described below, that may be directly or indirectly applicable to our operations and relationships or the business practices of our clients. Healthcare laws and regulations may change rapidly, and it is frequently unclear how they apply to our business. Any failure of our solutions or services to comply with these laws and regulations could result in substantial civil or criminal liability and could, among other things, adversely affect demand for our services, invalidate all or portions of some of our contracts with our customers, require us to change or terminate some portions of our business, require us to refund portions of our revenue, cause us to be disqualified from serving customers doing business with government payers and give our customers the right to terminate our contracts with them, any one of which could have an adverse effect on our business, results of operations and financial condition.
Healthcare Fraud. A number of federal and state laws, including the U.S. federal Anti-Kickback Statute (“AKS”) and laws prohibiting the submission of false or fraudulent claims, such as the False Claims Act apply to healthcare providers and others that provide, offer, solicit or receive payments to induce or reward referrals of items or services for which payment may be made under any federal or state healthcare program and, under certain state laws, any third-party payor. These laws are complex and their application to our specific services and relationships may not be clear and may be applied to our business in ways that we do not anticipate. Federal and state regulatory and law enforcement authorities have recently increased fraud and abuse enforcement activities, including in the healthcare IT industry. Additionally, from time to time, participants in the healthcare industry receive inquiries or subpoenas to produce documents in connection with government investigations.
In addition, our solutions and services include electronically transmitting claims for services and items rendered by providers to payers for approval and reimbursement. We also provide revenue cycle management services to our clients that include the coding, preparation, submission and collection of claims for medical service to payers for reimbursement. Such claims are governed by U.S. federal and state laws. The federal civil False Claims Act (“FCA”) imposes civil penalties on any persons that knowingly submit, or cause to be submitted, a false or fraudulent claim to a federal health care program such as Medicare or Medicaid. U.S. federal law may also impose criminal penalties for intentionally submitting such false claims. Further, the FCA contains a whistleblower provision that allows a private individual to file a lawsuit on behalf of the U.S. government and entitles that whistleblower to a percentage of any recoveries. In addition, the government may assert that a claim including items and services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the False Claims Act.
It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations. We may be subject to government investigations, and if our operations are found to be in violation of these laws, we may be subject to significant fines and penalties, including civil, criminal and administrative penalties, damages, exclusion from Medicare, Medicaid or other government-funded healthcare programs, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations. Any investigation or proceeding related to these laws, even if unwarranted or without merit, may have a material adverse effect on our business, results of operations and financial condition.
Security and Privacy of Health-Related Information. Federal, state and local laws regulate the privacy and security of health-related information and the circumstances under which such health-related information may be used, disclosed, transmitted and maintained. For example, HIPAA regulations require the use of uniform electronic data transmission standards and code sets for certain health care claims and payment transactions submitted or received electronically. The privacy and security regulations promulgated under HIPAA regulate the use and disclosure of individually identifiable health information, and impose privacy and security requirements on covered entities and their business associates. HIPAA requires covered entities and business associates to develop and maintain policies with respect to the protection of, use and disclosure of PHI, including the adoption of administrative, physical and technical safeguards to protect electronic PHI and certain notification requirements in the event of a data breach. The Company’s operations could be negatively impacted by a violation of the HIPAA privacy, security or breach notification rules. Additionally, if the Company or any of its downstream / subcontractor business associates fails to comply with HIPAA or contractual requirements, or create or are otherwise involved in a HIPAA data breach, the Company may face significant fines and penalties, ongoing compliance requirements, reputational harm, contractual reimbursement, recoupment or other obligations and private litigation brought by impacted individuals.
Promoting Interoperability Programs and Health IT Certification. We are subject to laws and regulations governing our use of health record technology. While a combination of our solutions has been certified as meeting standards for certified electronic health record technology, the regulatory standards to achieve certification will continue to evolve over time. We may incur increased development
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costs and delays in delivering solutions if we need to upgrade our software or healthcare devices to be in compliance with these varying and evolving standards. In addition, further delays in interpreting these standards may result in postponement or cancellation of our clients’ decisions to purchase our software solutions. If our software solutions are not compliant with these evolving standards, our relationships with current customers, market position and sales could be impaired and we may have to invest significantly in changes to our software solutions.
Information Blocking and Interoperability Rules. Federal rules implementing the 21st Century Cures Act require developers of certified EHRs and health IT products to adopt standardized application programming interfaces, which help individuals to securely and easily access structured and unstructured electronic health information formats using smartphones and other mobile devices. These rules create a potentially lengthy list of certification and maintenance of certification requirements that developers of EHRs and other health IT products must meet in order to maintain approved federal government certification status. Meeting and maintaining this certification status could require additional development costs. Under the 21st Century Cures Act, HHS has the regulatory authority to investigate and assess civil monetary penalties against health IT developers and/or providers found to be guilty of “information blocking.” Any failure to comply with these rules could have a material adverse effect on our business, results of operations and financial condition.
Risks Related to Ownership of Our Common Stock
Our stock price may be volatile or may decline regardless of our operating performance, resulting in substantial losses for investors.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
•actual or anticipated fluctuations in our financial conditions and results of operations;
•the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;
•failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates or ratings by any securities analysts who follow our company or our failure to meet these estimates or the expectations of investors;
•announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, results of operations or capital commitments;
•changes in stock market valuations and operating performance of other technology companies generally, or those in our industry in particular;
•price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;
•changes in our board of directors or management;
•sales of large blocks of our common stock, including sales by certain affiliates of Providence Strategic Growth, Silver Lake or our executive officers and directors;
•lawsuits threatened or filed against us;
•anticipated or actual changes in laws, regulations or government policies applicable to our business;
•changes in our capital structure, such as future issuances of debt or equity securities;
•short sales, hedging and other derivative transactions involving our capital stock;
•general economic conditions in the United States;
•other events or factors, including those resulting from war (including the ongoing war in Ukraine), pandemics or other public health crises, incidents of terrorism or responses to these events; and
•the other factors described in this “Risk Factors” section of this Annual Report on Form 10-K.
The stock market has recently experienced extreme price and volume fluctuations. The market prices of securities of companies have experienced fluctuations that often have been unrelated or disproportionate to their results of operations. Market fluctuations could result in extreme volatility in the price of shares of our common stock, which could cause a decline in the value of your investment. Price volatility may be greater if the public float and trading volume of shares of our common stock is low. Furthermore, in the past, stockholders have sometimes instituted securities class action litigation against companies following periods of volatility in the market
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price of their securities. Any similar litigation against us could result in substantial costs, divert management’s attention and resources, and harm our business, financial condition and results of operations.
The parties to our sponsor stockholders agreement hold a substantial portion of our outstanding common stock, and such parties interests may conflict with our interests and the interests of other stockholders.
The parties to our sponsor stockholders agreement own approximately 85.7% of our common stock. We have agreed to nominate to our board of directors individuals designated by Providence Strategic Growth and Silver Lake in accordance with the sponsor stockholders agreement. Providence Strategic Growth and Silver Lake each retain the right to designate directors for so long as they beneficially own at least 5% of the aggregate number of shares of common stock outstanding. In addition, for so long as Providence Strategic Growth and Silver Lake collectively beneficially own at least 30% of the aggregate number of shares of common stock outstanding, certain actions by us or any of our subsidiaries require the prior written consent of each of Providence Strategic Growth and Silver Lake so long as such stockholder is entitled to designate at least two (2) directors for nomination to our board of directors. The actions that require prior written consent include: (i) change in control transactions, (ii) acquiring or disposing of assets or any business enterprise or division thereof for consideration in excess of $500.0 million in any single transaction or series of transactions, (iii) increasing or decreasing the size of our board of directors, (iv) terminating the employment of our chief executive officer or hiring a new chief executive officer, (v) initiating any liquidation, dissolution, bankruptcy or other insolvency proceeding involving us or any of our significant subsidiaries and (vi) any transfer, issue, issuance, sale or disposition of any shares of common stock, other equity securities, equity-linked securities or securities that are convertible into equity securities of us or our subsidiaries to any person or entity that is a non-strategic financial investor in a private placement transaction or series of transactions.
Even when the parties to our sponsor stockholders agreement cease to own shares of our stock representing a majority of the total voting power, for so long as the parties to such agreement continue to own a significant percentage of our stock, they will still be able to significantly influence or effectively control the composition of our board of directors and the approval of actions requiring stockholder approval through their voting power. In addition, pursuant to the sponsor stockholder agreement, we are generally required to obtain the prior written consent of the parties to our sponsor stockholders agreement before we or our subsidiaries undertake certain actions. Accordingly, for such period of time, the parties to our sponsor stockholders agreement have significant influence with respect to our management, business plans and policies. In particular, for so long as the parties to our sponsor stockholders agreement continue to own a significant percentage of our stock, the parties to such agreement may be able to cause or prevent a change of control of our Company or a change in the composition of our board of directors, and could preclude any unsolicited acquisition of our Company. The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of common stock as part of a sale of our Company and ultimately might affect the market price of our common stock.
Further, our amended and restated certificate of incorporation provides that the doctrine of “corporate opportunity” does not apply with respect to certain parties to our stockholders agreements or their affiliates (other than us and our subsidiaries), and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives (other than any such person who is also our employee or an employee of our subsidiaries), or any director or stockholder who is not employed by us or our subsidiaries. See “-Our amended and restated certificate of incorporation provides that the doctrine of “corporate opportunity” does not apply with respect to certain parties to our stockholders agreements and any director or stockholder who is not employed by us or our subsidiaries.”
Substantial future sales by the parties to our stockholders agreements or other holders of our common stock, or the perception that such sales may occur, could depress the price of our common stock.
The parties to our stockholders agreements collectively own approximately 90.1% of our outstanding shares of common stock. In addition to the limitations on the sale and transfer of shares of common stock held by such stockholders as set forth in the stockholders agreements, subject to the restrictions described in the paragraph below, future sales of these shares in the public market will be subject to the volume and other restrictions of Rule 144 under the Securities Act, for so long as such parties are deemed to be our affiliates, unless the shares to be sold are registered with the SEC. These stockholders are entitled to rights with respect to the registration of their shares. We are unable to predict with certainty whether or when such parties will sell a substantial number of shares of our common stock. The sale by the parties to our stockholders agreements of a substantial number of shares, or a perception that such sales could occur, could significantly reduce the market price of our common stock.
We have filed registration statements on Form S-8 registering under the Securities Act the shares of our common stock reserved for issuance under our incentive plans. If equity securities granted under our incentive plans are sold or it is perceived that they will be sold in the public market, the trading price of our common stock could decline substantially. These sales also could impede our ability to raise future capital.
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We are a “controlled company” under the corporate governance rules of The Nasdaq Stock Market and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. You do not have the same protections afforded to stockholders of companies that are subject to such requirements.
Certain affiliates of Providence Strategic Growth and Silver Lake own approximately 85.7% of our common stock and are parties, among others, to the sponsor stockholders agreement. The parties to the sponsor stockholders agreement have agreed to vote, or cause to vote, all of their outstanding shares of our common stock at any annual or special meeting of stockholders in which directors are elected, so as to cause the election of the director nominees designated by each party. As a result, we are a “controlled company” within the meaning of the corporate governance standards of the rules of The Nasdaq Stock Market (“Nasdaq”). Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:
•the requirement that a majority of its board of directors consist of independent directors;
•the requirement that its director nominations be made, or recommended to the full board of directors, by its independent directors or by a nominations committee that is comprised entirely of independent directors and that it adopt a written charter or board resolution addressing the nominations process; and
•the requirement that it have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
We rely on certain of the exemptions, namely the requirement that director nominations be made, or recommended, by the independent directors or by a nominations committee comprised entirely of independent directors. As long as we remain a “controlled company,” we may elect in the future to take advantage of any of these exemptions. As a result of any such election, our board of directors would not have a majority of independent directors, our compensation committee would not consist entirely of independent directors and our directors would not be nominated or selected by independent directors. Accordingly, you do not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the rules of Nasdaq.
If securities or industry analysts do not publish research or reports about our business, or they publish negative reports about our business, our share price and trading volume could decline.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business, our market and our competitors. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade our shares or publish negative views on us or our shares, our share price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
We are an “emerging growth company” and our compliance with the reduced reporting and disclosure requirements applicable to “emerging growth companies” may make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act, and we have elected to take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” These provisions include, but are not limited to: being exempt from compliance with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act; being exempt from any rules that could be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotations or a supplement to the auditor’s report on financial statements; being subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and not being required to hold nonbinding advisory votes on executive compensation or on any golden parachute payments not previously approved.
In addition, while we are an “emerging growth company,” we will not be required to comply with any new financial accounting standard until such standard is generally applicable to private companies. As a result, our financial statements may not be comparable to companies that are not “emerging growth companies” or elect not to avail themselves of this provision.
We may remain an “emerging growth company” until as late as December 31, 2026, the fiscal year-end following the fifth anniversary of the completion of our initial public offering, though we may cease to be an “emerging growth company” earlier under certain circumstances, including if (i) we have more than $1.235 billion in annual revenue in any fiscal year, (ii) we become a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates as of the end of the second quarter of that fiscal year or (iii) we issue more than $1.0 billion of non-convertible debt over a three-year period. The exact implications of the JOBS Act are still subject to interpretations and guidance by the SEC and other regulatory agencies, and we cannot assure you that we will be able to take advantage of all of the benefits of the JOBS Act. In addition, investors may find our common stock less attractive to the
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extent we rely on the exemptions and relief granted by the JOBS Act. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may decline or become more volatile.
We incur significant increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives.
As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. We are subject to the reporting requirements of the Exchange Act, which require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, the Dodd-Frank Act contains significant corporate governance and executive compensation related provisions that require the SEC to adopt additional rules and regulations in these areas such as “say on pay” and proxy access. Emerging growth companies are permitted to implement many of these requirements over a longer period and up to five years from the IPO. We intend to take advantage of this legislation for as long as we are permitted to do so. Once we become required to implement these requirements, we will incur additional compliance-related expenses. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.
We expect the rules and regulations applicable to public companies to continue to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs adversely impact our net income or net loss, and may require us to reduce costs in other areas of our business or increase the prices of our solutions or services. For example, these rules and regulations have made it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.
In addition, public company reporting and disclosure obligations may lead to threatened or actual litigation from time to time. If such claims are successful, our business, operating results and financial condition may be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them and the diversion of management resources, could adversely affect our business, operating results and financial condition.
Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.
Certain provisions in our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following:
•amendments to certain provisions of our amended and restated certificate of incorporation or amendments to our amended and restated bylaws generally require the approval of at least 66 2/3% of the voting power of our outstanding capital stock;
•our staggered board;
•at any time when the parties to our sponsor stockholders agreement beneficially own, in the aggregate, at least a majority of the voting power of our outstanding capital stock, our stockholders may take action by consent without a meeting, and at any time when the parties to our sponsor stockholders agreement beneficially own, in the aggregate, less than the majority of the voting power of our outstanding capital stock, our stockholders may not take action by written consent, but may only take action at a meeting of stockholders;
•our amended and restated certificate of incorporation does not provide for cumulative voting;
•vacancies on our board of directors may be filled only by our board of directors and not by stockholders, subject to the rights granted pursuant to the stockholders agreements;
•a special meeting of our stockholders may only be called by the chairperson of our board of directors, our Chief Executive Officer or a majority of our board of directors;
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•unless we otherwise consent in writing, restrict the forum for certain litigation against us to Delaware or the federal courts, as applicable;
•our board of directors has the authority to issue shares of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and
•advance notice procedures apply for stockholders (other than the parties to our stockholders’ agreements for nominations made pursuant to the terms of the stockholders’ agreements) to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
In addition, we have opted out of Section 203 of the Delaware General Corporation Law, but our amended and restated certificate of incorporation provides that engaging in any of a broad range of business combinations with any “interested stockholder” (generally defined as any person who, together with that person’s affiliates and associates, owns, 15% or more of our outstanding voting stock) for a period of three years following the date on which the stockholder became an “interested stockholder” is prohibited, provided, however, that, under our amended and restated certificate of incorporation, the parties to our sponsor stockholders agreement and their respective affiliates will not be deemed to be interested stockholders regardless of the percentage of our outstanding voting stock owned by them, and accordingly will not be subject to such restrictions.
These provisions, alone or together, could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.
Our amended and restated certificate of incorporation provided that the doctrine of “corporate opportunity” does not apply with respect to certain parties to our stockholders agreements and any director or stockholder who is not employed by us or our subsidiaries.
The doctrine of corporate opportunity generally provides that a corporate fiduciary may not develop an opportunity using corporate resources, acquire an interest adverse to that of the corporation or acquire property that is reasonably incident to the present or prospective business of the corporation or in which the corporation has a present or expectancy interest, unless that opportunity is first presented to the corporation and the corporation chooses not to pursue that opportunity. The doctrine of corporate opportunity is intended to preclude officers or directors or other fiduciaries from personally benefiting from opportunities that belong to the corporation. Pursuant to our amended and restated certificate of incorporation, we renounce, to the fullest extent permitted by law and in accordance with Section 122(17) of the Delaware General Corporation Law, all interest and expectancy that we otherwise would be entitled to have in, and all rights to be offered an opportunity to participate in, any opportunity that may be presented to Providence Strategic Growth, Silver Lake or their affiliates (other than us and our subsidiaries), and any of their respective principals, members, directors, partners, stockholders, officers, employees or other representatives (other than any such person who is also our employee or an employee of our subsidiaries), or any director or stockholder who is not employed by us or our subsidiaries. Providence Strategic Growth and Silver Lake or their affiliates and any director or stockholder who is not employed by us or our subsidiaries, therefore, have no duty to communicate or present corporate opportunities to us, and have the right to either hold any corporate opportunity for their (and their affiliates’) own account and benefit or to recommend, assign or otherwise transfer such corporate opportunity to persons other than us, including to any director or stockholder who is not employed by us or our subsidiaries. As a result, certain of our stockholders, directors and their respective affiliates are not prohibited from operating or investing in competing businesses. We, therefore, may find ourselves in competition with certain of our stockholders, directors or their respective affiliates, and we may not have knowledge of, or be able to pursue, transactions that could potentially be beneficial to us. Accordingly, we may lose a corporate opportunity or suffer competitive harm, which could negatively impact our business, operating results and financial condition.
Our amended and restated certificate of incorporation provided that the Court of Chancery of the State of Delaware is the sole and exclusive forum for certain stockholder litigation matters and the federal district courts of the United States is the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.
Our amended and restated certificate of incorporation provides that, unless we otherwise consent in writing, (A) (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws (as either may be amended or restated) or as to which the Delaware General Corporation Law confers exclusive jurisdiction on the Court of Chancery of the State of Delaware or (iv) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware shall, to the fullest extent permitted by
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law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware; and (B) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Our decision to adopt such a federal forum provision followed a decision by the Supreme Court of the State of Delaware holding that such provisions are facially valid under Delaware law. While there can be no assurance that federal or state courts will follow the holding of the Delaware Supreme Court or determine that our federal forum provision should be enforced in a particular case, application of our federal forum provision means that suits brought by our stockholders to enforce any duty or liability created by the Securities Act must be brought in federal court and cannot be brought in state court.
Notwithstanding the foregoing, the exclusive forum provision does not apply to claims seeking to enforce any liability or duty created by the Exchange Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court.
The choice of forum provision in our amended and restated certificate of incorporation may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation.
General Risk Factors
Because we maintain and may expand our business that is located outside of the United States, our business is susceptible to risks associated with international operations.
We maintain operations outside of the United States, including in Canada, the UK, Australia and New Zealand, which we may expand in the future. Conducting and expanding international operations subjects us to new risks that we have not generally faced in the United States. These include:
•exposure to foreign currency exchange rate risk;
•difficulties in collecting payments internationally, and managing and staffing international operations;
•establishing relationships with employees, independent contractors, subcontractors and suppliers in international locations;
•the increased travel, infrastructure and legal compliance costs associated with international locations;
•the burdens of complying with a wide variety of laws associated with international operations, including data privacy and security, taxes and customs;
•significant fines, penalties and collateral consequences if we fail to comply with anti-bribery laws;
•heightened risk of improper, unfair or corrupt business practices in certain geographies;
•potentially adverse tax consequences, including in connection with repatriation of earnings;
•increased financial accounting and reporting burdens and complexities;
•political, social and economic instability abroad, terrorist attacks and security concerns in general; and
•reduced or varied protection for intellectual property rights in some countries.
We utilize and may in the future increase our utilization of independent contractors in a number of jurisdictions in which we operate, including India, Russia, and Ukraine. We currently depend on these independent contractors for certain software development activities. Our dependence on third-party contractors creates a number of risks, in particular, the risk that we may not maintain development quality, control, or effective management with respect to these business operations. In addition, poor relations between the United States and Russia, sanctions by the United States and the EU against Russia, ongoing conflict in Ukraine and Israel or the spreading or escalation of political tensions or economic instability in surrounding areas could have an adverse impact on our third-
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party software development in Russia and Ukraine. In particular, increased tensions between the United States and other countries, could increase the threat of armed conflict, cyberwarfare and economic instability that could disrupt or delay the operations of our resources in other countries including Russia and Ukraine, disrupt or delay our communications with such resources or the flow of funds to support their operations, or otherwise render our resources unavailable.
Changes in accounting rules, assumptions and/or judgments could materially and adversely affect us.
Accounting rules and interpretations for certain aspects of our operations are highly complex and involve significant assumptions and judgment. These complexities could lead to a delay in the preparation and dissemination of our financial statements. Furthermore, changes in accounting rules and interpretations or in our accounting assumptions and/or judgments could significantly impact our financial statements. In some cases, we could be required to apply a new or revised standard retroactively, resulting in restating prior period financial statements. Any of these circumstances could have a material adverse effect on our business, prospects, liquidity, financial condition and results of operations.
Litigation and the outcomes of such litigation could negatively impact our future financial condition and results of operations.
We are, from time to time, subject to various litigation and legal proceedings. As a public company, we may be subject to proceedings across a variety of matters, including matters involving stockholder class actions, tax audits, unclaimed property audits and related matters, employment and others. For example, on January 31, 2024 plaintiff Vladimir Gusinsky Revocable Trust filed a putative class action lawsuit in the Court of Chancery of the State of Delaware against the Company, members of its Board of Directors (the “Board”) and the other parties to its sponsor stockholders agreement, dated June 30, 2021, Providence Strategic Growth II L.P., Providence Strategic Growth II-A L.P., Providence Strategic Growth III L.P., SLA Eclipse Co-Invest, L.P., and SLA CM Eclipse Holdings, L.P. (collectively, the “Sponsor Stockholders”), captioned Vladimir Gusinsky Revocable Trust v. Remer et. al, Case No. 2024-0077-PAF (Del Ch.). The complaint generally alleges violations of Section 141(a) of the Delaware General Corporation Law (“DGCL”) by providing the Sponsor Stockholders with an approval right over the Board’s ability to hire or fire the Company’s Chief Executive Officer (the “CEO Approval Right”) on the basis that it unlawfully limits the Board’s authority to manage the business and affairs of the Company. The plaintiff seeks declaratory judgment that the CEO Approval Right is invalid and void, and other declaratory and equitable relief for the class and/or the Company including attorneys’ and experts’ witness fees and other costs and expenses. On June 14, 2024, the Company filed its opening brief in support of its Motion to Dismiss, and on July 15, 2024, Plaintiff opposed that motion. On July 16, 2024, the court entered a stipulation and order dismissing the director defendants from the action. On August 29, 2024, the remaining defendants, the Company and Sponsor Stockholders (collectively, “Defendants”), filed their reply in support of the Motion to Dismiss, and pursuant to a stipulation between the parties, Plaintiff filed a sur-reply on September 26, 2024, which Defendants filed a response to on October 10, 2024. On October 15, 2024, Defendants filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction, arguing that the claims alleged are not ripe for adjudication and on November 15, 2024 Plaintiff opposed that motion. On December 9, 2024, Defendants filed their reply in support of the Motion to Dismiss for Lack of Subject Matter Jurisdiction. On January 3, 2025, the Court entered a minute order deferring oral argument on the pending Motion to Dismiss until after the disposition of the appeal in Moelis & Company v. West Palm Beach Firefighters’ Pension Fund, Case No. 340, 2024 (Del. Supr.).
The outcome of litigation and other legal proceedings and the magnitude of potential losses therefrom, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify. Also, our insurance coverage may be insufficient, our assets may be insufficient to cover any amounts that exceed our insurance coverage, and we may have to pay damage awards or otherwise may enter into settlement arrangements in connection with such claims. Any such payments or settlement arrangements in current or future litigation could have a material adverse effect on our business, operating results or financial condition. Even if the plaintiffs’ claims are not successful, current or future litigation could result in substantial costs and significantly and adversely impact our reputation and divert management’s attention and resources, which could have a material adverse effect on our business, operating results and financial condition, and negatively affect the price of our common stock.
We may be subject to additional tax liabilities in connection with our operations or due to future legislation, each of which could materially impact our financial position and results of operation.
We are subject to federal and state income, sales, use, value added and other taxes in the United States and other countries in which we conduct business, and such laws and rates vary by jurisdiction. We do not collect sales and use, value added and similar taxes in all jurisdictions in which we have sales, based on our belief that such taxes are not applicable. Certain jurisdictions in which we do not collect sales, use, value added or other taxes on our sales may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, and we may be required to collect such taxes in the future. Similarly, non-U.S. jurisdictions have imposed or proposed digital services taxes, including in connection with the Organization for Economic Co-Operation and Development’s (“OECD”) Base Erosion and Profit Shifting (“BEPS”) Project. These taxes, whether imposed unilaterally by non-U.S. jurisdictions or in response to multilateral measures (e.g., the “BEPS Project”), could result in taxation of companies that have customers in a particular jurisdiction but do not operate there through a permanent establishment. Changes to tax law or administration
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such as these, whether at the state level or the international level, could increase our tax administrative costs and tax risk and negatively affect our overall business, results of operations, financial condition and cash flows.
Although we believe our tax practices and provisions are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical tax practices, provisions and accruals. If we receive an adverse ruling as a result of an audit, or we unilaterally determine that we have misinterpreted provisions of the tax regulations to which we are subject, there could be a material effect on our tax provision, net income or cash flows in the period or periods for which that determination is made, which could materially impact our financial results. In addition, liabilities associated with taxes are often subject to an extended or indefinite statute of limitations period. Therefore, we may be subject to additional tax liability (including penalties and interest) for a particular year for extended periods of time. Further, any changes in the taxation of our activities, may increase our effective tax rate and adversely affect our financial position and results of operations. For example, the United States government may enact significant changes to the taxation of business entities (such as the 2022 United States Inflation Reduction Act which, among other changes, introduced a 15% corporate minimum tax on certain United States corporations and a 1% excise tax on certain stock redemptions by United States corporations). We are unable to predict what tax reforms may be proposed or enacted in the future or what effect such changes would on our business.
We do not intend to pay dividends for the foreseeable future.
We currently intend to retain any future earnings to finance the operation and expansion of our business and we do not expect to declare or pay any dividends in the foreseeable future. Moreover, the terms of our existing Credit Agreement, and the expected terms of our Credit Facilities, restrict our ability to pay dividends, and any additional debt we may incur in the future may include similar restrictions. In addition, Delaware law may impose requirements that may restrict our ability to pay dividends to holders of our common stock. As a result, stockholders must rely on sales of their common stock after price appreciation as the only way to realize any future gains on their investment.
We primarily depend on our subsidiaries for cash to fund operations and expenses, including future dividend payments, if any.
We do not conduct significant business operations of our own. As a result, we are largely dependent upon cash distributions and other transfers from our subsidiaries to meet our obligations and to make future dividend payments, if any. We do not currently expect to declare or pay dividends on our common stock for the foreseeable future; however, the agreements governing the indebtedness of our subsidiaries impose restrictions on our subsidiaries’ ability to pay dividends or other distributions to us. See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources” in this Annual Report on Form 10-K. The deterioration of the earnings from, or other available assets of, our subsidiaries for any reason could impair their ability to make distributions to us.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.
We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”). This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Our cybersecurity risk management program includes:
•vendor and system security risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment;
•a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;
•the use of external service providers , where appropriate, to assess, test or otherwise assist with aspects of our security controls;
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•cybersecurity awareness training of our employees, incident response personnel, and senior management;
•a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and
•a third-party risk management process for certain service providers, suppliers, and vendors that have access to our critical systems and information.
Cybersecurity Governance
The Committee receives quarterly reports from management on our cybersecurity risks. In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program. Board members receive presentations on relevant cybersecurity topics from our Chief Information Security Officer (“CISO”) and internal security staff.
Our Security Operations team, in coordination with our legal and compliance teams, supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment. Our Security Operations team meets monthly with key executives and management to provide updates regarding the Company’s cybersecurity efforts. For more information, see the section titled “Risk Factor— We and our third-party providers are exposed to cybersecurity risks and incidents which may result in damage to our brand and reputation, material financial penalties, and legal liability, which could in turn materially adversely affect our business, results of operations, and financial condition.”
Item 2. Properties
Our global corporate headquarters is located in Denver, Colorado, where we currently lease and occupy approximately 50,125 square feet of office space. The lease for this facility expires in 2031 with an option to extend the lease for an additional five years. In October 2023, the Company subleased approximately 24,000 square feet of the Denver office space for an initial three year period with an option for the subtenant to extend.
We also lease 13 additional office locations throughout the United States, and two offices in Canada, several of which include office spaces that are subleased to third parties. We do not own any real property.
We believe that these facilities are sufficient for our current needs and that additional space will be available to accommodate the expansion of our businesses should they be needed. Additionally, we also often take on leases when we acquire businesses, and we explore optimization of our overall lease footprint in conjunction with any new leases assumed in an acquisition.
Item 3. Legal Proceedings
We are from time to time subject to various legal proceedings, claims and governmental inspections, audits, or investigations that arise in or outside the ordinary course of our business. The information contained in “Note 17 — Commitments and Contingencies” in the Notes to the Consolidated Financial Statements is incorporated by reference into this Item.
Item 4. Mine Safety Disclosures
None.
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PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock trades on the Nasdaq Global Select Market under the symbol “EVCM.”
Holders
As of March 9, 2026, there were 52 registered holders of record of our common stock.
Dividend Policy
We have never declared or paid any cash dividends on our capital stock, and we do not currently intend to pay any cash dividends in the foreseeable future. We expect to retain future earnings, if any, to fund the development and growth of our business, including through acquisitions. Any decision to declare and pay dividends in the future will be made at the discretion of our Board and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our Board may deem relevant. In addition, our ability to pay dividends is, and may be, limited by covenants of existing and any future outstanding indebtedness we or our subsidiaries incur, including under our Credit Facilities (as defined below).
Purchases of Equity Securities by the Issuer or Affiliated Purchaser
During the quarter ended December 31, 2025, we repurchased $24.8 million in shares of our common stock under our stock repurchase program, including transaction fees and taxes. The stock repurchase activity under our stock repurchase program during the quarter ended December 31, 2025 was as follows:
| Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs (1) | Approximate dollar value of shares that may yet be purchased under the plans or programs | ||||||||||||||||||||
| (in thousands, except per share and share amounts) | |||||||||||||||||||||||
October 1, 2025 - October 31, 2025 | 686,003 | $ | 11.20 | 686,003 | $ | 64,590 | |||||||||||||||||
November 1, 2025 - November 30, 2025 | 924,426 | $ | 8.95 | 924,426 | $ | 56,321 | |||||||||||||||||
December 1, 2025 - December 31, 2025 | 872,282 | $ | 9.91 | 872,282 | $ | 47,679 | |||||||||||||||||
| Total | 2,482,711 | 2,482,711 | |||||||||||||||||||||
(1)On June 14, 2022, our Board approved a stock repurchase program (as subsequently amended, the “Repurchase Program”) with authorization to purchase up to $50.0 million in shares of the Company’s common stock through the expiration of the program on December 21, 2022. On November 7, 2022, November 5, 2023, May 21, 2024, May 1, 2025 and November 4, 2025 our Board increased the authorization of the Repurchase Program by an additional $50.0 million in shares of the Company’s common stock on each date for a total authorization to repurchase up to $300.0 million in shares of the Company’s common stock, and most recently, extended the expiration of the Repurchase Program through December 31, 2026.
Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at our discretion, depending on market conditions and corporate needs. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Exchange Act. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. The Repurchase Program does not obligate us to acquire any particular amount of common stock and may be modified, suspended or terminated at any time at the discretion of the Board. We expect to fund repurchases with existing cash on hand.
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Stock Performance Graph
The following performance graph and related information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended, and shall not be incorporated by reference into any registration statement or other document filed by us with the SEC, whether made before or after the date of this Annual Report on Form 10-K, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.
The following graph and related information shows a comparison of the cumulative total return for our common stock, Nasdaq Composite Index and Nasdaq US Small Cap Software Index between July 1, 2021 (the date our common stock commenced trading on the Nasdaq) through December 31, 2025. All values assume an initial investment of $100 and reinvestment of any dividends. The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock.
| 7/1/21 | 12/31/21 | 12/31/22 | 12/31/23 | 12/31/24 | 12/31/25 | ||||||||||||||||||||||||||||||
| EverCommerce Common Stock | $ | 100.00 | $ | 89.49 | $ | 42.27 | $ | 62.67 | $ | 62.56 | $ | 68.81 | |||||||||||||||||||||||
| Nasdaq Composite Index | $ | 100.00 | $ | 107.73 | $ | 72.07 | $ | 103.37 | $ | 132.97 | $ | 160.04 | |||||||||||||||||||||||
| Nasdaq US Small Cap Software Index | $ | 100.00 | $ | 93.88 | $ | 57.85 | $ | 84.36 | $ | 105.33 | $ | 90.35 | |||||||||||||||||||||||
Recent Sales of Unregistered Securities
The Company did not sell any equity securities during the year ended December 31, 2025 that were not registered under the Securities Act.
Item 6. [Reserved]
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
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.
Overview
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.
We offer several vertically-tailored suites of solutions, each of which follows a similar and repeatable go-to-market playbook: offer a “system of action” Business Management Software that streamlines daily business workflows, integrate highly complementary, value-add adjacent solutions and complete gaps in the value chain to create integrated solutions. These solutions focus on addressing how service SMBs market their services, streamline operations and retain and engage their customers.
•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.
•Billing & Payment Solutions: Our Billing & Payment Solutions provide integrated payments, billing and invoicing automation and business intelligence and analytics. Our omni-channel payments capabilities include point-of-sale, eCommerce, online bill payments, recurring billing, electronic invoicing and mobile payments. Supported payment types include credit card, debit card and Automated Clearing House (“ACH”) processing. Our payments platform also provides a full suite of service commerce features, including customer management as well as cash flow reporting and analytics. These value-add features help small- and medium-sized businesses (“SMBs”) to ensure more timely billing and payments collection and provide improved cash flow visibility.
•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.
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.
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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.
•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.
•Other revenue includes: (i) consulting, implementation, training and other professional services; (ii) website development; (iii) revenue from various business development partnerships; (iv) event income; and (v) hardware sales related to our business management or payment software solutions.
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.
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.
This 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 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 our ability to retain our customers. Our calculation of net pro forma revenue retention rate may differ from similarly titled metrics presented by other companies.
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Impact of Macroeconomic Climate
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.
Sale of Marketing Technology Solutions
On October 31, 2025, we completed the sale of our marketing technology solutions business to Ignite Visibility for approximately $45.0 million in cash, subject to certain closing adjustments, as part of its previously announced strategic review (see Note 3. Acquisition and Dispositions included in this Annual Report on Form 10-K). We determined that our decision to sell marketing technology solutions met the criteria for classification as discontinued operations. As a result, the assets and liabilities of marketing technology solutions are presented as held for sale as of December 31, 2024 on our consolidated balance sheets and their operating results are presented as discontinued operations on our consolidated statements of operations and comprehensive income (loss) for all periods presented through the date of sale. During the year ended December 31, 2025, we recognized a loss of $1.1 million, related to the sale of marketing technology solutions and a goodwill impairment charge of $6.9 million, which are included in loss on sale and impairments within discontinued operations on our consolidated statements of operations and comprehensive income (loss). In connection with the sale, we entered into a transition services agreement (“TSA”) with Ignite Visibility to provide services including information technology, finance, and accounting support. The income related to support services from the TSA is included in interest and other income (expense), net in our consolidated statements of operations and comprehensive income (loss).
Acquisition of ZyraTalk
On September 15, 2025, we acquired 100% of the interest of Joblyt LLC, dba ZyraTalk (“ZyraTalk”), an AI-powered customer engagement solution that combines virtual assistant capabilities with an agentic automation platform, for approximately $36.1 million in cash, not inclusive of up to an additional $6.5 million of contingent consideration, which could be paid over the next three years related to post-combination employment services (see Note 3. Acquisition and Dispositions included in this Annual Report on Form 10-K). The acquisition helps to establish us as an AI-driven innovator, beginning with near-term application in our Home Services vertical, EverPro, and we plan to extend ZyraTalk into broader opportunities across its other verticals.
Sale of Fitness Solutions
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.
Key Factors Affecting Our Performance
We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges.
Acquiring New Customers
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.
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Expand Revenue and Margin from Existing Customers
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.
Expanding into New Products and Micro-Verticals
Given our position in the service SMB ecosystem, as well as our relationships and level of engagement with our customers, we use insights gained through our customer relationships and lifecycle to identify additional solutions that are value-additive for our customers. These insights allow us to continually assess opportunities to develop or acquire solutions to further grow our business by expanding market share, cross-selling solutions and enhancing customer stickiness to improve customer retention. Additionally, we have completed acquisitions to enter new micro-verticals and geographies.
Continued Investment in Growth
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.
We intend to increase our investment in our solutions to maintain our position as a leading provider of integrated SaaS solutions for service SMBs. To drive adoption and increase penetration within our base, we will continue to introduce new features and upgrade our technology solutions. We believe that investment in technology development will contribute to our long-term growth, but may also negatively impact our short-term profitability.
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.
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.
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
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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.”
Key Business and Financial Metrics
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.
Revenue and Pro Forma Revenue Growth Rate
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.
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.
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.
Non-GAAP Financial Measures
Adjusted Gross Profit
Gross profit is calculated as total revenue less cost of revenue (exclusive of depreciation and amortization), amortization of developed technology, amortization of capitalized software and depreciation expense (allocated to cost of revenues). We calculate Adjusted Gross Profit as gross profit adjusted to exclude non-cash charges of depreciation and amortization allocated to cost of revenues.
Adjusted Gross Profit is a key performance measure that our management uses to assess our operational performance, as it represents the results of revenues and direct costs, which are key components of our operations. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it reflects the gross profitability of our operations, and excludes the indirect costs associated with our sales and marketing, product development, general and administrative activities and depreciation and amortization and the impact of our financing methods and income taxes. Adjusted Gross Profit should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other GAAP measures of income (loss) or profitability.
The following table presents a reconciliation of gross profit, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted Gross Profit on a consolidated basis.
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| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
Revenue | $ | 588,907 | $ | 562,185 | $ | 534,871 | |||||||||||
Cost of revenues (exclusive of depreciation and amortization) | 132,063 | 124,787 | 127,405 | ||||||||||||||
Amortization of developed technology | 7,627 | 10,747 | 14,418 | ||||||||||||||
Amortization of capitalized software | 10,795 | 9,760 | 8,023 | ||||||||||||||
Depreciation expense allocated to cost of revenue | 484 | 627 | 872 | ||||||||||||||
Gross profit | 437,938 | 416,264 | 384,153 | ||||||||||||||
| Depreciation and amortization | 18,906 | 21,134 | 23,313 | ||||||||||||||
Adjusted gross profit from continuing operations | $ | 456,844 | $ | 437,398 | $ | 407,466 | |||||||||||
Adjusted EBITDA
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.
Adjusted EBITDA is a key performance measure that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods. In addition, we believe that providing Adjusted EBITDA, together with a reconciliation of net income (loss) to Adjusted EBITDA, helps investors make comparisons between our company and other companies that may have different capital structures, different tax rates and/or different forms of employee compensation. Adjusted EBITDA is used by our management team as an additional measure of our performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of net income (loss) or income (loss) from continuing operations. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees. Our Management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies. Adjusted EBITDA should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other GAAP measures of income (loss).
The following table presents a reconciliation of net loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA on a consolidated basis.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
Net income (loss) from continuing operations | $ | 18,204 | $ | (15,197) | $ | (50,705) | |||||||||||
| Adjusted to exclude the following: | |||||||||||||||||
Interest and other expense (income), net | 38,091 | 35,560 | 46,408 | ||||||||||||||
Income tax expense | 2,955 | 5,839 | 1,377 | ||||||||||||||
| Depreciation and amortization | 67,228 | 80,650 | 94,872 | ||||||||||||||
| Other amortization | 6,266 | 5,419 | 4,413 | ||||||||||||||
Stock-based compensation expense | 27,929 | 25,730 | 24,991 | ||||||||||||||
Transaction-related and other non-recurring or unusual costs | 19,837 | 26,355 | 17,528 | ||||||||||||||
Adjusted EBITDA from continuing operations | $ | 180,510 | $ | 164,356 | $ | 138,884 | |||||||||||
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Description of Certain Components of Financial Data
For additional information concerning our accounting policies, see Note 2. Summary of Significant Accounting Policies in the notes to the consolidated financial statements included in this Annual Report on Form 10-K.
Revenues
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.”
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.
Other: Revenue includes (i) consulting, implementation, training and other professional services; (ii) website development; (iii) revenue from various business development partnerships; (iv) event income; and (v) hardware sales related to our business management or payment software solutions.
Cost of Revenues
Cost of revenue (exclusive of depreciation and amortization) consists of expenses related to delivering our services and products and providing support to our customers and includes employee costs and related overhead, customer credit card processing fees, targeted mail costs, third-party fulfillment costs and software hosting expenses.
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.
Sales and Marketing
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.
Product Development
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.
General and Administrative
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.
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Depreciation and Amortization
Depreciation and amortization primarily relate to intangible assets, property and equipment and capitalized software.
Loss on Sale and Impairments
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.
Interest and Other Income (Expense), net
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.
Income Tax Expense
U.S. GAAP requires deferred tax assets and liabilities to be recognized for temporary differences between the tax basis and financial reporting basis of assets and liabilities, computed at the expected tax rates for the periods in which the assets or liabilities will be realized, as well as for the expected tax (expense) benefit of net operating loss and tax credit carryforwards. Income taxes are recognized for the amount of taxes payable by the Company's corporate subsidiaries for the current year and for the impact of deferred tax assets and liabilities, which represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes.
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Results of Operations
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.
Comparison of the years ended December 31, 2025, 2024 and 2023
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Revenues: | |||||||||||||||||
| Subscription and transaction fees | $ | 566,915 | $ | 542,977 | $ | 515,119 | |||||||||||
| Other | 21,992 | 19,208 | 19,752 | ||||||||||||||
| Total revenues | 588,907 | 562,185 | 534,871 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
Cost of revenues (1) (exclusive of depreciation and amortization presented separately below) | 132,063 | 124,787 | 127,405 | ||||||||||||||
Sales and marketing (1) | 119,503 | 114,098 | 113,692 | ||||||||||||||
Product development (1) | 79,018 | 76,179 | 72,144 | ||||||||||||||
General and administrative (1) | 131,760 | 128,599 | 123,353 | ||||||||||||||
| Depreciation and amortization | 67,228 | 80,650 | 94,872 | ||||||||||||||
Loss on sale and impairments | 85 | 11,670 | 6,325 | ||||||||||||||
| Total operating expenses | 529,657 | 535,983 | 537,791 | ||||||||||||||
Operating income | 59,250 | 26,202 | (2,920) | ||||||||||||||
Interest and other income (expense), net | (38,091) | (35,560) | (46,408) | ||||||||||||||
Net income (loss) from continuing operations before income tax expense | 21,159 | (9,358) | (49,328) | ||||||||||||||
Income tax expense | (2,955) | (5,839) | (1,377) | ||||||||||||||
Net income (loss) from continuing operations | $ | 18,204 | $ | (15,197) | $ | (50,705) | |||||||||||
(1)Includes stock-based compensation expense as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Cost of revenues | $ | 345 | $ | 387 | $ | 367 | |||||||||||
| Sales and marketing | 1,656 | 1,163 | 1,634 | ||||||||||||||
| Product development | 2,480 | 1,939 | 2,194 | ||||||||||||||
| General and administrative | 23,448 | 22,241 | 20,796 | ||||||||||||||
| Total stock-based compensation expense | $ | 27,929 | $ | 25,730 | $ | 24,991 | |||||||||||
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Comparison of the years ended December 31, 2025, 2024 and 2023 (percentage of revenue)
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.
| Year Ended December 31, | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | % Change | % Change | |||||||||||||||||||||||||
| Total Revenues | 100.0% | 100.0% | 100.0% | —% | —% | ||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization presented separately below) | 22.4 | % | 22.2 | % | 23.8 | % | 0.2 | % | (1.6) | % | |||||||||||||||||||
| Sales and marketing | 20.3 | % | 20.3 | % | 21.3 | % | — | % | (1.0) | % | |||||||||||||||||||
| Product development | 13.4 | % | 13.5 | % | 13.5 | % | (0.1) | % | — | % | |||||||||||||||||||
| General and administrative | 22.4 | % | 22.9 | % | 23.1 | % | (0.5) | % | (0.2) | % | |||||||||||||||||||
| Depreciation and amortization | 11.4 | % | 14.3 | % | 17.7 | % | (2.9) | % | (3.4) | % | |||||||||||||||||||
Loss on sale and impairments | — | % | 2.1 | % | 1.2 | % | (2.1) | % | 0.9 | % | |||||||||||||||||||
| Total operating expenses | 89.9 | % | 95.3 | % | 100.6 | % | (5.4) | % | (5.3) | % | |||||||||||||||||||
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.
2025 compared to 2024
As a percentage of revenue, cost of revenues increased from 22.2% for the year ended December 31, 2024 to 22.4% for the year ended December 31, 2025, an increase of approximately 20 basis points. Additionally, the combination of cost of revenue, sales and marketing, product development and general and administrative costs declined from 78.9% for the year ended December 31, 2024 to 78.5% for the year ended December 31, 2025, an improvement of approximately 40 basis points.
2024 compared to 2023
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.
A discussion on primary drivers of cost reductions follows in the subsequent sections.
Revenues
| Year Ended December 31, | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||
| Subscription and transaction fees | $ | 566,915 | $ | 542,977 | $ | 515,119 | $ | 23,938 | 4.4 | % | $ | 27,858 | 5.4 | % | |||||||||||||||||||||||||||
| Other | 21,992 | 19,208 | 19,752 | 2,784 | 14.5 | % | (544) | (2.8) | % | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 588,907 | $ | 562,185 | $ | 534,871 | $ | 26,722 | 4.8 | % | $ | 27,314 | 5.1 | % | |||||||||||||||||||||||||||
2025 compared to 2024
Revenues increased $26.7 million, or 4.8%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Revenues from subscription and transaction fees increased 4.4% and other revenue increased 14.5% during the year ended December 31, 2025, respectively, as compared to the prior year period. 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 fees revenue increase consists primarily of increases from (a) business management software and (b) billing and payment solutions, partially offset by (c) revenues associated with our share of rebates from suppliers generated through
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group purchase programs. Business management software revenues drove a $22.9 million increase in subscription and transaction fees revenue 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 $3.1 million, which was primarily due to higher transaction volumes processed through our payment platforms, partially offset by lower revenue due to the Fitness Solutions divestiture. Revenues associated with our share of rebates from suppliers generated through group purchasing programs declined by $2.1 million, which is more closely connected to macro-economic impacts than our core business management software. Subscription and transaction fees revenue also includes $1.2 million post-acquisition revenue from ZyraTalk for the year ended December 31, 2025, and pre-divestiture revenue from Fitness Solutions of $8.0 million for the year ended December 31, 2024 (see Note 3. Acquisition and Dispositions in this Annual Report on Form 10-K). Other revenues increased $2.8 million during the year ended December 31, 2025 driven by revenue related to project implementation and customer development services.
2024 compared to 2023
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.
Cost of Revenues
| Year Ended December 31, | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization presented separately below) | $ | 132,063 | $ | 124,787 | $ | 127,405 | $ | 7,276 | 5.8 | % | $ | (2,618) | (2.1) | % | |||||||||||||||||||||||||||
2025 compared to 2024
Cost of revenues increased by $7.3 million, or 5.8%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase was primarily driven by an additional $4.3 million in API fees and software hosting expenses, a $3.1 million increase in communication services expenses, $1.2 million in campaign mail and advertising expenses, $0.6 million in software and tools and $0.2 million in outsourced services, partially offset by a reduction of $2.6 million in clearinghouse fees.
2024 compared to 2023
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.
Sales and Marketing
| Year Ended December 31, | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | $ | 119,503 | $ | 114,098 | $ | 113,692 | $ | 5,405 | 4.7 | % | $ | 406 | 0.4 | % | |||||||||||||||||||||||||||
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2025 compared to 2024
Sales and marketing expenses increased by $5.4 million, or 4.7%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase was driven primarily by an additional $7.0 million in personnel and compensation expense, a $1.1 million increase in consulting and outsourced services, and a $0.5 million increase in stock-based compensation. These increases were partially offset by a $1.7 million decrease in commissions related to volume from third-party channels associated with legacy payment platform solutions, a $1.0 million decrease in advertising, and $0.7 million decrease in software and tools.
2024 compared to 2023
Sales and marketing expenses increased by $0.4 million, or 0.4%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Sales and marketing expenses were relatively consistent compared to the prior year period and declined as a percentage of revenue by 100 basis points.
Product Development
| Year Ended December 31, | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Product development | $ | 79,018 | $ | 76,179 | $ | 72,144 | $ | 2,839 | 3.7 | % | $ | 4,035 | 5.6 | % | |||||||||||||||||||||||||||
2025 compared to 2024
Product development expenses increased by $2.8 million, or 3.7%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase was driven primarily by an additional $4.1 million in outsourced services as we continue to execute against our transformation strategy for cost optimization, $1.1 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, and $0.5 million in higher stock-based compensation expense. These increases were partially offset by a $3.0 million reduction in personnel and compensation expenses.
2024 compared to 2023
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.
General and Administrative
| Year Ended December 31, | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
| General and administrative | $ | 131,760 | $ | 128,599 | $ | 123,353 | $ | 3,161 | 2.5 | % | $ | 5,246 | 4.3 | % | |||||||||||||||||||||||||||
2025 compared to 2024
General and administrative expenses increased by $3.2 million, or 2.5%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase was driven primarily by an additional $3.5 million in outsourced services as we continue to execute against our transformation strategy for cost optimization, $2.2 million increase in professional and legal fees associated with acquisition and divestiture transaction-related activity during 2025, $1.5 million in software and tools, $1.2 million in bad debt expense and $1.2 million in stock-based compensation. These increases were partially offset by a $4.0 million reduction in personnel and compensation expense, a $2.0 million decrease in insurance expense, a $0.8 million decrease in facility expense. The increase in outsourced services is driven by cost optimization efforts utilizing third-party services enabling the reduction in personnel and compensation expense.
2024 compared to 2023
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
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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.
Depreciation and Amortization
| Year Ended December 31, | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 67,228 | $ | 80,650 | $ | 94,872 | $ | (13,422) | (16.6) | % | $ | (14,222) | (15.0) | % | |||||||||||||||||||||||||||
2025 compared to 2024
Depreciation and amortization expenses decreased by $13.4 million, or 16.6%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The decrease was driven primarily by lower intangible assets’ amortization due to the reduced rate of replacement assets resulting from a slowdown in business acquisitions. Specifically, the decrease was driven primarily by $13.9 million in lower intangible assets’ amortization and a decrease of $0.6 million of property and equipment depreciation, partially offset by $1.0 million of additional capitalized software amortization.
2024 compared to 2023
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.
Loss on Sale and Impairments
| Year Ended December 31, | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Loss on sale and impairments | $ | 85 | $ | 11,670 | $ | 6,325 | $ | (11,585) | 100.0 | % | $ | 5,345 | 84.5 | % | |||||||||||||||||||||||||||
2025 compared to 2024
In March 2024, we entered into definitive sale and purchase agreements to sell our Fitness Solutions (see Note 3. Acquisition and Dispositions included in this Annual Report on Form 10-K). During the year ended December 31, 2025, we recorded a $0.1 million working capital adjustment related to the disposal of Fitness Solutions. 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. Additionally, we ceased use of certain leased premises and subleased certain facilities resulting in an impairment charge of $0.4 million to impair the right-of-use lease assets to their fair value during the year ended December 31, 2024.
2024 compared to 2023
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.
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Interest and Other Income (Expense), net
| Year Ended December 31, | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Interest and other income (expense), net | $ | 38,091 | $ | 35,560 | $ | 46,408 | $ | 2,531 | 7.1 | % | $ | (10,848) | (23.4) | % | |||||||||||||||||||||||||||
2025 compared to 2024
Interest and other income (expense), net, increased by $2.5 million, or 7.1%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024 with the changes primarily driven by volatility of interest rates and foreign currency and the associated impact on the fair value of interest rate swaps. The increase for the year ended December 31, 2025 was driven by an unrealized loss of $6.2 million on interest rate swaps compared to an unrealized gain of $6.4 million in the comparative period, a year over year increase of $12.6 million as a result of the fair value change in interest rate swaps. This increase was partially offset by a decrease of $7.0 million in interest expense as a result of lower variable base interest rates on the Company’s Credit Facilities, a $2.3 million decrease in unrealized foreign currency loss, $0.4 million of income related to support services provided under the TSA with Ignite Visibility, and a $0.3 million increase in interest income. The decline in interest expense is a result of lower variable base interest rates on the Company’s Credit Facilities (as defined below), the amendments to the Term Loan (as defined below) in the fourth quarter 2024 and third quarter 2025, which resulted in a reduction in margin and the removal of the credit spread adjustment (see Note 10. Long-Term Debt included in this Annual Report on Form 10-K).
2024 compared to 2023
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.
Income Tax Expense
| Year Ended December 31, | 2025 vs. 2024 | 2024 vs. 2023 | |||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Income tax expense | $ | (2,955) | $ | (5,839) | $ | (1,377) | $ | 2,884 | (49.4) | % | $ | (4,462) | 324.0 | % | |||||||||||||||||||||||||||
2025 compared to 2024
Income tax expense decreased by $2.9 million, or 49.4%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The decrease was driven primarily by lower U.S. federal and state current tax expense resulting from enacted tax law changes, as well as the release of the valuation allowance on New Zealand deferred tax assets. These benefits were partially offset by higher income from continuing operations before taxes.
2024 compared to 2023
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.
Liquidity and Capital Resources
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.
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,
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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.
As of December 31, 2025, we had cash, cash equivalents and restricted cash of $129.7 million, $155.0 million of available borrowing capacity under our Revolver (as defined below) and $526.6 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.”
Cash Flows
The following table sets forth cash flow data:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Net cash provided by operating activities | $ | 111,456 | $ | 113,163 | $ | 104,605 | |||||||||||
| Net cash used in investing activities | (30,573) | (12,297) | (38,020) | ||||||||||||||
Net cash used in financing activities | (87,555) | (59,614) | (66,630) | ||||||||||||||
| Effect of foreign currency exchange rate changes on cash | 620 | (1,649) | 400 | ||||||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (6,052) | $ | 39,603 | $ | 355 | |||||||||||
Cash Flow from Operating Activities
Net cash provided by operating activities was $111.5 million, $113.2 million, and $104.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. Changes in net cash provided by operating activities resulted primarily from cash received from net sales within our subscription and transaction fees. 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.
The decrease in cash provided by operating activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to a decrease in cash collections from our subscription and transaction fees and marketing technology solutions, which includes revenues from payment processing of approximately $22.4 million, and investments made to support the growth of our business including personnel expenses of $4.6 million, partially offset by lower costs as a result of our transformation and optimization initiatives comprised of lower costs related to the delivery of our services and products of $16.2 million, lower interest payments of $7.2 million, a decrease in taxes of $1.5 million, and higher interest income of $0.4 million.
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 investments made to support the growth of our business including personnel expenses of $13.8 million, an increase in costs directly related to the delivery of our services and products of $7.0 million, and an increase in taxes of $1.4 million.
Cash Flow from Investing Activities
During the year ended December 31, 2025, net cash used in investing activities of $30.6 million was related primarily to the acquisition of ZyraTalk, net of cash acquired, for approximately $35.8 million, costs to develop software of $29.6 million and $2.2 million for purchases of property and equipment, partially offset by proceeds from marketing technology solutions, net of transaction costs and cash sold for approximately $37.1 million.
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.
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During the year ended December 31, 2023, net cash used in investing activities of $38.0 million was related primarily to costs to develop software of $20.0 million, the acquisition of Kickserv, net of cash acquired, for approximately $15.0 million and $3.0 million for purchases of property and equipment.
Cash Flow from Financing Activities
During the year ended December 31, 2025, net cash used in financing activities of $87.6 million was related primarily to the repurchase and retirement of shares of our common stock of $85.1 million.
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.
During the year ended December 31, 2023, net cash used in financing activities of $66.6 million was related primarily to the repurchase and retirement of shares of our common stock of $67.3 million.
For additional information regarding our repurchase and retirement of shares of our common stock, refer to Note 11. Equity in the notes to the consolidated financial statements included in this Annual Report on Form 10-K.
Credit Facilities
We are party to a credit agreement, as amended, that provides for one term loan for an aggregate principal amount of $529.4 million (the “Term Loan”), a revolver with a capacity of $155.0 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”.
Simultaneously with the execution of the Credit Facilities, we and various of our subsidiaries entered into a collateral agreement and guarantee agreement. Pursuant to the guarantee agreement, EverCommerce Intermediate Inc. and various of our subsidiaries are guarantors of the obligations under the Credit Facilities. Pursuant to the collateral agreement, the Credit Facilities are secured by liens on substantially all of our assets, including our intellectual property and the equity interests of our various subsidiaries, including EverCommerce Solutions Inc.
The Credit Facilities contain certain affirmative and negative covenants, including, among other things, restrictions on indebtedness, issuance of preferred equity interests, liens, fundamental changes and asset sales, investments, negative pledges, repurchases of stock, dividends and other distributions, and transactions with affiliates. In addition, we are subject to a financial covenant with respect to the Revolver whereby, if the aggregate principal amount of revolving loans (excluding letters of credit) outstanding on the last day of any fiscal quarter exceeds 35% of the aggregate commitments available under the Revolver, then our first lien leverage ratio as of the last day of such fiscal quarter must be 7.50 to 1.00 or less.
With respect to ABR borrowings, interest payments are due on a quarterly basis on the last business day of each March, June, September and December. With respect to Eurocurrency borrowings, interest payments are due on the last business day of the interest period applicable to the borrowing and, in the case of a Eurocurrency borrowing with an interest period of more than three months’ duration, each day prior to the last day of such interest period that occurs at intervals of three months’ duration after the first day of such interest period.
On December 13, 2024, the Company entered into an amendment (the “2024 Amendment”) to the Credit Facilities to reduce the applicable margin and remove the credit spread adjustment from the existing Term Loan in its entirety in an aggregate principal amount of $533.5 million. Following the 2024 Amendment, the Term Loan bears interest, at the borrower’s election, at (x) a forward-looking term rate based upon the secured overnight financing rate (“SOFR”) (as defined in the Credit Facilities) plus an applicable margin of 2.50%, with a minimum forward-looking SOFR rate 0.50% or (y) Alternative Base Rate (“ABR) (as defined in the Credit Facilities) plus an applicable margin of 1.50%, with a minimum ABR of 1.50%, in each case, with no step-downs. The credit spread adjustment was removed in connection with the 2024 Amendment. The refinanced Term Loan priced at par and refinanced all of the existing term loans outstanding under the Credit Agreement immediately prior to giving effect to the 2024 Amendment.
Effective as of June 10, 2025, the Company entered into an additional amendment to the Credit Facilities (the “June 2025 Amendment”) to reduce the commitments outstanding under the Revolver, extend the maturity of a portion of such commitments and reduce the applicable margin with respect to extended revolving loans. As a result of the June 2025 Amendment, commitments under the Revolver were reduced from $190.0 million to $155.0 million. With respect to $125.0 million of such commitments, (i) the maturity date was extended to January 6, 2028 and (ii) the applicable margin for (x) Term SOFR (as defined in the Credit Facilities) loans was reduced to 2.50% and (y) ABR (as defined in the Credit Facilities) loans was reduced to 1.50%, in each case, subject to a single 0.25% step-down based on the Company’s first lien net leverage ratio. With respect to the remaining $30.0 million of such commitments, (i) the maturity date remains July 6, 2026 and (ii) the applicable margin was unchanged.
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Additionally, on July 29, 2025, the Company entered into an amendment to the Credit Facilities (the “July 2025 Amendment”) to, among other things, refinance the existing Term Loan in an aggregate principal amount of $529.4 million. The July 2025 Amendment, among other things, (i) extends the maturity date of the Term Loan to July 6, 2031, and (ii) reduces the applicable margin by 25 basis points with respect to all term loans. The Term Loan bears interest, at the Borrower’s election, at (x) Term SOFR (as defined in the Credit Agreement) plus an applicable margin of 2.25%, with a minimum Term SOFR rate of 0.50% or (y) ABR (as defined in the Credit Agreement) plus an applicable margin of 1.25%, with a minimum ABR of 1.50%, in each case, with no stepdowns. The refinanced Term Loan priced at par and refinanced the existing term loan outstanding under the Credit Agreement immediately prior to giving effect to the July 2025 Amendment.
Pursuant to the July 2025 Amendment, with respect to $125.0 million of commitments under the existing $155.0 million Revolver, (i) the maturity date was extended to July 29, 2030 and (ii) the applicable margin for (x) Term SOFR loans was reduced to 2.00% and (y) Alternate Base Rate loans was reduced to 1.00%, in each case, subject to a 25 basis points step-up based on the Company’s first lien net leverage ratio. Other than the changes noted above, the terms and conditions of all commitments at closing as well as those extending beyond the original maturity date remain the same as the existing Revolver. Accordingly, $155.0 million of availability remains under the Revolver until July 6, 2026 and then reduces to $125.0 million through July 29, 2030.
We have entered into the following interest rate swap agreements in connection with our Credit Facilities to convert a portion of the floating rate component of the Term Loan from a floating rate to fixed rate:
Effective | Expiration | Fixed Interest | Notional | Asset (Liability) Fair Value at | ||||||||||||||||||||||
Date | Date | Rate | Amount | December 31, 2025 | ||||||||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||||||||
| October 31, 2022 | October 31, 2027 | 4.212 | % | $ | 200,000 | $ | (3,293) | |||||||||||||||||||
| March 31, 2023 | October 31, 2027 | 3.951 | % | $ | 100,000 | $ | (1,178) | |||||||||||||||||||
| September 20, 2024 | October 31, 2027 | 3.395 | % | $ | 125,000 | $ | (216) | |||||||||||||||||||
The Revolver has a variable commitment fee, which is based on our first lien leverage ratio. We expect the commitment fee to range from 0.25% to 0.375% per annum. We are obligated to pay a fixed fronting fee for letters of credit of 0.125% per annum.
Amounts borrowed under the Revolver may be repaid and re-borrowed through maturity of the Revolver in July 2030. The Term Loans mature in July 2031. The Term Loan may be repaid or prepaid but may not be re-borrowed.
As of December 31, 2025, there was $526.6 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 6.32% for the year ended December 31, 2025, excluding the effect of any interest rate swap agreements.
As of December 31, 2025, we were in compliance with the financial covenants under the Credit Facilities.
Stock Repurchase Program
On June 14, 2022, our Board approved a stock repurchase program (as subsequently amended, the “Repurchase Program”) with authorization to purchase up to $50.0 million in shares of the Company’s common stock through the expiration of the program on December 21, 2022. On November 7, 2022, November 5, 2023, May 21, 2024, May 1, 2025, and November 4, 2025 our Board increased the authorization of the Repurchase Program by an additional $50.0 million in shares of the Company’s common stock on each date for a total authorization to repurchase up to $300.0 million in shares of the Company’s common stock, and most recently extended the expiration of the Repurchase Program through December 31, 2026. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at the Company’s discretion, depending on market conditions and corporate needs. The Repurchase Program does not obligate the Company to acquire any particular amount of common stock and may be modified, suspended or terminated at any time at the discretion of the Board. The Company expects to fund repurchases with existing cash on hand.
The Company repurchased and retired 8.2 million shares of common stock for $85.6 million, including transaction fees and taxes, during the year ended December 31, 2025. As of December 31, 2025, $47.7 million remains available under the Repurchase Program.
Contractual Obligations
Refer to Notes 9. Leases, 10. Long-Term Debt and 17. Commitments and Contingencies in the notes to the consolidated financial statements included in this Annual Report on Form 10-K for a discussion of our operating lease, debt and contractual obligations, respectively.
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Critical Accounting Estimates
Our financial statements are prepared in accordance with U.S. GAAP. The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
While our significant accounting policies are described in further detail in Note 2. Summary of Significant Accounting Policies in the notes to the consolidated financial statements included in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Revenue Recognition
Revenues are derived from subscription and transaction fees, marketing technology solutions, and other revenues. We recognize revenue when our customers obtain control of goods or services in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. In determining the total consideration that we expect to receive, we include variable consideration only to the extent that it is probable that a significant reversal of cumulative revenue will not occur when the uncertainty is resolved. There have not been any material changes during 2025 in the underlying estimates and assumptions in determining probability of variable consideration.
Subscription and Transaction Fees:
Subscription revenue primarily consists of the sale of SaaS offerings, software licenses and related support services and payment processing services.
The timing of revenue recognition within our software subscription services is dictated by the nature of the underlying performance obligation. SaaS offerings and license support services are generally recognized ratably over the contractual period that the services are delivered, beginning on the date our service is made available to customers, while on-premise perpetual or term licenses are generally recognized at the point in time when the software is made available to the customer to download or use. Subscription revenue-related contracts can be both short and long-term, with stated contract terms that range from one month to five years. Our contracts may contain termination for convenience provisions that allow the Company, customer or both parties the ability to terminate for convenience, either at any time or upon providing a specified notice period, without a penalty.
Transaction fees relate to payment processing and group purchasing program administration services. In fulfillment of our payment processing services, we partner with third-party merchants and processors who assist us in fulfillment of our obligations to customers. We have concluded that we do not possess the ability to control the underlying services provided by third parties in the fulfillment of our obligations to customers and therefore recognize revenue net of interchange fees retained by the card issuing financial institutions and fees charged by payment networks. Transaction services contracts with customers are generally for a term of one month and automatically renew each month.
We also receive rebates from contracted suppliers in exchange for our program administration services. Rebates earned are based on a defined percentage of the purchase price of goods and services sold to members. Administration services contracts with customers are generally for an annual or monthly term and renew automatically upon lapse of the current term.
Other:
Other revenues generally consist of fees associated with the sale of distinct professional services and hardware. Contract terms for other revenue arrangements are generally short-term, with stated contract terms that are less than one year.
Our professional services associated with our subscription revenue generally relate to standard implementation, configuration, installation, or training services applied to both SaaS and on-premise deployment models. Professional service revenue is recognized over time as the services are performed, as the customer simultaneously receives and consumes the benefit of these services.
Performance Obligations and Standalone Selling Price:
Our contracts at times include the sale of multiple promised goods or services that have been determined to be distinct. The transaction price for contracts with multiple performance obligations is allocated based on the relative stand-alone selling price of each performance obligation within the contract.
Judgment can be involved when determining the stand-alone selling price of products and services. For the majority of the Company’s SaaS, on-premise license and professional services, we establish a stand-alone selling price based on observable selling prices to similar classes of customers. If the stand-alone selling price is not observable through past transactions, we estimate the stand-alone selling price taking into consideration available information such as market conditions and internally approved pricing guidelines
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related to the performance obligation. As permitted under ASC 606, at times we have established the stand-alone selling price of performance obligations as a range and utilize this range to determine whether there is a discount that needs to be allocated based on the relative stand-alone selling price of the various performance obligations.
At contract inception, we perform a review of each performance obligation’s selling price against the established stand-alone selling price range. If any performance obligations are priced outside of the established stand-alone selling price range, we reallocate the total transaction price to each performance obligation based on the relative stand-alone selling price for each performance. The established range is reassessed on a periodic basis when facts and circumstances surrounding these established ranges change.
Goodwill and Intangible Assets Recoverability
We perform an impairment test annually in the fourth quarter or whenever events or changes in circumstances indicate that the carrying value of goodwill might not be fully recoverable. In accordance with applicable accounting guidance, a company can assess qualitative factors to determine whether it is necessary to perform a goodwill impairment test or may elect to proceed directly to a quantitative goodwill impairment test. For the year ended December 31, 2025, the Company performed an qualitative annual impairment assessment, which indicated that it was more likely than not that the estimated fair value was in excess of the net carrying value for each reporting unit. The qualitative annual impairment assessment for the year ended December 31, 2024 excluded the marketing technology reporting unit as discussed below. For the year ended December 31, 2023 the Company performed a quantitative assessment, which resulted in substantial excess of estimated fair value over net carrying value for each reporting unit. For the quantitative assessment, we use a weighted combination of a discounted cash flow model (known as the income approach) and comparisons to publicly traded companies engaged in similar businesses (known as the market approach). The income approach requires us to use a number of assumptions, including market factors specific to the business, the amount and timing of estimated future cash flows over an extended period of time, long-term growth rates for the business and a rate of return that considers the relative risk of achieving the cash flows and the time value of money. As part of the market approach, we make judgments about the comparability of publicly traded companies engaged in similar businesses. For the qualitative assessments, we reviewed factors including macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, changes in any key personnel, any changes in composition of carrying amount of our assets and changes in our stock price. There were no reasonable changes to the methods and assumptions that would have resulted in an impairment. In the future, if there are material changes in the underlying estimates and assumptions pertaining to the impairment assessment, the financial statements could be materially impacted.
The Company performed a qualitative annual impairment assessment for the year ended December 31, 2024, which resulted in substantial excess of estimated fair value over net carrying value for each reporting unit, except for the marketing technology reporting unit as further described below. As a result of this qualitative assessment for the year ended December 31, 2024, we performed a further quantitative evaluation for the marketing technology reporting unit.
During the fourth quarter 2024, in conjunction with our review of strategic alternatives for our marketing technology solutions, and as a result of lower than expected financial performance and future forecasted growth rates we determined that the estimated fair value of our marketing technology reporting unit was insufficient to recover the net carrying value of the reporting unit resulting in an impairment of goodwill of approximately $28.1 million. Additionally, during the year ended December 31, 2025, we recognized a goodwill impairment charge of $6.9 million, related to the sale of marketing technology solutions (see Note 3. Acquisition and Dispositions included in this Annual Report on Form 10-K). In connection with the definitive sale and purchase agreements to sell our fitness solutions, we tested the goodwill balance for impairment as of March 31, 2024 and recognized a goodwill impairment of $6.4 million representing the allocated goodwill for Fitness Solutions (see Note 3. Acquisition and Dispositions included in this Annual Report on Form 10-K).
Intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. Indicators we reviewed included whether there was a significant decrease in market prices of our assets, a significant adverse change in the extent or manner in which our assets are being used, a significant adverse change in legal factors affecting our assets and a cash flow loss. 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, of which $3.1 million was attributable to intangible assets. In the future, if there are material changes in the underlying estimates and assumptions pertaining to the impairment assessment, the financial statements could be materially impacted.
Income Taxes
Deferred income tax assets and liabilities are determined based upon the net tax effect of the differences between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income or loss in the years in which the differences are expected to be reversed. A valuation allowance is used to reduce some
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or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, recent financial operations and their associated valuation allowances, if any.
We recognize the tax benefit from an uncertain tax position only when it is more likely than not, based on the technical merits of the position, that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.
The Company recorded a reduction of $0.3 million and an increase of $13.0 million in valuation allowance on our deferred tax assets in 2025 and 2024, respectively, using the aforementioned approach. The Company recorded $0.6 million and $0.1 million in unrecognized tax benefits for the years ended December 31, 2025 and 2024, respectively.
Valuation allowances are currently assessed based on scheduling the reversal of temporary differences, without consideration to future projections of income, given the Company’s history of losses. This approach may change in the future, requiring the use of estimates or assumptions with regard to future taxable income in assessing the need for and quantum of valuation allowances.
Recent Accounting Pronouncements
See Note 2. Summary of Significant Accounting Policies in the notes to the consolidated financial statements included in this Annual Report on Form 10-K for a discussion of accounting pronouncements recently adopted and recently issued accounting pronouncements not yet adopted and their potential impact to our financial statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk in the ordinary course of business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in interest rates and foreign currency exchange risk. We do not hold or issue financial instruments for speculative or trading purposes.
Interest rate risk
We hold cash and cash equivalents for working capital purposes. We do not have material exposure to market risk with respect to investments. We have mitigated a majority of our market risks related to fluctuations in interest rates on amounts borrowed under the Credit Facility by entering into interest rate swap agreements, which cover $425.0 million of our $526.6 million outstanding under our Term Loan as of December 31, 2025. Following the July 2025 Amendment, the Term Loan bears interest, at the borrower’s election, at (x) Term SOFR (as defined in the Credit Agreement) plus an applicable margin of 2.25%, with a minimum Term SOFR rate of 0.50% or (y) Alternate Base Rate (as defined in the Credit Agreement) plus an applicable margin of 1.25%, with a minimum ABR of 1.50%, in each case, with no step-downs. As of December 31, 2025, we had no amounts outstanding under our Revolving Loan.
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, the Company entered into the Initial Swap in connection with the Company’s Credit Facilities for a notional amount of $200.0 million. The Initial Swap has a term of five years with a fixed rate in the agreement of 4.2120%, as amended in June 2023. Additionally, effective March 31, 2023, the Company entered into a Second Swap in connection with the Company’s Credit Facilities for a notional amount of $100.00 million. The Second Swap agreement has a term of approximately 4.5 years with a fixed rate in the agreement of 3.951%, as amended in June 2023. On September 20, 2024, the Company entered into a Third Swap in connection with the Company’s Credit Facilities for a notional amount of $125.0 million. The Third Swap agreement has a term of approximately 3.0 years with a fixed rate in the agreement of 3.395%.
Based on the outstanding balance of the Credit Facilities as of December 31, 2025, for every 100 basis point increase in the Adjusted SOFR rate, we would incur approximately $1.0 million of additional annual interest expense.
Foreign currency exchange risk
We have foreign currency risks related to certain of our foreign subsidiaries, primarily in Canada, the United Kingdom, New Zealand and Australia. The functional currencies of our significant foreign operations include the Canadian dollar, Great British pound, Australian dollar and the New Zealand dollar. We do not believe that a 10% change in the relative value of the U.S. dollar to other foreign currencies would have a material effect on our cash flows and operating results.
We currently do not hedge foreign currency exposure. We may in the future hedge our foreign currency exposure and may use currency forward contracts, currency options or other common derivative financial instruments to reduce foreign currency risk. It is difficult to predict the effect that future hedging activities would have on our operating results.
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Item 8. Financial Statements and Supplementary Data
| Index to Consolidated Financial Statements | Page | |||||||
Report of Independent Registered Public Accounting Firm (PCAOB ID 00 | II-24 | |||||||
Consolidated Balance Sheets as of December 31, 2025 and 2024 | II-25 | |||||||
Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2025, 2024 and 2023 | II-26 | |||||||
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023 | II-27 | |||||||
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 | II-28 | |||||||
| Notes to Consolidated Financial Statements | II-29 | |||||||
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of EverCommerce Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of EverCommerce Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2020.
March 12, 2026
II-24
EverCommerce Inc.
Consolidated Balance Sheets
(in thousands, except per share and share amounts)
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for expected credit losses of $ | |||||||||||
| Contract assets | |||||||||||
Assets held for sale | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Capitalized software, net | |||||||||||
| Other non-current assets | |||||||||||
Non-current assets held for sale | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses and other | |||||||||||
| Deferred revenue | |||||||||||
| Customer deposits | |||||||||||
| Current maturities of long-term debt | |||||||||||
Liabilities held for sale | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, net of current maturities and deferred financing costs | |||||||||||
| Other non-current liabilities | |||||||||||
Non-current liabilities held for sale | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 17) | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
II-25
EverCommerce Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except per share and share amounts)
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Revenues: | |||||||||||||||||
| Subscription and transaction fees | $ | $ | $ | ||||||||||||||
| Other | |||||||||||||||||
| Total revenues | |||||||||||||||||
| Operating expenses: | |||||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization presented separately below) | |||||||||||||||||
| Sales and marketing | |||||||||||||||||
| Product development | |||||||||||||||||
| General and administrative | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Loss on sale and impairments | |||||||||||||||||
| Total operating expenses | |||||||||||||||||
Operating income (loss) | ( | ||||||||||||||||
Interest and other income (expense), net | ( | ( | ( | ||||||||||||||
| Net income (loss) from continuing operations before income tax expense | ( | ( | |||||||||||||||
Income tax expense | ( | ( | ( | ||||||||||||||
| Net income (loss) from continuing operations | ( | ( | |||||||||||||||
(Loss) income from discontinued operations, net of income tax | ( | ( | |||||||||||||||
| Net income (loss) | ( | ( | |||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||
| Foreign currency translation gain (loss), net | ( | ||||||||||||||||
Comprehensive income (loss) | $ | $ | ( | $ | ( | ||||||||||||
Basic net income (loss) per share attributable to common stockholders | |||||||||||||||||
Continuing operations | $ | $ | ( | $ | ( | ||||||||||||
Discontinued operations | ( | ||||||||||||||||
Total | $ | $ | ( | $ | — | $ | ( | ||||||||||
Diluted net income (loss) per share attributable to common stockholders | |||||||||||||||||
Continuing operations | $ | $ | ( | $ | ( | ||||||||||||
Discontinued operations | ( | ||||||||||||||||
Total | $ | $ | ( | $ | — | $ | ( | ||||||||||
Weighted-average shares of common stock outstanding used in computing net income (loss) per share: | |||||||||||||||||
Basic | |||||||||||||||||
Diluted | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
II-26
EverCommerce Inc.
Consolidated Statements of Stockholders’ Equity
(in thousands)
| Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||
| Shares | Amount | |||||||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||
| Issuance of common stock for Employee Stock Purchase Plan | — | — | — | |||||||||||||||||
| Common stock issued upon vesting of restricted stock units | — | — | — | — | — | |||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||
| Stock option exercises | — | — | — | |||||||||||||||||
| Repurchase and retirement of common stock including taxes | ( | — | ( | — | — | ( | ||||||||||||||
| — | — | — | ( | — | ( | |||||||||||||||
| Foreign currency translation gain, net | — | — | — | — | ||||||||||||||||
| Net loss | — | — | — | ( | — | ( | ||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||
| Issuance of common stock for Employee Stock Purchase Plan | — | — | — | |||||||||||||||||
| Common stock issued upon vesting of restricted stock units, net of shares withheld for employee taxes | — | ( | — | — | ( | |||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||
| Stock option exercises | — | — | — | |||||||||||||||||
| Repurchase and retirement of common stock, including taxes | ( | — | ( | — | — | ( | ||||||||||||||
Foreign currency translation loss, net | — | — | — | — | ( | ( | ||||||||||||||
| Disposition of Fitness Solutions | — | — | — | — | ||||||||||||||||
| Net loss | — | — | — | ( | — | ( | ||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||
| Issuance of common stock for Employee Stock Purchase Plan | — | — | — | |||||||||||||||||
| Common stock issued upon vesting of restricted stock units, net of shares withheld for employee taxes | — | ( | — | — | ( | |||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||
| Stock option exercises | — | — | — | |||||||||||||||||
| Repurchase and retirement of common stock, including taxes | ( | — | ( | — | — | ( | ||||||||||||||
Foreign currency translation gain, net | — | — | — | — | ||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
II-27
EverCommerce Inc.
Consolidated Statements of Cash Flows
(in thousands)
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash flows provided by operating activities: | |||||||||||||||||
Net income (loss) | $ | $ | ( | $ | ( | ||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
Stock-based compensation expense | |||||||||||||||||
| Deferred taxes | ( | ( | |||||||||||||||
| Amortization of deferred financing costs and non-cash interest | |||||||||||||||||
Loss on sale and impairments | |||||||||||||||||
| Bad debt expense | |||||||||||||||||
Loss (gain) on interest rate swap valuation adjustments | ( | ||||||||||||||||
| Other non-cash items | |||||||||||||||||
| Changes in operating assets and liabilities, net of effects of acquisitions: | |||||||||||||||||
| Accounts receivable, net | ( | ( | ( | ||||||||||||||
| Prepaid expenses and other current assets | ( | ( | ( | ||||||||||||||
| Other non-current assets | ( | ||||||||||||||||
| Accounts payable | ( | ( | |||||||||||||||
| Accrued expenses and other | ( | ||||||||||||||||
| Deferred revenue | ( | ||||||||||||||||
| Other non-current liabilities | ( | ( | ( | ||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
| Cash flows used in investing activities: | |||||||||||||||||
| Purchases of property and equipment | ( | ( | ( | ||||||||||||||
| Capitalization of software costs | ( | ( | ( | ||||||||||||||
Proceeds from dispositions, net of transaction costs, cash and restricted cash | |||||||||||||||||
Acquisitions, net of cash acquired | ( | ( | |||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ||||||||||||||
Cash flows used in financing activities: | |||||||||||||||||
Payments on long-term debt | ( | ( | ( | ||||||||||||||
| Deferred financing costs | ( | ||||||||||||||||
Exercise of stock options, net | |||||||||||||||||
| Proceeds from common stock issuance for Employee Stock Purchase Plan | |||||||||||||||||
Employee taxes paid for RSU withholdings | ( | ( | |||||||||||||||
| Repurchase and retirement of common stock | ( | ( | ( | ||||||||||||||
Net cash used in financing activities | ( | ( | ( | ||||||||||||||
| Effect of foreign currency exchange rate changes on cash | ( | ||||||||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash, including cash and restricted cash classified as held for sale | ( | ||||||||||||||||
Cash, cash equivalents and restricted cash: | |||||||||||||||||
Beginning of period | |||||||||||||||||
End of period | $ | $ | $ | ||||||||||||||
| Supplemental disclosures of cash flow information: | |||||||||||||||||
| Cash paid for interest | $ | $ | $ | ||||||||||||||
| Cash paid for income taxes | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
II-28
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Note 1. Nature of the Business
EverCommerce Inc. and subsidiaries (the “Company” or “EverCommerce”) is a leading provider of integrated software as a service (“SaaS”) solutions or services for service based small and medium sized businesses (“service SMBs”). Our platforms span across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications. As of December 31, 2025, the Company served more than 745,000 customers primarily across three core verticals: EverPro for Home Services; EverHealth for Health Services; and EverWell for Wellness Services. Within the core verticals, customers operate within numerous micro-verticals, ranging from home service professionals, such as construction contractors and home maintenance technicians, to physician practices and therapists in the Health Services industry, to salon owners in the Wellness sectors. The platform provides vertically-tailored SaaS solutions that address service SMBs’ increasingly nuanced 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. The Company is headquartered in Denver, Colorado, and has operations across the United States, Canada, United Kingdom, Australia and New Zealand.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The Company’s consolidated financial statements (collectively, the “financial statements”) include the operations of EverCommerce and all wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All material intercompany transactions have been eliminated in consolidation.
In late 2024, the Company began a process to review strategic alternatives for its marketing technology solutions. On March 5, 2025, the Board of Directors (“the Board”), in conjunction with management, committed to a plan to sell its marketing technology solutions. On October 31, 2025, the Company completed the sale of its marketing technology solutions business concluding the previously announced strategic review. The Company determined that its decision to sell marketing technology solutions is considered a strategic shift that will have a major effect on its operations and financial results and met the criteria for classification as discontinued operations. As such, the assets and liabilities of marketing technology solutions are presented as held for sale on our consolidated balance sheets as of December 31, 2024. The results of operations of marketing technology solutions are presented as discontinued operations in our consolidated statements of operations and comprehensive income (loss) for all periods presented through the date of sale. The consolidated statements of cash flow are inclusive of continuing and discontinued operations for all periods presented. Certain prior period amounts related to discontinued operations have been reclassified and separately presented in the consolidated financial statements and accompanying notes to conform to the current year presentation. Unless otherwise noted, disclosures throughout these notes to the consolidated financial statements reflect continuing operations only. Refer to Note 3. Acquisition and Dispositions for additional information.
On March 13, 2024, the Company entered into definitive sale and purchase agreements to sell its fitness solutions to Jonas Fitness Portfolio Holdco Inc. (“Jonas Software”) (see Note 3. Acquisition and Dispositions). The sale of American Service Finance LLC., ASF Payment Solutions ULC and Technique Fitness Inc. (collectively, “North American Fitness”), closed simultaneous with signing. The sale of EverCommerce UK, including wholly-owned subsidiaries Fitii UK (MyPTHub and MyPTHub LLC) and ClubWise UK and its wholly-owned subsidiary ClubWise Australia (collectively, “UK Fitness” and together with North American Fitness, “Fitness Solutions”), closed on July 1, 2024. The divestiture did not qualify for reporting as a discontinued operation. As a result, our consolidated financial statements include the results of North American Fitness and UK Fitness for all periods through the applicable date of sale.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates are subject to uncertainties due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change. Significant items subject to such estimates include: valuing identified intangible assets and acquired goodwill and establishing estimated useful lives for intangible assets in connection with business combinations; the estimation of the recoverability of goodwill and other intangible assets; income tax uncertainties, including valuation allowance for deferred tax assets and value of any uncertain tax positions; recognizing bad debt expense from expected credit losses; recognizing stock-based compensation expense and estimating standalone selling price, when applicable, for the allocation of transaction price when multiple performance obligations are included in a contract with a customer.
II-29
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
We evaluate our estimates on an ongoing basis. We base these estimates on historical and anticipated results, trends, and various other assumptions we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recognized revenue and expenses that are not readily apparent from other sources. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates and assumptions.
Assets and Liabilities Held for Sale and Discontinued Operations
The Company classifies assets and liabilities as held for sale (the “disposal group”) in the period when all the relevant classification criteria have been met. Assets and liabilities held for sale are measured at the lower of carrying value or fair value less cost to sell. Any loss resulting from the measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of the disposal group until the date of sale. The fair value of the disposal group, less any cost to sell, are reassessed during each subsequent reporting period it remains classified as held for sale. Subsequent changes in the disposal group’s fair value less cost to sell will be reported as an adjustment to the carrying value of the disposal group to the extent that it does not increase the value of the disposal group beyond its original carrying value at the time it was initially classified as held for sale. Upon determining that the disposal group meets the criteria to be classified as held for sale, the Company discontinues depreciation and amortization and the related assets and liabilities are reported as held for sale on the consolidated balance sheets.
As part of this assessment, the Company also evaluates the criteria for reporting the disposal group as a discontinued operation. Factors which the Company considers include, but are not limited to, whether the disposal represents a strategic shift that would have a major effect on the Company's operations and financial results.
Business Combinations
The results of a business acquired in a business combination are included in the Company’s financial statements from the date of acquisition with the associated purchase price allocated to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Based on the nature of the businesses that the Company acquires, goodwill arising from acquisitions typically consists of synergies with previously acquired businesses and economies of scale resulting from centralizing shared service functions. Acquisition-related transaction costs are expensed in the period in which the costs are incurred.
Determining the fair value of assets acquired and liabilities assumed requires management to make significant judgments and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies.
Concentrations of Risk
Cash and Cash Equivalents and Restricted Cash
The Company considers all highly liquid investments with an original maturity of three months or less when acquired to be cash equivalents.
Accounts Receivable, net
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for estimated credit losses inherent in its accounts receivable portfolio. In establishing the expected credit loss, management considers historical losses adjusted to take into account current market conditions and the customers’ financial condition, the amount of receivables in dispute and customer paying patterns. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.
Property and Equipment, net
Property and equipment are recorded at cost, net of accumulated depreciation. Property and equipment acquired in purchase accounting are recorded at fair value at the date of acquisition. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the following estimated useful lives.
II-30
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
| Property and Equipment | Estimated Useful Life | |||||||
| Computer equipment and software | ||||||||
| Furniture and fixtures | ||||||||
| Leasehold improvements | Lesser of estimated useful life or remaining lease term | |||||||
Upon disposition, the cost of disposed assets and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to earnings/loss.
Capitalized Software, net
The Company capitalizes certain costs related to software developed for internal use for which it has no plans to market externally. Internal use software includes the software used for its SaaS offerings. We expense the costs of developing computer software until the software has reached the application development stage and capitalizes all costs incurred from that time until the software has been placed in service, at which time amortization of the capitalized costs begins. Determination of when the software has reached the application development stage is based upon completion of conceptual designs, evaluation of alternative designs and performance requirements. Costs of major enhancements to internal use software are capitalized while routine maintenance of existing software is charged to product development expense as incurred.
The Company also capitalizes certain costs related to software developed for external use for which it plans to sell to customers, i.e. on-premise software to be installed on customer computers at the customer site. Costs incurred prior to reaching technological feasibility are charged to product development expense as incurred. Capitalization ceases when the product is available for general release to the customers. Such costs have not been material.
The Company amortizes software costs, using the straight-line method, over its estimated useful life of five years .
Cloud Computing Arrangements
The Company incurs costs to implement cloud computing arrangements hosted by third-party vendors that are considered service contracts. We capitalize certain implementation costs of cloud computing arrangements during the application development stage, consistent with the capitalization criteria used for internal use software. Capitalized implementation costs are amortized on a straight-line basis over its estimated useful life of five years . Capitalized amounts related to such arrangements are recorded within prepaid and other current assets and other non-current assets on the consolidated balance sheets, and the associated amortization expense is included within general and administrative expense on the consolidated statements of operations and comprehensive income (loss).
Intangible Assets, net
Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its estimated fair value. Estimates of expected future cash flows represent management’s best estimate based on currently available information and reasonable and supportable assumptions. Any impairment recognized is permanent and may not be restored.
Impairment of Long-Lived Assets
During the fourth quarter of 2023, the Company evaluated the recoverability of our fitness asset group. As a result of our evaluation, 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 of approximately $5.1 million during the three months ended December 31, 2023, of which $3.1 million related to intangible assets. Additionally, the Company 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 during the year ended December 31, 2023. The impairment charges are recorded in impairment expense on the consolidated statements of operations
II-31
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
and comprehensive income (loss). There were no impairments of long-lived assets during the years ended December 31, 2025 and 2024, other than the abandonment of certain features of its capitalized software as more fully described in Note 8. Capitalized Software.
Goodwill
Goodwill represents the excess of purchase price over amounts allocated to identifiable assets acquired and liabilities assumed in business combinations. The carrying value of goodwill is evaluated for impairment at least annually or more frequently whenever events or changes in circumstances indicate the carrying value of these assets may not be recoverable. The Company performs an annual impairment review of its goodwill balance during the fourth quarter or more frequently if business factors indicate. Prior to performing a quantitative evaluation, an assessment of qualitative factors may be performed to determine whether it is more likely than not that the fair value of the reporting unit exceeds its carrying value. In the event the Company determines that it is more likely than not the carrying value of a reporting unit is higher than its estimated fair value, quantitative testing is performed comparing recorded values to estimated fair values. Alternatively, the Company may perform a quantitative assessment for the annual review of recoverability rather than a qualitative assessment. If the carrying value, including goodwill, exceeds the reporting unit’s fair value, we will recognize an impairment loss for the amount by which the carrying amount exceeds the reporting unit’s fair value. We recorded goodwill impairment losses during the years ended December 31, 2025 and 2024 (see Note 3. Acquisition and Dispositions). We did not incur any goodwill impairment losses during the year ended December 31, 2023.
Leases
The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. We also consider whether our service arrangements include the right to control the use of an asset. Lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. We do not recognize right-of-use (“ROU”) lease assets and lease liabilities for leases with a term of 12 months or less. For all other leases, operating lease assets and liabilities are recognized at commencement based on the present value of lease payments over the lease term. The ROU lease assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are adjusted for lease incentives.
The Company’s leases do not provide a readily determinable implicit interest rate and we use our incremental borrowing rate to measure the lease liability and corresponding ROU lease assets. Our incremental borrowing rate is the rate of interest the Company would have to pay to borrow on a collateralized basis adjusted for market conditions and the length of the lease term. Judgment is applied in assessing factors such as Company-specific credit risk, lease term, nature and quality of the underlying collateral, currency, and economic environment in determining the incremental borrowing rate to apply to each lease.
The Company’s leases may include a non-lease component representing additional services transferred to the Company, such as common area maintenance for real estate. We elected the practical expedient to not separate lease from fixed non-lease components for our real estate leases. We account for the lease and fixed non-lease components of our operating ROU lease assets as a single lease component. The non-lease components are usually variable in nature and recorded in variable lease expense in the period incurred.
Future lease payments may include fixed rent escalation clauses or payments that depend on an index (such as the consumer price index) measured using the index or applicable rate at lease commencement. Subsequent changes in index and other periodic market-rate adjustments to base rent are recorded in variable lease expense in the period incurred. In addition, certain leases include options to extend or terminate a lease, which are recognized when it is reasonably certain that we will exercise that option. The Company’s leases generally do not contain any material restrictive covenants or residual value guarantees.
Lease expense is recognized on a straight-line basis over the non-cancelable lease term and is recorded to general and administrative expense on the statements of operations and comprehensive income (loss). Operating ROU lease assets are included in other non-current assets and operating lease liabilities are included in accrued expenses and other and other non-current liabilities on our consolidated balance sheets.
The Company does not have any leases classified as finance leases.
Deferred Financing and Credit Facility Costs
Deferred financing costs and discounts on long-term debt are capitalized and netted with long-term debt and amortized over the term of the related debt, using the effective interest method. Costs incurred in connection with the establishment of revolving credit facilities are capitalized and amortized over the term of the related facility period, using the straight-line method. Amortization of debt issuance costs, noncash discounts and other credit facility costs are included in interest expense on the consolidated statements of operations and comprehensive income (loss).
II-32
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Revenue Recognition
In accordance with U.S. GAAP, the Company performs the following steps in determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its contracts with customers: (i) identification of the contract with a customer; (ii) determination of whether the promised goods or services are performance obligations; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as each performance obligation is satisfied. The Company assesses the goods or services promised within each contract to determine if they are distinct and represent a performance obligation. The Company then allocates the transaction price to the respective performance obligations, and recognizes revenue when (or as) the performance obligations are satisfied. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these goods or services.
The Company maintains two primary categories of revenue sources:
Subscription and Transaction Fees:
Subscription revenue primarily consists of the sale of SaaS offerings or the sale of software licenses. Through the SaaS offerings and related support services, customers are granted access to a hosted software application over the contract period, generally ranging from one month to five years, without a contractual right to possession of the software. Alternatively, through the sale of software licenses the customer is provided with a right to use software that provides functionality to the customer on a stand-alone basis, and related support services, which include telephone/technical support, when-and-if available software updates and, in certain instances, hosting services. The software licenses are both perpetual, providing the customer with the right-of-use for an indefinite period, and term, which generally range for a defined period of time from one month to five years. Contracts may contain termination for convenience provisions that allow the Company, customer or both parties the ability to terminate for convenience, either at any time or upon providing a specified notice period, without a penalty. The contract term for accounting purposes is determined to be the period in which parties to the contract have present enforceable rights and obligations, therefore the contract term for accounting purposes may be shorter than the stated term.
•SaaS and related support services: Revenues from the sale of hosted software applications and related support services are generally recognized ratably over the contractual period that the services are delivered, beginning on the date the service is made available to customers. Revenue is recognized ratably because the customer simultaneously receives and consumes the benefits of the services throughout the contract period. Contracts are generally fixed price and may be invoiced on a monthly, quarterly or annual basis, with standard payment terms ranging from due upon receipt to 30 days.
•License and related support services: Revenues from the sale of distinct on-premise licenses are generally recognized at the point in time when the software is made available to the customer to download or use. Revenues from the sale of license related support services are generally recognized ratably over the contractual period that the services are delivered. Within these arrangements, the Company is obligated to make the support services available continuously throughout the contract and the customer simultaneously receives and consumes the benefit of making these services available throughout the contract period. Contracts are generally fixed price and may be invoiced on a monthly, quarterly or annual basis, with standard payment terms ranging from due upon receipt to 30 days. The timing of revenue recognition may differ from the timing of invoicing customers due to the existence of these invoicing practices as well as the requirement to recognize revenue on a relative stand-alone selling price basis between the on-premise license and related support.
Transaction fees relate to payment processing and group purchasing program administration services. In fulfillment of payment processing services, the Company partners with third-party merchants and processors who assist in the fulfillment of the Company’s obligations to customers. Payment processing services enable customers to accept payments via credit card, electronic check and other similar methods through facilitation of payment information within the cloud-based applications. Group purchasing program administration services relate to facilitation of group purchasing programs for members through which the Company aggregates member purchasing power to negotiate pricing discounts with suppliers.
•Payment processing services: The Company has concluded that it does not possess the ability to control the underlying services provided by third parties in the fulfillment of its obligations to customers and therefore recognizes revenue net of interchange fees retained by the card issuing financial institutions and fees charged by payment networks. The Company recognizes revenue from these transaction services as the services are provided and ascribes the transaction consideration to the distinct services utilizing the variable consideration allocation exception. Payment for transaction services is received in arrears, typically within one month of when the services have been provided. Transaction services contracts with customers are generally for a term of one month and renew automatically each month.
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
•Purchasing program administration services: The Company receives rebates from contracted suppliers in exchange for program administration services. Rebates earned are based on a defined percentage of the purchase price of goods and services sold to program members under the contract the Company has negotiated with its suppliers. Administration services contracts with customers are generally for an annual or monthly term and renew automatically upon lapse of the current term.
Other:
Other revenues generally consist of fees associated with the sale of distinct professional services, in support of subscription revenue and hardware. Professional service offerings are typically sold as part of an arrangement for products or services included within subscription revenue. Professional services associated with subscription revenue generally relate to standard implementation, configuration, installation or training services applied to both SaaS and on-premise deployment models. Professional service revenue is recognized over time as the services are performed, as the customer simultaneously receives and consumes the benefit of these services. Professional service contracts are offered at either a fixed or a variable price and may be invoiced in advance or arrears of the services being provided.
Standard payment terms for these arrangements range from due upon receipt to 30 days. Contract terms for other revenue arrangements are generally short-term, with stated contract terms that are less than one year.
Performance Obligations and Standalone Selling Price:
The Company’s contracts at times include the sale of multiple promised goods or services that have been determined to be distinct. The transaction price for contracts with multiple performance obligations is allocated based on the relative stand-alone selling price of each performance obligation within the contract.
The Company’s contracts may include standard warranty or service level provisions that state promised goods and services will perform and operate in all material respects as defined in the respective agreements. We have determined that these represent assurance-type warranties, and we have not incurred any material costs as a result of such commitments.
Cost to Obtain and Fulfill a Contract:
The Company incurs certain costs to obtain contracts, principally sales, third-party commissions and third-party fulfillment fees, which we capitalize when the liability has been incurred if they are (i) incremental costs of obtaining a contract, (ii) expected to be recovered and (iii) have an expected amortization period that is greater than one year (as the Company has elected the practical expedient to expense any costs to obtain a contract when the liability is incurred if the amortization period of such costs would be one year or less).
Material Rights:
The Company’s contracts with customers may include renewal or other options at stated prices. Determining whether these options provide the customer with a material right and therefore need to be accounted for as separate performance obligations requires judgment. The price of each option must be assessed to determine whether it is reflective of the stand-alone selling price or is reflective of a discount that the customer only received as a result of its prior purchase (a material right).
Other considerations:
The Company has elected a policy to exclude from the transaction price all sales taxes assessed by governmental authorities and as a result, revenue is presented net of tax.
Cost of Revenues
Advertising
Stock-based Compensation
The Company measures stock-based compensation awards made to employees and directors based on the estimated grant date fair value of the awards and recognize the compensation expense on a straight-line basis over the applicable service period. We use the
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Black-Scholes option-pricing model to estimate the fair value of options granted with time-based vesting and performance-based vesting terms, respectively, which requires the use of assumptions, including the fair value of the common stock, expected volatility, expected term, risk-free interest rate and expected dividends. We estimate expected volatility based on the historical volatility of our common stock. The expected term represents the estimated average period of time that the option will remain outstanding using the “simplified” method that measures the expected term as the average of the vesting period and the contractual term. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of the awards. The dividend yield assumption is based on history and the expectation of paying no dividends.
The Company estimates forfeitures at the date of grant and adjust these estimates to actual forfeitures as they occur. These assumptions involve inherent uncertainties including market conditions and employee behavior that are generally outside of the Company’s control. Stock-based compensation expense is based on the value of the portion of stock-based payment awards that is ultimately expected to vest.
Income Taxes
The Company is a C corporation for federal income tax purposes. Deferred taxes are provided whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company's total provision for taxes includes income taxes on the Company's corporate subsidiaries. The Tax Cuts and Jobs Act of 2017 ("TCJA") subjects a U.S. shareholder to current tax on global intangible low-taxed income ("GILTI") earned by foreign subsidiaries. The Company accounts for GILTI as a period cost as incurred.
The Company records uncertain tax positions based on the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority when it is determined that the tax position will more likely than not be sustained on the basis of the technical merits of the position. When applicable, interest and penalties relating to any such uncertain tax positions are recorded as part of income tax expense.
Comprehensive Income (Loss)
Comprehensive income (loss) includes net income (loss) as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. The Company includes cumulative foreign currency translation adjustments in comprehensive income (loss) as described below.
Net Income (Loss) per Share Attributable to Common Stockholders
Foreign Currency Translation
The functional currency of our foreign subsidiaries is primarily the local currency in which the entity is located. The financial results of all subsidiaries with a functional currency other than the U.S. dollar are translated into U.S. dollars upon consolidation. Assets and liabilities of foreign subsidiaries are translated into U.S. dollars at the current exchange rate in effect as of the date of the consolidated balance sheets (the “Spot Rate”). Revenues and expenses are translated at the average exchange rates during the respective periods. Translation adjustments resulting from fluctuations in exchange rates are included in the cumulative currency translation adjustments in accumulated other comprehensive loss in stockholders’ equity. The functional currencies of the Company’s significant foreign operations include the Canadian dollar, Great British Pound, Australian dollar and New Zealand dollar.
For the Company’s subsidiaries that operate primarily in the U.S. dollar, foreign currency denominated monetary assets and liabilities are remeasured into U.S. dollars at the Spot Rate in effect as of the date of the consolidated balance sheets. Non-monetary assets and liabilities are remeasured using historical exchange rates. Income and expense elements are remeasured at the average exchange rates during the respective periods in which the elements are recognized within the consolidated statements of operations and comprehensive income (loss).
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Recently Issued Accounting Pronouncements
The Company evaluates all ASUs issued by the FASB for consideration of their applicability. ASUs not included in the disclosures in this report were assessed and determined to be either not applicable or are not expected to have a material impact on our consolidated financial statements.
Accounting pronouncements issued and adopted
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update is intended to improve transparency of income tax disclosure by requiring consistent categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. The amendments in this update are effective for annual periods beginning after December 15, 2024 with early adoption permitted. The amendments in this update should be applied on a prospective basis with retrospective application permitted. The Company adopted this ASU for the year ended December 31, 2025, which resulted in additional disclosures in Note 16. Income Taxes included within the Notes to the Consolidated Financial Statements.
Accounting pronouncements not yet adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. Public companies will be required to disclose the amounts related to purchases of inventory, employee compensation, depreciation, intangible asset amortization, and selling expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting the amendments in this update on its consolidated financial statements and disclosures.
In July 2025, the FASB issued ASU No. 2025-05, Financial instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This update provides a practical expedient for entities estimating expected credit losses on current trade receivables and contract assets arising from revenue transactions accounted for under Topic 606. The practical expedient permits an entity to assume current conditions as of the balance sheet date will not change for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses. The amendments in this update are effective for interim and annual periods within fiscal years beginning after December 15, 2025, with early adoption permitted. The amendments in this update should be applied on a prospective basis. The Company is currently evaluating the impact of adopting the amendments in this update on its consolidated financial statements and disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This update modernizes the capitalization criteria for internal-use software by removing references to software development project stages so that the guidance is neutral to different software development methods. Therefore, under the guidance, software capitalization will begin when management has authorized and committed to funding the software project and when it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in this update are effective for interim and annual periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting the amendments in this update on its consolidated financial statements and disclosures.
Note 3. Acquisition and Dispositions
ZyraTalk Acquisition
On September 15, 2025, the Company acquired 100 % of the interest of Joblyt LLC, dba ZyraTalk (“ZyraTalk”), an AI-powered customer engagement solution that combines virtual assistant capabilities with an agentic automation platform, for approximately $36.1 million in cash, not inclusive of an additional $6.5 million of contingent consideration, which could be paid over the next three years related to post-combination employment services. The acquisition helps to establish EverCommerce as an AI-driven innovator, beginning with near-term application in its Home and Field Services vertical, EverPro, and the Company plans to extend ZyraTalk into broader opportunities across its other verticals.
The Company accounted for the acquisition as a business combination under ASC 805, Business Combinations. Accordingly, the Company recorded identifiable assets acquired and liabilities assumed at their acquisition date estimated fair values, with any excess consideration recognized as goodwill. Goodwill primarily represents the value associated with the assembled workforce and expected synergies subsumed into goodwill. The goodwill recognized as a result of the acquisition of ZyraTalk is deductible for income tax purposes.
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
The Company has preliminarily measured the identifiable assets and liabilities assumed at their acquisition date estimated fair values separately from goodwill, which represent Level 3 fair value measurements as defined in ASC 820, Fair Value Measurement. The estimated fair values were determined by management using the assistance of third-party valuation specialists, and this evaluation is not yet final. The valuation methods used to determine the estimated fair value of intangible assets included the income approach---relief from royalty method for trademarks and developed technology with estimated useful lives of five years , and the income approach---multi period excess earnings method for customer relationships with an estimated useful life of nine years . A number of assumptions and estimates were involved in the application of these valuation methods, including revenue forecasts, expected competition, costs of revenues, obsolescence, tax rates, capital spending, customer attrition rates, discount rates and working capital changes. Cash flow forecasts were generally based on pre-acquisition forecasts coupled with estimated revenues and cost synergies available to a market participant.
The purchase price allocation for the acquisition is preliminary and subject to revision with estimated amounts related to working capital, the valuation of intangible assets and liabilities acquired, and provisional amounts related to tax and other items. Additional information that existed as of the acquisition date but at the time was unknown to the Company may become known to the Company during the remainder of the measurement period, which is not to exceed 12 months from the acquisition date.
The financial results of ZyraTalk since the closing through December 31, 2025, were not material to the Company’s consolidated financial statements, nor were they material to the Company’s prior period consolidated results on a pro forma basis.
The following table summarizes the estimated fair values of consideration transferred, assets acquired and liabilities assumed at the acquisition date.
| September 15, 2025 | ||||||||
| (in thousands) | ||||||||
| Total consideration transferred: | ||||||||
| Cash | $ | |||||||
| Net assets acquired: | ||||||||
| Cash and cash equivalents | $ | |||||||
| Accounts receivable, trade | ||||||||
| Prepaid expenses and other current assets | ||||||||
Intangible-definite lived | ||||||||
| Goodwill | ||||||||
| Accrued expenses and other | ( | |||||||
| Deferred revenue | ( | |||||||
| Total net assets acquired | $ | |||||||
Marketing Technology Solutions Disposition
On October 31, 2025, the Company completed the sale of its marketing technology solutions business to Ignite Visibility for approximately $45.0 million in cash, subject to certain closing adjustments, as part of its previously announced strategic review. As such, the assets and liabilities of the disposal group were classified as held for sale on our consolidated balance sheets as of December 31, 2024. The results of operations of marketing technology solutions are presented as discontinued operations on the consolidated statements of operations and comprehensive income (loss) through the date of sale. During the year ended December 31, 2025, we recognized a loss of $1.1 million related to the sale of marketing technology solutions and a goodwill of $6.9 million, which are included in loss on sale and impairments within discontinued operations on our consolidated statements of operations and comprehensive income (loss).
During the fourth quarter of 2024, in conjunction with our review of strategic alternatives for our marketing technology solutions, the Company 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 charge of approximately $28.1 million during the year ended December 31, 2024, which is included in accumulated impairment losses.
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
The following table summarizes the results of operations of marketing technology solutions reported as discontinued operations:
| Twelve Months Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
(in thousands) | |||||||||||||||||
| Total revenues | $ | $ | $ | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization presented separately below) | |||||||||||||||||
| Sales and marketing | |||||||||||||||||
| Product development | |||||||||||||||||
| General and administrative | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Loss on held for sale and impairments | |||||||||||||||||
| Total operating expenses | |||||||||||||||||
| Operating (loss) income | ( | ( | |||||||||||||||
| Other income, net | |||||||||||||||||
Net (loss) income before income tax (expense) benefit | ( | ( | |||||||||||||||
Income tax (expense) benefit | ( | ( | |||||||||||||||
(Loss) income from discontinued operations, net of income tax | $ | ( | $ | ( | $ | ||||||||||||
The components of assets and liabilities classified as held for sale on the consolidated balance sheets were as follows:
| December 31, | ||||||||
| 2024 | ||||||||
(in thousands) | ||||||||
| Assets: | ||||||||
| Accounts receivable, net | $ | |||||||
| Contract assets | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Property and equipment, net | ||||||||
| Capitalized software, net | ||||||||
| Other non-current assets | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Assets held for sale | $ | |||||||
| Liabilities: | ||||||||
| Accounts payable | $ | |||||||
| Accrued expenses and other | ||||||||
| Deferred revenue | ||||||||
| Customer deposits | ||||||||
| Other long-term liabilities | ||||||||
| Liabilities held for sale | ||||||||
| Assets held for sale, net | $ | |||||||
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
The following table presents the significant non-cash items related to discontinued operations that are included in the accompanying statements of cash flows:
| Twelve Months Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
(in thousands) | |||||||||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Share-based compensation | |||||||||||||||||
| Loss on assets held for sale and impairments | |||||||||||||||||
In connection with the sale, we entered into a transition services agreement (“TSA”) with Ignite Visibility to provide services including information technology, finance, and accounting support. During the year ended December 31, 2025, we recorded $0.4 million of income related to support services provided under the TSA, which is included in interest income and other income (expense), net on our consolidated statements of operations and comprehensive income (loss). As of December 31, 2025, we had a receivable of $3.1 million related to amounts due under the TSA, which is included in prepaid expenses and other current assets on our consolidated balance sheets.
Fitness Solutions Disposition
On March 13, 2024, the Company entered into definitive sale and purchase agreements to sell its fitness solutions to Jonas Software. 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 discontinued operations. During the year ended December 31, 2024, the Company 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). Additionally, the Company 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 our consolidated statements of operations and comprehensive income (loss).
Note 4. Revenue
Disaggregation of Revenue
The following tables present a disaggregation of our revenue from contracts with customers by revenue recognition pattern and geographical market:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| By pattern of recognition (timing of transfer of services): | |||||||||||||||||
| Point in time | $ | $ | $ | ||||||||||||||
| Over time | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
| By Geographical Market: | |||||||||||||||||
| United States | $ | $ | $ | ||||||||||||||
| International | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
Contract Balances
Supplemental balance sheet information related to contracts from customers as of:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Accounts receivables | $ | $ | |||||||||
| Contract assets | $ | $ | |||||||||
| Deferred revenue | $ | $ | |||||||||
| Customer deposits | $ | $ | |||||||||
| Long-term deferred revenue | $ | $ | |||||||||
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Accounts receivable, net: Accounts receivable, net of allowance for expected credit losses, represent rights to consideration in exchange for products or services that have been transferred by us, when payment is unconditional and only the passage of time is required before payment is due.
Contract assets: Contract assets represent rights to consideration in exchange for products or services that have been transferred (i.e., the performance obligation or portion of the performance obligation has been satisfied), but payment is conditional on something other than the passage of time. These amounts typically relate to contracts with the suppliers within our group purchasing programs for which payment is received at least one quarter in arrears from the service period. They also relate to contracts that include on-premise licenses and professional services where the right to payment is not present until completion of the contract or achievement of specified milestones and the fair value of products or services transferred exceed this constraint.
Contract liabilities: Contract liabilities, or deferred revenue, represent our obligation to transfer products or services to a customer for which consideration has been received in advance of the satisfaction of performance obligations. Long-term deferred revenue is included within other non-current liabilities on the consolidated balance sheets. Revenue recognized from the contract liability balance at December 31, 2024 was $22.1 million for the year ended December 31, 2025. Revenue recognized from the contract liability balance at December 31, 2023 was $20.9 million for the year ended December 31, 2024.
Customer deposits: Customer deposits relate to payments received in advance for contracts, which allow the customer to terminate a contract and receive a pro rata refund for the unused portion of payments received to date.
Accounts Receivable
Activity in our allowance for expected credit losses is as follows for the years ended December 31, 2025 and 2024 (in thousands):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Allowances for expected credit losses, beginning of year | $ | $ | |||||||||
| Bad debt expense | |||||||||||
| Write-offs, net of recoveries | ( | ( | |||||||||
| Disposition of Fitness Solutions | ( | ||||||||||
| Transfer to held for sale | ( | ||||||||||
Allowance for expected credit losses, end of year | $ | $ | |||||||||
Remaining Performance Obligations
Remaining performance obligations represent the transaction price of unsatisfied or partially satisfied performance obligations within contracts with an original expected contract term that is greater than one year for which fulfillment of the contract has started as of the end of the reporting period. Contracts that include 30-day termination rights are considered to be contracts with a term of one month and are therefore excluded from remaining performance obligations. Remaining performance obligations generally relate to those which are stand-ready in nature, as found within the subscription revenue streams. The aggregate amount of transaction consideration allocated to remaining performance obligations as of December 31, 2025 was $18.4 million. The Company expects to recognize approximately 65 % of its remaining performance obligations as revenue within the next year, 28 % of its remaining performance obligations as revenue the subsequent year, 5 % of its remaining performance obligations as revenue in the third year, and the remainder during the two-year period thereafter.
Cost to Obtain and Fulfill a Contract
Assets resulting from costs to obtain contracts are included within prepaid expenses and other current assets for short-term balances and other non-current assets for long-term balances on the Company’s consolidated balance sheets. The costs to obtain contracts are amortized over five years , which corresponds with the useful life of the related technology. Short-term assets were $10.3 million and $8.9 million at December 31, 2025 and 2024, respectively, and long-term assets were $16.2 million and $16.0 million at December 31, 2025 and 2024, respectively. The Company recorded $6.0 million, $5.3 million and $4.4 million of amortization expense related to assets for the years ended December 31, 2025, 2024 and 2023, respectively, which is included in sales and marketing expense on the consolidated statements of operations and comprehensive income (loss), as well as $3.8 million, $3.1 million and $2.3 million, respectively, which is included in cost of revenues expense on the consolidated statements of operations and comprehensive income (loss).
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Note 5. Goodwill
Goodwill activity for the years ended December 31, 2025 and 2024 (in thousands):
Balance, January 1, 2024 | $ | ||||
Impairments | ( | ||||
| Effect of foreign currency exchange rate changes | ( | ||||
Balance, December 31, 2024 | |||||
Acquired goodwill | |||||
Effect of foreign currency exchange rates | |||||
Balance, December 31, 2025 | $ | ||||
| Accumulated impairment losses at December 31, 2025 | $ | ( | |||
Note 6. Intangible Assets
Intangible assets consisted of the following as of:
| December 31, 2025 | |||||||||||||||||||||||
| Useful Life | Gross Carrying Value | Accumulated Amortization | Net Book Value | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
Customer relationships | $ | $ | $ | ||||||||||||||||||||
Developed technology | |||||||||||||||||||||||
Trade names | |||||||||||||||||||||||
| Non-compete agreements | |||||||||||||||||||||||
Total | $ | $ | $ | ||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Useful Life | Gross Carrying Value | Accumulated Amortization | Net Book Value | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
Customer relationships | $ | $ | $ | ||||||||||||||||||||
Developed technology | |||||||||||||||||||||||
Trade names | |||||||||||||||||||||||
| Non-compete agreements | |||||||||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||||||||
Amortization expense was $53.9 million, $67.8 million and $82.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The weighted average remaining useful life of intangible assets acquired is 6.7 years, 7.4 years and 8.8 years for the years ended December 31, 2025, 2024 and 2023, respectively.
In determining the useful life for each category of intangible asset, the Company considered the following: the expected use of the intangible, the longevity of the brand and considerations for obsolescence, demand, competition and other economic factors.
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Amortization expense for the Company’s intangible assets is as follows (in thousands):
| Year Ended December 31, | |||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total amortization expense for the Company’s intangible assets | $ | ||||
Note 7. Property and Equipment
Property and equipment consisted of the following as of:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Computer equipment and software | $ | $ | |||||||||
| Furniture and fixtures | |||||||||||
| Leasehold improvements | |||||||||||
| Total property and equipment | |||||||||||
| Less accumulated depreciation | ( | ( | |||||||||
| Property and equipment, net | $ | $ | |||||||||
Depreciation expense was $2.6 million, $3.1 million and $4.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. During the year ended December 31, 2024, we recorded an impairment charge of $0.2 million to leasehold improvements, which is included in loss on sale and impairments on the consolidated statements of operations and comprehensive income (loss) (see Note 2. Summary of Significant Accounting Policies).
Note 8. Capitalized Software
Capitalized software consisted of the following as of:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Capitalized software | $ | $ | |||||||||
| Less accumulated amortization | ( | ( | |||||||||
| Capitalized software, net | $ | $ | |||||||||
Amortization expense was $10.8 million, $9.8 million and $8.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. During the ordinary course of business, the Company may determine that certain capitalized features of its software will no longer be used either internally or to deliver value to its customers. During the years ended December 31, 2025, 2024 and 2023, we recorded a charge of $0.5 million, $0.8 million and $0.6 million, respectively, related to capitalized costs associated with abandoned projects, which were included in general and administrative expense on the consolidated statements of operations and comprehensive income (loss).
During the year ended December 31, 2024, we recorded an impairment charge of $1.1 million, which is included in impairment expense on the consolidated statements of operations and comprehensive income (loss) (see Note 2. Summary of Significant Accounting Policies).
Note 9. Leases
The Company leases real estate from unrelated parties under operating lease agreements that have initial terms ranging from one year to 9 years. Some leases include one or more options to renew, generally at our sole discretion, of additional years each.
II-42
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
The components of lease expense are as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Operating lease cost | $ | $ | |||||||||
| Variable lease cost | |||||||||||
| Short-term lease cost | |||||||||||
| Total lease cost | $ | $ | |||||||||
The Company ceased use of certain leased premises and subleased certain facilities resulting in impairment charges of $0.4 million and $1.2 million for the years ended December 31, 2024 and 2023, respectively, to impair ROU lease assets to their fair value, which are included in loss on sale and impairments on our consolidated statement of operations and comprehensive income (loss) (see Note 2. Summary of Significant Accounting Policies).
Supplemental cash flow information related to leases is as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Cash paid for operating lease liabilities | $ | $ | |||||||||
| Operating lease assets obtained in exchange for operating lease liabilities | $ | $ | |||||||||
Supplemental balance sheet information, included in , and on the consolidated balance sheet, related to leases is as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Operating lease right-of-use assets | $ | $ | |||||||||
| Current operating lease liabilities | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Total operating lease liabilities | $ | $ | |||||||||
At December 31, 2025 and 2024, the weighted average remaining lease term for operating leases was 4.16 years and 5.15 years, and the weighted average discount rate was 5.2
Future undiscounted cash flows for each of the next five years and thereafter and the reconciliation to the lease liabilities recognized on the balance sheet as of December 31, 2025 is as follows (in thousands):
| Year ended December 31, | |||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total lease payments | |||||
| Less: imputed interest | |||||
| Total present value of lease liabilities | $ | ||||
II-43
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Note 10. Long-Term Debt
Long-term debt consisted of the following as of:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
Term note with interest payable monthly, interest rate at Adjusted SOFR, plus an applicable margin of | $ | $ | |||||||||
Revolver with interest payable monthly, interest rate at Adjusted SOFR, plus an applicable margin of | |||||||||||
| Principal debt | |||||||||||
| Deferred financing costs on long-term debt | ( | ( | |||||||||
| Discount on long-term debt | ( | ( | |||||||||
| Total debt | |||||||||||
| Less current maturities | |||||||||||
| Long-term portion | $ | $ | |||||||||
The Company is party to a credit agreement, as amended, that provides for one term loan in the aggregate principal amount of $529.4 million (the “Term Loan”), a revolver with a capacity of $155.0 million (the “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”.
On December 13, 2024, the Company entered into an amendment (the “2024 Amendment”) to the Credit Facilities to reduce the applicable margin and remove the credit spread adjustment from the existing Term Loan in its entirety in an aggregate principal amount of $533.5 million. Following the 2024 Amendment, the Term Loan bears interest, at the borrower’s election, at (x) a forward-looking term rate based upon the secured overnight financing rate (“SOFR”) (as defined in the Credit Facilities) plus an applicable margin of 2.50 %, with a minimum forward-looking SOFR rate 0.50 % or (y) Alternative Base Rate (“ABR”) (as defined in the Credit Facilities) plus an applicable margin of 1.50 %, with a minimum ABR of 1.50 %, in each case, with no step-downs. The credit spread adjustment was removed in connection with the 2024 Amendment. The refinanced Term Loan priced at par and refinanced the existing term loan outstanding under the Credit Agreement immediately prior to giving effect to the 2024 Amendment.
Effective as of June 10, 2025, the Company entered into an additional amendment to the Credit Facilities (the “June 2025 Amendment”) to reduce the commitments outstanding under the Revolver, extend the maturity of a portion of such commitments and reduce the applicable margin with respect to extended revolving loans. As a result of the June 2025 Amendment, commitments under the Revolver were reduced from $190.0 million to $155.0 million. With respect to $125.0 million of such commitments, (i) the maturity date was extended to January 6, 2028 and (ii) the applicable margin for (x) Term SOFR (as defined in the Credit Facilities) loans was reduced to 2.50 % and (y) ABR (as defined in the Credit Facilities) loans was reduced to 1.50 %, in each case, subject to a single 0.25 % step-down based on the Company’s first lien net leverage ratio. With respect to the remaining $30.0 million of such commitments, (i) the maturity date remains July 6, 2026 and (ii) the applicable margin was unchanged.
On July 29, 2025, the Company entered into an amendment to the Credit Facilities (the “July 2025 Amendment”) to, among other things, refinance the existing Term Loan in an aggregate principal amount of $529.4 million. The July 2025 Amendment, among other things, (i) extends the maturity date of the Term Loan to July 6, 2031, and (ii) reduces the applicable margin by 25 basis points with respect to all term loans. The Term Loan bears interest, at the Borrower’s election, at (x) Term SOFR (as defined in the Credit Agreement) plus an applicable margin of 2.25 %, with a minimum Term SOFR rate of 0.50 % or (y) ABR (as defined in the Credit Agreement) plus an applicable margin of 1.25 %, with a minimum ABR of 1.50 %, in each case, with no step-downs. The refinanced Term Loan priced at par and refinanced the existing term loan outstanding under the Credit Agreement immediately prior to giving effect to the July 2025 Amendment.
Pursuant to the July 2025 Amendment, with respect to $125.0 million of commitments under the existing $155.0 million Revolver, (i) the maturity date was extended to July 29, 2030 and (ii) the applicable margin for (x) Term SOFR loans was reduced to 2.00 % and (y) Alternate Base Rate loans was reduced to 1.00 %, in each case, subject to a 25 basis points step-up based on the Company’s first lien net leverage ratio. Other than the changes noted above, the terms and conditions of all commitments at closing as well as those extending beyond the original maturity date remain the same as the existing Revolver. Accordingly, $155.0 million of availability remains under the Revolver until July 6, 2026 and then reduces to $125.0 million through July 29, 2030.
II-44
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
The Company determines the fair value of long-term debt based on trading prices for its debt if available. As of December 31, 2025, the Company obtained trading prices for the term notes outstanding. However, as such trading prices require significant unobservable inputs to the pricing model, such instruments are classified as Level 2. The fair value amounts were approximately $529.3 million and $537.4 million as of December 31, 2025 and 2024, respectively.
The Company has entered into the following interest rate swap agreements in connection with its Credit Facilities to convert a portion of the floating rate component of the Term Loan from a floating rate to fixed rate:
Swap | Effective Date | Expiration Date | Fixed Interest Rate | Notional Amount | Asset (Liability) Fair Value at December 31, 2025 | |||||||||||||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Initial Swap | October 31, 2022 | October 31, 2027 | % | $ | $ | ( | ||||||||||||||||||||||||||
Second Swap | March 31, 2023 | October 31, 2027 | % | $ | $ | ( | ||||||||||||||||||||||||||
Third Swap | September 20, 2024 | October 31, 2027 | % | $ | $ | ( | ||||||||||||||||||||||||||
The Swap Agreements are accounted for as derivatives whereby the fair value of the contract is reported within the consolidated balance sheets, and related gains and losses resulting from changes in the fair value are reported in interest and other expense, net, in the statements of operations and comprehensive income (loss). As of December 31, 2025 the fair value of the Swap Agreements was a liability of $4.7 million, which is reported in other non-current liabilities on the consolidated balance sheets. As of December 31, 2024 the fair value of the Initial Swap was a liability of $0.9 million, while the fair value of the Second and Third Swaps were an asset of $2.4 6.2 million, a gain of $6.4 million and a loss of $2.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The Company’s Credit Facilities are subject to certain financial and nonfinancial covenants and are secured by substantially all assets of the Company. As of December 31, 2025, the Company was in compliance with all of its financial covenants.
Aggregate maturities of the Company’s debt are as follows (in thousands):
| Year Ended December 31, | |||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total aggregate maturities of the Company’s debt | $ | ||||
Note 11. Equity
On July 6, 2021, the Company filed an amended and restated certificate of incorporation with the Secretary of State of the State of Delaware to authorize the issuance of up to 2,050,000,000 shares, par value $0.00001 2,000,000,000 shares of common stock and 50,000,000 shares of preferred stock.
Repurchase Program
On June 14, 2022, our Board approved a stock repurchase program (as subsequently amended, the “Repurchase Program”) with authorization to purchase up to $50.0 million in shares of the Company’s common stock through the expiration of the program on December 21, 2022. On November 7, 2022, November 5, 2023, May 21, 2024, May 1, 2025 and November 4, 2025, our Board increased the authorization of the Repurchase Program by an additional $50.0 300.0 million in shares of the Company’s common stock through December 31, 2026. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at the Company’s discretion, depending on market conditions and corporate needs. The Repurchase Program does not obligate the Company to acquire any particular amount of common stock and may be modified, suspended or terminated at any time at the discretion of the Board. The Company expects to fund repurchases with existing cash on hand.
II-45
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
The Company repurchased and retired 8.2 million shares of common stock pursuant to the Repurchase Program for $85.6 million, including transaction fees and taxes, during the year ended December 31, 2025. As of December 31, 2025, $47.7 million remained available under the Repurchase Program.
Note 12. Stock-Based Compensation
In 2016, the Company adopted the 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan provided for the granting of stock-based awards, including stock options, stock appreciation rights, restricted or unrestricted stock awards, phantom stock, performance awards and other stock-based awards. The 2016 Plan allowed for the granting of stock-based awards through January 17, 2027.
In connection with the Initial Public Offering (“IPO”), the Company’s Board adopted, and the Company’s stockholders approved, the 2021 Incentive Award Plan (the “2021 Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO and, as a result of which, the Company can no longer make awards under the 2016 Plan. The 2021 Plan provides for the issuance of incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based awards. The number of shares initially reserved for issuance under the 2021 Plan was 22,000,000 shares, inclusive of available shares previously reserved for issuance under the 2016 Plan. In addition, the number of shares reserved for issuance under the 2021 Plan is subject to an annual increase on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (i) 3 % of the shares outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares as determined by the Company’s Board, provided that no more than 22,000,000 shares may be issued upon the exercise of incentive stock options. Based on the number of outstanding shares of the Company’s common stock as of December 31, 2024, on January 1, 2025 the number of shares reserved for issuance under the 2021 Plan increased by 5.5 million.
In August 2024, the Company adopted a "withhold to cover" program, which allows it to withhold common stock from employees in connection with the settlement of income tax withholding obligations arising from the vesting of RSUs under the 2021 Plan.
Stock options
During the years ended December 31, 2025 and 2024, the Company granted time-based and performance-based stock options to employees and directors. Time-based options granted under the 2016 Plan vest 25 % after one year , and then monthly over the next three years . Time-based options granted to newly hired employees under the 2021 Plan generally vest 25 % after one year and then quarterly over the next three years . The vesting schedule for options granted to existing employees provides that the options vest ratably in quarterly installments over a period of four years . Time-based options granted under both the 2016 Plan and the 2021 Plan expire 10 years from date of grant and carry an exercise price equal to the fair market value at the date of grant as determined by the Company’s Board for options granted under the 2016 Plan and an exercise price equal to the closing price of the Company’s stock at the date of grant for options granted under the 2021 Plan. The Company did not grant stock options in 2023.
The performance-based options generally carried an exercise price equal to the fair market value at the date of grant as determined by the Board and expired 10 years from date of grant.
The relevant data used to determine the value of the stock options is as follows:
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 (1) | |||||||||||||||
| Weighted-average risk-free interest rate | N/A | ||||||||||||||||
| Expected term in years | N/A | ||||||||||||||||
| Weighted-average expected volatility | N/A | ||||||||||||||||
| Expected dividends | N/A | ||||||||||||||||
(1) There were no stock options granted during 2023.
II-46
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
A summary of stock option activity for the year ended December 31, 2025 is as follows:
| Number of Options | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term in Years | Aggregate Intrinsic Value | ||||||||||||||||||||
(in thousands except for exercise price and term in years) | |||||||||||||||||||||||
Outstanding balance at January 1, 2025 | $ | $ | |||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||
Cancelled | ( | ||||||||||||||||||||||
Outstanding balance at December 31, 2025 | $ | $ | |||||||||||||||||||||
Exercisable at December 31, 2025 | $ | $ | |||||||||||||||||||||
The weighted-average grant date fair value of time-based stock options granted was $4.75 , $5.31 , and nil , for the years ended December 31, 2025, 2024 and 2023, respectively. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $1.7 million, $2.8 million and $2.2 million, respectively. Compensation expense of $4.6 million, $5.4 million and $8.8 million was recognized in the statements of operations and comprehensive income (loss) for the years ended December 31, 2025, 2024 and 2023, respectively. The unrecognized compensation expense associated with outstanding time-based stock options at December 31, 2025 was $6.3 million, which is expected to be recognized over a weighted average period of 2.77 years.
Restricted Stock Units
During the years ended December 31, 2025, 2024 and 2023, the Company issued time vesting RSUs. The vesting schedule for awards granted to newly hired employees provides that the awards vest over a four-year period starting on the grant date, with 25 % of the awards vesting on the one-year anniversary, and then in equal quarterly installments for the subsequent three years . The vesting schedule for awards granted to existing employees provides that the awards vest ratably in quarterly installments over a period of four years . The Company records compensation expense for these awards on a straight-line basis, which approximates the service period. Compensation expense of $22.4 million, $19.4 million and $15.0 million related to these awards was recognized in the statements of operations and comprehensive income (loss) for the years ended December 31, 2025, 2024 and 2023, respectively. The unrecognized compensation expense associated with the RSUs at December 31, 2025 was $39.3 million, which is expected to be recognized over a weighted average period of 2.70 years.
The summary of time vesting restricted stock units activity for the year ended December 31, 2025 is as follows:
Number of Units | Weighted-Average Grant Date Fair Value | ||||||||||
| (in thousands except for fair value) | |||||||||||
Unvested, restricted stock units at January 1, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
Unvested, restricted stock units at December 31, 2025 | $ | ||||||||||
2021 Employee Stock Purchase Plan
In connection with the IPO, the Company’s Board adopted the 2021 ESPP. The ESPP is designed to allow eligible employees to purchase shares of our common stock, at periodic intervals, with their accumulated payroll deductions. The aggregate number of shares of common stock that were initially reserved for issuance under the ESPP is equal to the sum of (i) 4,500,000 shares and (ii) an annual increase on the first day of each calendar year beginning in 2022 and ending in and including 2031 equal to the lesser of (A) one percent (1 %) of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year and (B) such smaller number of shares as determined by the Board; provided that in no event will more than 60,000,000 shares of our common stock be available for issuance under the ESPP. Compensation expense of $1.0 million, $1.0 million and $1.2 million related to the ESPP was recognized in the statements of operations and comprehensive income (loss) for the years ended December 31, 2025, 2024 and 2023, respectively.
II-47
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Stock-based Compensation Expense
Stock-based compensation expense was classified in the accompanying consolidated statements of operations and comprehensive income (loss) as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Cost of revenues | $ | $ | $ | ||||||||||||||
| Sales and marketing | |||||||||||||||||
| Product development | |||||||||||||||||
| General and administrative | |||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | ||||||||||||||
Note 13. Net Income (Loss) Per Share Attributable to Common Stockholders
The following table presents the calculation of basic and diluted net income (loss) per share for the Company’s common stock as of:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
(in thousands except per share amounts) | |||||||||||||||||
| Numerator: | |||||||||||||||||
Net income (loss) from continuing operations | $ | $ | ( | $ | ( | ||||||||||||
Income (loss) from discontinued operations, net of income tax | ( | ( | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | $ | ( | $ | ( | ||||||||||||
| Denominator: | |||||||||||||||||
Weighted-average shares of common stock outstanding, basic | |||||||||||||||||
Weighted-average shares of common stock outstanding, diluted | |||||||||||||||||
Net income (loss) per share attributable to common stockholders, basic: | |||||||||||||||||
Continuing operations | $ | $ | ( | $ | ( | ||||||||||||
Discontinued operations | ( | ||||||||||||||||
Net income (loss) per share | $ | $ | ( | $ | ( | ||||||||||||
Net income (loss) per share attributable to common stockholders, diluted: | |||||||||||||||||
Continuing operations | $ | $ | ( | $ | ( | ||||||||||||
Discontinued operations | ( | ||||||||||||||||
Net income (loss) per share | $ | $ | ( | $ | ( | ||||||||||||
The following table illustrates the reconciliation of the denominators of the basic and diluted EPS computations for income (loss) from continuing operations and loss from discontinued operations, net of income tax.
Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
(in thousands) | |||||||||||||||||
Weighted-average shares of common stock outstanding, basic | |||||||||||||||||
Shares of common stock subject to outstanding RSUs | |||||||||||||||||
Shares of common stock subject to outstanding options | |||||||||||||||||
Shares of common stock pursuant to ESPP | |||||||||||||||||
Weighted-average shares of common stock outstanding, diluted | |||||||||||||||||
II-48
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
The following outstanding potentially dilutive common stock equivalents have been excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented due to their anti-dilutive effect:
| December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Outstanding stock options and unvested RSUs | |||||||||||||||||
Shares of common stock pursuant to ESPP | |||||||||||||||||
| Total anti-dilutive outstanding potential common stock | |||||||||||||||||
Note 14. Fair Value of Financial Instruments
Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value.
The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. We utilize a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
•Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.
•Level 2: Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
•Level 3: Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The carrying value of cash and cash equivalents, accounts receivable, contract assets and accounts payable approximate their fair value because of the short-term nature of these instruments. Our interest rate swaps are valued based upon interest yield curves, interest rate volatility and credit spreads. Our interest rate swaps are classified within Level 2 of the fair value hierarchy as all significant inputs are corroborated by observable data.
There were no transfers between fair value measurement levels during the years ended December 31, 2025 and 2024.
The following table presents information about our financial assets and liabilities measured at fair value on a recurring basis as of:
| December 31, 2025 | Balance Sheet Classification | ||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||
| Asset: | |||||||||||||||||||||||||||||
| Money market | $ | $ | $ | $ | Cash equivalents | ||||||||||||||||||||||||
| Liability: | |||||||||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | Other non-current liabilities | ||||||||||||||||||||||||
| December 31, 2024 | Balance Sheet Classification | ||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||
| Asset: | |||||||||||||||||||||||||||||
| Money market | $ | $ | $ | $ | Cash equivalents | ||||||||||||||||||||||||
Interest rate swaps | Other non-current assets | ||||||||||||||||||||||||||||
| Liability: | |||||||||||||||||||||||||||||
Interest rate swap | $ | $ | $ | $ | Other non-current liabilities | ||||||||||||||||||||||||
II-49
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Note 15. Retirement Plan
Effective January 1, 2009, EverCommerce Inc. adopted a defined contribution savings plan under section 401(k) of the Internal Revenue Code (the “401(k)”). The 401(k) covers substantially all employees who meet minimum age and service requirements and allows participants to contribute a portion of their pre-tax and post-tax annual compensation in accordance with prescribed limits. The Company may make discretionary and/or matching contributions to the 401(k). The Company matched 100 % of employee contributions up to 4 % of eligible compensation. Employer matching contributions were $5.1 million, $5.0 million and $4.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Note 16. Income Taxes
The components of our net income (loss) before income tax expense are as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
United States | $ | $ | ( | $ | ( | ||||||||||||
International | |||||||||||||||||
Net income (loss) before income tax expense | $ | $ | ( | $ | ( | ||||||||||||
As of December 31, 2025, a portion of our undistributed earnings from non-U.S. subsidiaries are intended to be indefinitely reinvested in non-U.S. operations, and therefore no U.S. deferred taxes have been recorded. As of December 31, 2025, there was no material unrecognized deferred tax liability related to countries where we are indefinitely reinvested. The remaining undistributed earnings from non-U.S. subsidiaries are not permanently reinvested, however, due to a combination of anticipated tax treatment and losses, no material deferred tax liability exists.
The components of the provision for income tax expense (benefit) consists of the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | $ | $ | ||||||||||||||
| State | |||||||||||||||||
| Foreign | |||||||||||||||||
| Total current | |||||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | ( | ( | ( | ||||||||||||||
| State | ( | ( | ( | ||||||||||||||
| Foreign | ( | ||||||||||||||||
| Change in valuation allowance - United States | |||||||||||||||||
Change in valuation allowance - State (1) | ( | ||||||||||||||||
| Change in valuation allowance - Foreign | ( | ( | ( | ||||||||||||||
| Total deferred | ( | ( | |||||||||||||||
Total income tax expense | $ | $ | $ | ||||||||||||||
(1) 2025 presentation of change in state valuation allowance is provided separately due to the prospective adoption of ASU 2023-09. | |||||||||||||||||
II-50
| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
The Company’s deferred tax assets and liabilities, included in other non-current liabilities on the consolidated balance sheets, related to temporary differences and operating loss carryforwards were as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Deferred tax assets: | |||||||||||
| Net operating losses | $ | $ | |||||||||
| 163(j) interest limitation | |||||||||||
| Reserves and accrued expenses | |||||||||||
| Property and equipment depreciation | |||||||||||
Capitalized software | |||||||||||
| Stock-based compensation | |||||||||||
Intangibles | |||||||||||
| Lease liability | |||||||||||
Capital loss carryforward | |||||||||||
| Other | |||||||||||
| Total deferred tax assets | |||||||||||
| Less: valuation allowance | ( | ( | |||||||||
| Net deferred tax assets | |||||||||||
| Deferred tax liabilities: | |||||||||||
Goodwill | ( | ( | |||||||||
| Property and equipment depreciation | ( | ||||||||||
Capitalized software | ( | ||||||||||
| Capitalized expenses | ( | ( | |||||||||
| Operating lease right-of-use assets | ( | ( | |||||||||
| Other | ( | ( | |||||||||
| Total deferred tax liabilities | ( | ( | |||||||||
| Net deferred tax liabilities | $ | ( | $ | ( | |||||||
The Company had net operating loss, capital loss, and tax credit carryforwards as of the financial statement date as follows:
| Amount | Expiration Years | ||||||||||
| (in thousands) | |||||||||||
Net operating losses, federal (Post December 31, 2017) | $ | Indefinite | |||||||||
Net operating losses, federal (Pre January 1, 2018) | $ | 2036 | |||||||||
| Net operating losses, state | $ | Various | |||||||||
| Net operating losses, foreign | $ | 2038 - Indefinite | |||||||||
Capital loss, federal | $ | 2029 | |||||||||
| Tax credits, federal | $ | Various | |||||||||
Tax credits, state | $ | Various | |||||||||
| Tax credits, foreign | $ | Various | |||||||||
Management has not considered future projections of income in this analysis due to the Company’s history of losses. The Company has determined that it is more likely than not that a portion of the deferred tax assets will not be realized and has recorded a valuation allowance of $64.6 million and $64.9 million as of December 31, 2025 and 2024, respectively, against the deferred tax assets. If the Company’s assumptions change and we determine that we will be able to realize these deferred tax assets, the tax benefits related to
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
any reversal of the valuation allowance on deferred tax assets as of December 31, 2025, will be accounted for as follows: $64.2 million will be recognized as a reduction of income tax expense and $0.4 million will be recorded as an increase in equity.
A reconciliation of our valuation allowance on deferred tax assets is as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Balance at beginning of period | $ | $ | |||||||||
| Additions to valuation allowance | |||||||||||
Reductions recorded from sale of business | ( | ( | |||||||||
| Additions recorded as a decrease in equity | |||||||||||
| Reductions recorded as an increase in equity | ( | ( | |||||||||
| Balance at end of period | $ | $ | |||||||||
The Company files income tax returns in the U.S. federal jurisdiction, Colorado, various other state jurisdictions, Canada, Jordan, the United Kingdom, Australia and New Zealand. The years open for audit vary depending on the tax jurisdiction. In the U.S., the Company's federal tax returns for the years before 2022 (year ended December 31, 2022) are no longer subject to audit. The net operating losses utilized during the open periods from select years prior to 2022 are subject to examination. The foreign jurisdictions statutes vary but are generally four years from assessment of the return.
While management believes we have adequately provided for all tax positions, amounts asserted by taxing authorities could materially differ from our accrued positions as a result of uncertain and complex application of tax regulations. Additionally, the recognition and measurement of certain tax benefits includes estimates and judgment by management and inherently includes subjectivity. Accordingly, additional provision on federal, state and foreign tax-related matters could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Balance at beginning of period | $ | $ | |||||||||
| Gross additions based on tax positions related to the current year | |||||||||||
Gross reductions based on tax positions related to prior years | ( | ||||||||||
| Balance at end of period | $ | $ | |||||||||
As of December 31, 2025 and 2024, unrecognized tax benefits of $1.2 million and $0.6 million, respectively, were recorded in other long-term liabilities, which would impact the annual effective tax rate if recognized. The Company recognizes interest and penalties, if any, related to unrecognized tax positions in the provision for income taxes in the accompanying consolidated statements of operations and comprehensive income (loss).
The Company, through its former foreign subsidiary Alnashmi Digital Marketing, LLC, provided exported technology services that were exempt from income tax through December 31, 2025 under Article (9/A/4) of Regulation No. 106 of the 2016 Regulations. Alnashmi Digital Marketing, LLC was sold as part of the Company’s marketing technology solutions disposition in 2025 and its operating results, including the related tax effects of the tax holiday, are reported within discontinued operations in the accompanying consolidated statements of operations and comprehensive income (loss). The approximate dollar value of tax expense related to the tax holiday was nil and $0.1 million as of December 31, 2025 and 2024, respectively.
During the year ended December 31, 2024, we sold Fitness Solutions as discussed in Note 3. Acquisition and Dispositions, which resulted in an income tax benefit.
During the year ended December 31, 2025, we sold marketing technology solutions as discussed in Note 3. Acquisition and Dispositions, which resulted in an income tax benefit.
The tables below represent a reconciliation of the statutory federal income tax expense (benefit) to income tax expense. The Company has adopted the guidance in ASU 2023-09 on a prospective basis (see Note 2. Summary of Significant Accounting Policies). The
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
following table reflects the rate reconciliation for the current year under the new guidance. Rate reconciliations for the years ending December 31, 2024 and 2023 are presented below the current year table under the prior guidance.
| Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| (in thousands, except percentages) | |||||||||||
Provision for income taxes U.S. statutory rate | $ | ||||||||||
| Change in income tax resulting from: | |||||||||||
State and local income tax, net of federal income tax effect (1) | ( | ( | |||||||||
Foreign tax effects | |||||||||||
New Zealand | |||||||||||
Change in valuation allowance | ( | ( | |||||||||
Other | |||||||||||
Canada | |||||||||||
Rate differential | |||||||||||
Other | |||||||||||
Australia | |||||||||||
Rate differential | |||||||||||
Other | |||||||||||
Other | |||||||||||
Effect of cross-border tax laws | |||||||||||
Foreign branch income | |||||||||||
Other | |||||||||||
Nontaxable or nondeductible items | |||||||||||
Nondeductible compensation | |||||||||||
Sale of marketing technology solutions | ( | ( | |||||||||
| Other | |||||||||||
Tax credits | |||||||||||
Federal research and development tax credit | ( | ( | |||||||||
Foreign tax credit | ( | ( | |||||||||
| Change in valuation allowance | |||||||||||
Changes in unrecognized tax benefits | |||||||||||
| Other | |||||||||||
Income tax expense | $ | % | |||||||||
(1) The tax effect in this category primarily reflects state and local taxes in Florida and Texas. | |||||||||||
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
| Year Ended December 31, | |||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| Benefit at U.S. statutory rate | $ | ( | $ | ( | |||||||||||||||||||
| Change in income tax resulting from: | |||||||||||||||||||||||
| State income benefit, net of federal benefit | ( | ( | |||||||||||||||||||||
| Stock-based compensation | ( | ( | |||||||||||||||||||||
| Nondeductible compensation | ( | ( | |||||||||||||||||||||
| Nondeductible transaction costs | ( | ||||||||||||||||||||||
| Foreign rate differential | ( | ( | |||||||||||||||||||||
| Change in valuation allowance | ( | ( | |||||||||||||||||||||
| Intellectual property migration | |||||||||||||||||||||||
Change in deferred state income tax rate | ( | ( | |||||||||||||||||||||
US taxation of foreign income | ( | ( | |||||||||||||||||||||
Goodwill impairment | ( | ||||||||||||||||||||||
Sale of Fitness Solutions | ( | ||||||||||||||||||||||
Tax credits | ( | ||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||
Income tax expense | $ | ( | % | $ | ( | % | |||||||||||||||||
Net cash paid for income taxes consisted of the following:
| Year Ended December 31, | |||||
| 2025 | |||||
| (in thousands) | |||||
| Federal | $ | ||||
| State | |||||
Florida | |||||
Texas | |||||
Other | |||||
Total state | |||||
Foreign | |||||
Canada | |||||
Other | |||||
Total foreign | |||||
Total cash paid | $ | ||||
On July 4, 2025, President Trump signed H.R. 1, the “One Big Beautiful Bill Act,” into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. The Act also includes certain changes to the US taxation of foreign activity, including changes to foreign tax credits, global intangible low-taxed income, foreign-derived intangible income, and base erosion and anti-abuse tax, amongst other changes. The Company’s tax provision for the year ended December 31, 2025 includes the estimated impact of the Act. The Company will continue to evaluate the impact for future periods.
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Note 17. Commitments and Contingencies
The Company has non-cancelable contractual purchase obligations incurred in the normal course of business to help deliver its services and products and provide support to its customers. These contracts with vendors primarily relate to software service, targeted mail costs, third-party fulfillment costs and software hosting. Unrecognized future minimum payments due under these agreements are as follows (in thousands):
| Year Ended December 31, | |||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total future minimum payments due | $ | ||||
From time to time, the Company is involved in various lawsuits and legal proceedings which arise in or outside the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Accruals for loss contingencies are recorded when a loss is probable, and the amount of such loss can be reasonably estimated. An adverse determination in one or more of these pending matters could have an adverse effect on the Company’s consolidated financial position, results of operations or cash flows.
On January 31, 2024, plaintiff Vladimir Gusinsky Revocable Trust filed a putative class action lawsuit in the Court of Chancery of the State of Delaware against the Company, members of its Board and the other parties to its sponsor stockholders agreement, dated June 30, 2021, Providence Strategic Growth II L.P., Providence Strategic Growth II-A L.P., SLA Eclipse Co-Invest, L.P., and SLA CM Eclipse Holdings, L.P. (collectively, the “Sponsor Stockholders”), captioned Vladimir Gusinsky Revocable Trust v. Eric Remer, Penny Baldwin, et. al., Case No. 2024-0077 (Del Ch.). The complaint generally alleges violations of Section 141(a) of the Delaware General Corporation Law (“DGCL”) by providing the Sponsor Stockholders with a veto right over the Board’s ability to hire or fire the Company’s Chief Executive Officer (the “CEO Approval Right”) on the basis that it unlawfully limits the Board’s authority to manage the business and affairs of the Company. The plaintiff seeks declaratory judgment that the CEO Approval Right is invalid and void, other declaratory and equitable relief for the class and/or the Company, attorneys’ and experts’ witness fees and other costs and expenses, and other equitable relief. On June 14, 2024, the Company filed its opening brief in support of its Motion to Dismiss, and on July 15, 2024, Plaintiff opposed that motion. On July 16, 2024, the court entered a stipulation and order dismissing the director defendants from the action. On August 29, 2024, the remaining defendants, the Company and Sponsor Stockholders (collectively, “Defendants”), filed their reply in support of the Motion to Dismiss, and pursuant to a stipulation between the parties, Plaintiff filed a sur-reply on September 26, 2024, which Defendants filed a response to on October 10, 2024. On October 15, 2024, Defendants filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction, arguing that the claims alleged are not ripe for adjudication and on November 15, 2024 Plaintiff opposed that motion. On December 9, 2024, Defendants filed their reply in support of the Motion to Dismiss for Lack of Subject Matter Jurisdiction. On January 3, 2025, the Court entered a minute order deferring oral argument on the pending Motion to Dismiss until after the disposition of the appeal in Moelis & Company v. West Palm Beach Firefighters’ Pension Fund, Case No. 340, 2024 (Del. Supr.). The Company believes it has meritorious defenses to the claims of the plaintiff and members of the class and any liability for the alleged claims is not currently probable and the potential loss or range of loss is not reasonably estimable.
The Company is party to additional legal proceedings incidental to its business. While the outcome of these additional matters could differ from management’s expectations, the Company does not believe that the resolution of such matters is reasonably likely to have a material effect on its results of operations or financial condition.
The Company assesses the applicability of nexus in jurisdictions in which the Company sells products and services. As of December 31, 2025 and 2024, the Company recorded a liability in the amount of $9.4 million and $10.7 million, respectively, within current liabilities and other long-term liabilities as a provision for sales and use and gross receipts tax. In connection with the Company's accounting for acquisitions, the Company has recorded liabilities and corresponding provisional escrow or indemnity receivables within the purchase price allocations for instances in which the Company is indemnified for tax matters.
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
Note 18. Geographic Areas
The following table sets forth long-lived assets by geographic area:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| United States | $ | $ | |||||||||
| International | $ | $ | |||||||||
Note 19. Segment Reporting
The Company operates in a single reportable segment. The segment derives revenue from providing SaaS and other technology-based solutions to help service SMB’s optimize their operations, improve customer relationships and experience, and accelerate growth. The Company primarily focuses on three core vertical markets: EverPro for Home Services, EverHealth for Health Services, and EverWell for Wellness Services.
The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer.
The accounting policies of the segment are the same as those described in the summary of significant accounting policies. Based on being a single reportable segment company, the Company has disclosed net income (loss) as its primary measure of profit or loss used by the CODM, which is reported on the consolidated statement of operations and comprehensive income (loss) as net income (loss) from continuing operations. The CODM is provided financial information inclusive of net income (loss) from continuing operations, which is used to assess performance of the segment and decide how to allocate resources. The CODM uses net income (loss) from continuing operations, among other metrics, to assist in evaluating the financial performance of the Company and monitoring budget versus actual results. The CODM does not review assets in evaluating segments results, and therefore, such information is not presented. The measure of segment assets is reported on the consolidated balance sheets as total assets.
Disaggregated information is not used for assessing the performance of the Company or for making resource allocation decisions. The CODM reviews financial information presented on an aggregated and consolidated basis, together with revenue information of the three core vertical markets. The software and technology-based solutions provided by the Company are deployed and implemented to customers in a similar manner regardless of industry. See Notes 4. Revenue and 18. Geographic Areas for disaggregated information regarding the Company's revenues and long-lived assets by geography, respectively.
The following table provides segment information for revenues, net loss and significant expenses:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Total revenues | $ | $ | $ | ||||||||||||||
Less(1): | |||||||||||||||||
| Employee expense | |||||||||||||||||
| Lead generation, marketing and advertising | |||||||||||||||||
Communication services | |||||||||||||||||
Third-party commissions | |||||||||||||||||
Software, tools and hosting | |||||||||||||||||
Legal and professional fees | |||||||||||||||||
Loss on sale and impairments | |||||||||||||||||
Other segment items(2) | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Interest and other expense, net | |||||||||||||||||
Income tax expense | |||||||||||||||||
Total expenses | |||||||||||||||||
Net income (loss) from continuing operations | ( | ( | |||||||||||||||
(Loss) income from discontinued operations, net of income tax | ( | ( | |||||||||||||||
Net income (loss) | $ | $ | ( | $ | ( | ||||||||||||
(1) The significant expense categories and amounts align with information that is regularly reviewed by the CODM. | |||||||||||||||||
(2) Other segment items include corporate overhead expenses, transaction-related and other non-recurring or unusual costs, facility expenses, bad debt and other miscellaneous cost of services. | |||||||||||||||||
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| EverCommerce Inc. | ||
| Notes to Consolidated Financial Statements | ||
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
Other Segment Disclosures | |||||||||||||||||
Interest income | $ | ( | $ | ( | $ | ( | |||||||||||
Interest expense | |||||||||||||||||
Other Significant Non-cash Items: | |||||||||||||||||
Stock-based compensation | |||||||||||||||||
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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures
None.
Item 9A. Controls and Procedures
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of December 31, 2025, our disclosure controls and procedures were not effective as a result of the material weakness in our internal control over financial reporting described below.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act.
Under the supervision of and with the participation of our principal executive officer and principal financial officer, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included evaluation of elements such as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and the Company’s overall control environment. Based on this assessment, management concluded that our internal control over financial reporting was not effective as of December 31, 2025 due to the existence of the material weakness described below. The material weakness did not result in any identified material misstatements in the current period consolidated financial statements, nor in any of the consolidated financial statements previously reported by us, and there were no changes in previously released financial results.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The scope of our management’s assessment of the effectiveness of internal control over financial reporting includes all of our Company’s consolidated operations.
In connection with the preparation of the financial statements for this Annual Report on Form 10-K, we identified a material weakness, as previously disclosed in our Annual Reports on Form 10-K for the years ended December 31, 2023 and December 31, 2024, that has not been remediated as of December 31, 2025 related to the lack of properly designed controls over certain of our order to cash revenue accounting processes. Specifically, adequate controls are not in place primarily as a result of (a) the lack of full system integration for certain of our order to cash systems and (b) control deficiencies within the manual controls designed to mitigate that risk.
Our independent registered public accounting firm will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act.
Remediation Efforts to Address Material Weakness
The material weakness identified above relates to the design and operation of controls over certain order to cash revenue accounting processes, driven primarily by incomplete system integration across certain legacy platforms and deficiencies in the design and execution of certain manual controls intended to mitigate revenue recognition risks within the order to cash process. As of December 31, 2025, this material weakness has not been remediated; however, management has made progress toward remediation.
During fiscal year 2025, management executed a variety of remediation activities across several product offerings. These efforts included (i) implementing integrated software solutions within the customer order to billing process for select product offerings, (ii) expanding finance, information technology, and operational resources with personnel experienced in internal control environments and U.S. GAAP, (iii) designing and implementing additional automated and manual controls within the order to cash cycle for certain product offerings, and (iv) providing targeted training to personnel responsible for executing and reviewing these controls.
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The Company continues to operate a partially disaggregated technology environment due to historical acquisitions, and the full integration of systems supporting customer order to billing processes remains ongoing. Management’s ongoing remediation plan includes continuing the phased rollout of integrated systems across additional product offerings, further enhancements to manual control design where system integration is not yet complete, and continued evaluation and testing of the operating effectiveness of controls within the order to cash process. The material weakness will not be considered remediated until these controls are fully implemented and have operated effectively for a sufficient period of time.
Changes in Internal Control Over Financial Reporting
Other than as described above with respect to our remediation efforts to address the material weakness, there were no changes in our internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
(a) None.
(b) During the three months ended December 31, 2025, no director or officer of the Company adopted terminated
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
Code of Ethics
Our Board has adopted a written Code of Conduct and Ethics applicable to all officers, directors and employees, including our principal executive officer, principal financial officer and controller, principal accounting officer, or persons performing similar functions. We have posted a current copy of our Code of Conduct and Ethics on our Investor Relations website at investors.evercommerce.com. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Business Conduct and Ethics, as well as Nasdaq’s requirement to disclose waivers with respect to directors and executive officers, by posting such information on our website at the address specified above. The information contained on our website is not incorporated by reference into this Annual Report on Form 10-K.
Executive Officers and Directors
Information about our Executive Officers and Directors
The following table sets forth the name, age and position(s) of each of our executive officers and directors as of March 12, 2026:
| Name | Age | Position(s) with EverCommerce | Principal Employment | |||||||||||||||||
| Executive Officers | ||||||||||||||||||||
Eric Remer(1) | 54 | Chief Executive Officer and Director | Same | |||||||||||||||||
| Matthew Feierstein | 53 | President | Same | |||||||||||||||||
Ryan Siurek | 54 | Chief Financial Officer | Same | |||||||||||||||||
| Lisa Storey | 44 | Chief Legal Officer, Corporate Secretary and Chief Compliance Officer | Same | |||||||||||||||||
| Non-Employee Directors | ||||||||||||||||||||
Penny Baldwin-Leonard(2) | 68 | Director | Former SVP and Chief Marketing Officer of Qualcomm Incorporated | |||||||||||||||||
Mark Hastings(3) | 58 | Director | Chief Executive Officer of PSG Equity L.L.C. | |||||||||||||||||
Tanner Austin | 34 | Director | Principal at PSG Equity L.L.C. | |||||||||||||||||
Joseph Osnoss(3) | 48 | Director | Managing Partner of Silver Lake | |||||||||||||||||
John Rudella(1) | 55 | Director | Director of Silver Lake | |||||||||||||||||
Richard A. Simonson(2) | 67 | Director | Managing Partner of Specie Mesa L.L.C. | |||||||||||||||||
Amy Guggenheim Shenkan(2) | 61 | Director | Ms. Shenkan has provided advisory services to Altamont Capital Partners | |||||||||||||||||
(1)Member of the Nominating and Corporate Governance Committee
(2)Member of the Audit Committee
(3)Member of the Compensation Committee
The remainder of the information required to be disclosed by this Item 10. will be included in the Company’s definitive proxy statement to be filed with the SEC with respect to its 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 11. Executive Compensation
The information required by this Item 11. will be included in the Company’s definitive proxy statement to be filed with the SEC with respect to its 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item 12. will be included in the Company’s definitive proxy statement to be filed with the SEC with respect to its 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13. will be included in the Company’s definitive proxy statement to be filed with the SEC with respect to its 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
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Item 14. Principal Accounting Fees and Services
The information required by this Item 14. will be included in the Company’s definitive proxy statement to be filed with the SEC with respect to its 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
III-2
PART IV
Item 15. Exhibits and Financial Statement Schedules
Financial Statements
The following consolidated financial statements are included in Part II, Item 8. of this Annual Report on Form 10‑K:
| Index to Consolidated Financial Statements | Page | |||||||
Report of Independent Registered Public Accounting Firm (PCAOB ID 00 | II-24 | |||||||
Consolidated Balance Sheets as of December 31, 2025 and 2024 | II-25 | |||||||
Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2025, 2024 and 2023 | II-26 | |||||||
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023 | II-27 | |||||||
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 | II-28 | |||||||
| Notes to Consolidated Financial Statements | II-29 | |||||||
Financial Statement Schedules
All financial statement schedules have been omitted because they are not applicable, not material or because the information required is already included in the consolidated financial statements or the notes thereto.
Exhibits
The following is a list of exhibits filed as part of this Annual Report on Form 10‑K or are incorporated herein by reference, in each case as indicated below.
| Incorporated by Reference | Filed/ | |||||||||||||||||||||||||||||||||||||
| Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Furnished Herewith | ||||||||||||||||||||||||||||||||
| 3.1 | Amended and Restated Certificate of Incorporation of EverCommerce Inc | 8-K | 001-40575 | 3.1 | 07/09/21 | |||||||||||||||||||||||||||||||||
| 3.2 | Amended and Restated Bylaws of EverCommerce Inc | 8-K | 001-40575 | 3.2 | 07/09/21 | |||||||||||||||||||||||||||||||||
| 4.1 | Form of Certificate of Common Stock | S-1/A | 333-256641 | 4.1 | 06/23/21 | |||||||||||||||||||||||||||||||||
| 4.2 | Registration Rights Agreement by and between EverCommerce Inc. and certain security holders of EverCommerce Inc., dated May 7, 2021 | S-1 | 333-256641 | 4.3 | 05/28/21 | |||||||||||||||||||||||||||||||||
| 4.3 | Sponsor Stockholders Agreement, dated as of June 30, 2021 | 8-K | 001-40575 | 10.1 | 07/09/21 | |||||||||||||||||||||||||||||||||
| 4.4 | Management Stockholders Agreement, dated as of June 30, 2021 | 8-K | 001-40575 | 10.2 | 07/09/21 | |||||||||||||||||||||||||||||||||
| 4.5 | Description of Capital Stock | 10-K | 001-40575 | 4.5 | 03/15/22 | |||||||||||||||||||||||||||||||||
| 10.1# | Form of Indemnification Agreement between EverCommerce Inc. and its directors and officers | S-1/A | 333-256641 | 10.1 | 06/23/21 | |||||||||||||||||||||||||||||||||
| 10.2# | Amended & Restated 2016 Equity Incentive Plan and related form agreements thereunder | S-1/A | 333-256641 | 10.2 | 06/23/21 | |||||||||||||||||||||||||||||||||
10.3# | EverCommerce Inc. 2021 Incentive Award Plan | S-1/A | 333-256641 | 10.6 | 06/23/21 | |||||||||||||||||||||||||||||||||
10.4# | Form of RSU Agreement under the EverCommerce Inc. 2021 Incentive Award Plan | S-1/A | 333-256641 | 10.6.1 | 06/23/21 | |||||||||||||||||||||||||||||||||
10.5# | Form of Option Agreement under the EverCommerce Inc. 2021 Incentive Award Plan | S-1/A | 333-256641 | 10.6.2 | 06/23/21 | |||||||||||||||||||||||||||||||||
10.6# | EverCommerce Inc. 2021 Employee Stock Purchase Plan | S-1/A | 333-256641 | 10.7 | 06/23/21 | |||||||||||||||||||||||||||||||||
10.7# | Employment Agreement by and between the Company and Eric Remer, dated July 1, 2021 | 10-K | 001-40575 | 10.11# | 03/15/22 | |||||||||||||||||||||||||||||||||
10.8# | Employment Agreement by and between the Company and Matthew Feierstein, dated July 1, 2021 | 10-K | 001-40575 | 10.12# | 03/15/22 | |||||||||||||||||||||||||||||||||
10.8.1# | Amendment to Executive Employment Agreement by and between Matthew Feierstein and EverCommerce Solutions Inc. | 10-Q | 001-40575 | 10.1 | 05/08/25 | |||||||||||||||||||||||||||||||||
10.9# | Employment Agreement by and between the Company and Ryan Siurek dated August 6, 2024 | 10-Q | 001-40575 | 10.2 | 11/12/24 | |||||||||||||||||||||||||||||||||
10.10# | PaySimple, Inc. 2008 Equity Incentive Plan | S-8 | 333-268321 | 99.3 | 11/14/22 | |||||||||||||||||||||||||||||||||
| 10.11 | Credit Agreement, dated July 6, 2021 | 8-K | 001-40575 | 10.3 | 07/09/21 | |||||||||||||||||||||||||||||||||
IV-1
10.11.1 | Amendment No. 1, dated as of November 23, 2021, to the Credit Agreement, dated as of July 6, 2021, among EverCommerce Intermediate Inc., EverCommerce Solutions Inc., Royal Bank of Canada, as administrative agent and collateral agent, and the other parties and lenders party thereto | 8-K | 001-40575 | 10.1 | 11/23/21 | |||||||||||||||||||||||||||||||||
10.11.2 | Amendment No. 2, dated as of June 26, 2023, to the Credit Agreement, dated as of July 6, 2021, among EverCommerce Intermediate Inc., EverCommerce Solutions Inc., Royal Bank of Canada, as administrative agent and collateral agent, and the other parties and lenders party thereto | 10-Q | 001-40575 | 10.1 | 08/08/23 | |||||||||||||||||||||||||||||||||
10.11.3 | Amendment No. 3, dated as of December 13, 2024, to the Credit Agreement, dated as of July 6, 2021, among EverCommerce Intermediate Inc., EverCommerce Solutions Inc., Royal Bank of Canada, as administrative agent and collateral agent, and the other parties and lenders party thereto | 8-K | 001-40575 | 10.1 | 12/16/24 | |||||||||||||||||||||||||||||||||
10.11.4 | Amendment No. 4, dated as of June 10, 2025, to the Credit Agreement, dated as of July 6, 2021, among EverCommerce Intermediate Inc., EverCommerce Solutions Inc., Royal Bank of Canada, as administrative agent and collateral agent, and the other parties and lenders party thereto. | 8-K | 001-40575 | 10.1 | 06/10/25 | |||||||||||||||||||||||||||||||||
10.11.5 | Amendment No. 5, dated as of July 29, 2025, to the Credit Agreement, dated as of July 6, 2021, among EverCommerce Intermediate Inc., EverCommerce Solutions Inc., Royal Bank of Canada, as administrative agent and collateral agent, and the other parties and lenders party thereto. | 8-K | 001-40575 | 10.1 | 07/30/25 | |||||||||||||||||||||||||||||||||
| 10.12 | Collateral Agreement, dated July 6, 2021 | 8-K | 001-40575 | 10.4 | 07/09/21 | |||||||||||||||||||||||||||||||||
| 10.13 | Guarantee Agreement, dated July 6, 2021 | 8-K | 001-40575 | 10.5 | 07/09/21 | |||||||||||||||||||||||||||||||||
10.14^ | Office Lease by and among EverCommerce Solutions Inc. and BCSP RINO Property LLC, dated June 13, 2019 | S-1 | 333-256641 | 10.13 | 05/28/21 | |||||||||||||||||||||||||||||||||
| 10.15# | Amended and Restated Non-Employee Director Compensation Policy | 10-Q | 001-40575 | 10.2 | 08/06/25 | |||||||||||||||||||||||||||||||||
| 19.1 | 10-K | 001-40575 | 19.1 | 03/13/25 | ||||||||||||||||||||||||||||||||||
| 21.1 | List of Subsidiaries of the Registrant | * | ||||||||||||||||||||||||||||||||||||
| 23.1 | Consent of Ernst & Young LLP | * | ||||||||||||||||||||||||||||||||||||
| 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) | * | ||||||||||||||||||||||||||||||||||||
| 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) | * | ||||||||||||||||||||||||||||||||||||
| 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 | ** | ||||||||||||||||||||||||||||||||||||
| 32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 | ** | ||||||||||||||||||||||||||||||||||||
| 97.1 | EverCommerce, Inc. Policy for Recovery of Erroneously Awarded Compensation | 10-K | 001-40575 | 97.1 | 03/14/24 | |||||||||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | * | ||||||||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | * | ||||||||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | * | ||||||||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | * | ||||||||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | * | ||||||||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | * | ||||||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | * | ||||||||||||||||||||||||||||||||||||
* Filed herewith.
** Furnished herewith.
# Denotes management contract or compensatory plan
^ Portions of the exhibit have been omitted as permitted under Item 601(b)(10)(iv) of Regulation S-K.
Item 16. Form 10-K Summary
None.
IV-2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| EVERCOMMERCE INC. | |||||||||||
Date: March 12, 2026 | By: | /s/ Eric Remer | |||||||||
| Eric Remer | |||||||||||
| Chief Executive Officer | |||||||||||
| (Principal Executive Officer) | |||||||||||
Date: March 12, 2026 | By: | /s/ Ryan H. Siurek | |||||||||
| Ryan H. Siurek | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial Officer) | |||||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
| Signatures | Title | Date | ||||||||||||
| /s/ Eric Remer | Director and Chief Executive Officer (Principal Executive Officer) | March 12, 2026 | ||||||||||||
| Eric Remer | ||||||||||||||
| /s/ Ryan H. Siurek | Chief Financial Officer (Principal Financial and Accounting Officer) | March 12, 2026 | ||||||||||||
| Ryan H. Siurek | ||||||||||||||
| /s/ Penny Baldwin-Leonard | Director | March 12, 2026 | ||||||||||||
| Penny Baldwin-Leonard | ||||||||||||||
| /s/ Mark Hastings | Director | March 12, 2026 | ||||||||||||
| Mark Hastings | ||||||||||||||
/s/ Tanner Austin | Director | March 12, 2026 | ||||||||||||
Tanner Austin | ||||||||||||||
| /s/ Joseph Osnoss | Director | March 12, 2026 | ||||||||||||
| Joseph Osnoss | ||||||||||||||
| /s/ John Rudella | Director | March 12, 2026 | ||||||||||||
| John Rudella | ||||||||||||||
| /s/ Richard A. Simonson | Director | March 12, 2026 | ||||||||||||
| Richard A. Simonson | ||||||||||||||
/s/ Amy Guggenheim Shenkan | Director | March 12, 2026 | ||||||||||||
Amy Guggenheim Shenkan | ||||||||||||||
FAQ
How did EverCommerce (EVCM) perform financially in 2025?
EverCommerce grew revenue and turned profitable in 2025. Revenue from continuing operations reached $588.9 million, up 4.8% from 2024, while net income from continuing operations was $18.2 million versus a $15.2 million loss the prior year.
What is EverCommerce’s business model and who are its customers?
EverCommerce provides vertically tailored SaaS for service SMBs. It offers business management, billing and payments, and customer experience solutions to over 745,000 customers across home services (EverPro), health services (EverHealth) and wellness (EverWell) as of December 31, 2025.
What major acquisitions and divestitures did EverCommerce (EVCM) complete?
EverCommerce reshaped its portfolio through deals in 2024–2025. It sold its fitness solutions in 2024 and its marketing technology solutions in October 2025, and acquired ZyraTalk, an AI-powered customer engagement platform, on September 15, 2025 to bolster AI-driven offerings.
How large is EverCommerce’s addressable market for its SaaS solutions?
EverCommerce targets a very large global SMB services market. It estimates about 456 million service SMBs worldwide and a 2023 total addressable market of approximately $1.6 trillion globally, including roughly $662 billion in North America across home, health, wellness and other services.
What key risks does EverCommerce highlight in its 2025 annual report?
EverCommerce cites numerous operational and market risks. These include limited operating history, competition, acquisition execution, cybersecurity threats, AI-related liabilities, regulatory and healthcare compliance, dependence on payment networks and processors, and potential goodwill and intangible asset impairments.
How significant are payments to EverCommerce’s revenue mix?
Payments are a meaningful but partial revenue driver. Payment-related transactions comprised approximately 20% of revenue in 2025. Based on Q4 2025 processing, EverCommerce estimates annualized processed volume of $13.0 billion and an aggregate annualized payment opportunity exceeding $100 billion.
What was EverCommerce’s market value and share count around 2025–2026?
EverCommerce provides recent market value and shares data. As of June 30, 2025, non-affiliate common equity had an aggregate market value of $200.1 million. The company reports 177,566,869 shares of common stock outstanding as of March 9, 2026.
Evercommerce Inc.
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[144] EverCommerce Inc. SEC Filing
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[144] EverCommerce Inc. SEC Filing
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[144] EverCommerce Inc. SEC Filing
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